SEGMENT REPORTING (Tables)

9 Months Ended

Sep. 30, 2020

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 September 30, 2020
Interest income	$	17,407	$	373	$	91,576	$	—	$	109,356	$	61,034	$	33,913	$	29,545	$	—	$	233,848
Servicing revenue, net	(3,767)		111,420		(80,987)		(70,595)		(43,929)		—		—		—		—		(43,929)
Gain on originated mortgage loans, held-for-sale, net	445,578		346		10,184		38,990		495,098		—		—		—		—		495,098
Total revenues	459,218		112,139		20,773		(31,605)		560,525		61,034		33,913		29,545		—		685,017
Interest expense	10,977		90		59,650		—		70,717		15,652		19,326		5,809		19,024		130,528
G&A and other	136,086		81,767		149,426		(70,595)		296,684		930		10,361		3,361		27,706		339,042
Total operating expenses	147,063		81,857		209,076		(70,595)		367,401		16,582		29,687		9,170		46,730		469,570
Other income (loss)	123		—		(19,753)		—		(19,630)		36,941		44,699		(5,240)		(56,750)		20
Impairment	—		—		218		—		218		(3,849)		14,366		—		—		10,735
Income (loss) before income taxes(B)	312,278		30,282		(208,274)		38,990		173,276		85,242		34,559		15,135		(103,480)		204,732
Income tax expense (benefit)	71,304		6,044		15,682		—		93,030		—		7,783		(1)		—		100,812
Net income (loss)	$	240,974	$	24,238	$	(223,956)	$	38,990	$	80,246	$	85,242	$	26,776	$	15,136	$	(103,480)	$	103,920
Noncontrolling interests in income (loss) of consolidated subsidiaries	$	4,840	$	—	$	2,612	$	—	$	7,452	$	—	$	—	$	4,188	$	—	$	11,640
Dividends on preferred stock	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	14,359	$	14,359
Net income (loss) attributable to common stockholders	$	236,134	$	24,238	$	(226,568)	$	38,990	$	72,794	$	85,242	$	26,776	$	10,948	$	(117,839)	$	77,921


	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
Nine Months Ended September 30, 2020
Interest income	$	43,105	$	8,975	$	299,315	$	—	$	351,395	$	278,702	$	141,118	$	97,204	$	—	$	868,419
Servicing revenue, net	(6,843)		295,047		(591,004)		(156,513)		(459,313)		—		—		—		—		(459,313)
Gain on originated mortgage loans, held-for-sale, net	885,730		948		65,424		26,054		978,156		—		6,662		—		—		984,818
Total revenues	921,992		304,970		(226,265)		(130,459)		870,238		278,702		147,780		97,204		—		1,393,924
Interest expense	30,071		397		178,027		—		208,495		141,340		67,570		18,691		27,690		463,786
G&A and other	338,760		220,026		374,868		(156,513)		777,141		8,128		46,395		10,947		83,672		926,283
Total operating expenses	368,831		220,423		552,895		(156,513)		985,636		149,468		113,965		29,638		111,362		1,390,069
Other income (loss)	497		499		(267,351)		—		(266,355)		(881,261)		(110,896)		(16,007)		(103,519)		(1,378,038)
Impairment	—		—		127		—		127		15,166		118,377		—		—		133,670
Income (loss) before income taxes(B)	553,658		85,046		(1,046,638)		26,054		(381,880)		(767,193)		(195,458)		51,559		(214,881)		(1,507,853)
Income tax expense (benefit)	138,304		21,244		(143,824)		—		15,724		—		(64,501)		130		—		(48,647)
Net income (loss)	$	415,354	$	63,802	$	(902,814)	$	26,054	$	(397,604)	$	(767,193)	$	(130,957)	$	51,429	$	(214,881)	$	(1,459,206)
Noncontrolling interests in income (loss) of consolidated subsidiaries	$	10,542	$	—	$	(44)	$	—	$	10,498	$	—	$	—	$	23,620	$	—	$	34,118
Dividends on preferred stock	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	39,938	$	39,938
Net income (loss) attributable to common stockholders	$	404,812	$	63,802	$	(902,770)	$	26,054	$	(408,102)	$	(767,193)	$	(130,957)	$	27,809	$	(254,819)	$	(1,533,262)


	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
September 30, 2020
Investments	$	2,843,720	$	—	$	5,753,366	$	—	$	8,597,086	$	10,830,067	$	2,887,350	$	722,108	$	—	$	23,036,611
Cash and cash equivalents	99,321		50,942		406,965		—		557,228		160,764		4,681		7,195		111,154		841,022
Restricted cash	3,929		32,369		102,166		—		138,464		12,723		—		29,367		—		180,554
Other assets	369,988		191,398		4,466,009		—		5,027,395		1,005,847		193,394		59,968		32,105		6,318,709
Goodwill	11,836		12,540		5,092		—		29,468		—		—		—		—		29,468
Total assets	$	3,328,794	$	287,249	$	10,733,598	$	—	$	14,349,641	$	12,009,401	$	3,085,425	$	818,638	$	143,259	$	30,406,364
Debt	$	2,612,817	$	6,669	$	5,980,900	$	—	$	8,600,386	$	10,877,414	$	2,241,607	$	681,109	$	541,758	$	22,942,274
Other liabilities	165,022		63,657		1,661,193		—		1,889,872		9,633		45,696		5,425		84,833		2,035,459
Total liabilities	2,777,839		70,326		7,642,093		—		10,490,258		10,887,047		2,287,303		686,534		626,591		24,977,733
Total equity	550,955		216,923		3,091,505		—		3,859,383		1,122,354		798,122		132,104		(483,332)		5,428,631
Noncontrolling interests in equity of consolidated subsidiaries	18,365		—		42,946		—		61,311		—		—		38,126		—		99,437
Total New Residential stockholders’ equity	$	532,590	$	216,923	$	3,048,559	$	—	$	3,798,072	$	1,122,354	$	798,122	$	93,978	$	(483,332)	$	5,329,194
Investments in equity method investees	$	—	$	—	$	139,351	$	—	$	139,351	$	—	$	—	$	—	$	—	$	139,351


	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 September 30, 2019
Interest income	$	10,880	$	8,847	$	129,350	$	—	$	149,077	$	184,933	$	73,786	$	40,331	$	—	$	448,127
Servicing revenue, net	(548)		54,646		18,588		(19,636)		53,050		—		—		—		—		53,050
Gain on originated mortgage loans, held-for-sale, net	104,126		348		15,554		(14,892)		105,136		—		21,611		—		—		126,747
Total revenues	114,458		63,841		163,492		(34,528)		307,263		184,933		95,397		40,331		—		627,924
Interest expense	10,359		264		59,056		—		69,679		123,023		45,707		7,493		—		245,902
G&A and other	67,708		41,850		80,522		(19,636)		170,444		1,839		11,662		3,965		62,655		250,565
Total operating expenses	78,067		42,114		139,578		(19,636)		240,123		124,862		57,369		11,458		62,655		496,467
Other income (loss)	(149)		—		(42,993)		—		(43,142)		116,081		33,541		(2,651)		(1,189)		102,640
Impairment	—		—		—		—		—		5,567		(16,553)		5,863		—		(5,123)
Income (loss) before income taxes(B)	36,242		21,727		(19,079)		(14,892)		23,998		170,585		88,122		20,359		(63,844)		239,220
Income tax expense (benefit)	9,674		5,799		(4,724)		—		10,749		—		(15,546)		(643)		—		(5,440)
Net income (loss)	$	26,568	$	15,928	$	(14,355)	$	(14,892)	$	13,249	$	170,585	$	103,668	$	21,002	$	(63,844)	$	244,660
Noncontrolling interests in income (loss) of consolidated subsidiaries	$	2,457	$	—	$	1,684	$	—	$	4,141	$	—	$	—	$	10,597	$	—	$	14,738
Dividends on Preferred Stock	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	5,338	$	5,338
Net income (loss) attributable to common stockholders	$	24,111	$	15,928	$	(16,039)	$	(14,892)	$	9,108	$	170,585	$	103,668	$	10,405	$	(69,182)	$	224,584


	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
Nine Months Ended September 30, 2019
Interest income	$	25,744	$	23,181	$	379,368	$	—	$	428,293	$	557,895	$	188,278	$	128,575	$	—	$	1,303,041
Servicing revenue, net	(1,215)		146,730		34,400		(46,549)		133,366		—		—		—		—		133,366
Gain on originated mortgage loans, held-for-sale, net	228,881		681		37,169		(34,195)		232,536		—		62,399		—		—		294,935
Total revenues	253,410		170,592		450,937		(80,744)		794,195		557,895		250,677		128,575		—		1,731,342
Interest expense	24,012		737		183,299		—		208,048		330,992		122,180		25,518		—		686,738
G&A and other	169,980		118,329		217,860		(46,549)		459,620		4,124		28,945		18,396		121,730		632,815
Total operating expenses	193,992		119,066		401,159		(46,549)		667,668		335,116		151,125		43,914		121,730		1,319,553
Other income (loss)	808		—		(132,193)		—		(131,385)		31,677		118,244		(10,324)		4,515		12,727
Impairment	—		—		—		—		—		21,942		(16,557)		24,599		—		29,984
Income (loss) before income taxes(B)	60,226		51,526		(82,415)		(34,195)		(4,858)		232,514		234,353		49,738		(117,215)		394,532
Income tax expense (benefit)	16,075		13,753		(21,354)		—		8,474		—		11,048		(542)		—		18,980
Net income (loss)	$	44,151	$	37,773	$	(61,061)	$	(34,195)	$	(13,332)	$	232,514	$	223,305	$	50,280	$	(117,215)	$	375,552
Noncontrolling interests in income (loss) of consolidated subsidiaries	$	4,407	$	—	$	4,466	$	—	$	8,873	$	—	$	—	$	23,106	$	—	$	31,979
Dividends on Preferred Stock	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	5,338	$	5,338
Net income (loss) attributable to common stockholders	$	39,744	$	37,773	$	(65,527)	$	(34,195)	$	(22,205)	$	232,514	$	223,305	$	27,174	$	(122,553)	$	338,235

(A)Elimination of intercompany transactions primarily relate to servicing fees, loan sales, and MSR recaptures.

(B)Beginning in the third quarter of 2020, New Residential revised its methodology of allocating tax expense within the Servicing and Origination segments. Specifically, taxes are now allocated based on intercompany agreements rather than based on a more general pro rata approach, which better reflects the operating performance of each respective segment. The revised methodology has been applied consistently for all periods presented.