SEGMENT REPORTING

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

At December 31, 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 19) and related interest expense.

In 2021, Rithm Capital reevaluated the composition and number of its reportable segments based on the significance of certain business activities to its operations and performance evaluation, which drive resource allocation. Based on this reevaluation, the Company revised its presentation and composition of reportable segments. In the beginning of the third quarter of 2021, MSR assets serviced by Newrez (previously reflected within the MSR Related Investments Segment) and Caliber are reflected within Servicing. MSRs owned by third-parties but serviced by the Company’s subsidiaries are also reflected within Servicing. MSR assets sub-serviced by third-parties (PHH, LoanCare, Flagstar, Valon and Mr. Cooper) continue to be reflected as part of the MSR Related Investments. During the fourth quarter of 2021, the Mortgage Loans Receivable segment was added to reflect Genesis and consists of a platform that originates construction, renovation and bridge loans. Segment information for prior periods have been restated to reflect these changes.

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(A)		Real Estate Securities		Properties and Residential Mortgage Loans		Consumer Loans		Mortgage Loans Receivable		Corporate		Total
Year Ended December 31, 2022
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	—	$	1,431,947	$	400,017	$	1,831,964	$	—	$	—	$	—	$	—	$	—	$	1,831,964
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(631,120))	—		731,222		1,528		732,750		—		—		—		—		—		732,750
Servicing revenue, net	—		2,163,169		401,545		2,564,714		—		—		—		—		—		2,564,714
Interest income	173,947		152,687		105,279		431,913		298,544		89,476		68,788		166,479		20,781		1,075,981
Gain on originated residential mortgage loans, held-for-sale, net	1,039,939		87,343		—		1,129,787		—		(43,555)		—		—		—		1,086,232
Total revenues	1,213,886		2,403,199		506,824		4,126,414		298,544		45,921		68,788		166,479		20,781		4,726,927
Interest expense	123,350		201,706		107,849		432,905		166,937		78,706		8,066		64,188		40,199		791,001
G&A and other	1,219,271		503,434		195,415		1,918,120		3,720		60,682		8,277		64,277		497,972		2,553,048
Total operating expenses	1,342,621		705,140		303,264		2,351,025		170,657		139,388		16,343		128,465		538,171		3,344,049
Change in fair value of investments	—		(1,812)		(11,386)		(13,198)		1,055,346		37,102		(36,739)		65,779		—		1,108,290
Gain (loss) on settlement of investments, net	—		(1,378)		(5,883)		(7,261)		(1,382,605)		67,465		—		(37,345)		67		(1,359,679)
Other income (loss), net	6,256		767		42,635		49,658		(9,174)		76,895		26,548		12,243		(24,858)		131,312
Total other income (loss)	6,256		(2,423)		25,366		29,199		(336,433)		181,462		(10,191)		40,677		(24,791)		(120,077)
Income (loss) before income taxes	(122,479)		1,695,636		228,926		1,804,588		(208,546)		87,995		42,254		78,691		(542,181)		1,262,801
Income tax (benefit) expense	(30,397)		357,715		40,678		367,996		—		(5,333)		33		(7,792)		(75,388)		279,516
Net income (loss)	$	(92,082)	$	1,337,921	$	188,248	$	1,436,592	$	(208,546)	$	93,328	$	42,221	$	86,483	$	(466,793)	$	983,285
Noncontrolling interests in income (loss) of consolidated subsidiaries	2,716		—		2,850		5,566		—		—		23,200		—		—		28,766
Dividends on preferred stock	—		—		—		—		—		—		—		—		89,726		89,726
Net income (loss) attributable to common stockholders	$	(94,798)	$	1,337,921	$	185,398	$	1,431,026	$	(208,546)	$	93,328	$	19,021	$	86,483	$	(556,519)	$	864,793

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

	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
December 31, 2022
Investments	$	2,066,798	$	7,304,637	$	2,091,507	$	11,462,942	$	8,289,277	$	2,248,591	$	363,756	$	2,064,028	$	—	$	24,428,594
Cash and cash equivalents	163,452		440,739		276,690		880,881		381,456		361		605		52,441		20,764		1,336,508
Restricted cash	24,316		136,933		69,347		230,596		4,604		4,627		15,930		25,369		—		281,126
Other assets	224,705		2,204,127		3,000,911		5,429,743		248,283		324,119		29,375		170,129		146,260		6,347,909
Goodwill	11,836		12,540		5,092		29,468		—		—		—		55,731		—		85,199
Total assets	$	2,491,107	$	10,098,976	$	5,443,547	$	18,033,630	$	8,923,620	$	2,577,698	$	409,666	$	2,367,698	$	167,024	$	32,479,336
Debt	$	1,909,030	$	4,751,454	$	3,272,945	$	9,933,429	$	7,430,463	$	1,937,395	$	299,498	$	1,733,579	$	567,371	$	21,901,735
Other liabilities	214,148		2,081,536		35,052		2,330,736		776,785		272,484		1,176		25,818		160,534		3,567,533
Total liabilities	2,123,178		6,832,990		3,307,997		12,264,165		8,207,248		2,209,879		300,674		1,759,397		727,905		25,469,268
Total equity	367,929		3,265,986		2,135,550		5,769,465		716,372		367,819		108,992		608,301		(560,881)		7,010,068
Noncontrolling interests in equity of consolidated subsidiaries	12,437		—		12,193		24,630		—		—		42,437		—		—		67,067
Total Rithm Capital stockholders’ equity	$	355,492	$	3,265,986	$	2,123,357	$	5,744,835	$	716,372	$	367,819	$	66,555	$	608,301	$	(560,881)	$	6,943,001
Investments in equity method investees	$	—	$	—	$	72,437	$	72,437	$	—	$	—	$	—	$	—	$	—	$	72,437

	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
Year Ended December 31, 2021
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(4,089)	$	1,025,888	$	537,755	$	1,559,554	$	—	$	—	$	—	$	—	$	—	$	1,559,554
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(1,192,646))	—		(313,655)		(261,698)		(575,353)		—		—		—		—		—		(575,353)
Servicing revenue, net	(4,089)		712,233		276,057		984,201		—		—		—		—		—		984,201
Interest income	188,053		20,629		49,162		257,844		293,989		139,658		93,847		4,219		21,339		810,896
Gain on originated residential mortgage loans, held-for-sale, net	1,704,363		101,764		(138,505)		1,781,204		9,878		35,827		—		—		—		1,826,909
Total revenues	1,888,327		834,626		186,714		3,023,249		303,867		175,485		93,847		4,219		21,339		3,622,006
Interest expense	121,392		97,696		104,838		323,926		47,037		76,273		10,999		1,000		38,073		497,308
G&A and other	1,223,668		395,007		273,748		1,892,423		4,620		90,377		10,856		1,802		119,686		2,119,764
Total operating expenses	1,345,060		492,703		378,586		2,216,349		51,657		166,650		21,855		2,802		157,759		2,617,072
Change in fair value of investments	—		—		(22,336)		(22,336)		(101,566)		155,758		(20,133)		—		—		11,723
Gain (loss) on settlement of investments, net	—		(4,766)		(35,116)		(39,882)		(254,672)		60,164		—		—		(171)		(234,561)
Other income (loss), net	2,346		742		79,355		82,443		3,515		94,765		1,935		—		(946)		181,712
Total other income (loss)	2,346		(4,024)		21,903		20,225		(352,723)		310,687		(18,198)		—		(1,117)		(41,126)
Income (loss) before income taxes	545,613		337,899		(169,969)		827,125		(100,513)		319,522		53,794		1,417		(137,537)		963,808
Income tax (benefit) expense	115,289		17,828		(26,553)		106,564		—		51,579		83		—		—		158,226
Net income (loss)	$	430,324	$	320,071	$	(143,416)	$	720,561	$	(100,513)	$	267,943	$	53,711	$	1,417	$	(137,537)	$	805,582
Noncontrolling interests in income (loss) of consolidated subsidiaries	11,298		—		(1,800)		9,498		—		—		23,858		—		—		33,356
Dividends on preferred stock	—		—		—		—		—		—		—		—		66,744		66,744
Net income (loss) attributable to common stockholders	$	419,026	$	320,071	$	(141,616)	$	711,063	$	(100,513)	$	267,943	$	29,853	$	1,417	$	(204,281)	$	705,482

(A) Includes elimination of intercompany transactions of $113.6 million primarily related to loan sales.

	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
December 31, 2021
Investments	$	8,829,598	$	5,439,613	$	2,776,078	$	17,045,289	$	9,396,539	$	3,099,294	$	507,291	$	1,515,762	$	—	$	31,564,175
Cash and cash equivalents	587,685		250,294		288,900		1,126,879		197,559		22		1,437		5,653		1,025		1,332,575
Restricted cash	32,803		95,785		27,182		155,770		15,342		2,482		21,961		—		312		195,867
Other assets	969,338		2,728,253		1,926,482		5,624,073		389,309		125,647		39,662		106,615		279,068		6,564,374
Goodwill	11,836		12,540		5,092		29,468		—		—		—		55,731		—		85,199
Total assets	$	10,431,260	$	8,526,485	$	5,023,734	$	23,981,479	$	9,998,749	$	3,227,445	$	570,351	$	1,683,761	$	280,405	$	39,742,190
Debt	$	8,251,702	$	4,131,297	$	3,561,342	$	15,944,341	$	9,040,309	$	2,440,693	$	460,314	$	1,252,660	$	642,670	$	29,780,987
Other liabilities	425,582		2,323,315		182,460		2,931,357		6,991		179,260		583		8,541		165,091		3,291,823
Total liabilities	8,677,284		6,454,612		3,743,802		18,875,698		9,047,300		2,619,953		460,897		1,261,201		807,761		33,072,810
Total equity	1,753,976		2,071,873		1,279,932		5,105,781		951,449		607,492		109,454		422,560		(527,356)		6,669,380
Noncontrolling interests in equity of consolidated subsidiaries	15,683		—		10,251		25,934		—		—		39,414		—		—		65,348
Total Rithm Capital stockholders’ equity	$	1,738,293	$	2,071,873	$	1,269,681	$	5,079,847	$	951,449	$	607,492	$	70,040	$	422,560	$	(527,356)	$	6,604,032
Investments in equity method investees	$	—	$	—	$	105,592	$	105,592	$	—	$	—	$	—	$	—	$	—	$	105,592

	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
Year Ended December 31, 2020
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables	$	(11,519)	$	891,191	$	762,600	$	1,642,272	$	—	$	—	$	—	$	—	$	—	$	1,642,272
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(1,583,628))	—		(1,094,339)		(1,074,570)		(2,168,909)		—		—		—		—		—		(2,168,909)
Servicing revenue, net	(11,519)		(203,148)		(311,970)		(526,637)		—		—		—		—		—		(526,637)
Interest income	63,160		16,897		58,517		138,574		355,916		175,963		124,512		—		—		794,965
Gain on originated residential mortgage loans, held-for-sale, net	1,289,584		47,277		23,860		1,400,552		(13,398)		11,938		—		—		—		1,399,092
Total revenues	1,341,225		(138,974)		(229,593)		1,012,489		342,518		187,901		124,512		—		—		1,667,420
Interest expense	45,676		76,884		157,230		279,790		157,371		87,958		22,587		—		36,763		584,469
G&A and other	494,398		368,208		155,882		1,018,488		7,639		62,900		10,301		—		109,893		1,209,221
Total operating expenses	540,074		445,092		313,112		1,298,278		165,010		150,858		32,888		—		146,656		1,793,690
Change in fair value of investments	—		—		(18,958)		(18,958)		(25,012)		(107,604)		2,816		—		—		(148,758)
Gain (loss) on settlement of investments, net	—		(5,486)		(11,227)		(16,713)		(828,525)		(19,655)		(4,183)		—		(61,055)		(930,131)
Other income (loss), net	433		(1,738)		39,690		38,385		(11,071)		(113,428)		(8,386)		—		(41,109)		(135,609)
Total other income (loss)	433		(7,224)		9,505		2,714		(864,608)		(240,687)		(9,753)		—		(102,164)		(1,214,498)
Income (loss) before income taxes	801,584		(591,290)		(533,200)		(283,075)		(687,100)		(203,644)		81,871		—		(248,820)		(1,340,768)
Income tax (benefit) expense	211,359		(58,288)		(71,719)		81,352		—		(65,215)		779		—		—		16,916
Net income (loss)	$	590,225	$	(533,002)	$	(461,481)	$	(364,427)	$	(687,100)	$	(138,429)	$	81,092	$	—	$	(248,820)	$	(1,357,684)
Noncontrolling interests in income (loss) of consolidated subsidiaries	15,625		—		891		16,516		—		—		36,158		—		—		52,674
Dividends on preferred stock	—		—		—		—		—		—		—		—		54,295		54,295
Net income (loss) attributable to common stockholders	$	574,600	$	(533,002)	$	(462,372)	$	(380,943)	$	(687,100)	$	(138,429)	$	44,934	$	—	$	(303,115)	$	(1,464,653)

(A) Includes elimination of intercompany transactions of $39.8 million primarily related to loan sales.

Servicing Segment Revenues

The table below summarizes the components of servicing segment revenues:

	Year Ended December 31,
	2022		2021		2020
Base servicing
MSR assets	$	1,187,130	$	731,924	$	611,669
Residential whole loans	11,354		16,448		16,081
Third party	92,589		103,617		139,480
	1,291,073		851,989		767,230
Other fees
Ancillary and other fees(A)	140,874		173,899		123,961
Change in fair value due to:
Realization of cash flows	(414,017)		(783,349)		(792,680)
Change in valuation inputs and assumptions and other	1,145,239		469,694		(301,659)
Total servicing fees	$	2,163,169	$	712,233	$	(203,148)
Servicing data unpaid principal balance (“UPB”) (period end) (in millions)
UPB – MSR assets	$	401,897	$	389,852	$	220,880
UPB – Residential whole loans	8,630		14,097		9,993
UPB – Third party	93,036		78,814		66,892

(A)Includes incentive, boarding and other fees.