RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Accordingly, the tables below present the effect of these adjustments, including the reclassifications, on the affected line items in the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows as reported in the Company’s Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2024.


Consolidated Balance Sheet:
	March 31, 2024
	As Reported (Unaudited)		Error Adjustments		*	Subtotal		Reclassifications (c)*		As Restated (Unaudited)
Assets
Mortgage servicing rights and mortgage servicing rights financing receivables, at fair value	$	8,706,723	$	—		$	8,706,723	$	—	$	8,706,723
Real estate and other securities (includes $14,832,401 at fair value)	15,314,199		(456,913)		(a)	14,857,286		—		14,857,286
Residential mortgage loans, held-for-investment, at fair value	365,398		—			365,398		—		365,398
Residential mortgage loans, held-for-sale (includes $3,691,700 at fair value)(A)	3,766,115		—			3,766,115		—		3,766,115
Consumer loans, held-for-investment, at fair value(A)	1,103,799		—			1,103,799		—		1,103,799
Single-family rental properties	1,007,172		—			1,007,172		—		1,007,172
Mortgage loans receivable, at fair value	2,384,744		—			2,384,744		(341,831)		2,042,913
Residential mortgage loans subject to repurchase	1,845,889		—			1,845,889		—		1,845,889
Cash and cash equivalents(A)	1,136,437		—			1,136,437		—		1,136,437
Restricted cash(A)	394,546		10,856		(b)	405,402		(22,463)		382,939
Servicer advances receivable	2,586,409		—			2,586,409		—		2,586,409
Reverse repurchase agreement	—		3,040,756		(b)	3,040,756		—		3,040,756
Other assets (includes $1,124,961 at fair value)(A)	3,509,497		(53,737)		(b)	3,455,760		(344,074)		3,111,686
Assets of consolidated CFEs(A):
Investments, at fair value and other assets	—		3,273,691		(a)	3,273,691		708,368		3,982,059
Total Assets	$	42,120,928	$	5,814,653		$	47,935,581	$	—	$	47,935,581

Liabilities and Equity
Liabilities
Secured financing agreements(A)	$	18,271,046	$	—		$	18,271,046	$	—	$	18,271,046
Secured notes and bonds payable (includes $221,922 at fair value)(A)	10,045,375		—			10,045,375		(324,062)		9,721,313
Residential mortgage loan repurchase liability	1,845,889		—			1,845,889		—		1,845,889
Unsecured notes, net of issuance costs	1,205,411		—			1,205,411		—		1,205,411
Treasury securities payable	—		2,992,477		(b)	2,992,477		—		2,992,477
Payable for investments purchased	1,271,542		—			1,271,542		—		1,271,542
Dividends payable	135,695		—			135,695		—		135,695
Accrued expenses and other liabilities (includes $33,586 at fair value)(A)	2,102,598		5,488		(b)	2,108,086		(223,559)		1,884,527
Liabilities of consolidated CFEs(A):										—
Notes payable, at fair value and other liabilities	—		2,816,688		(a)	2,816,688		547,621		3,364,309
Total Liabilities	34,877,556		5,814,653			40,692,209		—		40,692,209



Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 51,964,122 issued and outstanding, $1,299,104 aggregate liquidation preference	1,257,254		—			1,257,254		—		1,257,254
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 483,477,713 issued and outstanding	4,836		—			4,836		—		4,836
Additional paid-in capital	6,075,080		—			6,075,080		—		6,075,080
Retained earnings (accumulated deficit)	(232,119)		—			(232,119)		—		(232,119)
Accumulated other comprehensive income	44,501		—			44,501		—		44,501
Total Rithm Capital stockholders’ equity	7,149,552		—			7,149,552		—		7,149,552
Noncontrolling interests in equity of consolidated subsidiaries	93,820		—			93,820		—		93,820
Total Equity	7,243,372		—			7,243,372		—		7,243,372
Total Liabilities and Equity	$	42,120,928	$	5,814,653		$	47,935,581	$	—	$	47,935,581

(A)The Company's Consolidated Balance Sheets include assets and liabilities of consolidated VIEs and certain other consolidated VIEs classified as CFEs that are presented separately and measured under the CFE election. VIE assets can only be used to settle obligations and liabilities of the VIEs. VIE creditors do not have recourse to Rithm Capital Corp. As of March 31, 2024, total assets of such consolidated VIEs were $5.8 billion, and total liabilities of such consolidated VIEs were $4.9 billion. See Note 21 for further details.

* See the beginning of this Note 3, for explanations of the adjustments and reclassifications by type referenced in the above table as (a), (b), and (c).


Consolidated Statement of Operations:
	Three Months Ended March 31, 2024
	As Reported (Unaudited)		Error Adjustments		*	Subtotal		Reclassifications (c)*		As Restated (Unaudited)
Revenues
Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable and Corporate
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	470,203	$	(312)	(a)	$	469,891	$	—	$	469,891
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(116,839))	84,175		—			84,175		—		84,175
Servicing revenue, net	554,378		(312)			554,066		—		554,066
Interest income	448,179		(9,348)		(a)	438,831		(8,945)		429,886
Gain on originated residential mortgage loans, held-for-sale, net	149,545		(7,087)		(a)	142,458		—		142,458
Other revenues	58,348		—			58,348		—		58,348
	1,210,450		(16,747)			1,193,703		(8,945)		1,184,758
Asset Management
Asset management revenues	75,860		—			75,860		—		75,860
	1,286,310		(16,747)			1,269,563		(8,945)		1,260,618

Expenses
Interest expense and warehouse line fees	414,365		—			414,365		(4,538)		409,827
General and administrative	195,118		2,076		(a)	197,194		—		197,194
Compensation and benefits	235,778		—			235,778		—		235,778
	845,261		2,076			847,337		(4,538)		842,799

Other Income (Loss)
Realized and unrealized gains (losses), net	(68,134)		18,881		(a)	(49,253)		4,407		(44,846)
Other income (loss), net	7,984		(58)		(a)	7,926		—		7,926
	(60,150)		18,823			(41,327)		4,407		(36,920)
Income (loss) before income taxes	380,899		—			380,899		—		380,899
Income tax expense (benefit)	93,412		—			93,412		—		93,412
Net Income (loss)	$	287,487	$	—		$	287,487	$	—	$	287,487
Noncontrolling interests in income (loss) of consolidated subsidiaries	3,452		—			3,452		—		3,452
Dividends on preferred stock	22,395		—			22,395		—		22,395
Net income (loss) attributable to common stockholders	$	261,640	$	—		$	261,640	$	—	$	261,640

Net Income (loss) per share of common stock
Basic	$	0.54	$	—		$	0.54	$	—	$	0.54
Diluted	$	0.54	$	—		$	0.54	$	—	$	0.54
Weighted average number of shares of common stock outstanding
Basic	483,336,777		—			483,336,777		—		483,336,777
Diluted	485,931,501		—			485,931,501		—		485,931,501

Dividends declared per share of common stock	$	0.25	$	—		$	0.25	$	—	$	0.25

* See the beginning of this Note 3, for explanations of the adjustments and reclassifications by type referenced in the above table as (a), (b), and (c).


Consolidated Statement of Cash Flows:
	Three Months Ended March 31, 2024
	As Reported (Unaudited)		Error Adjustments		*	Subtotal		Reclassifications (c)*		As Restated (Unaudited)
Net income (loss)	$	287,487	$	—		$	287,487	$	—	$	287,487
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Change in fair value of investments, net	341,744		(525)		(a)	341,219		—		341,219
Change in fair value of equity investments	(6,012)		—			(6,012)		—		(6,012)
Change in fair value of secured notes and bonds payable	4,605		—			4,605		—		4,605
(Gain) loss on settlement of investments, net	(274,709)		—			(274,709)		—		(274,709)
(Gain) loss on sale of originated residential mortgage loans, held-for-sale, net	(149,545)		7,088		(a)	(142,457)		—		(142,457)
(Gain) loss on transfer of loans to real estate owned ("REO")	(2,166)		—			(2,166)		—		(2,166)
Accretion and other amortization	(21,091)		(133)		(a)	(21,224)		—		(21,224)
Provision (reversal) for credit losses on securities, loans and REO	462		—			462		—		462
Non-cash portions of servicing revenue, net	(76,376)		—			(76,376)		—		(76,376)
Deferred tax provision	90,628		—			90,628		—		90,628
Mortgage loans originated and purchased for sale, net of fees	(11,439,065)		—			(11,439,065)		—		(11,439,065)
Sales proceeds and loan repayment proceeds for residential mortgage loans, held-for-sale	10,114,343		(257,597)		(a)	9,856,746		—		9,856,746
Residential mortgage loan repayment proceeds of consolidated CFEs	—		80,822		(a)	80,822		—		80,822
Interest received from servicer advance investments, loans and other	13,488		—			13,488		—		13,488
Purchase of investments of consolidated CFEs	—		—			—		(9,811)		(9,811)
Proceeds from sale and repayments of investments of consolidated CFEs	—		—			—		2,090		2,090
Changes in:
Servicer advances receivable, net	165,425		—			165,425		—		165,425
Other assets	29,916		—			29,916		7,721		37,637
Accrued expenses and other liabilities	(223,335)		—			(223,335)		—		(223,335)
Net cash provided by (used in) operating activities	(1,144,201)		(170,345)			(1,314,546)		—		(1,314,546)
Cash Flows From Investing Activities
Purchase of US Treasuries	(4,733,368)		—			(4,733,368)		—		(4,733,368)
Purchase of servicer advance investments	(212,656)		—			(212,656)		—		(212,656)
Purchase of RMBS	(16,928)		15,037		(a)	(1,891)				(1,891)
US Treasury short sales	1,425,370		—			1,425,370		—		1,425,370
Reverse repurchase agreements entered	(1,256,872)		—			(1,256,872)		—		(1,256,872)

Purchase of Single-family rental (“SFR”) properties, MSRs and other assets	(63,877)		—			(63,877)		—		(63,877)
Draws on revolving consumer loans	(4,113)		—			(4,113)		—		(4,113)
Origination of mortgage loans receivable	(649,698)		—			(649,698)		—		(649,698)
Net settlement of derivatives	371,827		—			371,827		—		371,827
Return of investments in Excess MSRs	10,423		—			10,423		—		10,423
Principal repayments from servicer advance investments	224,039		—			224,039		—		224,039
Principal repayments from RMBS	177,333		(12,009)		(a)	165,324		—		165,324
Principal repayments from residential mortgage loans	12,187		—			12,187		—		12,187
Principal repayments from consumer loans	153,479		—			153,479		—		153,479
Principal repayments from mortgage loans receivable	505,091		—			505,091		(81,822)		423,269


	Three Months Ended March 31, 2024
	As Reported (Unaudited)	Error Adjustments	*	Subtotal	Reclassifications (c)*	As Restated (Unaudited)
Mortgage loans receivable repayment proceeds of consolidated entities	—	—		—	81,822	81,822
Proceeds from sale of MSRs and MSR financing receivables	(671)	—		(671)	—	(671)

Proceeds from sale of REO	5,216	—		5,216	—	5,216
Net cash provided by (used in) investing activities	(4,053,218)	3,028		(4,050,190)	—	(4,050,190)





Cash Flows From Financing Activities
Repayments of secured financing agreements	(18,055,590)		—			(18,055,590)		—		(18,055,590)
Repayments of warehouse credit facilities	(10,778,294)		—			(10,778,294)		—		(10,778,294)
Repayment of unsecured senior notes	(275,000)		—			(275,000)		—		(275,000)
Net settlement of margin deposits under repurchase agreements and derivatives	(346,569)		—			(346,569)		—		(346,569)
Repayments of secured notes and bonds payable	(1,405,197)		—			(1,405,197)		—		(1,405,197)
Deferred financing fees	(8,298)		—			(8,298)		—		(8,298)
Dividends paid on common and preferred stock	(143,298)		—			(143,298)		—		(143,298)
Borrowings under secured financing agreements	22,495,882		—			22,495,882		—		22,495,882
Borrowings under warehouse credit facilities	12,047,306		—			12,047,306		—		12,047,306
Borrowings under notes receivable financing	—		—			—		—		—
Borrowings under secured notes and bonds payable	761,266		—			761,266		—		761,266
Proceeds from issuance of unsecured senior notes	767,103		—			767,103		—		767,103
Noncontrolling interest in equity of consolidated subsidiaries - distributions	(3,728)		—			(3,728)		—		(3,728)
Proceeds from issuance of debt obligations of consolidated CFEs	—		257,597		(a)	257,597		—		257,597
Repayments of debt obligations of consolidated CFEs	—		(87,545)		(a) (b)	(87,545)		—		(87,545)
Net cash provided by (used in) financing activities	5,055,583		170,052			5,225,635		—		5,225,635

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	(141,836)		2,735			(139,101)		—		(139,101)

Cash, Cash Equivalents and Restricted Cash, Beginning of Period	1,672,819		24,276		(a) (b)	1,697,095		—		1,697,095

Cash, Cash Equivalents and Restricted Cash, End of Period	$	1,530,983	$	27,011		$	1,557,994	$	—	$	1,557,994
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	419,701		46,263		(a)	465,964		—		465,964
Cash paid during the period for income taxes	1,259		—			1,259		—		1,259
Supplemental Schedule of Non-Cash Investing and Financing Activities
Dividends declared but not paid on common and preferred stock	143,199		—			143,199		—		143,199
Transfer from residential mortgage loans to REO and other assets	5,917		—			5,917		—		5,917
Real estate securities retained from loan securitizations	34,203		(34,203)		(a)	—		—		—
Residential mortgage loans subject to repurchase	1,845,889		—			1,845,889		—		1,845,889
Purchase of Agency RMBS, settled after quarter-end	1,271,542		—			1,271,542		—		1,271,542

* See the beginning of this Note 3, for explanations of the adjustments and reclassifications by type referenced in the above table as (a), (b), and (c).