Newcastle Announces Fourth Quarter And Full Year 2013 Results

Newcastle Investment Corp. (NYSE:NCT; “Newcastle”, the “Company”) today reported the following information for the quarter and full year ended December 31, 2013:

FOURTH QUARTER FINANCIAL HIGHLIGHTS :
  • GAAP Income of $29.0 million, or $0.09 per diluted share
  • Core Earnings of $26.8 million, or $0.08 per diluted share
  • GAAP book value of $3.14 per share
  • Average uninvested capital of $150 million throughout the quarter

FULL YEAR 2013 FINANCIAL HIGHLIGHTS :
  • GAAP Income of $145.8 million, or $0.51 per diluted share
  • Core Earnings of $140.9 million, or $0.50 per diluted share
  • Spun off New Residential Investment Corp. (NYSE:NRZ) on May 15, 2013
           

 
Q4 2013 Q3 2013 12M Ended

Q4 2013
Summary Operating Results:
GAAP Income $29.0 million $27.8 million $145.8 million
GAAP Income per Diluted Share $0.09 $0.09 $0.51
 
Non-GAAP Results:
Core Earnings* $26.8 million $23.9 million $140.9 million
Core Earnings per Diluted Share* $0.08 $0.08 $0.50
 
GAAP Book Value: $3.14 $2.74 $3.14

*For a reconciliation of GAAP Income to Core Earnings, please refer to the Reconciliation of Core Earnings below.

Highlights for the quarter ended December 31, 2013 :

Newcastle invested approximately $434 million of capital throughout the quarter and the Company raised a total of $351 million of gross proceeds through the issuance of common stock and the resecuritization of CDO VI.
  • Senior Housing – Invested $331 million of equity to acquire $1.1 billion of senior housing assets.
    • Triple Net Lease Properties – In December, Newcastle invested $321 million of equity to acquire 51 independent living senior housing properties from Holiday Retirement. The total purchase price, including transaction costs, was $1.04 billion. This investment marks Newcastle’s first triple net lease acquisition.
    • Managed Properties – During the fourth quarter, Newcastle invested $10 million of equity to acquire 2 senior housing properties for a total purchase price of $30 million.
  • CDOs & Other
    • CDO VI Resecuritization – In October, Newcastle restructured the $110 million CDO VI Class I-MM into a $99 million senior tranche and an $11 million junior tranche. Newcastle issued the senior tranche to a third party for approximately $88 million of proceeds, retained the $11 million junior tranche on balance sheet and continues to manage the CDO. The issuance resulted in $47 million of unrestricted cash for Newcastle, and the remaining $41 million was paid to CDO VIII and CDO IX bondholders.
    • Media Assets – During the fourth quarter, Newcastle invested $54 million of equity and $122 million of proceeds received from the new GateHouse debt facility to buy $440 million face of GateHouse term loan at 40% of par. On November 26, Newcastle exchanged its interest in the GateHouse term loan for equity of New Media at 40% of par.
    • Golf – On December 30, Newcastle completed the restructuring of an existing debt investment in National Golf Properties. In the transaction, Newcastle acquired the equity of National Golf Properties and its affiliate, American Golf Corporation (together the “Golf Business”), and Newcastle invested $49 million, which consisted of an approximately $47 million senior loan and $2 million of equity. The Golf Business owns, leases or manages a portfolio of 92 golf courses located throughout 15 U.S. states.
  • Capital Raise – In November, Newcastle generated gross proceeds of approximately $304 million through the sale of approximately 58 million shares of common stock.
  • Dividend – In December, Newcastle declared a fourth quarter dividend of $0.10 per common share, or $35 million.

Highlights subsequent to December 31, 2013:
  • Senior Housing – In January, Newcastle invested $9 million of equity to acquire 2 managed senior housing properties for a total purchase price of $26 million. Newcastle is also in-contract to acquire 11 properties for a total purchase price of $273 million, which we would expect to require an equity investment of $92 million. There can be no assurance that we will complete investments under contract, which are subject to closing conditions.
  • CDOs & Other
    • Intrawest Resort Holdings Third Lien Pay Down – In February, Newcastle received $83 million of proceeds from Intrawest Resort Holdings. The proceeds were used to partially pay down a third-lien loan held in CDO VIII & CDO IX. As a result of Newcastle’s direct holdings in CDO VIII, the Company received approximately $22 million of cash from this pay down.
    • Sold 100% of Agency RMBS Portfolio – In January, Newcastle sold $503 million face amount of Agency RMBS at an average price of 105.8%, or $532 million. After paying off the related financing, the Company generated $28 million of net proceeds and a $2 million gain on sale.
    • New Media Investment Group – On February 13, Newcastle completed the spin-off of the Company’s 85% ownership in New Media Investment Group. Holders of Newcastle common stock as of the record date, February 6, 2014, have been electronically issued approximately 0.07219 shares of New Media Investment Group per common share of Newcastle.

Appointment of New Chief Financial Officer, Treasurer & Chief Operating Officer:

On February 27, 2014, Newcastle’s Board of Directors appointed Justine Cheng as Chief Financial Officer, Treasurer and Chief Operating Officer, effective as of March 4, 2014.

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