Quarterly report pursuant to Section 13 or 15(d)

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Tables)

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Tables)
3 Months Ended
Mar. 31, 2013
Pro Forma Condensed Consolidated Financial Information Tables  
Pro forma condensed consolidated balance sheet

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
At March 31, 2013

 

    March 31, 2013
(Unaudited) (A)
   

Pro Forma

Adjustments

   

New Residential

Pro Forma

 
Assets                        
Real estate securities, available-for-sale   $ 1,318,023     $ 501,815 (B)   $ 1,819,838  
Investments in excess mortgage servicing rights at fair value     236,555       2,453 (C)     239,008  
Investments in equity method investees, excess mortgage servicing rights, at fair value     102,588       268,133 (D)     370,721  
Investments in equity method investees, consumer loans, at fair value     —       247,971 (E)     247,971  
Residential mortgage loans, held-for-investment     35,484       —       35,484  
Cash and cash equivalents     —       102,936 (F)     102,936  
Other assets     450       —       450  
    $ 1,693,100     $ 1,123,308     $ 2,816,408  
                         
Liabilities and Equity                        
                         
Liabilities                        
Repurchase agreements   $ 915,058     $ 477,840 (G)   $ 1,392,898  
Payable related to the investments in equity method investees, excess
mortgage servicing rights
    —       198,855 (H)     198,855  
Due to affiliate     7,784       —       7,784  
Accrued expenses and other liabilities     2,839       —       2,839  
      925,681       676,695       1,602,376  
                         
Commitments and contingencies                        
                         
Equity                        
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis     —       2,530 (I)     2,530  
Accumulated Equity     735,710       444,083 (J)     1,179,793  
Accumulated other comprehensive income     31,709       —       31,709  
Total Equity     767,419       446,613       1,214,032  
    $ 1,693,100     $ 1,123,308     $ 2,816,408  

 

(A) Represents New Residential’s historical consolidated balance sheet at March 31, 2013.
(B) Represents the carrying value of securities contributed by Newcastle to New Residential and the acquisition of additional Agency and Non-Agency RMBS subsequent to March 31, 2013 net of sales.
(C) Represents the investment in additional excess mortgage servicing rights subsequent to March 31, 2013.
(D) Represents the investment in additional equity method investees, excess mortgage servicing rights, subsequent to March 31, 2013.
(E) Represents the investments in equity method investees, consumer loans, subsequent to March 31, 2013.
(F) Represents New Residential’s cash balance as of May 15, 2013 adjusted for subsequent purchases, sales and financings.
(G) Represents the additional repurchase agreements to finance the real estate securities described in (B) above, net of paydowns through June 10, 2013.
(H) Represents commitments of New Residential’s investments in equity method investees.
(I) Represents 253,025,645 shares of common stock at a par value of $0.01 per share. The number of shares of common stock is based on Newcastle’s shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock.
(J) Represents New Residential’s accumulated equity, including the additional contributions from Newcastle to New Residential subsequent to March 31, 2013, less the par value of the shares of common stock set forth in (I) above.

 

Pro forma condensed consolidated statements of income

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

 

    Three Months Ended
March 31, 2013
(A)
    Pro Forma Adjustments     New Residential Pro Forma  
                         
Interest income   $ 16,191     $ 4,226 (B)   $ 20,417  
Interest expense     899       2,754 (C)     3,653  
Net Interest Income     15,292       1,472       16,764  
                         
Change in fair value of investments in excess mortgage servicing rights     1,858       —       1,858  
Change in fair value of investments in equity method investees     969       —       969  
Other Income     2,827       —       2,827  
                         
Expenses                        
General and administrative expenses     2,719       —       2,719  
Management fees allocated by Newcastle     2,325       71 (D)     2,396  
      5,044       71       5,115  
                         
Net Income   $ 13,075     $ 1,401     $ 14,476  
                         
Net Income Per Share                        
Basic     N/A             $ 0.06 (E)
Diluted     N/A             $ 0.06 (F)
                         
Weighted average number of shares outstanding                        
Basic     N/A               235,136,756 (E)
Diluted     N/A               240,079,144 (F)

 

(A) Represents New Residential’s historical consolidated statement of income for the three months ended March 31, 2013.
(B) Represents additional interest income from Agency RMBS acquired during the quarter ended March 31, 2013 and subsequent to March 31, 2013. The interest income was computed based on the weighted average accounting yield of the securities of 1.43%. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest income of approximately $0.4 million for the three months ended March 31, 2013.
(C) Represents additional interest expense from additional repurchase agreements used to finance the real estate securities acquired subsequent to March 31, 2013. The interest expense was computed based on the actual terms of the repurchase agreements. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest expense of approximately $0.4 million for the three months ended March 31, 2013.
(D) Represents additional management fees related to the capital transactions noted herein.
(E) Pro forma basic earnings per share and weighted average number of basic shares outstanding reflect an estimated number of shares of common stock outstanding based upon Newcastle’s weighted average number of basic shares outstanding for the three months ended March 31, 2013 (based on a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock).
(F) Pro forma diluted earnings per share and weighted average number of diluted shares outstanding reflect shares of common stock that may be issued in connection with awards granted prior to the distribution under Newcastle equity plans based on the distribution ratio noted above in (E). While the actual dilutive impact will depend on various factors, we believe the estimate yields a reasonable approximation of the dilutive impact of the Newcastle equity plans and is based upon Newcastle’s weighted average number of diluted shares outstanding.