Highlights - GAAP loss of $149.5 million or $2.83 per diluted share for the quarter ended September 30, 2008.
New York, Nov. 7 /PRNewswire-FirstCall/ -- Newcastle Investment Corp.
(NYSE: NCT) reported that for the quarter ended September 30, 2008, Adjusted
Funds from Operations ("AFFO")(1) loss was $154.7 million or $2.93 per diluted
share and GAAP loss was $149.5 million or $2.83 per diluted share. This
compares to an AFFO and GAAP loss of $0.74 per diluted share for the quarter
ended September 30, 2007.
The GAAP loss of $149.5 million consists of Operating Income (net of
preferred dividends) of $25.9 million less realized and other losses of $14.5
million and impairments of $160.9 million. Operating Income (net of preferred
dividends) return on average invested equity was 16.1%.
(1) AFFO is equivalent to our previously stated FFO.
Book Value
Our GAAP book value decreased to $(9.33) per share, or $(492.6) million at
September 30, 2008, down from $(1.08) per share, or $(56.8) million at June
30, 2008. The decrease in book value was primarily attributable to a market
value decline in our portfolio.
Our securities portfolio is predominantly financed to maturity with long-
term collateralized debt obligations ("CBOs") that are not callable as a
result of changes in value and are non-recourse to the Company. While the
assets in the CBOs are consolidated on our books for GAAP purposes, our
exposure to losses is limited to our investment in each CBO. Our September
30, 2008 GAAP book value reflects approximately $789.4 million of unrealized
losses in assets in our CBOs that could not be realized by the Company.
At September 30, 2008, our adjusted book value per share was $21.91. Our
GAAP book value would equal our adjusted book value if we elected to mark all
of our financial assets and liabilities to fair value under SFAS 159, "The
Fair Value Option for Financial Assets and Financial Liabilities."
The following table compares Newcastle's book value per share as of
September 30, 2008 and June 30, 2008:
September 30, June 30,
20082008
Adjusted book value (1) $21.91 $20.01
GAAP book value $(9.33) $(1.08)
(1) Represents GAAP book value as if Newcastle had elected to measure all
of its financial assets and liabilities at fair value under SFAS 159.
For a reconciliation and discussion of GAAP net income (loss) attributable
to common stockholders to AFFO, Operating Income (net of preferred dividends),
and GAAP book equity to invested common equity, as well as GAAP book value to
adjusted book value, please refer to the tables following the presentation of
GAAP results.
Dividends
For the quarter ended September 30, 2008, Newcastle's Board of Directors
declared a dividend of $0.25 per common share. We also declared dividends on
our 9.75% Series B, 8.05% Series C and 8.38% Series D Cumulative Redeemable
Preferred Stock in the amounts of $0.609375, $0.503125 and $0.523438 per
share, respectively.
Investment Portfolio
Newcastle's current $6.6 billion investment portfolio consists of
commercial, residential and corporate debt. During the quarter, the portfolio
decreased by $71.6 million primarily as a result of paydowns of $112.1
million, sales of $34.1 million and realized writedowns of $56.1 million,
offset by purchases of $127.2 million.
The following table describes our investment portfolio ($ in millions):
Weighted
NumberAverage
FaceBasisofLife
Amount Amount % of Invest- Credit (years)
$ $ Basis ments (1) (2)
Commercial Assets
CMBS $2,268 $2,153 36.1% 259 BBB- 5.3
Mezzanine Loans 759 755 12.7% 23 67% 3.3
B-Notes 388 3666.1% 14 58% 3.0
Whole Loans87 861.4% 4 63% 2.5
ICH Loans 5 50.1% 3 --3.3
Total Commercial
Assets 3,507 3,365 56.4% 4.5
Residential Assets
MH and Residential Loans 572 5489.2% 14,478 696 5.7
Subprime Securities 564 2574.3% 121 BB- 4.6
Subprime Retained
Securities80 90.2% 7 CCC+ 2.4
Subprime Residual
Interests 3 30.1% 2 647 0.6
Real Estate ABS 101 951.6% 26 BBB 4.6
1,320 912 15.4% 4.9
FNMA/FHLMC Securities 466 4677.8% 17 AAA 3.8
Total Residential
Assets 1,786 1,379 23.2% 4.6
Corporate Assets
REIT Debt 653 662 11.1% 65 BBB- 4.9
Corporate Bank Loans 606 5549.3% 16 B-3.0
Total Corporate Assets 1,259 1,216 20.4% 4.0
Total/Weighted Average (3) $6,552 $5,960 100.0% 4.5
(1) Credit statistics represent minimum rating for rated assets, LTV for
non-rated commercial assets, FICO score for non-rated residential
assets and implied AAA for FNMA/FHLMC securities.
(2) Mezzanine loans, B-Notes and whole loans are based on the fully
extended maturity date.
(3) Excludes real estate held for sale and loans subject to call option
with a face amount of $14 million and $406 million, respectively.
The following table compares certain supplemental data relating to our
investment portfolio ($ in millions):
September 30,June 30,
2008 2008
Face Amount ($) 6,552 6,624
Weighted average asset yield 7.03% 6.62%
Weighted average liability cost 5.05% 4.47%
Weighted average net spread 1.98% 2.15%
Excluding the FNMA/FHLMC securities, our weighted average net spread was
2.06% as of September 30, 2008 and 2.23% as of June 30, 2008.
Commercial Assets
We own $3.5 billion of commercial assets, which includes CMBS, mezzanine
loans, B-Notes and whole loans.
-- During the quarter, we purchased $39.3 million, sold $14.5 million, had
paydowns of $47.0 million and realized writedowns of $31.1 million for a net
decrease of $53.3 million. The asset paydowns primarily consisted of $24.0
million of mezzanine loans, $14.8 million of CMBS and $5.9 million of ICH
loans.
-- We had no CMBS upgraded and five securities or $44.1 million downgraded
(from an average rating of BBB- to BB+).
CMBS portfolio ($ in thousands):
Delin-
Face Basis quency Principal Average
Minimum Amount Amount % of 60+/FC/ Subord- Life
Vintage Rating Number$$ BasisREOination (yr)
Pre 2004 BBB+78 401,252 397,188 18.4%1.0% 9.5%4.2
2004 BBB-59 435,494 428,785 19.9%0.2% 5.0%5.3
2005 BB+49 576,187 545,233 25.3%0.4% 4.6%6.3
2006 BBB-37 455,308 429,361 20.0%0.1% 4.8%3.8
2007 BBB+36 400,056 352,749 16.4%0.1% 9.2%6.6
TOTAL/WA BBB- 259 2,268,297 2,153,316 100.0%0.3% 6.4%5.3
Mezzanine loans, B-Notes and whole loan portfolio ($ in thousands):
Whole
Mezzanine B-Note Loan Total
Face Amount ($) 759,219 388,168 86,566 1,233,953
Basis Amount ($) 754,571 365,669 86,474 1,206,714
WA First $ Loan To Value (1)55.6%46.0%0.0% 48.7%
WA Last $ Loan To Value (1) 67.0%58.4% 62.9% 64.0%
Delinquency 0.0% 0.0%0.0% 0.0%
(1) Loan To Value is based on the appraised value at the time of
purchase.
In the quarter, we recorded a $4.8 million charge on a B-Note secured by
residential land, reducing our basis to zero. We also recorded a $21.3
million charge on two B-Notes secured by hotel/casino properties. Our
remaining basis in these assets is $10.3 million. Additionally, we recorded a
$20.2 million impairment on three CMBS with a principal face amount of $45.0
million.
Residential Assets
We own $1.8 billion of residential assets, which includes manufactured
housing loans ("MH"), residential loans, subprime securities and FNMA/FHLMC
securities.
-- During the quarter, we purchased $87.9 million, sold $3.6 million, had
paydowns of $54.9 million and realized writedowns of $25.0 million for a net
increase of $4.4 million. The asset paydowns primarily consisted of $18.2
million of subprime securities, $16.7 million of MH loans, $11.6 million of
agency securities and $6.6 million of residential mortgage loans.
-- We had no ABS securities upgraded and 20 securities or $99.8 million
downgraded (from an average rating of BB to CCC+).
Manufactured housing loan portfolios ($ in thousands):
Projec-
Actualted
Weighted Cumula- Cumula-
Average Delin- tivetive
FaceBasis Loan Original quency LossLoss
Amount Amount % ofAge Balance 90+/FC/ to to
Deal $ $ Total (months) $ REODateDate
Portfolio 1 195,807 182,886 39.6%85 327,855 0.9% 3.9%5.6%
Portfolio 2 289,791 278,787 60.4% 115 434,743 0.6% 2.2%3.8%
TOTAL/WA 485,598 461,673 100.0% 103 762,598 0.7% 2.9%4.5%
Subprime securities portfolio excluding our residuals and retained
interests in our own securitizations ($ in thousands):
Security Characteristics:
Face Basis
Minimum Amount % of Amount % of PrincipalExcess
Vintage Rating Number $ Total$ Total Subordination Spread
2003 A- 1529,792 5.3% 25,177 9.8% 19.8% 2.2%
2004 BBB30 129,614 23.0% 94,794 36.9% 13.2% 2.5%
2005 B 43 189,960 33.6% 78,802 30.6% 12.9% 3.3%
2006 B 27 181,032 32.1% 41,552 16.2% 9.2% 3.0%
2007 A+ 633,656 6.0% 16,760 6.5% 21.0% 3.1%
TOTAL/WA BB- 121 564,054 100.0% 257,085 100.0% 12.7% 3.0%
Collateral Characteristics:
Average
Loan Age Collateral 3 Month DelinquencyCumulative
Vintage (months) Factor CPR (1)90+/FC/REO Loss to Date
2003 66 0.12 11.3%12.8% 2.0%
2004 53 0.16 14.6%14.8% 2.0%
2005 40 0.31 23.9%26.1% 3.3%
2006 27 0.65 21.3%27.4% 3.5%
2007 21 0.81 13.4%26.0% 1.7%
TOTAL/WA 39 0.41 19.6%23.2% 2.9%
(1) CPR is constant prepayment rate.
In the quarter, we recorded a $43.8 million charge related to our subprime
securities portfolio. The majority of the charge was related to a $27.6
million impairment on 36 of our 2005 vintage securities and a $13.3 million
impairment on 18 of our 2004 vintage securities.
Residuals and retained securities
We own $80.4 million of retained securities with a basis of $9.2 million
and $2.6 million of residual interests in two subprime portfolio
securitizations from 2006 ("Portfolio 1") and 2007 ("Portfolio 2"). The
following table summarizes our subprime portfolio securitizations ($ in
thousands):
Security Characteristics
Face Basis % of
DealAmount $ Amount $Basis
Portfolio 1 41,719 5,31145.2%
Portfolio 2 41,234 6,44654.8%
TOTAL/WA82,95311,757 100.0%
Portfolio Characteristics
Average Original ActualProjected
Loan Securi-Delinquency Cumulative Cumulative
Agetization Current 90+/FC/ Loss Loss
Deal(months) Balance $ Balance $ REO to Dateto Date
Portfolio 1 37 1,502,181756,073 17.9%2.1% 1.4%
Portfolio 2 20 1,087,942951,107 14.7%0.9% 0.3%
TOTAL/WA 28 2,590,123 1,707,180 16.1%1.5% 0.8%
In the quarter, we updated our future loan loss and prepayment
assumptions. Based on current market conditions we lowered our prepayment
assumptions which resulted in higher projected loan defaults and future loan
losses. Under the new assumptions, our basis in the residuals was reduced by
a $9.5 million impairment charge and $1.2 million return of principal. In
addition, we recorded impairments of $42.4 million on the retained securities.
The following summarizes the changes in our basis, loss assumptions and
prepayment assumptions on both portfolios ($ in thousands):
Portfolio Characteristics
Portfolio 1 Portfolio 2
Retained Interest (Basis)
June 30, 2008 $32,652 $18,253
Current 5,147 4,037
Change $(27,505) $(14,216)
Residual (Basis)
June 30, 2008$1,757 $11,517
Current 164 2,409
Change$(1,593) $(9,108)
Cumulative Loss Assumptions
June 30, 2008 11.2% 16.3%
Revised 17.5% 30.7%
Change +6.3%+14.4%
Lifetime Constant Voluntary
Prepayment Rate Assumptions
June 30, 2008 16.9% 13.3%
Revised 13.8% 9.2%
Change -3.1% -4.1%
Corporate Assets
We own $1.3 billion of corporate assets, including REIT debt and corporate
bank loans.
-- During the quarter, we made no purchases, sold $16.0 million and had
paydowns of $10.2 million for a net decrease of $26.2 million. All of the
asset paydowns were from bank loans.
-- We had three bank loans or $162.0 million downgraded (from an average
rating of B+ to B-) and seven REIT securities or $73.1 million downgraded
(from BBB to BB+).
REIT debt portfolio ($ in thousands):
Minimum Face Basis % of
Industry Rating Number Amount $ Amount $ Basis
RetailBB+ 16 200,035 202,52930.6%
Diversified BBB- 14 151,463 152,04123.0%
OfficeBBB 14 132,919 135,73920.5%
Multifamily BBB+ 844,50845,683 6.9%
Hotel BBB- 442,72043,403 6.5%
HealthcareBBB- 436,60037,197 5.6%
StorageA-223,40624,102 3.6%
IndustrialBBB320,86521,701 3.3%
TOTAL/WA BBB- 65 652,516 662,395 100.0%
Corporate bank loan portfolio ($ in thousands):
Minimum Face Basis % of
Industry Rating Number Amount $ Amount $ Basis
Real EstateB-5 174,310 168,29630.4%
Resorts BB-1 110,488 100,88818.2%
Media CCC+ 2 112,000 101,81418.4%
Retail B-1 100,00094,51517.1%
RestaurantCCC244,22334,949 6.3%
Transportation C 127,00026,137 4.7%
GamingCCC- 329,55719,067 3.4%
Theatres B 1 8,541 8,541 1.5%
TOTAL/WA B- 16 606,119 554,207 100.0%
In the quarter, we recorded a $13.8 million charge related to four senior
bank loans.
Financing and Liquidity
In the third quarter, the Company decreased its non-agency recourse debt
by $64 million and increased its agency recourse debt by $53 million. As of
November 5, 2008, our non-agency recourse debt was reduced to $311 million,
our agency recourse debt was reduced to $176 million and our unrestricted cash
was $108 million.
The following table compares the face amount of our financings as of
September 30, 2008 compared to June 30, 2008 ($ in millions):
September 30, June 30,
2008 2008
Recourse Financings
Real Estate Securities and
Loans (1) $307 $332
Manufacturing Housing Loans 5392
FNMA/FHLMC Securities451 398
Total Recourse Financings811 822
Non-Recourse Financings
CBOs and Other 4,719 4,737
Total Financings $5,530$5,559
Recourse Financings as % of
Total Financings 14.7% 14.8%
(1) Recourse financings on our real estate securities and loans include
off-balance sheet debt (in the form of total return swaps) of $59
million as of September 30, 2008 and $72 million as of June 30, 2008.
Conference Call
Newcastle's management will conduct a live conference call today, November
7, 2008, at 11:00 A.M. eastern time to review the financial results for the
quarter ended September 30, 2008. All interested parties are welcome to
participate on the live call. You can access the conference call by dialing
(888) 243-2046 (from within the U.S.) or (706) 679-1533 (from outside of the
U.S.) ten minutes prior to the scheduled start of the call; please reference
"Newcastle Third Quarter Earnings Call."
A simultaneous webcast of the conference call will be available to the
public on a listen-only basis at www.newcastleinv.com. Please allow extra time
prior to the call to visit the site and download the necessary software
required to listen to the internet broadcast.
A telephonic replay of the conference call will also be available from
2:00 P.M. eastern time on November 7, 2008 until 11:59 P.M. eastern time on
Friday, November 14, 2008 by dialing (800) 642-1687 (from within the U.S.) or
(706) 645-9291 (from outside of the U.S.); please reference access code
"70221244."
About Newcastle
Newcastle Investment Corp. owns and manages a $6.6 billion portfolio of
highly diversified, credit sensitive real estate debt that is primarily
financed with match funded debt. Our business strategy is to "lock in" and
optimize the difference between the yield on our assets and the cost of our
liabilities. Newcastle is organized and conducts its operations to qualify as
a real estate investment trust (REIT) for federal income tax purposes.
Newcastle is managed by an affiliate of Fortress Investment Group LLC, a
global alternative asset manager with approximately $35.1 billion in assets
under management as of June 30, 2008. For more information regarding
Newcastle Investment Corp. or to be added to our e-mail distribution list,
please visit www.newcastleinv.com.
Safe Harbor
Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements relating to our liquidity, our ability to
acquire assets with attractive returns and the delinquent and loss rates on
our subprime portfolios. These statements are based on management's current
expectations and beliefs and are subject to a number of trends and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements, many of which are beyond our
control. Newcastle can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ materially from
Newcastle's expectations include, but are not limited to, the risk that the
ongoing credit and liquidity crisis continues to cause downgrades of a
significant number of our securities and recording of reductions in
shareholders' equity; the risk that we can find additional suitably priced
investments; the risk that investments made or committed to be made cannot be
financed on the basis and for the term at which we expect; the relationship
between yields on assets which are paid off and yields on assets in which such
monies can be reinvested; and the relative spreads between the yield on the
assets we invest in and the cost and availability of debt and equity
financing. Accordingly, you should not place undue reliance on any forward-
looking statements contained in this press release. For a discussion of some
of the risks and important factors that could affect such forward-looking
statements, see the sections entitled "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operation" in
the Company's Annual Report on Form 10-K and Quarterly Report on Form 10-Q,
which available on the Company's website (www.newcastleinv.com). In addition,
new risks and uncertainties emerge from time to time, and it is not possible
for the Company to predict or assess the impact of every factor that may cause
its actual results to differ from those contained in any forward-looking
statements. Such forward-looking statements speak only as of the date of this
press release. Newcastle expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with regard thereto
or change in events, conditions or circumstances on which any statement is
based.
Newcastle Investment Corp.
Consolidated Statements of Operations
(dollars in thousands, except share data)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30,Ended September 30,
2008 2007 2008 2007
Revenues
Interest income $ 113,549 $169,766 $361,461 $523,846
113,549169,766361,461523,846
Expenses
Interest expense 73,651117,415236,739368,064
Loan and security
servicing expense 1,718 2,091 5,236 7,772
Provision for credit
losses 2,077 2,820 6,450 7,945
General and administrative
expense2,135 1,297 5,619 4,025
Management fee to
affiliate 4,597 4,597 13,791 13,048
Incentive compensation to
affiliate - - - 6,209
Depreciation and
amortization 73 74218218
84,251128,294268,053407,281
Operating Income 29,298 41,472 93,408116,565
Other Income (Loss)
Gain (Loss) on sale of
investments, net (2,569) 4,825 3,920 14,014
Other income (loss) (17,912)(7,033) (35,793) (569)
Other than temporary
impairment (121,047) (67,860) (269,216) (73,813)
Loan impairment (39,831) -(76,916) -
Provision for losses,
loans held for sale- - - (5,754)
Gain (Loss) on
extinguishment of debt 5,315( 7,752) 13,848 (15,032)
Equity in earnings of
unconsolidated
subsidiaries 419488 8,189 2,154
(175,625) (77,332) (355,968) (79,000)
Income (loss) from
continuing operations (146,327) (35,860) (262,560)37,565
Income (loss) from
discontinued operations 227(37)(8,724) (158)
Net Income (Loss) (146,100) (35,897) (271,284)37,407
Preferred dividends (3,375)(3,375) (10,126)(9,265)
Income Available For Common
Stockholders $(149,475) $(39,272) $(281,410) $28,142
Net Income Per Share of
Common Stock
Basic $(2.83)$(0.74) $ (5.33) $0.55
Diluted$(2.83)$(0.74) $ (5.33) $0.55
Income from continuing
operations per share of
common stock, after
preferred dividends
Basic $(2.84)$(0.74)$(5.17) $0.55
Diluted$(2.84)$(0.74)$(5.17) $0.55
Income from discontinued
operations per share of
common stock
Basic $ 0.01 $- $(0.16) $ -
Diluted$ 0.01 $- $(0.16) $ -
Weighted Average Number of
Shares of Common Stock
Outstanding
Basic 52,788,766 52,779,179 52,784,048 50,894,424
Diluted52,788,766 52,779,179 52,784,048 51,045,418
Dividends Declared per
Share of Common Stock $0.25 $0.72 $0.75 $2.13
Newcastle Investment Corp.
Consolidated Balance Sheets
(dollars in thousands, except share data)
September 30,
2008 December 31,
(unaudited) 2007
Assets
Real estate securities, available for
sale $2,784,744 $4,835,884
Real estate related loans, net 1,686,7071,856,978
Residential mortgage loans, net 560,111 634,605
Subprime mortgage loans subject to call
option 396,943 393,899
Investments in unconsolidated
subsidiaries442 24,477
Operating real estate, held for sale 13,150 34,399
Cash and cash equivalents166,623 55,916
Restricted cash 127,686 133,126
Derivative assets2454,114
Receivables and other assets 48,575 64,372
$5,785,226 $8,037,770
Liabilities and Stockholders' Equity
Liabilities
CBO bonds payable 4,362,9584,716,535
Other bonds payable 396,134 546,798
Repurchase agreements699,0251,634,362
Financing of subprime mortgage loans
subject to call option 396,943 393,899
Junior subordinated notes payable
(security for trust preferred) 100,100 100,100
Derivative liabilities 141,411 133,510
Dividends payable 15,447 40,251
Due to affiliates 1,5327,741
Accrued expenses and other liabilities11,777 16,949
6,125,3277,590,145
Stockholders' Equity
Preferred stock, $0.01 par value,
100,000,000 shares authorized, 2,500,000
shares of 9.75% Series B Cumulative
Redeemable Preferred Stock
1,600,000 shares of 8.05% Series C
Cumulative Redeemable Preferred Stock,
and 2,000,000 shares of 8.375% Series D
Cumulative Redeemable Preferred Stock
liquidation preference $25.00 per share,
issued and outstanding (Series D issued
in 2007)152,500 152,500
Common stock, $0.01 par value,
500,000,000 shares authorized, 52,789,050
and 52,779,179 shares issued and
outstanding at September 30, 2008 and
December 31, 2007, respectively 528 528
Additional paid-in capital 1,033,4161,033,326
Dividends in excess of earnings (557,210)(236,213)
Accumulated other comprehensive income (969,335)(502,516)
(340,101) 447,625
$5,785,226 $8,037,770
Newcastle Investment Corp.
Reconciliation of GAAP Net Income (Loss) to AFFO
(dollars in thousands)
(Unaudited)
Three Months Ended
September 30, September 30,
2008 2007
Net income (loss) attributable to
common stockholders $(149,475) $(39,272)
Operating real estate depreciation (5,223) 285
Adjusted Funds from operations ("AFFO") $(154,698) $(38,987)
We believe AFFO is one appropriate measure of the operating performance of
real estate companies because it provides investors with information regarding
our ability to service debt and make capital expenditures. We also believe
that AFFO is an appropriate supplemental disclosure of operating performance
for a REIT. Furthermore, AFFO is used to compute our incentive compensation to
our manager. AFFO, for our purposes, represents net income available for
common stockholders (computed in accordance with GAAP), excluding
extraordinary items, plus real estate depreciation, and after adjustments for
unconsolidated subsidiaries, if any. We consider gains and losses on
resolution of our investments to be a normal part of our recurring operations
and therefore do not exclude such gains and losses when arriving at AFFO.
Adjustments for unconsolidated subsidiaries, if any, are calculated to reflect
AFFO on the same basis. AFFO does not represent cash generated from operating
activities in accordance with GAAP and therefore should not be considered an
alternative to net income as an indicator of our operating performance or as
an alternative to cash flow as a measure of liquidity and is not necessarily
indicative of cash available to fund cash needs. Our calculation of AFFO may
be different from the calculation used by other companies and, therefore,
comparability may be limited.
As a result of the sale or expected sale of all of our operating real
estate, and the resultant discontinuation of depreciation, our income (loss)
applicable to common stockholders is now equal to our AFFO.
Newcastle Investment Corp.
Reconciliation of Operating Income (Net of Preferred Dividends)
(dollars in thousands)
(Unaudited)
Three Months Ended
September 30,September 30,
2008 2007
Operating Income $29,298 $41,472
Preferred dividends (3,375) (3,375)
Operating Income (Net of Preferred
Dividends) $25,923 $38,097
Newcastle Investment Corp.
Reconciliation of GAAP Book Equity to Invested Common Equity
(dollars in thousands)
(Unaudited)
September 30,
2008
Book equity $(340,101)
Preferred stock (152,500)
Accumulated depreciation on
operating real estate 1,003
Accumulated other comprehensive loss 969,335
Invested common equity $477,737
Newcastle Investment Corp.
Reconciliation of GAAP Book Value to Adjusted Book Value
(dollars in thousands, except per share)
(Unaudited)
Amount Per Share
GAAP Book Value $(492,601)$(9.33)
Adjustments to Fair Value:
Commercial Real Estate Loans(343,694) (6.51)
CDO Liabilities1,988,502 37.67
Other Loan Investments and Debt
Obligations 4,505 0.08
Total Adjustments1,649,313 31.24
Adjusted Book Value $1,156,712 $21.91
SOURCE Newcastle Investment Corp.
