SEGMENT REPORTING

9 Months Ended

Sep. 30, 2021

At September 30, 2021, New Residential’s reportable segments include (i) Origination, (ii) Servicing, (iii) MSR Related Investments, (iv) Residential Securities, Properties and Loans, (v) Consumer Loans and (vi) Corporate. The Corporate segment primarily consists of general and administrative expenses, management fees and incentive compensation related to the Management Agreement, corporate cash and related interest income, unsecured senior notes (Note 11) and related interest expense.

During the three months ended September 30, 2021, due to the Caliber acquisition, New Residential reevaluated the composition of its reportable segments based on the significance of certain business activities to its operations and performance evaluation, which drive resource allocation. Based on this reevaluation, MSR assets serviced by Newrez (previously reflected within the MSR Related Segment) and Caliber, representing $385.2 billion UPB as of September 30, 2021, are reflected within Servicing. MSRs owned by third-parties but serviced by the Company’s subsidiaries, representing $75.8 billion as of September 30, 2021, are also reflected within Servicing. MSR assets sub-serviced by third-parties (PHH Mortgage Corporation (“PHH”), LoanCare, LLC (“LoanCare”), Flagstar Bank (“Flagstar”) and Mr. Cooper), representing $164.7 billion UPB as of September 30, 2021, continue to be reflected as part of the MSR Related Investments. Segment information for prior periods have been restated to reflect this change.

The following tables summarize segment financial information, which in total reconciles to the same data for New Residential as a whole:


	Origination and Servicing										Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Elimination(A)		Total Servicing and Origination		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Corporate		Total
Three Months Ended September 30, 2021
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(6,451)	$	257,520	$	147,576	$	—	$	398,645	$	—	$	—	$	—	$	—	$	398,645
Change in fair value of MSRs and MSR financing receivables	—		(118,941)		(76,682)		—		(195,623)		—		—		—		—		(195,623)
Servicing revenue, net	(6,451)		138,579		70,894		—		203,022		—		—		—		—		203,022
Interest income	54,851		(2,729)		11,385		—		63,507		52,489		37,490		22,708		14,439		190,633
Gain on originated mortgage loans, held-for-sale, net	510,740		28,292		(44,235)		47,672		542,469		15,276		9,016		—		—		566,761
Total revenues	559,140		164,142		38,044		47,672		808,998		67,765		46,506		22,708		14,439		960,416
Interest expense	37,775		43,199		7,499		—		88,473		9,365		19,680		2,656		9,754		129,928
G&A and other	344,198		102,602		87,927		—		534,727		1,753		23,901		2,553		30,997		593,931
Total operating expenses	381,973		145,801		95,426		—		623,200		11,118		43,581		5,209		40,751		723,859
Change in fair value of investments	—		—		(7,675)		—		(7,675)		50,927		(26,432)		(5,708)		—		11,112
Gain (loss) on settlement of investments, net	—		(989)		(1,295)		—		(2,284)		(130,066)		34,033		—		—		(98,317)
Other income (loss), net	368		(11)		41,848		—		42,205		—		17,641		415		(995)		59,266
Total other income (loss)	368		(1,000)		32,878		—		32,246		(79,139)		25,242		(5,293)		(995)		(27,939)
Impairment	—		—		—		—		—		(2,370)		8,748		—		—		6,378
Income (loss) before income taxes	177,535		17,341		(24,504)		47,672		218,044		(20,122)		19,419		12,206		(27,307)		202,240
Income tax expense (benefit)	32,322		(3,125)		(8,372)		—		20,825		—		10,735		(1)		—		31,559
Net income (loss)	145,213		20,466		(16,132)		47,672		197,219		(20,122)		8,684		12,207		(27,307)		170,681
Noncontrolling interests in income (loss) of consolidated subsidiaries	3,032		—		(280)		—		2,752		—		—		6,249		—		9,001
Dividends on preferred stock	—		—		—		—		—		—		—		—		15,533		15,533
Net income (loss) attributable to common stockholders	$	142,181	$	20,466	$	(15,852)	$	47,672	$	194,467	$	(20,122)	$	8,684	$	5,958	$	(42,840)	$	146,147


	Origination and Servicing										Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Elimination(A)		Total Servicing and Origination		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Corporate		Total
Nine months ended September 30, 2021
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(19,638)	$	696,143	$	491,926	$	—	$	1,168,431	$	—	$	—	$	—	$	—	$	1,168,431
Change in fair value of MSRs and MSR financing receivables	—		(178,630)		(242,702)		—		(421,332)		—		—		—		—		(421,332)
Servicing revenue, net	(19,638)		517,513		249,224		—		747,099		—		—		—		—		747,099
Interest income	108,965		13,460		35,969		—		158,394		240,299		107,106		73,104		14,439		593,342
Gain on originated mortgage loans, held-for-sale, net	1,163,702		53,103		(109,127)		85,390		1,193,068		25,036		38,990		—		—		1,257,094
Total revenues	1,253,029		584,076		176,066		85,390		2,098,561		265,335		146,096		73,104		14,439		2,597,535
Interest expense	74,798		130,191		17,013		—		222,002		38,715		58,419		8,547		27,689		355,372
G&A and other	734,675		280,165		258,498		—		1,273,338		3,943		62,555		8,501		86,980		1,435,317
Total operating expenses	809,473		410,356		275,511		—		1,495,340		42,658		120,974		17,048		114,669		1,790,689
Change in fair value of investments	—		—		(18,780)		—		(18,780)		(121,642)		154,984		(13,338)		—		1,224
Gain (loss) on settlement of investments, net	—		(31,972)		15,873		—		(16,099)		(234,692)		62,220		—		(348)		(188,919)
Other income (loss), net	565		1,081		56,891		—		58,537		(1,686)		22,221		575		49		79,696
Total other income (loss)	565		(30,891)		53,984		—		23,658		(358,020)		239,425		(12,763)		(299)		(107,999)
Impairment	—		—		—		—		—		(5,020)		(42,617)		—		—		(47,637)
Income (loss) before income taxes	444,121		142,829		(45,461)		85,390		626,879		(130,323)		307,164		43,293		(100,529)		746,484
Income tax expense (benefit)	87,738		14,804		(17,206)		—		85,336		—		43,326		79		—		128,741
Net income (loss)	356,383		128,025		(28,255)		85,390		541,543		(130,323)		263,838		43,214		(100,529)		617,743
Noncontrolling interests in income (loss) of consolidated subsidiaries	9,782		—		(797)		—		8,985		—		—		19,463		—		28,448
Dividends on preferred stock	—		—		—		—		—		—		—		—		44,249		44,249
Net income (loss) attributable to common stockholders	$	346,601	$	128,025	$	(27,458)	$	85,390	$	532,558	$	(130,323)	$	263,838	$	23,751	$	(144,778)	$	545,046


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Servicing and Origination		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Corporate		Total
September 30, 2021
Investments	$	11,714,006	$	4,848,688	$	3,017,963	$	19,580,657	$	9,973,795	$	2,958,434	$	547,795	$	—	$	33,060,681
Cash and cash equivalents	768,301		102,825		321,924		1,193,050		171,532		53		1,778		265		1,366,678
Restricted cash	35,284		87,969		29,525		152,778		15,704		1,457		24,806		—		194,745
Other assets	1,484,399		2,582,560		2,072,971		6,139,930		368,724		131,996		38,987		272,906		6,952,543
Goodwill	11,836		12,540		5,092		29,468		—		—		—		—		29,468
Total assets	$	14,013,826	$	7,634,582	$	5,447,475	$	27,095,883	$	10,529,755	$	3,091,940	$	613,366	$	273,171	$	41,604,115
Debt	$	11,390,069	$	3,201,575	$	3,779,105	$	18,370,749	$	9,663,568	$	2,392,505	$	499,669	$	624,435	$	31,550,926
Other liabilities	583,220		2,389,688		108,326		3,081,234		(6,108)		182,653		746		167,551		3,426,076
Total liabilities	11,973,289		5,591,263		3,887,431		21,451,983		9,657,460		2,575,158		500,415		791,986		34,977,002
Total equity	2,040,537		2,043,319		1,560,044		5,643,900		872,295		516,782		112,951		(518,815)		6,627,113
Noncontrolling interests in equity of consolidated subsidiaries	16,134		—		13,283		29,417		—		—		41,606		—		71,023
Total New Residential stockholders’ equity	$	2,024,403	$	2,043,319	$	1,546,761	$	5,614,483	$	872,295	$	516,782	$	71,345	$	(518,815)	$	6,556,090
Investments in equity method investees	$	—	$	—	$	103,956	$	103,956	$	—	$	—	$	—	$	—	$	103,956


	Origination and Servicing										Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Elimination(A)		Total Servicing and Origination		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Corporate		Total
Three Months Ended September 30, 2020
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(3,767)	$	232,599	$	222,027	$	—	$	450,859	$	—	$	—	$	—	$	—	$	450,859
Change in fair value of MSRs and MSR financing receivables	—		(189,958)		(225,381)		—		(415,339)		—		—		—		—		(415,339)
Servicing revenue, net	(3,767)		42,641		(3,354)		—		35,520		—		—		—		—		35,520
Interest income	17,407		2,392		25,489		—		45,288		61,034		33,913		29,545		—		169,780
Gain on originated mortgage loans, held-for-sale, net	445,578		18,979		(1,332)		25,028		488,253		—		—		—		—		488,253
Total revenues	459,218		64,012		20,803		25,028		569,061		61,034		33,913		29,545		—		693,553
Interest expense	10,977		51,012		8,728		—		70,717		15,652		19,326		5,809		19,024		130,528
G&A and other	136,086		109,147		80,273		—		325,506		930		10,361		3,361		27,706		367,864
Total operating expenses	147,063		160,159		89,001		—		396,223		16,582		29,687		9,170		46,730		498,392
Change in fair value of investments	—		—		2,086		—		2,086		50,752		56,940		1,304		—		111,082
Gain (loss) on settlement of investments, net	—		(3,873)		(7,583)		—		(11,456)		(15,534)		(2,230)		(4,183)		(61,054)		(94,457)
Other income (loss), net	123		1,563		8,340		—		10,026		1,723		(10,011)		(2,361)		4,304		3,681
Total other income (loss)	123		(2,310)		2,843		—		656		36,941		44,699		(5,240)		(56,750)		20,306
Impairment	—		—		—		—		—		(3,849)		14,584		—		—		10,735
Income (loss) before income taxes	312,278		(98,457)		(65,355)		25,028		173,494		85,242		34,341		15,135		(103,480)		204,732
Income tax expense (benefit)	71,304		16,446		5,280		—		93,030		—		7,783		(1)		—		100,812
Net income (loss)	240,974		(114,903)		(70,635)		25,028		80,464		85,242		26,558		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	$	(114,903)	$	(73,247)	$	25,028	$	73,012	$	85,242	$	26,558	$	10,948	$	(117,839)	$	77,921


	Origination and Servicing										Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Elimination(A)		Total Servicing and Origination		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Corporate		Total
Nine Months Ended September 30, 2020
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(6,843)	$	432,960	$	963,925	$	—	$	1,390,042	$	—	$	—	$	—	$	—	$	1,390,042
Change in fair value of MSRs and MSR financing receivables	—		(785,024)		(946,354)		—		(1,731,378)		—		—		—		—		(1,731,378)
Servicing revenue, net	(6,843)		(352,064)		17,571		—		(341,336)		—		—		—		—		(341,336)
Interest income	43,105		16,280		45,815		—		105,200		278,702		141,118		97,204		—		622,224
Gain on originated mortgage loans, held-for-sale, net	885,730		43,026		5,293		26,102		960,151		—		6,662		—		—		966,813
Total revenues	921,992		(292,758)		68,679		26,102		724,015		278,702		147,780		97,204		—		1,247,701
Interest expense	30,071		102,319		76,105		—		208,495		141,340		67,570		18,691		27,690		463,786
G&A and other	338,760		240,175		297,946		—		876,881		8,128		46,395		10,947		83,672		1,026,023
Total operating expenses	368,831		342,494		374,051		—		1,085,376		149,468		113,965		29,638		111,362		1,489,809
Change in fair value of investments	—		—		(14,244)		—		(14,244)		3,682		(108,306)		(4,446)		—		(123,314)
Gain (loss) on settlement of investments, net	—		(3,873)		(12,590)		—		(16,463)		(886,650)		(645)		(4,183)		(61,054)		(968,995)
Other income (loss), net	497		(1,716)		11,534		—		10,315		1,707		(1,945)		(7,378)		(42,465)		(39,766)
Total other income (loss)	497		(5,589)		(15,300)		—		(20,392)		(881,261)		(110,896)		(16,007)		(103,519)		(1,132,075)
Impairment	—		—		—		—		—		15,166		118,504		—		—		133,670
Income (loss) before income taxes	553,658		(640,841)		(320,672)		26,102		(381,753)		(767,193)		(195,585)		51,559		(214,881)		(1,507,853)
Income tax expense (benefit)	138,304		(67,019)		(55,561)		—		15,724		—		(64,501)		130		—		(48,647)
Net income (loss)	415,354		(573,822)		(265,111)		26,102		(397,477)		(767,193)		(131,084)		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	$	(573,822)	$	(265,067)	$	26,102	$	(407,975)	$	(767,193)	$	(131,084)	$	27,809	$	(254,819)	$	(1,533,262)

(A)Elimination of intercompany transactions primarily relate to loan sales.

Servicing Segment Revenues

The table below summarizes the components of servicing segment revenues:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Base servicing
MSR assets	$	174,220	$	172,906	$	477,020	$	258,311
Residential whole loans	11,281		4,729		13,518		10,938
Third party	24,245		23,858		77,051		83,468
	209,746		201,493		567,589		352,717
Other fees
Ancillary and other fees(A)	47,774		31,106		128,554		80,243

Change in fair value due to:
Realization of cash flows	(207,184)		(253,670)		(610,433)		(539,264)
Change in valuation inputs and assumptions and other	88,243		63,712		431,803		(245,760)
Total servicing fees	$	138,579	$	42,641	$	517,513	$	(352,064)

Servicing Data (period end) (in millions)
UPB - MSR assets	$	385,166	$	199,839	$	385,166	$	199,839
UPB - Residential whole loans	14,898		10,233		14,898		10,233
UPB - Third party	75,768		77,131		75,768		77,131

(A)Includes incentive, boarding and other fees.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details