Note 3 — Segment Reporting

The Company conducts its business through the following segments: (i) investments in RMBS; (ii) investments in Servicing Related Assets; and (iii) “All Other,” which consists primarily of general and administrative expenses, including fees paid to the Company’s directors and management fees and reimbursements paid to the Manager pursuant to the Management Agreement (See Note 7). For segment reporting purposes, the Company does not allocate interest income on short-term investments or general and administrative expenses.

Summary financial data with respect to the Company’s segments is given below, together with a reconciliation to the same data for the Company as a whole (dollars in thousands):

	Servicing Related Assets			RMBS			All Other			Total
Income Statement
Three Months Ended June 30, 2019
Interest income	$	214		$	17,002		$	-		$	17,216
Interest expense		445			11,262			-			11,707
Net interest income (expense)		(231	)		5,740			-			5,509
Servicing fee income		18,362			-			-			18,362
Servicing costs		4,103			-			-			4,103
Net servicing income		14,259			-			-			14,259
Other (loss)		(29,136	)		(19,090	)		-			(48,226	)
Other operating expenses		-			-			3,072			3,072
(Benefit from) provision for corporate business taxes		(4,372	)		-			-			(4,372	)
Net income (loss)	$	(10,736	)	$	(13,350	)	$	(3,072	)	$	(27,158	)

Three Months Ended June 30, 2018
Interest income	$	-		$	12,019		$	-		$	12,019
Interest expense		424			6,900			-			7,324
Net interest income (expense)		(424	)		5,119			-			4,695
Servicing fee income		11,535			-			-			11,535
Servicing costs		2,394			-			-			2,394
Net servicing income		9,141			-			-			9,141
Other income (loss)		(365	)		3,855			-			3,490
Other operating expenses		-			-			2,320			2,320
(Benefit from) provision for corporate business taxes		1,161			-			-			1,161
Net income (loss)	$	7,191		$	8,974		$	(2,320	)	$	13,845

Six Months Ended June 30, 2019
Interest income	$	472		$	33,713		$	-		$	34,185
Interest expense		1,633			20,818			-			22,451
Net interest income (expense)		(1,161	)		12,895			-			11,734
Servicing fee income		35,550			-			-			35,550
Servicing costs		7,924			-			-			7,924
Net servicing income		27,626			-			-			27,626
Other (loss)		(54,103	)		(37,046	)		-			(91,149	)
Other operating expenses		-			-			5,844			5,844
(Benefit from) provision for corporate business taxes		(9,337	)		-			-			(9,337	)
Net income (loss)	$	(18,301	)	$	(24,151	)	$	(5,844	)	$	(48,296	)

Six Months Ended June 30, 2018
Interest income	$	-		$	25,434		$	-		$	25,434
Interest expense		637			14,230			-			14,867
Net interest income (expense)		(637	)		11,204			-			10,567
Servicing fee income		20,185			-			-			20,185
Servicing costs		4,106			-			-			4,106
Net servicing income		16,079			-			-			16,079
Other income		12,133			18,613			-			30,746
Other operating expenses		-			-			4,512			4,512
(Benefit from) provision for corporate business taxes		3,796			-			-			3,796
Net income (loss)	$	23,779		$	29,817		$	(4,512	)	$	49,084

Balance Sheet
June 30, 2019
Investments	$	273,699	$	2,152,340	$	-	$	2,426,039
Other assets		41,081		41,568		30,742		113,391
Total assets		314,780		2,193,908		30,742		2,539,430
Debt		152,027		1,942,511		-		2,094,538
Other liabilities		4,555		19,801		14,456		38,812
Total liabilities		156,582		1,962,312		14,456		2,133,350
Book value	$	158,198	$	231,596	$	16,286	$	406,080

December 31, 2018
Investments	$	294,907	$	1,770,110	$	-	$	2,065,017
Other assets		17,817		38,165		32,278		88,260
Total assets		312,724		1,808,275		32,278		2,153,277
Debt		157,543		1,598,592		-		1,756,135
Other liabilities		7,488		10,440		15,283		33,211
Total liabilities		165,031		1,609,032		15,283		1,789,346
Book value	$	147,693	$	199,243	$	16,995	$	363,931