SEGMENT REPORTING

9 Months Ended

Sep. 30, 2022

At September 30, 2022, Rithm Capital’s reportable segments include (i) Origination, (ii) Servicing, (iii) MSR Related Investments, (iv) Residential Securities, Properties and Loans, (v) Consumer Loans, (vi) Mortgage Loans Receivable and (vii) Corporate. The Corporate segment primarily consists of general and administrative expenses, corporate cash and related interest income, unsecured senior notes (Note 18) and related interest expense.

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


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Origination and Servicing		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		Corporate		Total
Three Months Ended September 30, 2022
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	—	$	354,171	$	98,992	$	453,163	$	—	$	—	$	—	$	—	$	—	$	453,163
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(141,616))	—		40,401		(57,579)		(17,178)		—		—		—		—		—		(17,178)
Servicing revenue, net	—		394,572		41,413		435,985		—		—		—		—		—		435,985
Interest income	41,862		55,844		15,401		113,107		76,908		19,186		16,456		42,335		5,387		273,379
Gain on originated residential mortgage loans, held-for-sale, net	214,703		5,980		—		220,683		—		(17,204)		—		—		—		203,479
Total revenues	256,565		456,396		56,814		769,775		76,908		1,982		16,456		42,335		5,387		912,843
Interest expense	31,345		56,650		26,033		114,028		51,822		21,242		1,925		18,888		10,184		218,089
G&A and other	283,798		132,160		43,388		459,346		921		12,220		1,991		15,241		15,889		505,608
Total operating expenses	315,143		188,810		69,421		573,374		52,743		33,462		3,916		34,129		26,073		723,697
Change in fair value of investments, net	—		—		(8,711)		(8,711)		887,898		67,797		(5,845)		27,201		—		968,340
Gain (loss) on settlement of investments, net	—		(549)		(1,454)		(2,003)		(1,018,354)		14,032		—		1,871		—		(1,004,454)
Other income (loss), net	1,368		(74)		923		2,217		(2,799)		11,448		8,701		5,710		(2,035)		23,242
Total other income (loss)	1,368		(623)		(9,242)		(8,497)		(133,255)		93,277		2,856		34,782		(2,035)		(12,872)
Income (loss) before income taxes	(57,210)		266,963		(21,849)		187,904		(109,090)		61,797		15,396		42,988		(22,721)		176,274
Income tax expense (benefit)	(14,243)		51,032		(7,197)		29,592		—		(5,564)		(4)		(1,940)		—		22,084
Net income (loss)	(42,967)		215,931		(14,652)		158,312		(109,090)		67,361		15,400		44,928		(22,721)		154,190
Noncontrolling interests in income (loss) of consolidated subsidiaries	471		—		(139)		332		—		—		6,975		—		—		7,307
Dividends on preferred stock	—		—		—		—		—		—		—		—		22,427		22,427
Net income (loss) attributable to common stockholders	$	(43,438)	$	215,931	$	(14,513)	$	157,980	$	(109,090)	$	67,361	$	8,425	$	44,928	$	(45,148)	$	124,456


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Origination and Servicing(A)		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		Corporate		Total
Nine Months Ended September 30, 2022
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	—	$	1,067,274	$	311,767	$	1,379,041	$	—	$	—	$	—	$	—	$	—	$	1,379,041
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(522,206))	—		882,611		12,167		894,778		—		—		—		—		—		894,778
Servicing revenue, net	—		1,949,885		323,934		2,273,819		—		—		—		—		—		2,273,819
Interest income	143,449		83,954		42,443		269,846		187,841		68,815		53,498		113,360		17,080		710,440
Gain on originated residential mortgage loans, held-for-sale, net	924,582		83,481		—		1,010,568		—		(30,302)		—		—		—		980,266
Total revenues	1,068,031		2,117,320		366,377		3,554,233		187,841		38,513		53,498		113,360		17,080		3,964,525
Interest expense	88,358		131,452		78,186		297,996		81,067		53,442		6,275		38,537		30,434		507,751
G&A and other(B)	1,041,988		377,335		154,799		1,574,122		2,403		47,545		6,405		46,249		478,844		2,155,568
Total operating expenses	1,130,346		508,787		232,985		1,872,118		83,470		100,987		12,680		84,786		509,278		2,663,319
Change in fair value of investments, net	—		(1,812)		(10,213)		(12,025)		520,736		46,448		(26,774)		58,796		—		587,181
Gain (loss) on settlement of investments, net	—		(1,428)		(4,918)		(6,346)		(851,755)		54,146		—		(44,379)		—		(848,334)
Other income (loss), net	5,295		1,014		46,146		52,455		(7,526)		55,235		33,198		13,140		(11,540)		134,962
Total other income (loss)	5,295		(2,226)		31,015		34,084		(338,545)		155,829		6,424		27,557		(11,540)		(126,191)
Income (loss) before income taxes	(57,020)		1,606,307		164,407		1,716,199		(234,174)		93,355		47,242		56,131		(503,738)		1,175,015
Income tax expense (benefit)	(14,086)		363,187		33,766		382,867		—		(4,387)		34		(5,563)		(75,388)		297,563
Net income (loss)	(42,934)		1,243,120		130,641		1,333,332		(234,174)		97,742		47,208		61,694		(428,350)		877,452
Noncontrolling interests in income (loss) of consolidated subsidiaries	2,165		—		130		2,295		—		—		24,803		—		—		27,098
Dividends on preferred stock	—		—		—		—		—		—		—		—		67,315		67,315
Net income (loss) attributable to common stockholders	$	(45,099)	$	1,243,120	$	130,511	$	1,331,037	$	(234,174)	$	97,742	$	22,405	$	61,694	$	(495,665)	$	783,039

(A)Includes elimination of intercompany transactions of $2.5 million primarily related to loan sales.

(B)Includes restructuring charge of $400.0 million in connection with the Internalization. Restructuring charges are reflected within the Corporate segment. See Note 25 for details.


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Origination and Servicing		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		Corporate		Total
September 30, 2022
Investments	$	2,677,372	$	7,356,620	$	2,798,750	$	12,832,742	$	9,437,008	$	2,223,712	$	393,599	$	1,919,913	$	—	$	26,806,974
Cash and cash equivalents	204,562		566,855		248,458		1,019,875		339,909		1,099		2,366		33,602		23,159		1,420,010
Restricted cash	350,501		73,676		56,974		481,151		6,131		4,638		17,611		20,034		—		529,565
Other assets	630,855		2,305,263		2,508,960		5,445,078		298,181		342,009		32,735		141,131		233,653		6,492,787
Goodwill	11,836		12,540		5,092		29,468		—		—		—		55,731		—		85,199
Total assets	$	3,875,126	$	10,314,954	$	5,618,234	$	19,808,314	$	10,081,229	$	2,571,458	$	446,311	$	2,170,411	$	256,812	$	35,334,535
Debt	$	2,874,184	$	4,484,277	$	3,249,426	$	10,607,887	$	8,835,284	$	1,896,255	$	320,001	$	1,589,330	$	604,766	$	23,853,523
Other liabilities	495,306		2,723,063		37,430		3,255,799		522,863		351,944		1,039		23,568		264,173		4,419,386
Total liabilities	3,369,490		7,207,340		3,286,856		13,863,686		9,358,147		2,248,199		321,040		1,612,898		868,939		28,272,909
Total equity	505,636		3,107,614		2,331,378		5,944,628		723,082		323,259		125,271		557,513		(612,127)		7,061,626
Noncontrolling interests in equity of consolidated subsidiaries	13,093		—		9,474		22,567		—		—		48,488		—		—		71,055
Total Rithm Capital stockholders’ equity	$	492,543	$	3,107,614	$	2,321,904	$	5,922,061	$	723,082	$	323,259	$	76,783	$	557,513	$	(612,127)	$	6,990,571
Investments in equity method investees	$	—	$	—	$	106,492	$	106,492	$	—	$	—	$	—	$	—	$	—	$	106,492


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Origination and Servicing(A)		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		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	$	139,824	$	390,893	$	—	$	—	$	—	$	—	$	—	$	390,893
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(287,318))	—		(127,482)		(68,141)		(195,623)		—		—		—		—		—		(195,623)
Servicing revenue, net	(6,451)		130,038		71,683		195,270		—		—		—		—		—		195,270
Interest income	54,851		(2,729)		11,385		63,507		52,489		37,490		22,708		—		14,439		190,633
Gain on originated residential mortgage loans, held-for-sale, net	510,740		28,292		(44,235)		542,469		15,276		9,016		—		—		—		566,761
Total revenues	559,140		155,601		38,833		801,246		67,765		46,506		22,708		—		14,439		952,664
Interest expense	37,775		24,198		26,500		88,473		9,365		19,680		2,656		—		9,754		129,928
G&A and other	344,198		102,602		80,175		526,975		1,753		23,901		2,553		—		30,997		586,179
Total operating expenses	381,973		126,800		106,675		615,448		11,118		43,581		5,209		—		40,751		716,107
Change in fair value of investments, net	—		—		(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		2,370		8,893		415		—		(995)		52,888
Total other income (loss)	368		(1,000)		32,878		32,246		(76,769)		16,494		(5,293)		—		(995)		(34,317)
Income (loss) before income taxes	177,535		27,801		(34,964)		218,044		(20,122)		19,419		12,206		—		(27,307)		202,240
Income tax expense (benefit)	32,322		(2,081)		(9,416)		20,825		—		10,735		(1)		—		—		31,559
Net income (loss)	145,213		29,882		(25,548)		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	$	29,882	$	(25,268)	$	194,467	$	(20,122)	$	8,684	$	5,958	$	—	$	(42,840)	$	146,147

(A)Includes elimination of intercompany transactions of $47.7 million primarily related to loan sales.


	Origination and Servicing						Residential Securities, Properties and Loans
	Origination		Servicing		MSR Related Investments		Total Origination and Servicing(A)		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		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	$	418,848	$	1,095,353	$	—	$	—	$	—	$	—	$	—	$	1,095,353
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(924,766))	—		(204,646)		(216,686)		(421,332)		—		—		—		—		—		(421,332)
Servicing revenue, net	(19,638)		491,497		202,162		674,021		—		—		—		—		—		674,021
Interest income	108,965		13,460		35,969		158,394		240,299		107,106		73,104		—		14,439		593,342
Gain on originated residential mortgage loans, held-for-sale, net	1,163,702		53,103		(109,127)		1,193,068		25,036		38,990		—		—		—		1,257,094
Total revenues	1,253,029		558,060		129,004		2,025,483		265,335		146,096		73,104		—		14,439		2,524,457
Interest expense	74,798		65,941		81,263		222,002		38,715		58,419		8,547		—		27,689		355,372
G&A and other	734,675		280,165		185,420		1,200,260		3,943		62,555		8,501		—		86,980		1,362,239
Total operating expenses	809,473		346,106		266,683		1,422,262		42,658		120,974		17,048		—		114,669		1,717,611
Change in fair value of investments, net	—		—		(18,780)		(18,780)		(121,642)		154,984		(13,338)		—		—		1,224
Gain (loss) on settlement of investments, net	—		(2,619)		(13,481)		(16,100)		(234,692)		62,220		—		—		(347)		(188,919)
Other income (loss), net	565		1,081		56,892		58,538		3,334		64,838		575		—		48		127,333
Total other income (loss)	565		(1,538)		24,631		23,658		(353,000)		282,042		(12,763)		—		(299)		(60,362)
Income (loss) before income taxes	444,121		210,416		(113,048)		626,879		(130,323)		307,164		43,293		—		(100,529)		746,484
Income tax expense (benefit)	87,738		15,558		(17,960)		85,336		—		43,326		79		—		—		128,741
Net income (loss)	356,383		194,858		(95,088)		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	$	194,858	$	(94,291)	$	532,558	$	(130,323)	$	263,838	$	23,751	$	—	$	(144,778)	$	545,046

(A)Includes elimination of intercompany transactions of $85.4 million primarily related 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,
	2022		2021		2022		2021
Base servicing
MSR assets	$	297,433	$	174,220	$	879,219	$	477,020
Residential whole loans	2,593		11,281		9,001		13,518
Third party	22,717		24,245		69,439		77,051
	322,743		209,746		957,659		567,589
Other fees
Ancillary and other fees(A)	31,428		47,774		109,615		128,554

Change in fair value due to:
Realization of cash flows	(90,750)		(207,184)		(341,706)		(629,246)
Change in valuation inputs and assumptions and other	131,151		79,702		1,224,317		424,600
Total servicing fees	$	394,572	$	130,038	$	1,949,885	$	491,497

Servicing data – unpaid principal balance (“UPB”) (period end) (in millions)
UPB – MSR assets	$	401,826	$	385,166	$	401,826	$	385,166
UPB – Residential whole loans	9,930		14,898		9,930		14,898
UPB – Third party	91,820		75,768		91,820		75,768

(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 https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Publisher FASB
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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+ Details