ORGANIZATION (Tables)

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The total consideration is summarized as follows:



Total Consideration	Amount
Share Issuance Consideration	28,286,980
New Residential's 4/6/2015 share price	$	15.3460
Dollar Value of Share Issuance^(A)	$	434,092
Cash Consideration	621,982
HLSS Seller Financing^(B)	385,174
HLSS New Merger Payment (71,016,771 @ $0.704059)^(C)	50,000
Total Consideration	$	1,491,248


(A)	Share Issuance Consideration

The share issuance consideration consists of 28.3 million newly issued shares of New Residential common stock with a par value $0.01 per share. The fair value of the common stock at the date of the acquisition was $15.3460 per share, which was New Residential’s volume weighted average share price on April 6, 2015.


(B)	HLSS Seller Financing

New Residential agreed to deliver $1.0 billion of cash purchase price, including a promise to pay an amount of $385.2 million immediately after closing from the proceeds of financing that was committed in anticipation of the HLSS Acquisition and is collateralized by certain of the HLSS assets acquired.


(C)	HLSS New Merger Payment

The HLSS New Merger Agreement, and the $50.0 million consideration related thereto, is included as a part of the business combination in conjunction with the Share and Asset Purchase Agreement. The range of outcomes for this contingent consideration was from $0.0 million to $50.0 million, dependent on whether the HLSS New Merger was approved by HLSS shareholders and other factors. As of the HLSS New Merger Effective Time, the net contingent consideration paid was fixed at $5.1 million.

Summary of Preliminary Allocation of Total Consideration

The preliminary allocation of the total consideration, following reclassifications to conform to New Residential’s presentation, is as follows:



Total Consideration ($ in millions)	$	1,491.2
Assets
Cash and cash equivalents	$	51.4
Servicer advances, at fair value	5,096.7
Excess mortgage servicing rights, at fair value	917.1
Residential mortgage loans, held-for-sale^(A)	416.8
Deferred tax asset^(B)	195.1
Investment in HLSS Ltd.	44.9
Other assets^(C)	402.4
Total Assets Acquired	$	7,124.4

Liabilities
Notes payable	5,580.3
Accrued expenses and other liabilities^(D)(E)	52.9
Total Liabilities Assumed	$	5,633.2

Net Assets	$	1,491.2


(A)	Represents $424.3 million unpaid principal balance (“UPB”) of Government National Mortgage Association (“Ginnie Mae”) early buy-out (“EBO”) residential mortgage loans not subject to Accounting Standards Codification (“ASC”) No. 310-30 as the contractual cash flows are guaranteed by the Federal Housing Administration (“FHA”).


(B)	Due primarily to the difference between carryover historical tax basis and acquisition date fair value of one of HLSS’s first tier subsidiaries.


(C)	Includes restricted cash and receivables not subject to ASC No. 310-30 which New Residential has deemed fully collectible.


(D)	Includes liabilities arising from contingencies regarding ongoing HLSS matters (Note 14).


(E)	Contingencies for HLSS class action law suits had not been recognized at the acquisition date as the criteria in ASC No. 450 had not been met (Note 14).

Summary of Unaudited Pro Forma Combined Interest Income and Income Before Income Taxes

The following table presents unaudited pro forma combined Interest income and Income Before Income Taxes for the years ended December 31, 2015 and 2014 prepared as if the HLSS Acquisition had been consummated on January 1, 2014.



	Year Ended December 31,
	2015		2014
	(unaudited)		(unaudited)
Pro Forma
Interest income	$	731,660	$	744,363
Income Before Income Taxes	322,365		647,058