Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.20.1
SEGMENT REPORTING
3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
SEGMENT REPORTING
SEGMENT REPORTING
 
New Residential’s portfolio consists of the following segments: (i) Origination, (ii) Servicing, (iii) MSR Related Investments, (iv) Residential Securities and Loans, (v) Consumer Loans and (vi) Corporate, organized based on differences in services and products. The corporate segment consists primarily of general and administrative expenses, management fees and incentive compensation related to the Management Agreement, corporate cash and related interest income.

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:
 
 
Servicing and Origination
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Origination
 
Servicing
 
MSR Related Investments
 
Elimination(A)
 
Total Servicing and Origination
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
16,735

 
$
7,487

 
$
99,353

 
$

 
$
123,575

 
$
184,005

 
$
59,921

 
$
34,872

 
$

 
$
402,373

Interest expense
 
13,427

 
196

 
57,783

 

 
71,406

 
108,009

 
30,773

 
6,667

 

 
216,855

Net interest income
 
3,308

 
7,291

 
41,570

 

 
52,169

 
75,996

 
29,148

 
28,205

 

 
185,518

Impairment
 

 

 

 

 

 
44,149

 
100,496

 

 

 
144,645

Servicing revenue, net
 
(1,078
)
 
86,742

 
(350,587
)
 
(24,192
)
 
(289,115
)
 

 

 

 

 
(289,115
)
Gain on originated mortgage loans, held-for-sale, net
 
158,215

 
259

 
22,088

 
(9,375
)
 
171,187

 

 
8,511

 

 

 
179,698

Other income (loss)
 
(16
)
 
499

 
(156,933
)
 

 
(156,450
)
 
(966,039
)
 
(192,271
)
 
(40,751
)
 
(47,150
)
 
(1,402,661
)
Operating expenses
 
100,212

 
64,352

 
108,072

 
(24,192
)
 
248,444

 
6,854

 
16,756

 
3,883

 
26,981

 
302,918

Income (loss) before income taxes
 
60,217

 
30,439

 
(551,934
)
 
(9,375
)
 
(470,653
)
 
(941,046
)
 
(271,864
)
 
(16,429
)
 
(74,131
)
 
(1,774,123
)
Income tax expense (benefit)
 
11,958

 
6,045

 
(109,785
)
 

 
(91,782
)
 

 
(75,201
)
 
115

 

 
(166,868
)
Net income (loss)
 
$
48,259

 
$
24,394

 
$
(442,149
)
 
$
(9,375
)
 
$
(378,871
)
 
$
(941,046
)
 
$
(196,663
)
 
$
(16,544
)
 
$
(74,131
)
 
$
(1,607,255
)
Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
1,283

 
$

 
$
(11,247
)
 
$

 
$
(9,964
)
 
$

 
$

 
$
(6,198
)
 
$

 
$
(16,162
)
Dividends on preferred stock
 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$
11,222

 
$
11,222

Net income (loss) attributable to common stockholders
 
$
46,976

 
$
24,394

 
$
(430,902
)
 
$
(9,375
)
 
$
(368,907
)
 
$
(941,046
)
 
$
(196,663
)
 
$
(10,346
)
 
$
(85,353
)
 
$
(1,602,315
)

 
 
Servicing and Origination
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Origination
 
Servicing
 
MSR Related Investments
 
Elimination(A)
 
Total Servicing and Origination
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
 
$
1,491,206

 
$

 
$
6,537,930

 
$

 
$
8,029,136

 
$
2,479,603

 
$
4,187,148

 
$
780,821

 
$

 
$
15,476,708

Cash and cash equivalents
 
76,752

 
14,032

 
161,778

 

 
252,562

 
101,646

 
560

 
4,382

 
1,303

 
360,453

Restricted cash
 
4,907

 
4,881

 
105,611

 

 
115,399

 

 

 
32,036

 

 
147,435

Other assets
 
403,277

 
274,883

 
3,023,482

 

 
3,701,642

 
4,064,232

 
310,095

 
65,602

 
37,840

 
8,179,411

Goodwill
 
11,836

 
12,540

 
5,092

 

 
29,468

 

 

 

 

 
29,468

Total assets
 
$
1,987,978

 
$
306,336

 
$
9,833,893

 
$

 
$
12,128,207

 
$
6,645,481

 
$
4,497,803

 
$
882,841

 
$
39,143

 
$
24,193,475

Debt
 
$
1,352,846

 
$
21,157

 
$
6,332,172

 
$

 
$
7,706,175

 
$
5,892,709

 
$
3,455,028

 
$
774,797

 
$

 
$
17,828,709

Other liabilities
 
244,137

 
73,889

 
384,496

 

 
702,522

 
218,654

 
53,854

 
7,389

 
51,883

 
1,034,302

Total liabilities
 
1,596,983

 
95,046

 
6,716,668

 

 
8,408,697

 
6,111,363

 
3,508,882

 
782,186

 
51,883

 
18,863,011

Total equity
 
390,995

 
211,290

 
3,117,225

 

 
3,719,510

 
534,118

 
988,921

 
100,655

 
(12,740
)
 
5,330,464

Noncontrolling interests in equity of consolidated subsidiaries
 
11,323

 

 
31,743

 

 
43,066

 

 

 
23,512

 

 
66,578

Total New Residential stockholders’ equity
 
$
379,672

 
$
211,290

 
$
3,085,482

 
$

 
$
3,676,444

 
$
534,118

 
$
988,921

 
$
77,143

 
$
(12,740
)
 
$
5,263,886

Investments in equity method investees
 
$

 
$

 
$
156,731

 
$

 
$
156,731

 
$

 
$

 
$

 
$

 
$
156,731

 

 
Servicing and Origination
 
Residential Securities and Loans







 
Origination

Servicing
 
MSR Related Investments
 
Elimination(A)
 
Total Servicing and Origination
 
Real Estate Securities

Residential Mortgage Loans

Consumer Loans

Corporate

Total
Three Months Ended March 31, 2019
 


 
 
 
 
 
 
 
 









Interest income
 
$
5,584


$
6,183

 
$
120,033

 
$

 
$
131,800

 
$
204,473


$
58,189


$
44,405


$


$
438,867

Interest expense
 
5,158


197

 
61,131

 

 
66,486

 
101,300


35,851


9,195




212,832

Net interest income
 
426


5,986

 
58,902

 

 
65,314

 
103,173


22,338


35,210




226,035

Impairment
 



 

 

 

 
7,516


(5,804
)

11,084




12,796

Servicing revenue, net
 
(270
)
 
43,521

 
128,737

 
(6,135
)
 
165,853

 

 

 

 

 
165,853

Gain on sale of originated mortgage loans, net
 
50,812

 
89

 
9,510

 
(9,085
)
 
51,326

 

 
15,844

 

 

 
67,170

Other income (loss)
 
1,059



 
(21,865
)
 

 
(20,806
)
 
(46,958
)

(3,445
)

4,531


2,712


(63,966
)
Operating expenses
 
46,363


36,123

 
50,491

 
(6,135
)
 
126,842

 
1,189


9,320


7,427


35,609


180,387

Income (loss) before income taxes
 
5,664

 
13,473

 
124,793

 
(9,085
)
 
134,845

 
47,510

 
31,221

 
21,230

 
(32,897
)

201,909

Income tax expense (benefit)
 
1,549

 
3,686

 
34,139

 

 
39,374

 

 
6,544

 
79

 


45,997

Net income (loss)
 
$
4,115

 
$
9,787

 
$
90,654

 
$
(9,085
)
 
$
95,471

 
$
47,510

 
$
24,677

 
$
21,151

 
$
(32,897
)

$
155,912

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
407

 
$

 
$
2,451

 
$

 
$
2,858

 
$

 
$

 
$
7,460

 
$


$
10,318

Dividends on Preferred Stock
 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

Net income (loss) attributable to common stockholders
 
$
3,708

 
$
9,787

 
$
88,203

 
$
(9,085
)
 
$
92,613

 
$
47,510

 
$
24,677

 
$
13,691

 
$
(32,897
)

$
145,594



As a result of the economic uncertainties arising from the COVID-19 pandemic, the impact of the uncertainty on the financial and mortgage-related asset markets, and the associated decreases in the Company’s common and preferred stock prices, the Company performed a qualitative impairment analysis for goodwill and intangible assets. Based on the analysis, the Company determined no impairment had occurred as of March 31, 2020. Such analysis required management to assess current and future market conditions. Given the uncertainty inherent in the analysis, heightened by the possibility of unforeseen effects of COVID-19, actual results may differ from assumptions used, or conditions may change, which could result in impairment charges in the future. In the event that the Company concludes that all or a portion of its goodwill or intangible asset is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital.