Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | CIFC Corp. | |
Entity Central Index Key | 1,313,918 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 25,323,973 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
ASSETS | |||
Cash and cash equivalents | $ 31,083 | $ 59,290 | |
Restricted cash and cash equivalents | 1,694 | 1,694 | |
Due from brokers | 63 | 1 | |
Investments at fair value | 84,911 | 38,699 | |
Receivables | 11,668 | 2,134 | |
Prepaid and other assets | 3,129 | 4,115 | |
Deferred tax assets, net | 48,179 | 55,475 | |
Equipment and improvements, net | 4,967 | 5,194 | |
Intangible assets, net | 8,641 | 15,074 | |
Goodwill | 76,000 | 76,000 | |
Subtotal | 270,335 | 257,676 | |
Assets | 1,169,870 | 13,148,135 | |
LIABILITIES | |||
Due to brokers | 2,692 | 0 | |
Accrued and other liabilities | 15,841 | 15,584 | |
Contingent liabilities at fair value | 10,861 | 12,668 | |
Long-term debt | 120,000 | 120,000 | |
Subtotal | 149,394 | 148,252 | |
Liabilities | 979,658 | 12,626,233 | |
EQUITY | |||
Common stock, par value $0.001: 500,000,000 shares authorized, 25,515,805 issued and 25,350,788 outstanding as of September 30, 2015 and 25,323,417 issued and 25,192,973 outstanding as of December 31, 2014 | 25 | 25 | |
Treasury stock, at cost: 165,017 shares as of September 30, 2015 and 130,444 shares as of December 31, 2014 | (1,160) | (914) | |
Additional paid-in capital | 992,952 | 988,904 | |
Retained earnings (deficit) | (811,293) | (811,695) | |
TOTAL CIFC CORP. STOCKHOLDERS’ EQUITY | 180,524 | 176,320 | |
TOTAL EQUITY | 190,212 | 521,902 | |
TOTAL LIABILITIES AND EQUITY | 1,169,870 | 13,148,135 | |
Consolidated Entities | |||
ASSETS | |||
Restricted cash and cash equivalents | 230,430 | 935,416 | |
Due from brokers | 30,218 | 120,541 | |
Investments at fair value | 634,308 | 11,772,826 | |
Receivables | 4,395 | 40,994 | |
Prepaid and other assets | 184 | 20,682 | |
Assets | [1] | 899,535 | 12,890,459 |
LIABILITIES | |||
Due to brokers | 108,532 | 391,291 | |
Accrued and other liabilities | 27 | 1,482 | |
Long-term debt | 720,391 | 12,049,034 | |
Interest payable | 1,314 | 36,174 | |
Liabilities | [1] | 830,264 | 12,477,981 |
Consolidated Funds | |||
EQUITY | |||
Noncontrolling interest in Consolidated Funds (Note 2) | 9,688 | 210,818 | |
Consolidated VIEs | |||
ASSETS | |||
Restricted cash and cash equivalents | 230,430 | 929,401 | |
Due from brokers | 30,218 | 102,373 | |
Investments at fair value | 634,308 | 11,573,164 | |
Receivables | 4,395 | 40,235 | |
Prepaid and other assets | 184 | 0 | |
Assets | 899,535 | 12,645,173 | |
LIABILITIES | |||
Due to brokers | 108,532 | 372,956 | |
Accrued and other liabilities | 27 | 1,230 | |
Interest payable | 1,314 | 36,174 | |
Liabilities | [1] | 830,264 | 12,459,394 |
EQUITY | |||
Retained earnings (deficit) | $ 0 | $ 134,764 | |
[1] | The assets of the Consolidated Entities would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt and residual interests of the Consolidated Entities have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation. |
CONSOLIDATED BALANCE SHEETS (VI
CONSOLIDATED BALANCE SHEETS (VIE) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Restricted cash and cash equivalents | $ 1,694 | $ 1,694 | |
Due from brokers | 63 | 1 | |
Investments at fair value | 84,911 | 38,699 | |
Receivables | 11,668 | 2,134 | |
Prepaid and other assets | 3,129 | 4,115 | |
Assets | 1,169,870 | 13,148,135 | |
Due to brokers | 2,692 | 0 | |
Accrued and other liabilities | 15,841 | 15,584 | |
Liabilities | 979,658 | 12,626,233 | |
Consolidated VIEs | |||
Restricted cash and cash equivalents | 230,430 | 929,401 | |
Due from brokers | 30,218 | 102,373 | |
Investments at fair value | 634,308 | 11,573,164 | |
Receivables | 4,395 | 40,235 | |
Prepaid and other assets | 184 | 0 | |
Assets | 899,535 | 12,645,173 | |
Due to brokers | 108,532 | 372,956 | |
Accrued and other liabilities | 27 | 1,230 | |
Interest payable | 1,314 | 36,174 | |
Long-term debt at fair value | 720,391 | 12,049,034 | |
Liabilities | [1] | $ 830,264 | $ 12,459,394 |
[1] | The assets of the Consolidated Entities would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt and residual interests of the Consolidated Entities have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 25,515,805 | 25,323,417 |
Common stock, shares outstanding | 25,350,788 | 25,192,973 |
Treasury stock, shares | 165,017 | 130,444 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Management fees & Incentive fees | $ 19,254 | $ 1,037 | $ 61,466 | $ 4,027 |
Net interest income from investments | 1,145 | 108 | 4,949 | 302 |
Total net revenues | 20,399 | 1,145 | 66,415 | 4,329 |
Expenses | ||||
Employee compensation and benefits | 7,513 | 7,680 | 23,547 | 22,224 |
Share-based compensation | 1,166 | 770 | 3,834 | 1,651 |
Professional services | 2,912 | 3,166 | 6,634 | 4,918 |
General and administrative expenses | 2,413 | 3,307 | 7,226 | 7,739 |
Depreciation and amortization | 1,769 | 2,897 | 6,259 | 8,914 |
Impairment of intangible assets | 461 | 0 | 1,203 | 0 |
Total expenses | 16,234 | 17,820 | 48,703 | 45,446 |
Other Income (Expense) and Gain (Loss) | ||||
Net gain (loss) on investments | (2,645) | 414 | 1,045 | 2,942 |
Net gain (loss) on liabilities | (502) | (416) | (1,792) | (2,174) |
Corporate interest expense | (962) | (713) | (2,256) | (3,667) |
Net gain on sale of management contract | 0 | 0 | 229 | |
Net other income (expense) and gain (loss) | (4,109) | (715) | (3,003) | (2,670) |
Operating income (loss) | 56 | (17,390) | 14,709 | (43,787) |
Net income (loss) | ||||
Income (loss) before income taxes | 1,811 | (134,967) | 22,074 | (75,237) |
Income tax (expense) benefit | (526) | (1,883) | (13,441) | (21,124) |
Net income (loss) | 1,285 | (136,850) | 8,633 | (96,361) |
Net results from Consolidated Entities attributable to CIFC Corp. | $ 1,469 | $ 934 | $ 8,000 | $ 7,613 |
Earnings (loss) per share | ||||
Earnings (loss) per share, Basic | $ 0.06 | $ 0.04 | $ 0.32 | $ 0.34 |
Earnings (loss) per share, Diluted | $ 0.06 | $ 0.04 | $ 0.30 | $ 0.33 |
Weighted-average number of shares outstanding - | ||||
Weighted Average Number of Shares Outstanding, Basic | 25,367,832 | 24,607,999 | 25,316,796 | 22,153,526 |
Weighted Average Number of Shares Outstanding, Diluted | 26,464,883 | 26,070,692 | 26,493,549 | 23,368,861 |
Common Stock, Dividends, Per Share, Declared | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
Consolidated Entities | ||||
Revenues | ||||
Net interest income from investments | $ 2,556 | $ 82,014 | $ 6,680 | $ 254,287 |
Other Income (Expense) and Gain (Loss) | ||||
Net gain (loss) on investments | (4,642) | (124,239) | (529) | (114,293) |
Net gain (loss) on liabilities | 11,178 | (59,010) | 8,512 | (141,711) |
Results of Consolidated Variable Interest Entities | ||||
Net results of Consolidated Entities | 1,755 | (117,577) | 7,365 | (31,450) |
Net income (loss) | ||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities | $ 184 | $ 137,784 | $ (633) | $ 103,974 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income (loss) | $ 1,285 | $ (136,850) | $ 8,633 | $ (96,361) |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Comprehensive income (loss) | 1,285 | (136,850) | 8,633 | (96,361) |
Comprehensive income (loss) attributable to CIFC Corp. | 1,469 | 934 | 8,000 | 7,613 |
Consolidated Entities | ||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities | $ 184 | $ 137,784 | $ (633) | $ 103,974 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock | Additional Paid-in Capital [Member] | Retained Earnings [Member] | CIFC Corp [Member] | Noncontrolling Interest [Member] | Retained Earnings, Appropriated [Member] |
Beginning Balance, shares at Dec. 31, 2013 | 20,791 | |||||||
Beginning Balance at Dec. 31, 2013 | $ 307,753 | $ 21 | $ (914) | $ 963,011 | $ (810,858) | $ 151,260 | $ 5,107 | $ 151,386 |
Net income (loss) | (96,361) | 7,613 | 7,613 | 3,227 | (107,201) | |||
Exercise of warrants, shares | 99 | |||||||
Exercise of warrants | 128 | 128 | 128 | |||||
Extension of warrants | 200 | 200 | 200 | |||||
Share-based compensation, net, shares | 25 | |||||||
Share-based compensation, net | 1,651 | 1,651 | 1,651 | |||||
Exercise of options, shares | 100 | |||||||
Exercise of options | 511 | 511 | 511 | |||||
Conversion of Convertible Notes, shares | 4,132 | |||||||
Conversion of Convertible Notes | 22,252 | $ 4 | 22,248 | 22,252 | ||||
Contribution from noncontrolling interests | 80,798 | 80,798 | ||||||
Distributions to noncontrolling interests | (20,357) | (20,357) | ||||||
Consolidation of Consolidated Entities | 149,038 | 140,115 | 8,923 | |||||
Deconsolidation of Consolidated Entities | (5,633) | (5,633) | ||||||
Dividends declared ($0.30 per share) | (6,704) | (6,704) | (6,704) | |||||
Ending Balance, shares at Sep. 30, 2014 | 25,147 | |||||||
Ending Balance at Sep. 30, 2014 | 433,276 | $ 25 | (914) | 987,749 | (809,949) | 176,911 | 203,257 | 53,108 |
Beginning Balance, shares at Dec. 31, 2014 | 25,193 | |||||||
Beginning Balance at Dec. 31, 2014 | 521,902 | $ 25 | (914) | 988,904 | (811,695) | 176,320 | 210,818 | 134,764 |
Adoption of ASU 2015-02 (Note 3) | (332,270) | (204,393) | (127,877) | |||||
Adoption of ASU 2014-13 (Note 3) | (6,887) | (6,887) | ||||||
Net income (loss) | 8,633 | 8,000 | 8,000 | 633 | ||||
Extension of warrants | 350 | 350 | 350 | |||||
Repurchases of common stock, shares | (35) | |||||||
Repurchases of common stock | (246) | (246) | (246) | |||||
Share-based compensation, net, shares | 168 | |||||||
Share-based compensation, net | 3,570 | 3,570 | 3,570 | |||||
Exercise of options, shares | 25 | |||||||
Exercise of options | 128 | 128 | 128 | |||||
Contribution from noncontrolling interests | 16,100 | 16,100 | ||||||
Distributions to noncontrolling interests | (13,470) | (13,470) | ||||||
Dividends declared ($0.30 per share) | (7,598) | (7,598) | (7,598) | |||||
Ending Balance, shares at Sep. 30, 2015 | 25,351 | |||||||
Ending Balance at Sep. 30, 2015 | $ 190,212 | $ 25 | $ (1,160) | $ 992,952 | $ (811,293) | $ 180,524 | $ 9,688 | $ 0 |
CONSOLIDATED STATEMENTS OF EQU8
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared, usd per share | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 8,633 | $ (96,361) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Amortization of debt issuance costs and other | 67 | 933 |
Share-based compensation | 3,834 | 1,651 |
Net (gain) loss on investments and contingent liabilities / other (gain) loss | 747 | (768) |
Depreciation and amortization | 6,259 | 8,914 |
Impairment of intangible assets | 1,203 | 0 |
Deferred income tax expense (benefit) | 7,296 | 6,791 |
Excess tax benefits from share-based payment arrangements | (7) | (158) |
Net gain on sale of management contract | 0 | (229) |
Net (gain) loss on liabilities | 1,792 | 2,174 |
Changes in operating assets and liabilities: | ||
Due from brokers | (62) | 12,833 |
Receivables | (5,253) | (5,902) |
Prepaid and other assets | 991 | 1,200 |
Due to brokers | 2,692 | (3,039) |
Accrued and other liabilities | $ (11) | 4,472 |
Change in restricted cash and cash equivalents | 7 | |
Net cash provided by (used in) operating activities | $ (375,597) | (1,150,740) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from the sale of management contracts | 229 | |
Purchases of investments at fair value | (66,256) | (18,151) |
Sales of investments at fair value | 72,662 | 20,477 |
Purchases of equipment and improvements | (802) | (815) |
Net cash provided by (used in) investing activities | (205,301) | (59,145) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchases of common stock | (246) | |
Payments of stock and debt issuance cost | (75) | 0 |
Dividends paid | (7,598) | (6,704) |
Proceeds from extension of warrants | 350 | 200 |
Proceeds from the exercise of options | 121 | 483 |
Payments for the delivery of restricted stock units | (265) | 0 |
Deferred purchase payments and payments on contingent liabilities | (3,599) | (5,890) |
Excess tax benefits from share-based payment arrangements | 7 | 158 |
Net cash provided by (used in) financing activities | 552,691 | 1,209,531 |
Net increase (decrease) in cash and cash equivalents | (28,207) | (354) |
Cash and cash equivalents at beginning of period | 59,290 | 25,497 |
Cash and cash equivalents at end of period | 31,083 | 25,143 |
SUPPLEMENTAL DISCLOSURE: | ||
Cash paid for interest | 1,879 | 2,785 |
Cash paid for income taxes | 9,400 | 17,125 |
Consolidated Entities | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Net (gain) loss on investments at fair value | 529 | 114,293 |
Net (gain) loss on liabilities | (8,512) | 141,711 |
Net other (gain) loss | (2,970) | (1,966) |
Changes in operating assets and liabilities: | ||
Due from brokers | (15,264) | (22,549) |
Purchases of investments at fair value | (809,811) | (6,865,607) |
Sales of investments at fair value | 336,749 | 5,576,649 |
Receivables | (4,137) | 2,683 |
Due to brokers | 100,650 | (43,336) |
Accrued and other liabilities | (114) | 5,369 |
Interest payable | 894 | 11,669 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Change in restricted cash and cash equivalents | (210,905) | (60,885) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Contributions from noncontrolling interests | 16,100 | 80,798 |
Distributions to noncontrolling interests | (13,470) | (20,357) |
Proceeds from issuance of long-term debt | 569,753 | 3,925,359 |
Payments made on long-term debt | (8,387) | (2,764,516) |
SUPPLEMENTAL DISCLOSURE: | ||
Cash paid for interest | 5,257 | 111,511 |
Consolidation of net assets | 0 | 160,074 |
Deconsolidation of net assets | (22,578) | (984) |
Non-cash settlement of interest receivables with increases in principal | $ 89 | $ 1,464 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | Organization and Business Organization —CIFC is a Delaware corporation headquartered in New York City. The Company is a private debt manager specializing in secured U.S. corporate loan strategies. The Company's primary business is to provide investment management services for investment products. The Company manages assets for various types of investors, including pension funds, hedge funds, other asset management firms, banks, insurance companies and other types of institutional investors across the world. Fee Earning Assets Under Management (“Fee Earning AUM” or “AUM”) refers to principal balance, net asset value or value of the assets managed by CIFC on which the Company earns management and/or incentive fees. The Company's AUM is primarily comprised of Collateralized Loan Obligations ("CLOs"). In addition, the Company manages credit funds, separately managed accounts ("SMAs"), and other-loan based products (together, with credit funds and SMAs, "Non-CLO products"). The Company manages these credit products through opportunistic investment strategies where the Company seeks to generate both current income and capital appreciation, primarily through senior secured corporate loan (“SSCLs”) investments and, to a lesser extent, other investments. The Company also manages Collateralized Debt Obligations (“CDOs”), which CIFC does not expect to manage in the future. The Company has three primary sources of revenue: management fees, incentive fees and investment income. Management fees are generally based on a percentage of AUM of the funds. Incentive fees are earned based on the performance of the funds and, for certain products, include performance-based or preferred allocation of income and gains from a fund (also known as carried interest, "Carried Interest"). Investment income represents interest income and realized/unrealized gains and losses on investments in the products sponsored by the Company and third parties. As of September 30, 2015 , DFR Holdings LLC ("DFR Holdings"), on a fully-diluted basis, owned approximately 70% of CIFC's common stock. The Company has previously announced that its board of directors has approved a reorganization plan to convert CIFC’s top-level form of organization from a corporation to a limited liability company that would be taxed as a partnership for U.S. federal income tax purposes. |
BASIS OF PRESENTATION AND PRINC
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Basis of Presentation —The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Management believes that estimates utilized in the preparation of the Condensed Consolidated Financial Statements are prudent and reasonable. Actual results could differ from those estimates and such differences could be material. These interim unaudited Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (the "2014 Annual Report"). In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year. In addition, certain prior year amounts on the Condensed Consolidated Financial Statements and the related notes have been re-presented to conform to current period presentation and provide additional details. These items include Employee compensation and benefits, Stock-based compensation, and General and administrative expenses on the Condensed Consolidated Statement of Operations as well as Contributions from and Distributions to noncontrolling interests on the Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statement of Equity. Principles of Consolidation —The Condensed Consolidated Financial Statements include the financial statements of CIFC and its wholly-owned subsidiaries, the entities in which the Company has a controlling interest ("Consolidated Funds") and variable interest entities ("VIEs" or "Consolidated VIEs") for which the Company is deemed to be the primary beneficiary (together with Consolidated Funds, the "Consolidated Entities"). The Company early adopted the amendments of Accounting Standard Update "ASU" 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis ("ASU 2015-02") (see Note 3 ). All intercompany balances and transactions have been eliminated upon consolidation. This consolidation, particularly with respect to the Consolidated Entities, significantly impacts the Company's Condensed Consolidated Financial Statements. Consolidated Entities —Consolidated Entities includes the operating results of the Consolidated Funds and the Consolidated VIEs. As of September 30, 2015 and December 31, 2014 , the Company held $59.4 million and $62.6 million , respectively, of investments in its Consolidated Entities. Consolidated VOEs —The Company consolidates entities in which the Company has a controlling voting interest. As of September 30, 2015 , the Company did not consolidate any entities under the voting interest model. As of December 31, 2014, the Company had consolidated the Tactical Income Fund and the Senior Secured Corporate Loan Fund under this model. Effective January 1, 2015, pursuant to the adoption of ASU 2015-02, our consolidation assessment changed. See below & Note 3 . Consolidated VIEs —The Company also consolidates variable interest entities in which it is deemed the primary beneficiary. These Consolidated VIEs generally include certain CLOs (collectively, the "Consolidated CLOs"), warehouses, loan investment products, and other similar legal entities (see Note 3 for further details). Tactical Income Fund —The Company invests in and manages an open ended credit fund that invests primarily in second-lien loans (the "Tactical Income Fund"). Under the new rules, limited partnerships where investors lack the right to remove the general partners, are deemed VIEs. The Company is deemed the primary beneficiary as it cannot be removed as the investment manager and has a significant financial interest in the fund. As of September 30, 2015 and December 31, 2014 , the Company held an investment of $14.3 million and $11.0 million , respectively, and the limited partners held a $9.7 million and $6.5 million investment, respectively. Limited partners' interests were reported in "Noncontrolling interest in Consolidated Funds" on the Condensed Consolidated Balance Sheet. Consolidated CLOs and Other —As of September 30, 2015 , the Company consolidated 2 CLOs and 1 other investment product and as of December 31, 2014 , the Company consolidated 31 CLOs. See Note 4 . The adoption of ASU 2015-02, resulted in the deconsolidation of 30 CLOs as of January 1, 2015. Warehouses — From time to time, the Company will create special purpose vehicles ("SPVs") to warehouse SSCLs in advance of sponsoring new CLOs or other funds. The Company may contribute equity to the new SPVs which are typically levered three to five times depending on the terms agreed to with the warehousing counterparties. When the related CLO or fund is sponsored, typically around three to nine months later, the warehouse is “terminated,” with it concurrently repaying the related financing and returning to the Company its equity contribution, net of gains and losses, if any. Since the launch of the Warehouse Fund (see below), most of the Company's direct investments in warehouses it manages have been limited. During the nine months ended September 30, 2015 , the Company consolidated and deconsolidated two warehouse(s). During the nine months ended September 30, 2014 , the Company consolidated seven warehouse(s) and deconsolidated four warehouse(s). As of September 30, 2015 , the Company did not consolidate any warehouse(s). Unconsolidated VOEs — Warehouse Fund — In December 2014, the Company launched a closed-end structured credit fund that invests primarily in equity interests of warehouses managed by CIFC (the "Warehouse Fund"). As of September 30, 2015 and December 31, 2014 , the carrying value of the Company's investment, as the general partner of the fund, was $13.8 million and $10.6 million , respectively. Co-Investment Fund — During 2013, the Company launched a closed-end structured credit fund that invests primarily in residual tranches of CLOs and, to a lesser extent, warehouses, managed by CIFC (the "Co-Investment Fund"). As of September 30, 2015 and December 31, 2014 , the carrying value of the Company's investment, as the general partner of the fund, was $15.5 million and $16.6 million , respectively. The limited partners of both the Warehouse Fund and the Co-Investment Fund may remove the general partner's presumption of control, and as such, the Company did not consolidate these funds. The adoption of ASU 2015-02, did not change our consolidation conclusion. The Company's investment in these funds was recorded in "Investments" on the Company's Condensed Consolidated Balance Sheets. Unconsolidated VIEs— Senior Secured Corporate Loan Fund —The Company invests in and manages an open ended credit fund that invests in U.S. performing senior secured corporate loans (the "Senior Secured Corporate Loan Fund") to provide capital appreciation and risk-adjusted returns to its investors. Pursuant to the adoption of ASU 2015-02, the Company deconsolidated this fund on a modified retroactive basis (or as of January 1, 2015). Under the new rules, limited partnerships where investors lack the right to remove the general partners, are deemed VIEs. The Company is not deemed the primary beneficiary because it does not have a significant financial interest in the fund. As of September 30, 2015 , the Company held an investment of $5.4 million in the fund which was reported in "Investments" on the Condensed Consolidated Balance Sheet. As of December 31, 2014 , the Company held an investment of $5.2 million and the limited partners held an investment of $204.5 million . Limited partners' interests were reported in "Noncontrolling interest in Consolidated Funds" on the Condensed Consolidated Balance Sheet. As of September 30, 2015 , the Company had variable interests in 30 CLO, 8 CDOs, and 2 other-loan based products ( including the Senior Secured Corporate Loan Fund), which the Company managed, that were not consolidated (collectively the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the Unconsolidated VIEs. As of December 31, 2014 , the Company's unconsolidated VIEs included 1 CLO, 8 CDOs and 4 other-loan based products. The adoption of ASU 2015-02, resulted in the deconsolidation of 30 CLOs as of January 1, 2015. The Company's maximum exposure to loss on Unconsolidated VIEs includes its investment, management fee receivables and future management fees collectible by the Company. As of September 30, 2015 , the Company invested $38.3 million in Unconsolidated VIEs and the Company's management fee receivables were $5.2 million . As of December 31, 2014 , the Company had no investments in its Unconsolidated VIEs and the Company's management fee receivables was $0.3 million . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Recent Accounting Updates | Summary of Significant Accounting Policies and Recent Accounting Updates As of September 30, 2015 , the Company's significant accounting policies, which are detailed in the Company's 2014 Annual Report, have not materially changed, except as noted: Consolidation — VIEs —In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02. The amendments changed the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. As of September 30, 2015, the Company elected to early adopt this guidance on a modified retroactive basis (as of January 1, 2015) (see below). Under the consolidation guidelines, the Company evaluates whether (a) it holds a variable interest in an entity, (b) the entity is a variable interest entity ("VIE") and (c) the Company is the primary beneficiary ("PB") of the VIE. An entity is a VIE if it meets any of the following criteria: total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; holders of equity investment at risk (as a group) lack the power to direct the activities of the entity that significantly impact economic performance or the obligation to absorb losses or right to receive residual returns of the entity; and voting rights of some investors are disproportionate to their obligation to absorb losses/receive returns and substantially all of the activities are on behalf of the investor with disproportionately few voting rights. Further a reporting entity is deemed to be the PB if (i) it has the power to direct the activities of the entity that most significantly impact the economic performance ("power criteria") and (ii) it holds a controlling financial interest ("economic criteria"). Generally, the Company determines whether it is the PB of a VIE through a qualitative assessment; however, when deemed necessary, a quantitative assessment may also be performed. This consolidation assessment is performed upon inception of the relationship and reconsidered on an ongoing basis. Prior to the adoption of ASU 2015-02, incentive or performance fees received by the Company for its investment management services were considered variable interests. Pursuant to the adoption of ASU 2015-02, incentive or performance fees that are customary and commensurate of the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered variable interests. As such, certain CLOs, CDOs and warehouses where the Company held direct interests or indirect interests through related parties, were considered variable interests and a consolidation analysis was performed. Further CLOs, CDOs and warehouses generally meet the VIE criteria as they have minimal equity at risk. For CLOs, the Company's investment management services meet the power criteria of the PB consideration. In certain cases, when it was determined that the Company's investment in the CLO was significant, the Company met the economic criteria and consolidated the CLO. To determine significance, the Company evaluated its right to receive and obligation to absorb the VIE's expected future gains and losses. The expected future gains and losses of the VIE is determined based on an internally developed discounted cash flows model that utilizes both observable and unobservable inputs. Significant inputs to the models include the structure of the VIE and estimates related to loan default rates, recovery rates, projected call dates, prepayment rates and discount rates. As of September 30, 2015 and January 1, 2015 (adoption date), the Company consolidated 2 and 1 CLO(s), respectively, for which it was deemed to be the PB. For warehouses, where the Company's investment management services meet the power criteria and where the Company contributes significant equity to a warehouse, the Company may meet both the power and economic criterion and consolidate the warehouse. As of September 30, 2015 and January 1, 2015 (adoption date), the Company did not consolidate any warehouses. However, during the nine months ended September 30, 2015 , the Company did consolidate a warehouse which was opened and closed during the reporting period. Upon adoption of the new consolidation rules, the granting of substantive kick-out rights is a key consideration in determining whether a limited partnership, or similar entity, is a VIE and whether or not that entity should be consolidated. Consequently, the adoption of ASU 2015-02, resulted in the deconsolidation of the Senior Secured Corporate Loan fund (see Note 2 ). Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities under the voting interest model (see below). Performance of these consolidation assessments requires the exercise of judgment. Consolidation — VOE —The Company consolidates all entities that it controls through a majority voting interest (or "VOE"). Financial Instruments held by Consolidated VIEs —Prior to the adoption of ASU 2014-13 (as defined below), the Company elected the fair value option for the consolidated assets and liabilities of the CLOs and warehouses. Accordingly, the measurement difference between the fair value of the financial assets and the fair value of the financial liabilities resulted in net gains (losses) that were reported in the Company's consolidated operating results. Upon adoption of ASU 2014-13, the Company has elected to use the measurement alternative for measuring financial assets and financial liabilities of the Company's CLOs and warehouses. The Company determined that financial assets of its CLOs and warehouses are generally more observable. The assets underlying the Company's managed CLOs and warehouses are SSCLs which are generally exchanged on an active over-the-counter system where multiple broker quotes can be obtained on the date of valuation. The CLO debt market is also actively traded; however, quotations are on a limited scale in comparison to the financial assets. Further, there is no active market for warehouse debt. As a result, the financial assets of the consolidated CLOs and warehouses are measured at fair value and the financial liabilities are measured in consolidation as: (1) the sum of the fair value of the financial assets and the carrying value of any non-financial assets that are incidental to the operations of the CLOs less (2) the sum of the fair value of any beneficial interests retained by the reporting entity (other than those that represent compensation for services) and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interest retained by the Company). ASU 2014-13 was applied on a modified retroactive basis (as of January 1, 2015) (see below). Under the measurement alternative, the Company’s Condensed Consolidated Statement of Operations reflects the Company’s economic interests in the consolidated CLOs and warehouses including (i) changes in the fair value of the beneficial interests retained by the Company and (ii) beneficial interests that represent compensation for its investment management services. Fair Value Option —The Company has elected the fair value option for the financial assets and the financial liabilities of the Consolidated Entities in connection with the initial adoption of the VIE consolidation guidance. Prior to the adoption of ASU 2014-13, the measurement difference between the fair value of the financial assets and the fair value of the financial liabilities resulted in net gains (losses) that were reported in the Company's consolidated operating results. Unrealized appreciation or depreciation and realized gains and losses on assets and liabilities of Consolidated VIEs are recorded in the Consolidated Statements of Operations within "Net results of Consolidated Entities" with a corresponding adjustment to "Net (income) loss attributable to noncontrolling interest in the Consolidated Entities." The adoption of the new measurement guidance eliminates the non-economic measurement differences and the associated income volatility. Revenue Recognition—Net Interest Income from Investments —For the CLOs and warehouses that the Company does not consolidate, interest income is recognized using the effective interest method and reported in "Net interest income from investments" on the Condensed Consolidated Statement of Operations. Interest income on consolidated CLOs/warehouses is reported on the Condensed Consolidated Statements of Operations in "Net results of Consolidated Entities—Investment income" (Note 6 ). Recent Accounting Updates Adopted Guidance: In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”). Under the guidance, investments measured at net asset value (“NAV”), as a practical expedient for fair value, are excluded from the fair value hierarchy. Instead, an entity is required to include those investments as a reconciling line item so that the total fair value amount of investments in the disclosure is consistent with the amount on the balance sheet. Further, entities must provide additional disclosures for investments for which they elect to use the NAV practical expedient to determine fair value. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years and early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company has elected to early adopt ASU 2015-07 and excluded from the fair value hierarchy table investments in its unconsolidated credit funds that are measured at NAV as a practical expedient (Note 5 ) In February 2015, the FASB issued ASU 2015-02. The guidance amends the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or VOEs, (ii) eliminated the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The standard is effective for the Company beginning on January 1, 2016, however, early adoption is allowed. The Company has elected to early adopt ASU 2015-02 on a modified retroactive basis. Upon adoption as of January 1, 2015, the Company deconsolidated 30 CLOs and the Senior Secured Corporate Loan Fund from its Condensed Consolidated Financial Statements. As of January 1, 2015, the Company made non-cash adjustments to write-off Consolidated Entities' assets of $12.6 billion and Consolidated Entities' liabilities of $12.3 billion . This resulted in cumulative effect adjustment of $127.9 million to beginning Appropriated retained earnings and $204.4 million to beginning Noncontrolling interest. The Company's investment in unconsolidated CLOs and the Senior Secured Corporate Loan fund have been reported in "Investments" on the Condensed Consolidated Balance Sheet as of September 30, 2015. The Condensed Consolidated Statement of Operations will reflect the impact of this adoption as of January 1, 2015. In August 2014, the FASB issued ASU 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force) (“ASU 2014-13”) which provides guidance on measuring the financial assets and financial liabilities of a consolidated collateralized financing entity (“CFE”), such as CLOs and warehouses. Entities may make an election to measure the CFE on the basis of either the fair value of the CFE’s financial assets or financial liabilities, whichever is deemed more observable. This will eliminate the non-economic measurement differences between financial assets and financial liabilities and the associated income volatility. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 for public companies and early adoption is permitted. The adoption can be applied on a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the annual period of adoption or retrospectively to all relevant prior periods. In conjunction with the adoption of ASU 2015-02 (see above and Note 2 ), the Company has also elected to early adopt ASU 2014-13 on a modified retroactive basis. As of September 30, 2015, ASU 2014-13 was applied to the consolidated CLOs (Note 2 ). This resulted in a cumulative effect adjustment of $6.9 million to beginning Appropriated retained earnings. Guidance not yet adopted: In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date . The ASU amends the effective date of ASU 2014-09 for all entities by one year. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard clarifies the required factors that an entity must consider when recognizing revenue and also requires additional disclosures. With the issuance of ASU 2014-15 the new effective date for the Company is beginning January 1, 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of this ASU on its Condensed Consolidated Financial Statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard does not affect the recognition and measurement of debt issuance costs. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. The Company is currently evaluating the impact that this ASU on its Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . The guidance will explicitly require management to assess an entity's ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Earlier adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements. |
CONSOLIDATED VIEs
CONSOLIDATED VIEs | 9 Months Ended |
Sep. 30, 2015 | |
Clos and Consolidated Variable Interest Entities | |
Consolidated VIEs | Consolidated VIEs Although the Company consolidates all the assets and liabilities of the Consolidated VIEs (including the Consolidated CLOs, warehouses and other investment products), its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of management fees from the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are administered by the trustee of each fund solely as collateral to satisfy the obligations of the Consolidated VIEs. If the Company were to liquidate, the assets of the Consolidated VIEs would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt and residual interests of the Consolidated VIEs have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation. The following table summarizes the Company's total maximum exposure to loss on these Consolidated VIEs, as follows (1): September 30, 2015 December 31, 2014 (In thousands) Maximum exposure to loss: Investments and beneficial interests (2) $ 59,916 $ 46,651 Receivables 203 4,200 Total maximum exposure to loss $ 60,119 $ 50,851 Explanatory Notes: ________________________________ (1) In addition, exposure to loss excludes future management fees on the Consolidated VIEs, which are not included in the table. (2) Investments made in our consolidated VIEs are eliminated in consolidation. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Fair Value Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair Value Hierarchy — The following table summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and level: September 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 NAV Estimated Fair Value Level 1 Level 2 Level 3 NAV Estimated Fair Value (In thousands) (In thousands) Assets Investments: Credit Funds (1) n/a n/a n/a $ 34,668 $ 34,668 n/a n/a n/a $ 27,169 $ 27,169 Loans — — — — — — 2,959 967 — 3,926 Structured products & other — 2,877 47,366 — 50,243 — — 7,604 — 7,604 Subtotal — 2,877 47,366 34,668 84,911 — 2,959 8,571 27,169 38,699 Consolidated Entities: Loans (2) — 508,178 124,677 — 632,855 — 9,184,488 2,517,887 — 11,702,375 Corporate bonds — — — — — — — 478 — 478 Structured products & other — 155 1,298 — 1,453 — — 69,973 — 69,973 Total Consolidated Entities — 508,333 125,975 — 634,308 — 9,184,488 2,588,338 — 11,772,826 Total Assets $ — $ 511,210 $ 173,341 $ 34,668 $ 719,219 $ — $ 9,187,447 $ 2,596,909 $ 27,169 $ 11,811,525 Liabilities Contingent liabilities $ — $ — $ 10,861 $ — $ 10,861 $ — $ — $ 12,668 $ — $ 12,668 Consolidated Entities: Long-term debt (2) — — — — — — — 12,049,034 — 12,049,034 Total Consolidated Entities — — — — — — — 12,049,034 — 12,049,034 Total Liabilities $ — $ — $ 10,861 $ — $ 10,861 $ — $ — $ 12,061,702 $ — $ 12,061,702 Explanatory Note: ______________________________ (1) Pursuant to ASU 2015-07, disclosure in the fair value hierarchy of assets measured at NAV as a practical expedient is no longer required. (2) From time to time, the Company may invest in the residual equity of the CLOs it sponsors and invest in warehouses it issues. For all assets and liabilities of the Consolidated Entities, the Company elected the fair value option. As of September 30, 2015 and December 31, 2014 , the total aggregate unpaid principal balance of loans was $0.7 billion and $12.0 billion , respectively, and total contractual principal amounts on long-term debt was $0.8 billion and $12.8 billion , respectively. As of September 30, 2015 , Long-term debt of the Consolidated VIEs is no longer measured using a third-party pricing service due to the adoption of ASU 2014-13 (Note 3 ). Changes in Level 3 Recurring Fair Value Measurements — The following tables summarize by class the changes in financial assets and liabilities measured at fair value classified within Level 3 of the valuation hierarchy. Net realized and unrealized gains (losses) for Level 3 financial assets and liabilities measured at fair value are included in the Condensed Consolidated Statements of Operations. Level 3 Financial Assets For the Three Months Ended September 30, 2015 Investments Investment Assets of Consolidated Entities Loans Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period (1) $ 1,996 $ 43,439 $ 45,435 $ 73,151 $ — $ 3,494 $ 76,645 Transfers into Level 3 (2) — — — 4,717 — — 4,717 Transfers out of Level 3 (3) — — — (15,930 ) — — (15,930 ) Net realized/unrealized gains (losses) 4 (2,459 ) (2,455 ) (726 ) — (209 ) (935 ) Purchases — 11,870 11,870 85,147 — — 85,147 Sales (2,000 ) (5,484 ) (7,484 ) (20,400 ) — (1,987 ) (22,387 ) Settlements — — — (1,282 ) — — (1,282 ) Estimated fair value, end of period $ — $ 47,366 $ 47,366 $ 124,677 $ — $ 1,298 $ 125,975 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ — $ (3,806 ) $ (3,806 ) $ (370 ) $ — $ (69 ) $ (439 ) For the Nine Months Ended September 30, 2015 Investments Investment Assets of Consolidated Entities Loans Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 967 $ 7,604 $ 8,571 $ 2,517,887 $ 478 $ 69,973 $ 2,588,338 Transfers into Level 3 (2) — — — 11,237 — — 11,237 Transfers out of Level 3 (3) — — — (21,758 ) — (1,803 ) (23,561 ) Transfers out due to deconsolidation (1) — — — (2,476,625 ) (478 ) (67,383 ) (2,544,486 ) Net realized/unrealized gains (losses) 33 (2,212 ) (2,179 ) (1,352 ) — (2 ) (1,354 ) Purchases (1) 2,971 76,192 79,163 201,860 — 3,742 205,602 Sales (1) (3,971 ) (34,218 ) (38,189 ) (91,240 ) — (3,229 ) (94,469 ) Settlements (1) — — — (15,332 ) — — (15,332 ) Estimated fair value, end of period $ — $ 47,366 $ 47,366 $ 124,677 $ — $ 1,298 $ 125,975 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (4,028 ) $ (4,028 ) $ (369 ) $ — $ (21 ) $ (390 ) Level 3 Financial Assets For the Three Months Ended September 30, 2014 Investments Investment Assets of Consolidated Entities Loans Investments in Funds Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 1,008 $ 17,082 $ 5,065 $ 23,155 $ 1,852,974 $ 6,210 $ 86,153 $ 1,945,337 Transfers into Level 3 (2) — — — — 457,528 — — 457,528 Transfers out of Level 3 (3) — — — — (341,431 ) — (8,322 ) (349,753 ) Net realized/unrealized gains (losses) (15 ) 209 (23 ) 171 (3,547 ) (148 ) 3,936 241 Purchases — — 1,832 1,832 915,677 — 435 916,112 Sales — — — — (264,421 ) (5,255 ) (2,240 ) (271,916 ) Settlements — — — — (105,176 ) — (9,170 ) (114,346 ) Estimated fair value, end of period $ 993 $ 17,291 $ 6,874 $ 25,158 $ 2,511,604 $ 807 $ 70,792 $ 2,583,203 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (15 ) $ 209 $ (23 ) $ 171 $ (5,385 ) $ (206 ) $ (50 ) $ (5,641 ) For the Nine Months Ended September 30, 2014 Investments Investment Assets of Consolidated Entities Loans Investments in Funds Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 510 $ — $ — $ 510 $ 1,706,290 $ 16,220 $ 93,516 $ 1,816,026 Transfers into Level 3 (2) — — — — 1,410,158 — — 1,410,158 Transfers out of Level 3 (3) — — — — (1,492,244 ) — (8,322 ) (1,500,566 ) Transfers in due to consolidation or acquisition 1,008 15,964 — 16,972 33,283 314 6,256 39,853 Transfers between classes (510 ) — — (510 ) 2,021 — — 2,021 Net realized/unrealized gains (losses) (15 ) 1,317 (44 ) 1,258 (31,483 ) 369 11,533 (19,581 ) Purchases — 10 6,918 6,928 1,966,501 — 1,910 1,968,411 Sales — — — — (577,880 ) (16,096 ) (18,469 ) (612,445 ) Settlements — — — — (505,042 ) — (15,632 ) (520,674 ) Estimated fair value, end of period $ 993 $ 17,291 $ 6,874 $ 25,158 $ 2,511,604 $ 807 $ 70,792 $ 2,583,203 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (15 ) $ 1,317 $ (44 ) $ 1,258 $ (14,895 ) $ (11 ) $ 2,115 $ (12,791 ) Explanatory Notes: ______________________________ (1) The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. Purchases, sales and settlements for the nine months ended September 30, 2015 , also reflect the deconsolidation. (2) Transfers in represent loans currently valued by a third-party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third-party pricing service using composite prices determined from two or more quotes. (3) Transfers out represent loans previously valued by an internally developed pricing model, broker quotes, or a third-party pricing service using composite prices determined using less than two quotes and are now being marked by a third-party pricing service using composite prices determined from two or more quotes. Level 3 Financial Liabilities For the Three Months Ended September 30, 2015 For the Three Months Ended September 30, 2014 Contingent Liabilities Long-term Debt of Consolidated Entities Total Contingent Liabilities Long-term Debt of Consolidated Entities Total (In thousands) Estimated fair value, beginning of period (1) $ 11,054 $ — $ 11,054 $ 14,450 $ 11,480,641 $ 11,495,091 Sale of investments in Consolidated CLOs (2) — — — — 27,403 27,403 Net realized/unrealized (gains) losses 502 — 502 416 62,313 62,729 Purchases — — — — 40,900 40,900 Issuances — — — — 1,557,934 1,557,934 Settlements (3) (695 ) — (695 ) (1,621 ) (1,132,803 ) (1,134,424 ) Estimated fair value, end of period $ 10,861 $ — $ 10,861 $ 13,245 $ 12,036,388 $ 12,049,633 Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period $ (502 ) $ — $ (502 ) $ (416 ) $ (7,441 ) $ (7,857 ) For the Nine Months Ended September 30, 2015 For the Nine Months Ended September 30, 2014 Contingent Liabilities Long-term Debt of Consolidated Entities Total Contingent Liabilities Long-term Debt of Consolidated Entities Total (In thousands) Estimated fair value, beginning of period $ 12,668 $ 12,049,034 $ 12,061,702 $ 16,961 $ 10,484,975 $ 10,501,936 Sale of investments in Consolidated CLOs (2) — — — — 89,850 89,850 Transfer in due to consolidation — — — — 247,303 247,303 Transfer out due to deconsolidation or sale (1)(4) — (12,049,034 ) (12,049,034 ) — — — Net realized/unrealized (gains) losses 1,792 — 1,792 2,174 148,329 150,503 Purchases — — — — 65,567 65,567 Issuances — — — — 4,016,389 4,016,389 Settlements (3) (3,599 ) — (3,599 ) (5,890 ) (3,016,025 ) (3,021,915 ) Estimated fair value, end of period $ 10,861 $ — $ 10,861 $ 13,245 $ 12,036,388 $ 12,049,633 Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period $ (1,792 ) $ — $ (1,792 ) $ (2,174 ) $ 39,898 $ 37,724 Explanatory Notes: __________________________ (1) The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. (2) Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. (3) For Contingent Liabilities, amount represents payments made related to the contingent liabilities from the Merger (as defined and described in the Company's 2014 Annual Report) with Legacy CIFC. (4) Transfers out due to adoption of ASU 2014-13. Pursuant to the adoption, the Liabilities of the consolidated CLOs have been remeasured in accordance with the ASU. (See Note 3 for details). As the guidance was adopted as of January 1, 2015, there are no transfers for the three months ended September 30, 2015 . Fair Value Methodologies of Financial Instruments The following is a description of the Company's valuation methodologies for financial instruments measured at fair value by class as required by ASC Topic 820, including the general classification of such instruments pursuant to the valuation hierarchy. Credit Funds —Amounts include the Company's investment in unconsolidated credit funds where the Company co-invests with third-party investors. The fair value of investments in credit funds are generally determined based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. Investors in the Company’s open-ended credit funds may redeem their interests, at any time, within 30 days after notice. Investors in the Company’s closed-end credit funds cannot redeem until expiration of the fund. The Company has no unfunded commitments in its open-ended and closed-end credit funds. Pursuant to the early adoption of ASU 2015-07, the Company's investments in credit funds have been excluded from the fair value hierarchy table. See Note 3 . Loans —Loans are generally valued via a third-party pricing service. The value represents a composite of the mid-point in the bid-ask spread of broker quotes or is based on the composite price of a different tranche of the same or similar security if broker quotes are unavailable for the specific tranche the Company owns. The third-party pricing service provides the number of quotes used in determining the composite price, a factor that the Company uses in determining the observability level of the inputs to the composite price. When the fair value of the loan investments is based on a composite price determined using two or more quotes the composite price is considered to be based on significant observable inputs and classified as Level 2 within the fair value hierarchy. When the fair value of certain loan investments is based on a composite price determined using less than two quotes, the composite price is considered to be based on significant unobservable inputs. In these instances, the Company performs certain procedures on a sample basis to determine that composite prices approximate fair market value. Alternative methodologies are used to value the loans such as a comparable company pricing model (an internally developed model using composite or other observable comparable market inputs) or an internally developed model using data including unobservable market inputs. Accordingly, loans valued using alternative methodologies are classified as Level 3 within the fair value hierarchy. Corporate Bonds —Corporate bonds are generally valued via a third-party pricing service. The inputs to the valuation include recent trades, discount rates and forward yield curves. Although the valuation model inputs used by third-party pricing services are generally obtained from active markets and are observable, third-party pricing services do not provide sufficient visibility into their pricing models. When a value is unavailable, the Company uses an internally developed discounted cash flow model that includes unobservable market inputs or broker quotes. Accordingly corporate bonds are classified as Level 3 within the fair value hierarchy. Structured Products & Other —Structured Products and Other primarily represents the fair value of investments in CIFC and third-party managed CLOs and warehouses. These assets are generally valued via a third-party pricing service. The inputs to the valuation include recent trade information, discount rates, forward yield curves, and loan level information (including loan loss, recovery and default rates, prepayment speeds and other security specific information obtained from the trustee and other service providers related to the product being valued). Although the inputs used in the third-party pricing service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value. When a value from a third-party pricing service is unavailable, the value may be based on an internally developed discounted cash flow model which includes unobservable market inputs or by broker quote. Inputs to the internally developed model include the structure of the product being valued, estimates related to loan default, recovery and discount rates. Accordingly these assets are classified as Level 3 within the fair value hierarchy. The adoption of ASU 2015-02, resulted in the deconsolidation of 30 CLOs and the Senior Secured Corporate Loan fund on a modified retrospective basis (as of January 1, 2015). As of September 30, 2015, the Company consolidated 2 CLOs, and 2 other-loan based products. In addition, included in Structured Products and Other are (i) equity securities not listed for trading on a national exchange ("Non-listed Equity Securities") received on certain loan restructurings within our portfolio and (ii) on occasion, warehouse total return swaps ("TRS", Note 7 ). Similar to the fair value of loans, Non-listed Equity Securities are valued using a third-party pricing service. When the fair value of a Non-listed Equity Security is determined using two or more quotes, it is classified as Level 2 within the fair value hierarchy, and when the fair value is determined using less than two quotes, it is classified as Level 3 within the fair value hierarchy. The fair value of a warehouse TRS is calculated as the sum of (i) the change in fair value of the reference obligations (SSCLs are valued at a composite of the mid-point in the bid-ask spread of broker quotes) since they became reference obligations, (ii) net realized gains (losses) on reference obligations sold during the period and (iii) interest income earned on the reference obligations, less an amount equal to LIBOR plus an agreed upon margin on the outstanding notional amount of the reference obligations. The warehouse TRS values are classified as Level 2 within the fair value hierarchy. Contingent Liabilities —The fair value of contingent liabilities is based on a discounted cash flow model. The model is based on projections of the relevant future management fee cash flows and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation model include the structure of the underlying CLO and estimates related to loan default, recovery and discount rates. Contingent liabilities are classified as Level 3 within the fair value hierarchy. Long-Term Debt of the Consolidated CLOs & Warehouses —Long-term debt of the Consolidated CLOs and warehouses consists of debt and subordinated notes of the Consolidated CLOs or warehouses. Prior to the adoption of ASU 2014-13 the fair value of the debt and subordinated notes of the Consolidated CLOs or warehouses were valued via a third-party pricing service. The inputs to the valuation included recent trade information, discount rates, forward yield curves, and loan level information (including loan loss, recovery and default rates, prepayment speeds and other security specific information obtained from the trustee and other service providers related to the product being valued). Although the inputs used in the third-party pricing service's valuation model were generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performed certain procedures on a sample basis to determine that prices approximated fair market value. When a value from a third-party pricing service was unavailable, the value was based on an internally developed discounted cash flow model which included unobservable market inputs or by broker quote. Inputs to the internally developed model included the structure of the product being valued, estimates related to loan default, recovery and discount rates. Accordingly, the fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses were classified as Level 3 within the fair value hierarchy. Pursuant to the adoption ASU 2014-13, the fair value of the financial liabilities are measured as: (1) the sum of the fair value of the financial assets and the carrying value of any non-financial assets that are incidental to the operations of the CLOs less (2) the sum of the fair value of any beneficial interests retained by the reporting entity (other than those that represent compensation for services) and the Company’s carrying value of any beneficial interests that represent compensation for services (Note 3 ). Quantitative Information about Level 3 Assets & Liabilities The disclosure provided below provides quantitative information about the significant unobservable inputs used in the valuation of the contingent liabilities of Legacy CLOs (see Note 9 ). September 30, 2015 September 30, 2015 December 31, 2014 Impact of Increase in Input on Fair Value Financial Liabilities Fair Value (in thousands) Valuation Technique Significant Unobservable Input Range Range Contingent Liabilities $ 10,861 Discounted cash flows Discount rate (2) 5.8%-12.5% 1.2%-12.5% Decrease Default rate (3) 2.0% 2.0% Decrease Recovery rate (3) 70% 70% Increase Pre-payment rate (3) 40% 35-40% Decrease Reinvestment spread of assets above LIBOR 3.0-3.8% 3.0-3.8% Increase Reinvestment price of assets 100.0 100.0 Increase Explanatory Notes: ____________________________ (1) The impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. (2) The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR . (3) Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates. Carrying Value and Estimated Fair Value of Financial Assets and Liabilities The Company has not elected the fair value option for certain financial liabilities. A summary of the carrying value and estimated fair value of those liabilities are as follows: As of September 30, 2015 As of December 31, 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (In thousands) Financial liabilities: Long-term debt: Junior Subordinated Notes (1) $ 120,000 $ 56,752 $ 120,000 $ 57,314 Explanatory Note: ________________________________ (1) The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (Note 10 ). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy. The carrying value of all of the following approximate the fair value of the financial instruments and are considered Level 1 in the fair value hierarchy: cash and cash equivalents, restricted cash and cash equivalents, due from brokers, receivables and due to brokers. In addition, amounts in the Consolidated Entities related to due from brokers, restricted cash and cash equivalents, receivables and due to brokers also approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy. Investments of the Consolidated Entities are diversified over multiple industries. In addition, applicable agreements governing CLOs and warehouses outline industry concentration limits. Management does not believe the Company has any significant concentration risks. |
NET RESULTS OF CONSOLIDATED ENT
NET RESULTS OF CONSOLIDATED ENTITIES | 9 Months Ended |
Sep. 30, 2015 | |
Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities | |
Net Gain (Loss) from Activities of Consolidated Variable Interest Entities [Text Block] | Net Results of Consolidated Entities Pursuant to the adoption of ASU 2015-02 (Note 3 ), the Company deconsolidated 30 CLOs and the Senior Secured Corporate Loan Fund from its Condensed Consolidated Financial Statements on January 1, 2015. The following table is a summary of the components of "Net results of Consolidated Entities": For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Investment income $ 4,143 $ 128,397 $ 9,934 $ 377,543 Interest expense (1,587 ) (46,383 ) (3,254 ) (123,256 ) Net investment income 2,556 82,014 6,680 254,287 Net gain (loss) on investments (4,642 ) (124,239 ) (529 ) (114,293 ) Net gain (loss) on liabilities 11,178 (59,010 ) 8,512 (141,711 ) Net gain (loss) on other investments and derivatives 1,228 (355 ) 2,970 1,966 Net gain (loss) from activities of Consolidated Entities $ 10,320 $ (101,590 ) $ 17,633 $ 249 Expenses of Consolidated Entities (8,565 ) (15,987 ) (10,268 ) (31,699 ) Net Results of Consolidated Entities $ 1,755 $ (117,577 ) $ 7,365 $ (31,450 ) |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Total Return Swap —During the nine months ended September 30, 2015 , the Company, through a warehouse SPV, entered into a TRS agreement with a third-party bank, in lieu of financing. Under the TRS, the Company received the income on the reference obligations (including gains on terminated reference obligations) and paid the counterparty an amount equal to three month LIBOR plus a margin on the outstanding notional amount of the reference obligations and losses on terminated reference obligations. The Company also consolidated this warehouse SPV as it was a VIE in which the Company was deemed the primary beneficiary (Note 2 ). The adoption of ASU 2015-02 did not change our consolidation assessment. During the nine months ended September 30, 2015 , the warehouse agreement was terminated in conjunction with the issuance of a CLO. During the nine months ended September 30, 2014 , the Company, through a warehouse SPV, entered into a separate TRS agreement with a third-party bank which was terminated in the same year. The Company recognized net income related to the TRS agreements and other derivative instruments during the three and nine months ended September 30, 2015 of $2.4 million and $4.1 million , respectively, and during the three and nine months ended September 30, 2014 of $(0.3) million and $2.0 million , respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | Intangible Assets Intangible assets are comprised of the following: Weighted-Average Remaining Estimated Useful Life Gross Carrying Amount (1) Accumulated Amortization (2) Net Carrying Amount (In years) (In thousands) September 30, 2015: Investment management contracts 2.7 $ 71,738 $ 66,148 $ 5,590 Referral arrangement 4.0 3,810 1,905 1,905 Non-compete agreements 2.5 1,535 1,076 459 Trade name 5.5 1,250 563 687 Total intangible assets $ 78,333 $ 69,692 $ 8,641 December 31, 2014: Investment management contracts 3.2 $ 72,941 $ 61,723 $ 11,218 Referral arrangement 4.8 3,810 1,334 2,476 Non-compete agreements 3.2 1,535 936 599 Trade name 6.3 1,250 469 781 Total intangible assets $ 79,536 $ 64,462 $ 15,074 Explanatory Notes: _________________________________ (1) Gross carrying amounts have been adjusted for impaired assets as of the date presented. (2) During the three and nine months ended September 30, 2015 , the Company recorded amortization expense on its intangible assets of $1.4 million and $5.2 million , respectively. During the three and nine months ended September 30, 2014 , the Company recorded amortization expense on its intangible assets of $2.4 million and $7.9 million , respectively. The following table presents expected amortization expense of the existing intangible assets: (In thousands) 2015 (three months remaining) $ 1,193 2016 3,337 2017 2,014 2018 1,527 2019 413 Thereafter 157 $ 8,641 During the three and nine months ended September 30, 2015 , the Company received notice from holders of certain CLOs exercising their right to call the CLO for redemption. As a result of these calls, the Company recorded impairment charges of $0.5 million and $1.2 million , respectively, to fully impair intangible assets associated with these management contracts. |
CONTINGENT LIABILITIES AT FAIR
CONTINGENT LIABILITIES AT FAIR VALUE | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination, Contingent Consideration Arrangements [Abstract] | |
CONTINGENT LIABILITIES AT FAIR VALUE | Contingent Liabilities Contingent Liabilities —In addition to the consideration paid in connection with the Merger, the Company was required to pay CIFC Parent Holdings LLC ("CIFC Parent") a portion of incentive fees earned on six CLOs managed by CIFCAM (the Company's "Legacy CIFC CLOs"). The terms of these payments were as follows: (i) the first $15.0 million of incentive fees received (which was fulfilled in 2013), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CIFC CLOs by the combined company over ten years from April 13, 2011 (the "Merger Closing Date") and (iii) payments relating to the present value of any such incentive fees from the Legacy CIFC CLOs that remain payable to the combined company after the tenth anniversary of the Merger Closing Date. During the three and nine months ended September 30, 2015 , the Company made total payments of $0.7 million and $2.5 million , respectively, and during the three and nine months ended September 30, 2014 , the Company made total payments of $1.5 million and $5.4 million , respectively, related to these contingent liabilities. In addition, the Company also assumed contingent liabilities during the Merger that primarily represent contingent consideration related to Legacy CIFC’s acquisition of CypressTree in December 2010. The assumed contingent liabilities are based on a fixed percentage of certain management fees from the CypressTree CLOs. These fixed percentages vary by CLO. The minimum fixed percentage was 39% since July 2013. During the nine months ended September 30, 2015 , the Company made its final payment of $1.1 million satisfying its contingent consideration. During the three and nine months ended September 30, 2014 , the Company made payments of $0.1 million and $0.5 million , respectively, related to these contingent liabilities. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | Long-Term Debt The following table summarizes the Company's long-term debt: September 30, 2015 December 31, 2014 Carrying Value Current Weighted Average Borrowing Rate Weighted Average Remaining Maturity Carrying Value Current Weighted Average Borrowing Rate Weighted Average Remaining Maturity (In thousands) (In years) (In thousands) (In years) Recourse debt: March Junior Subordinated Notes (1) $ 95,000 2.88 % 20.1 $ 95,000 1.00 % 20.8 October Junior Subordinated Notes (2) $ 25,000 3.80 % 20.1 $ 25,000 3.73 % 20.8 Total Subordinated Notes Debt $ 120,000 3.07 % 20.1 $ 120,000 1.57 % 20.8 Non-recourse Consolidated Entities' debt: Consolidated CLOs and Other (3) $ 720,391 0.02 % 8.5 $ 11,998,034 1.77 % 8.7 Warehouses (4) — — % n/m 51,000 1.89 % n/m Total non-recourse Consolidated Entities' debt $ 720,391 0.02 % 8.5 $ 12,049,034 1.77 % 8.7 Total long-term debt $ 840,391 $ 12,169,034 Explanatory Notes: ________________________________ (1) March Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 2.58% until maturity on October 30, 2035. Prior to April 30, 2015, these notes bore interest at an annual rate of 1% . (2) October Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 3.50% and mature on October 30, 2035. (3) Pursuant to the adoption of ASU 2014-13, Long-term debt of the Consolidated CLOs has been remeasured in accordance with the new guidance (Note 3 and 5 ). The subordinated notes of the Consolidated CLOs' do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of September 30, 2015 and December 31, 2014 , the par value of the Consolidated CLOs' long-term debt (including subordinated notes) was $0.8 billion and $12.8 billion , respectively. As of September 30, 2015 , long-term debt of the Consolidated CLOs includes $140.8 million of other investment products (Note 4 ). (4) Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of warehouses not held by the Company. As warehouses are generally terminated before the end of their terms, they are excluded from the calculation of the weighted average remaining maturity. Recourse Debt Junior Subordinated Notes —The $95.0 million aggregate principal amount of junior subordinated notes (the "March Junior Subordinated Notes") are governed by a junior subordinated indenture (the "March Note Indenture"), dated March 4, 2010, between the Company and the trustee. The $25.0 million aggregate principal amount of junior subordinated notes (the "October Junior Subordinated Notes") are governed by a junior subordinated indenture (the "October Note Indenture"), dated October 20, 2010, between the Company and the trustee. The March Note Indenture and October Note Indenture contain certain restrictive covenants including a restricted payments covenant that restricts the Company's ability to pay dividends or make distributions in respect of the Company's equity securities, subject to a number of exceptions and conditions. Non-Recourse Consolidated Entities' Debt —The debt and equity holders only have recourse to the total assets of the respective Consolidated Entity's assets. Consolidated CLOs— Upon adoption of ASU 2015-02, the Company deconsolidated 30 CLOs on a modified retrospective basis (as of January 1, 2015). As of September 30, 2015, the Company consolidated 2 CLOs and 2 other-loan based products. See Notes 2 and 3 for additional details. During the nine months ended September 30, 2015 , the Consolidated CLOs issued $484.4 million of debt, paid down $57.4 million of their outstanding debt, made net borrowings under revolving credit facilities of $140.7 million , and distributed $2.0 million to the holders of their subordinated notes. During the nine months ended September 30, 2014 , the Consolidated CLOs issued $2.7 billion of debt, paid down $1.4 billion of their outstanding debt, made net borrowings under revolving credit facilities of $19.6 million , and distributed $172.2 million to the holders of their subordinated notes. The carrying value of the assets of the Consolidated CLOs, which are the only assets to which the Consolidated CLO debt holders have recourse for repayment was $0.7 billion and $12.6 billion as of September 30, 2015 and December 31, 2014 , respectively. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | Equity Common Stock— During each of the three and nine months ended September 30, 2015 and 2014 , the Company paid aggregate quarterly dividends of $0.10 and $0.30 , respectively, per common share. Subsequent to quarter end, the board of directors declared a cash dividend of $0.10 per share. The dividend will be paid on December 1, 2015 to shareholders of record as of the close of business on November 18, 2015 (see Note 16 ). Treasury Stock/Stock Repurchases— During the three and nine months ended September 30, 2015 , the Company repurchased shares of 31,726 and 34,573 , respectively, in open-market transactions for an aggregate cost (including transaction costs) of approximately $225,000 and $246,000 , respectively, with an average price per share of $7.09 and $7.10 , respectively. There were no repurchases made during the three and nine months ended September 30, 2014 . As of September 30, 2015 , the Company was authorized to repurchase up to $5.1 million of its common stock under its share repurchase program. Stock-based Compensation— Stock Options and restricted stock units ("RSUs") are issued pursuant to the CIFC Corp. 2011 Stock Option and Incentive Plan (the “2011 Stock Plan”). As of September 30, 2015 , there was $9.0 million of estimated unrecognized compensation expense related to unvested stock option and RSU awards, net of estimated forfeitures. The remaining weighted average vesting period of stock options and RSUs are 0.54 years and 4.58 years, respectively. Stock Options — The following table summarizes certain Stock Options activity: Number of Shares Underlying Stock-Based Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2014 3,635,313 $ 6.68 5.16 $ 6,146 Exercised (1) (25,000 ) $ 4.83 Forfeited (99,063 ) $ 4.46 Outstanding at September 30, 2015 3,511,250 $ 6.68 4.58 $ 3,005 Exercisable at September 30, 2015 2,972,604 $ 6.50 4.01 $ 2,710 Vested and Expected to vest at September 30, 2015 (2) 3,483,674 $ 6.67 4.55 $ 2,997 Explanatory Notes: ________________________________ (1) During the nine months ended September 30, 2015 and 2014 , total intrinsic value of options exercised was $0.1 million and $0.3 million , respectively. (2) Includes a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. RSUs — The following table summarizes restricted stock unit activity: For the Nine Months Ended September 30, 2015 Restricted stock units outstanding, beginning of period 1,248,444 Granted (1) 232,919 Vested (191,402 ) Forfeited (2) (29,629 ) Restricted stock units outstanding, end of period 1,260,332 Explanatory Notes: _________________________________ (1) The weighted average grant date fair value of all awards granted above during the nine months ended September 30, 2015 was $7.13 . (2) The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. During the nine months ended September 30, 2015 , the Company granted 40,000 service-based RSUs to certain employees. The awards vest over three years with 1/3 initially vesting on December 31, 2015 and the remainder of the awards vesting ratably on a quarterly basis for the remaining two years (until the last vesting date of December 31, 2017 ). Additionally, the Company also granted 190,000 performance-based RSUs to certain employees which cliff vest on January 1, 2018. Neither the service-based nor the performance-based awards are entitled to dividends: therefore the fair value of these awards were determined using the Company's grant date common stock price less the present value of the expected dividends forgone during the vesting period. Warrants— The warrants held by DFR Holdings ("DFR Warrants") provide the holder the right to purchase 2.0 million shares of the Company's voting common stock (see Note 14 ). The DFR Warrants have an exercise price of $6.375 per share, and as of September 30, 2015 , they are immediately exercisable. On September 24, 2015, the term of the warrants was extended to January 24, 2017 in exchange for cash of $0.4 million which was recorded to “Additional paid-in-capital” on the Condensed Consolidated Balance Sheet for the amendment. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | Earnings (Loss) Per Share The following table presents the calculation of basic and diluted earnings (loss) per share ("EPS"): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) Net income (loss) attributable to CIFC Corp. - basic & diluted $ 1,469 $ 934 $ 8,000 $ 7,613 Weighted-average shares - basic 25,368 24,608 25,317 22,154 Stock options (1) 633 731 660 651 Warrants (2) 275 583 365 508 Unvested RSUs 189 149 152 56 Weighted-average shares - diluted 26,465 26,071 26,494 23,369 Earnings (loss) per share Basic $ 0.06 $ 0.04 $ 0.32 $ 0.34 Diluted $ 0.06 $ 0.04 $ 0.30 $ 0.33 Explanatory Notes: ________________________________ (1) For both the three and nine months ended September 30, 2015 , the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and for the three and nine months ended September 30, 2014 , the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and 0.9 million , respectively. (2) On September 24, 2015, the term of the warrants was extended to January 24, 2017 (Note 11 ). |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The following table summarizes the Company's tax provision: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Income (loss) before income taxes $ 1,811 $ (134,967 ) $ 22,074 $ (75,237 ) Income tax expense $ 526 $ 1,883 $ 13,441 $ 21,124 Effective income tax rate 29.0 % (1.4 )% 60.9 % (28.1 )% The difference between the statutory tax rate and the effective tax rate, as well as the change in the effective tax rate compared with the prior year is primarily attributable to the income/(loss) related to non-controlling interests of Consolidated VIEs. This income/(loss) is included in book income/(loss) before income taxes but is not taxable income/(loss) to CIFC Corp. During the nine months ended September 30, 2015 , the Company recorded a non-recurring tax expense of approximately $6.3 million attributable to the write-down of deferred tax assets impacted by the New York City law change. In addition, the effective tax rate for the period ended September 30, 2014 was impacted by a non-recurring expense of $6.6 million from the write-down of deferred tax assets related to the New York State law change. During the three and nine months ended September 30, 2015 , there were no material changes to the Company’s uncertain tax positions and the Company believes there will be no significant increases or decreases to the uncertain tax positions within 12 months of the reporting date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Related Party Transactions DFR Holdings— As of September 30, 2015 and December 31, 2014 , DFR Holdings owned approximately 18.8 million shares of the Company’s common stock. Accordingly, DFR Holdings received quarterly dividends distributed by the Company (see Note 11 ). In addition, the DFR Warrants provide DFR Holdings the right to purchase 2.0 million shares of the Company's voting common stock which were scheduled to expire on September 24, 2015. On September 24, 2015, the term of the warrants was extended to January 24, 2017 in exchange for cash of $0.4 million (Note 11 ). In August 2014, the Company entered into a consulting agreement with DFR Holdings whereby DFR Holdings agreed to provide CIFC with ongoing advisory services such as the participation in financial, tax and strategic planning/budgeting, investor interface, new product initiatives, fund raising and recruiting. During the nine months ended September 30, 2015 , we paid $2.0 million to DFR Holdings in connection with the consulting agreement and expensed $0.5 million and $1.5 million , for the three and nine months ended September 30, 2015 , respectively. During both the three and nine months ended September 30, 2014 , the Company expensed $1.5 million in connection with the consulting agreement. In addition, pursuant to the Third Amended and Restated Stockholders Agreement with DFR Holdings dated December 2, 2013, the Company agreed to nominate to the Company's Board of Directors six directors designated by DFR Holdings (the "DFR Designees"). The number of directors that can be designated by DFR Holdings will be reduced in the event that DFR Holdings decreases its ownership (on a diluted basis) in CIFC. If DFR Holdings' ownership falls below 5% , it will lose the right to designate any director. During the three and nine months ended September 30, 2015 , the DFR Designees earned an aggregate $0.2 million and $0.5 million , respectively, and during the three and nine months ended September 30, 2014 , the DFR Designees earned an aggregate $0.2 million and $0.5 million , respectively, related to their services. Other— As of September 30, 2015 and December 31, 2014 , a board member held $1.0 million of income notes in one of the Company's sponsored CLOs, CIFC Funding 2013-II, Ltd., through an entity in which he is a 50% equity holder. Funds— As of September 30, 2015 and December 31, 2014 , key employees and directors of the Company (including related entities) invested in four different funds for both periods, which the Company invests in, manages and invested an aggregate of $5.3 million and $4.7 million , respectively. Key employees are not charged a management fee or Carried Interest, where applicable, on their investment. Directors were charged a management fee and/or Carried Interest, where applicable, similar to certain other investors. For all periods presented in 2015 and 2014 , these fees were de minimis. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Legal Proceedings —In the ordinary course of business, the Company may be subject to legal and regulatory proceedings and examinations that are generally incidental to the Company's ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings or examinations, the Company does not believe their disposition will have a material adverse effect on the Company's Consolidated Financial Statements. Lease Commitments —During the three and nine months ended September 30, 2015 , total occupancy expense was $0.5 million and $1.3 million , respectively, and during the three and nine months ended September 30, 2014 , total occupancy expense was $0.4 million and $1.3 million , respectively. Unfunded Loan Commitments —Certain of the Consolidated CLOs have debt structures which include unfunded revolvers. Unfunded debt commitments represent the estimated fair value of those unfunded revolving debt facilities. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. As of September 30, 2015 and December 31, 2014 , the Consolidated CLOs had unfunded investment commitments on loans of $2.1 million and $5.9 million , respectively. The timing and amount of additional funding on these loans are at the discretion of the borrower, to the extent the borrower satisfies certain requirements and provides certain documentation. The Company does not have any obligation to fund these commitments. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events Subsequent to quarter end, the Company's board of directors declared a cash dividend of $0.10 per share. The dividend will be paid on December 1, 2015 to shareholders of record as of the close of business on November 18, 2015 . Subsequent to quarter end, CIFC Corp. issued $40.0 million aggregate principal amount of unsecured senior notes ("Senior Notes") due October 30, 2025 and bearing interest at 8.5% per annum. Interest will be paid semi-annually and the Senior Notes will be non-callable for five years. The notes will be senior unsecured obligations of CIFC and will be fully and unconditionally guaranteed by certain of its subsidiaries and affiliates. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation — VIEs —In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02. The amendments changed the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. As of September 30, 2015, the Company elected to early adopt this guidance on a modified retroactive basis (as of January 1, 2015) (see below). Under the consolidation guidelines, the Company evaluates whether (a) it holds a variable interest in an entity, (b) the entity is a variable interest entity ("VIE") and (c) the Company is the primary beneficiary ("PB") of the VIE. An entity is a VIE if it meets any of the following criteria: total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; holders of equity investment at risk (as a group) lack the power to direct the activities of the entity that significantly impact economic performance or the obligation to absorb losses or right to receive residual returns of the entity; and voting rights of some investors are disproportionate to their obligation to absorb losses/receive returns and substantially all of the activities are on behalf of the investor with disproportionately few voting rights. Further a reporting entity is deemed to be the PB if (i) it has the power to direct the activities of the entity that most significantly impact the economic performance ("power criteria") and (ii) it holds a controlling financial interest ("economic criteria"). Generally, the Company determines whether it is the PB of a VIE through a qualitative assessment; however, when deemed necessary, a quantitative assessment may also be performed. This consolidation assessment is performed upon inception of the relationship and reconsidered on an ongoing basis. Prior to the adoption of ASU 2015-02, incentive or performance fees received by the Company for its investment management services were considered variable interests. Pursuant to the adoption of ASU 2015-02, incentive or performance fees that are customary and commensurate of the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered variable interests. As such, certain CLOs, CDOs and warehouses where the Company held direct interests or indirect interests through related parties, were considered variable interests and a consolidation analysis was performed. Further CLOs, CDOs and warehouses generally meet the VIE criteria as they have minimal equity at risk. For CLOs, the Company's investment management services meet the power criteria of the PB consideration. In certain cases, when it was determined that the Company's investment in the CLO was significant, the Company met the economic criteria and consolidated the CLO. To determine significance, the Company evaluated its right to receive and obligation to absorb the VIE's expected future gains and losses. The expected future gains and losses of the VIE is determined based on an internally developed discounted cash flows model that utilizes both observable and unobservable inputs. Significant inputs to the models include the structure of the VIE and estimates related to loan default rates, recovery rates, projected call dates, prepayment rates and discount rates. As of September 30, 2015 and January 1, 2015 (adoption date), the Company consolidated 2 and 1 CLO(s), respectively, for which it was deemed to be the PB. For warehouses, where the Company's investment management services meet the power criteria and where the Company contributes significant equity to a warehouse, the Company may meet both the power and economic criterion and consolidate the warehouse. As of September 30, 2015 and January 1, 2015 (adoption date), the Company did not consolidate any warehouses. However, during the nine months ended September 30, 2015 , the Company did consolidate a warehouse which was opened and closed during the reporting period. Upon adoption of the new consolidation rules, the granting of substantive kick-out rights is a key consideration in determining whether a limited partnership, or similar entity, is a VIE and whether or not that entity should be consolidated. Consequently, the adoption of ASU 2015-02, resulted in the deconsolidation of the Senior Secured Corporate Loan fund (see Note 2 ). Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities under the voting interest model (see below). Performance of these consolidation assessments requires the exercise of judgment. Consolidation — VOE —The Company consolidates all entities that it controls through a majority voting interest (or "VOE"). |
Fair Value of Financial Instruments | Financial Instruments held by Consolidated VIEs —Prior to the adoption of ASU 2014-13 (as defined below), the Company elected the fair value option for the consolidated assets and liabilities of the CLOs and warehouses. Accordingly, the measurement difference between the fair value of the financial assets and the fair value of the financial liabilities resulted in net gains (losses) that were reported in the Company's consolidated operating results. Upon adoption of ASU 2014-13, the Company has elected to use the measurement alternative for measuring financial assets and financial liabilities of the Company's CLOs and warehouses. The Company determined that financial assets of its CLOs and warehouses are generally more observable. The assets underlying the Company's managed CLOs and warehouses are SSCLs which are generally exchanged on an active over-the-counter system where multiple broker quotes can be obtained on the date of valuation. The CLO debt market is also actively traded; however, quotations are on a limited scale in comparison to the financial assets. Further, there is no active market for warehouse debt. As a result, the financial assets of the consolidated CLOs and warehouses are measured at fair value and the financial liabilities are measured in consolidation as: (1) the sum of the fair value of the financial assets and the carrying value of any non-financial assets that are incidental to the operations of the CLOs less (2) the sum of the fair value of any beneficial interests retained by the reporting entity (other than those that represent compensation for services) and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interest retained by the Company). ASU 2014-13 was applied on a modified retroactive basis (as of January 1, 2015) (see below). Under the measurement alternative, the Company’s Condensed Consolidated Statement of Operations reflects the Company’s economic interests in the consolidated CLOs and warehouses including (i) changes in the fair value of the beneficial interests retained by the Company and (ii) beneficial interests that represent compensation for its investment management services. Fair Value Option —The Company has elected the fair value option for the financial assets and the financial liabilities of the Consolidated Entities in connection with the initial adoption of the VIE consolidation guidance. Prior to the adoption of ASU 2014-13, the measurement difference between the fair value of the financial assets and the fair value of the financial liabilities resulted in net gains (losses) that were reported in the Company's consolidated operating results. Unrealized appreciation or depreciation and realized gains and losses on assets and liabilities of Consolidated VIEs are recorded in the Consolidated Statements of Operations within "Net results of Consolidated Entities" with a corresponding adjustment to "Net (income) loss attributable to noncontrolling interest in the Consolidated Entities." The adoption of the new measurement guidance eliminates the non-economic measurement differences and the associated income volatility. |
Revenue Recognition - Net Interest Income from Investments | Revenue Recognition—Net Interest Income from Investments —For the CLOs and warehouses that the Company does not consolidate, interest income is recognized using the effective interest method and reported in "Net interest income from investments" on the Condensed Consolidated Statement of Operations. Interest income on consolidated CLOs/warehouses is reported on the Condensed Consolidated Statements of Operations in "Net results of Consolidated Entities—Investment income" (Note 6 ). |
Recent Accounting Updates | Recent Accounting Updates Adopted Guidance: In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”). Under the guidance, investments measured at net asset value (“NAV”), as a practical expedient for fair value, are excluded from the fair value hierarchy. Instead, an entity is required to include those investments as a reconciling line item so that the total fair value amount of investments in the disclosure is consistent with the amount on the balance sheet. Further, entities must provide additional disclosures for investments for which they elect to use the NAV practical expedient to determine fair value. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years and early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company has elected to early adopt ASU 2015-07 and excluded from the fair value hierarchy table investments in its unconsolidated credit funds that are measured at NAV as a practical expedient (Note 5 ) In February 2015, the FASB issued ASU 2015-02. The guidance amends the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or VOEs, (ii) eliminated the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The standard is effective for the Company beginning on January 1, 2016, however, early adoption is allowed. The Company has elected to early adopt ASU 2015-02 on a modified retroactive basis. Upon adoption as of January 1, 2015, the Company deconsolidated 30 CLOs and the Senior Secured Corporate Loan Fund from its Condensed Consolidated Financial Statements. As of January 1, 2015, the Company made non-cash adjustments to write-off Consolidated Entities' assets of $12.6 billion and Consolidated Entities' liabilities of $12.3 billion . This resulted in cumulative effect adjustment of $127.9 million to beginning Appropriated retained earnings and $204.4 million to beginning Noncontrolling interest. The Company's investment in unconsolidated CLOs and the Senior Secured Corporate Loan fund have been reported in "Investments" on the Condensed Consolidated Balance Sheet as of September 30, 2015. The Condensed Consolidated Statement of Operations will reflect the impact of this adoption as of January 1, 2015. In August 2014, the FASB issued ASU 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force) (“ASU 2014-13”) which provides guidance on measuring the financial assets and financial liabilities of a consolidated collateralized financing entity (“CFE”), such as CLOs and warehouses. Entities may make an election to measure the CFE on the basis of either the fair value of the CFE’s financial assets or financial liabilities, whichever is deemed more observable. This will eliminate the non-economic measurement differences between financial assets and financial liabilities and the associated income volatility. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 for public companies and early adoption is permitted. The adoption can be applied on a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the annual period of adoption or retrospectively to all relevant prior periods. In conjunction with the adoption of ASU 2015-02 (see above and Note 2 ), the Company has also elected to early adopt ASU 2014-13 on a modified retroactive basis. As of September 30, 2015, ASU 2014-13 was applied to the consolidated CLOs (Note 2 ). This resulted in a cumulative effect adjustment of $6.9 million to beginning Appropriated retained earnings. Guidance not yet adopted: In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date . The ASU amends the effective date of ASU 2014-09 for all entities by one year. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard clarifies the required factors that an entity must consider when recognizing revenue and also requires additional disclosures. With the issuance of ASU 2014-15 the new effective date for the Company is beginning January 1, 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of this ASU on its Condensed Consolidated Financial Statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard does not affect the recognition and measurement of debt issuance costs. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. The Company is currently evaluating the impact that this ASU on its Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . The guidance will explicitly require management to assess an entity's ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Earlier adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements. |
CONSOLIDATED VIEs (Tables)
CONSOLIDATED VIEs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Clos and Consolidated Variable Interest Entities | |
Schedule of Consolidated VIE assets, non-recourse liabilities and maximum exposure [Table Text Block] | The following table summarizes the Company's total maximum exposure to loss on these Consolidated VIEs, as follows (1): September 30, 2015 December 31, 2014 (In thousands) Maximum exposure to loss: Investments and beneficial interests (2) $ 59,916 $ 46,651 Receivables 203 4,200 Total maximum exposure to loss $ 60,119 $ 50,851 Explanatory Notes: ________________________________ (1) In addition, exposure to loss excludes future management fees on the Consolidated VIEs, which are not included in the table. (2) Investments made in our consolidated VIEs are eliminated in consolidation. |
FAIR VALUE OF FINANCIAL INSTR28
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Assets and liabilities measured at fair value | |
Schedule of financial instruments carried at fair value on a recurring basis | The following table summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and level: September 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 NAV Estimated Fair Value Level 1 Level 2 Level 3 NAV Estimated Fair Value (In thousands) (In thousands) Assets Investments: Credit Funds (1) n/a n/a n/a $ 34,668 $ 34,668 n/a n/a n/a $ 27,169 $ 27,169 Loans — — — — — — 2,959 967 — 3,926 Structured products & other — 2,877 47,366 — 50,243 — — 7,604 — 7,604 Subtotal — 2,877 47,366 34,668 84,911 — 2,959 8,571 27,169 38,699 Consolidated Entities: Loans (2) — 508,178 124,677 — 632,855 — 9,184,488 2,517,887 — 11,702,375 Corporate bonds — — — — — — — 478 — 478 Structured products & other — 155 1,298 — 1,453 — — 69,973 — 69,973 Total Consolidated Entities — 508,333 125,975 — 634,308 — 9,184,488 2,588,338 — 11,772,826 Total Assets $ — $ 511,210 $ 173,341 $ 34,668 $ 719,219 $ — $ 9,187,447 $ 2,596,909 $ 27,169 $ 11,811,525 Liabilities Contingent liabilities $ — $ — $ 10,861 $ — $ 10,861 $ — $ — $ 12,668 $ — $ 12,668 Consolidated Entities: Long-term debt (2) — — — — — — — 12,049,034 — 12,049,034 Total Consolidated Entities — — — — — — — 12,049,034 — 12,049,034 Total Liabilities $ — $ — $ 10,861 $ — $ 10,861 $ — $ — $ 12,061,702 $ — $ 12,061,702 Explanatory Note: ______________________________ (1) Pursuant to ASU 2015-07, disclosure in the fair value hierarchy of assets measured at NAV as a practical expedient is no longer required. (2) From time to time, the Company may invest in the residual equity of the CLOs it sponsors and invest in warehouses it issues. For all assets and liabilities of the Consolidated Entities, the Company elected the fair value option. As of September 30, 2015 and December 31, 2014 , the total aggregate unpaid principal balance of loans was $0.7 billion and $12.0 billion , respectively, and total contractual principal amounts on long-term debt was $0.8 billion and $12.8 billion , respectively. As of September 30, 2015 , Long-term debt of the Consolidated VIEs is no longer measured using a third-party pricing service due to the adoption of ASU 2014-13 (Note 3 ). |
Schedule of level 3 financial assets at fair value | The following tables summarize by class the changes in financial assets and liabilities measured at fair value classified within Level 3 of the valuation hierarchy. Net realized and unrealized gains (losses) for Level 3 financial assets and liabilities measured at fair value are included in the Condensed Consolidated Statements of Operations. Level 3 Financial Assets For the Three Months Ended September 30, 2015 Investments Investment Assets of Consolidated Entities Loans Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period (1) $ 1,996 $ 43,439 $ 45,435 $ 73,151 $ — $ 3,494 $ 76,645 Transfers into Level 3 (2) — — — 4,717 — — 4,717 Transfers out of Level 3 (3) — — — (15,930 ) — — (15,930 ) Net realized/unrealized gains (losses) 4 (2,459 ) (2,455 ) (726 ) — (209 ) (935 ) Purchases — 11,870 11,870 85,147 — — 85,147 Sales (2,000 ) (5,484 ) (7,484 ) (20,400 ) — (1,987 ) (22,387 ) Settlements — — — (1,282 ) — — (1,282 ) Estimated fair value, end of period $ — $ 47,366 $ 47,366 $ 124,677 $ — $ 1,298 $ 125,975 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ — $ (3,806 ) $ (3,806 ) $ (370 ) $ — $ (69 ) $ (439 ) For the Nine Months Ended September 30, 2015 Investments Investment Assets of Consolidated Entities Loans Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 967 $ 7,604 $ 8,571 $ 2,517,887 $ 478 $ 69,973 $ 2,588,338 Transfers into Level 3 (2) — — — 11,237 — — 11,237 Transfers out of Level 3 (3) — — — (21,758 ) — (1,803 ) (23,561 ) Transfers out due to deconsolidation (1) — — — (2,476,625 ) (478 ) (67,383 ) (2,544,486 ) Net realized/unrealized gains (losses) 33 (2,212 ) (2,179 ) (1,352 ) — (2 ) (1,354 ) Purchases (1) 2,971 76,192 79,163 201,860 — 3,742 205,602 Sales (1) (3,971 ) (34,218 ) (38,189 ) (91,240 ) — (3,229 ) (94,469 ) Settlements (1) — — — (15,332 ) — — (15,332 ) Estimated fair value, end of period $ — $ 47,366 $ 47,366 $ 124,677 $ — $ 1,298 $ 125,975 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (4,028 ) $ (4,028 ) $ (369 ) $ — $ (21 ) $ (390 ) Level 3 Financial Assets For the Three Months Ended September 30, 2014 Investments Investment Assets of Consolidated Entities Loans Investments in Funds Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 1,008 $ 17,082 $ 5,065 $ 23,155 $ 1,852,974 $ 6,210 $ 86,153 $ 1,945,337 Transfers into Level 3 (2) — — — — 457,528 — — 457,528 Transfers out of Level 3 (3) — — — — (341,431 ) — (8,322 ) (349,753 ) Net realized/unrealized gains (losses) (15 ) 209 (23 ) 171 (3,547 ) (148 ) 3,936 241 Purchases — — 1,832 1,832 915,677 — 435 916,112 Sales — — — — (264,421 ) (5,255 ) (2,240 ) (271,916 ) Settlements — — — — (105,176 ) — (9,170 ) (114,346 ) Estimated fair value, end of period $ 993 $ 17,291 $ 6,874 $ 25,158 $ 2,511,604 $ 807 $ 70,792 $ 2,583,203 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (15 ) $ 209 $ (23 ) $ 171 $ (5,385 ) $ (206 ) $ (50 ) $ (5,641 ) For the Nine Months Ended September 30, 2014 Investments Investment Assets of Consolidated Entities Loans Investments in Funds Structured Products & Other Total Loans Corporate Bonds Structured Products & Other Total (In thousands) Estimated fair value, beginning of period $ 510 $ — $ — $ 510 $ 1,706,290 $ 16,220 $ 93,516 $ 1,816,026 Transfers into Level 3 (2) — — — — 1,410,158 — — 1,410,158 Transfers out of Level 3 (3) — — — — (1,492,244 ) — (8,322 ) (1,500,566 ) Transfers in due to consolidation or acquisition 1,008 15,964 — 16,972 33,283 314 6,256 39,853 Transfers between classes (510 ) — — (510 ) 2,021 — — 2,021 Net realized/unrealized gains (losses) (15 ) 1,317 (44 ) 1,258 (31,483 ) 369 11,533 (19,581 ) Purchases — 10 6,918 6,928 1,966,501 — 1,910 1,968,411 Sales — — — — (577,880 ) (16,096 ) (18,469 ) (612,445 ) Settlements — — — — (505,042 ) — (15,632 ) (520,674 ) Estimated fair value, end of period $ 993 $ 17,291 $ 6,874 $ 25,158 $ 2,511,604 $ 807 $ 70,792 $ 2,583,203 Change in unrealized gains (losses) for the period for the assets held as of the end of the period $ (15 ) $ 1,317 $ (44 ) $ 1,258 $ (14,895 ) $ (11 ) $ 2,115 $ (12,791 ) Explanatory Notes: ______________________________ (1) The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. Purchases, sales and settlements for the nine months ended September 30, 2015 , also reflect the deconsolidation. (2) Transfers in represent loans currently valued by a third-party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third-party pricing service using composite prices determined from two or more quotes. (3) Transfers out represent loans previously valued by an internally developed pricing model, broker quotes, or a third-party pricing service using composite prices determined using less than two quotes and are now being marked by a third-party pricing service using composite prices determined from two or more quotes. Level 3 Financial Liabilities For the Three Months Ended September 30, 2015 For the Three Months Ended September 30, 2014 Contingent Liabilities Long-term Debt of Consolidated Entities Total Contingent Liabilities Long-term Debt of Consolidated Entities Total (In thousands) Estimated fair value, beginning of period (1) $ 11,054 $ — $ 11,054 $ 14,450 $ 11,480,641 $ 11,495,091 Sale of investments in Consolidated CLOs (2) — — — — 27,403 27,403 Net realized/unrealized (gains) losses 502 — 502 416 62,313 62,729 Purchases — — — — 40,900 40,900 Issuances — — — — 1,557,934 1,557,934 Settlements (3) (695 ) — (695 ) (1,621 ) (1,132,803 ) (1,134,424 ) Estimated fair value, end of period $ 10,861 $ — $ 10,861 $ 13,245 $ 12,036,388 $ 12,049,633 Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period $ (502 ) $ — $ (502 ) $ (416 ) $ (7,441 ) $ (7,857 ) For the Nine Months Ended September 30, 2015 For the Nine Months Ended September 30, 2014 Contingent Liabilities Long-term Debt of Consolidated Entities Total Contingent Liabilities Long-term Debt of Consolidated Entities Total (In thousands) Estimated fair value, beginning of period $ 12,668 $ 12,049,034 $ 12,061,702 $ 16,961 $ 10,484,975 $ 10,501,936 Sale of investments in Consolidated CLOs (2) — — — — 89,850 89,850 Transfer in due to consolidation — — — — 247,303 247,303 Transfer out due to deconsolidation or sale (1)(4) — (12,049,034 ) (12,049,034 ) — — — Net realized/unrealized (gains) losses 1,792 — 1,792 2,174 148,329 150,503 Purchases — — — — 65,567 65,567 Issuances — — — — 4,016,389 4,016,389 Settlements (3) (3,599 ) — (3,599 ) (5,890 ) (3,016,025 ) (3,021,915 ) Estimated fair value, end of period $ 10,861 $ — $ 10,861 $ 13,245 $ 12,036,388 $ 12,049,633 Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period $ (1,792 ) $ — $ (1,792 ) $ (2,174 ) $ 39,898 $ 37,724 Explanatory Notes: __________________________ (1) The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. (2) Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. (3) For Contingent Liabilities, amount represents payments made related to the contingent liabilities from the Merger (as defined and described in the Company's 2014 Annual Report) with Legacy CIFC. (4) Transfers out due to adoption of ASU 2014-13. Pursuant to the adoption, the Liabilities of the consolidated CLOs have been remeasured in accordance with the ASU. (See Note 3 for details). As the guidance was adopted as of January 1, 2015, there are no transfers for the three months ended September 30, 2015 . |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The disclosure provided below provides quantitative information about the significant unobservable inputs used in the valuation of the contingent liabilities of Legacy CLOs (see Note 9 ). September 30, 2015 September 30, 2015 December 31, 2014 Impact of Increase in Input on Fair Value Financial Liabilities Fair Value (in thousands) Valuation Technique Significant Unobservable Input Range Range Contingent Liabilities $ 10,861 Discounted cash flows Discount rate (2) 5.8%-12.5% 1.2%-12.5% Decrease Default rate (3) 2.0% 2.0% Decrease Recovery rate (3) 70% 70% Increase Pre-payment rate (3) 40% 35-40% Decrease Reinvestment spread of assets above LIBOR 3.0-3.8% 3.0-3.8% Increase Reinvestment price of assets 100.0 100.0 Increase Explanatory Notes: ____________________________ (1) The impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. (2) The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR . (3) Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates. |
Schedule of carrying amounts and estimated fair values of financial assets and liabilities | The Company has not elected the fair value option for certain financial liabilities. A summary of the carrying value and estimated fair value of those liabilities are as follows: As of September 30, 2015 As of December 31, 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (In thousands) Financial liabilities: Long-term debt: Junior Subordinated Notes (1) $ 120,000 $ 56,752 $ 120,000 $ 57,314 Explanatory Note: ________________________________ (1) The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (Note 10 ). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy. |
NET RESULTS OF CONSOLIDATED E29
NET RESULTS OF CONSOLIDATED ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities | |
Summary of components of the entity's net gain (loss) on activities of Consolidated Variable Interest Entities | The following table is a summary of the components of "Net results of Consolidated Entities": For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Investment income $ 4,143 $ 128,397 $ 9,934 $ 377,543 Interest expense (1,587 ) (46,383 ) (3,254 ) (123,256 ) Net investment income 2,556 82,014 6,680 254,287 Net gain (loss) on investments (4,642 ) (124,239 ) (529 ) (114,293 ) Net gain (loss) on liabilities 11,178 (59,010 ) 8,512 (141,711 ) Net gain (loss) on other investments and derivatives 1,228 (355 ) 2,970 1,966 Net gain (loss) from activities of Consolidated Entities $ 10,320 $ (101,590 ) $ 17,633 $ 249 Expenses of Consolidated Entities (8,565 ) (15,987 ) (10,268 ) (31,699 ) Net Results of Consolidated Entities $ 1,755 $ (117,577 ) $ 7,365 $ (31,450 ) |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets are comprised of the following: Weighted-Average Remaining Estimated Useful Life Gross Carrying Amount (1) Accumulated Amortization (2) Net Carrying Amount (In years) (In thousands) September 30, 2015: Investment management contracts 2.7 $ 71,738 $ 66,148 $ 5,590 Referral arrangement 4.0 3,810 1,905 1,905 Non-compete agreements 2.5 1,535 1,076 459 Trade name 5.5 1,250 563 687 Total intangible assets $ 78,333 $ 69,692 $ 8,641 December 31, 2014: Investment management contracts 3.2 $ 72,941 $ 61,723 $ 11,218 Referral arrangement 4.8 3,810 1,334 2,476 Non-compete agreements 3.2 1,535 936 599 Trade name 6.3 1,250 469 781 Total intangible assets $ 79,536 $ 64,462 $ 15,074 Explanatory Notes: _________________________________ (1) Gross carrying amounts have been adjusted for impaired assets as of the date presented. (2) During the three and nine months ended September 30, 2015 , the Company recorded amortization expense on its intangible assets of $1.4 million and $5.2 million , respectively. During the three and nine months ended September 30, 2014 , the Company recorded amortization expense on its intangible assets of $2.4 million and $7.9 million , respectively. |
Schedule of expected amortization expense of the existing intangible assets | The following table presents expected amortization expense of the existing intangible assets: (In thousands) 2015 (three months remaining) $ 1,193 2016 3,337 2017 2,014 2018 1,527 2019 413 Thereafter 157 $ 8,641 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the Company's long-term debt: September 30, 2015 December 31, 2014 Carrying Value Current Weighted Average Borrowing Rate Weighted Average Remaining Maturity Carrying Value Current Weighted Average Borrowing Rate Weighted Average Remaining Maturity (In thousands) (In years) (In thousands) (In years) Recourse debt: March Junior Subordinated Notes (1) $ 95,000 2.88 % 20.1 $ 95,000 1.00 % 20.8 October Junior Subordinated Notes (2) $ 25,000 3.80 % 20.1 $ 25,000 3.73 % 20.8 Total Subordinated Notes Debt $ 120,000 3.07 % 20.1 $ 120,000 1.57 % 20.8 Non-recourse Consolidated Entities' debt: Consolidated CLOs and Other (3) $ 720,391 0.02 % 8.5 $ 11,998,034 1.77 % 8.7 Warehouses (4) — — % n/m 51,000 1.89 % n/m Total non-recourse Consolidated Entities' debt $ 720,391 0.02 % 8.5 $ 12,049,034 1.77 % 8.7 Total long-term debt $ 840,391 $ 12,169,034 Explanatory Notes: ________________________________ (1) March Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 2.58% until maturity on October 30, 2035. Prior to April 30, 2015, these notes bore interest at an annual rate of 1% . (2) October Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 3.50% and mature on October 30, 2035. (3) Pursuant to the adoption of ASU 2014-13, Long-term debt of the Consolidated CLOs has been remeasured in accordance with the new guidance (Note 3 and 5 ). The subordinated notes of the Consolidated CLOs' do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of September 30, 2015 and December 31, 2014 , the par value of the Consolidated CLOs' long-term debt (including subordinated notes) was $0.8 billion and $12.8 billion , respectively. As of September 30, 2015 , long-term debt of the Consolidated CLOs includes $140.8 million of other investment products (Note 4 ). (4) Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of warehouses not held by the Company. As warehouses are generally terminated before the end of their terms, they are excluded from the calculation of the weighted average remaining maturity. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-based Compensation Stock Options Activity | The following table summarizes certain Stock Options activity: Number of Shares Underlying Stock-Based Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2014 3,635,313 $ 6.68 5.16 $ 6,146 Exercised (1) (25,000 ) $ 4.83 Forfeited (99,063 ) $ 4.46 Outstanding at September 30, 2015 3,511,250 $ 6.68 4.58 $ 3,005 Exercisable at September 30, 2015 2,972,604 $ 6.50 4.01 $ 2,710 Vested and Expected to vest at September 30, 2015 (2) 3,483,674 $ 6.67 4.55 $ 2,997 Explanatory Notes: ________________________________ (1) During the nine months ended September 30, 2015 and 2014 , total intrinsic value of options exercised was $0.1 million and $0.3 million , respectively. (2) Includes a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. |
Restricted Stock Units | The following table summarizes restricted stock unit activity: For the Nine Months Ended September 30, 2015 Restricted stock units outstanding, beginning of period 1,248,444 Granted (1) 232,919 Vested (191,402 ) Forfeited (2) (29,629 ) Restricted stock units outstanding, end of period 1,260,332 Explanatory Notes: _________________________________ (1) The weighted average grant date fair value of all awards granted above during the nine months ended September 30, 2015 was $7.13 . (2) The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted earnings (loss) per share | The following table presents the calculation of basic and diluted earnings (loss) per share ("EPS"): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) Net income (loss) attributable to CIFC Corp. - basic & diluted $ 1,469 $ 934 $ 8,000 $ 7,613 Weighted-average shares - basic 25,368 24,608 25,317 22,154 Stock options (1) 633 731 660 651 Warrants (2) 275 583 365 508 Unvested RSUs 189 149 152 56 Weighted-average shares - diluted 26,465 26,071 26,494 23,369 Earnings (loss) per share Basic $ 0.06 $ 0.04 $ 0.32 $ 0.34 Diluted $ 0.06 $ 0.04 $ 0.30 $ 0.33 Explanatory Notes: ________________________________ (1) For both the three and nine months ended September 30, 2015 , the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and for the three and nine months ended September 30, 2014 , the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and 0.9 million , respectively. (2) On September 24, 2015, the term of the warrants was extended to January 24, 2017 (Note 11 ). |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The following table summarizes the Company's tax provision: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Income (loss) before income taxes $ 1,811 $ (134,967 ) $ 22,074 $ (75,237 ) Income tax expense $ 526 $ 1,883 $ 13,441 $ 21,124 Effective income tax rate 29.0 % (1.4 )% 60.9 % (28.1 )% |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | Sep. 30, 2015 |
Organization, Consolidation and Presentation of Financial Statements | |
Sources of revenue | 3 |
DFR Holdings LLC | |
DFR Holdings LLC Transaction | |
Percentage of diluted shares outstanding | 70.00% |
BASIS OF PRESENTATION AND PRI36
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details) | 9 Months Ended | |||
Sep. 30, 2015USD ($)item | Sep. 30, 2014 | Jan. 01, 2015 | Dec. 31, 2014USD ($) | |
Basis of Presentation and Principles of Consolidation | ||||
Investments at fair value | $ 84,911,000 | $ 38,699,000 | ||
Consolidated VIEs [Abstract] | ||||
Number of CLOs consolidated | 2 | 1 | 31 | |
Number of Other Investment Products Consolidated | 1 | |||
Number of CLOs Deconsolidated | 30 | |||
Consolidated Funds [Abstract] | ||||
General Partners' Investment | $ 59,400,000 | $ 62,600,000 | ||
Unconsolidated VIEs [Abstract] | ||||
Number of CLOs not consolidated | 30 | 1 | ||
Number of CDOs not consolidated | 8 | 8 | ||
Number of Other Investment Products not consolidated | 2 | 4 | ||
Unconsolidated VIE, investment in | $ 38,304,000 | |||
Maximum exposure to loss | 60,119,000 | $ 50,851,000 | ||
Tactical Income Fund | ||||
Consolidated VIEs [Abstract] | ||||
Noncontrolling interest in Consolidated Funds | 9,700,000 | 6,500,000 | ||
Co-Investment Fund | ||||
Consolidated Funds [Abstract] | ||||
General Partners' Investment | $ 15,500,000 | 16,600,000 | ||
Warehouses | ||||
Consolidated VIEs [Abstract] | ||||
Warehouses deconsolidated during the period | 2 | 4 | ||
Warehouses consolidated during the period | 2 | 7 | ||
Consolidated Warehouse Investments Held | 0 | |||
Senior Secured Loan Fund | ||||
Consolidated VIEs [Abstract] | ||||
Noncontrolling interest in Consolidated Funds | 204,500,000 | |||
Consolidated Funds [Abstract] | ||||
General Partners' Investment | $ 5,400,000 | 5,200,000 | ||
Accounts Receivable | ||||
Unconsolidated VIEs [Abstract] | ||||
Maximum exposure to loss | 203,000 | 4,200,000 | ||
Accounts Receivable | Variable Interest Entity, Not Primary Beneficiary | ||||
Unconsolidated VIEs [Abstract] | ||||
Maximum exposure to loss | 5,200,000 | 300,000 | ||
Tactical Income Fund | Tactical Income Fund | ||||
Consolidated Funds [Abstract] | ||||
General Partners' Investment | $ 14,300,000 | 11,000,000 | ||
Minimum | ||||
Consolidated VIEs [Abstract] | ||||
Equity leverage | item | 3 | |||
Maximum [Member] | ||||
Consolidated VIEs [Abstract] | ||||
Equity leverage | item | 5 | |||
Warehouse Fund | Warehouse Fund | ||||
Consolidated Funds [Abstract] | ||||
General Partners' Investment | $ 13,800,000 | $ 10,600,000 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Jan. 01, 2015 | Dec. 31, 2014 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of CLOs consolidated | 2 | 1 | 31 |
Number of CLOs Deconsolidated | 30 | ||
Non cash Assets Deconsolidated | $ 12,582,300 | ||
Non cash Liabilities Deconsolidated | 12,250,000 | ||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | (332,270) | ||
Cumulative Effect on Retained Earnings, before Tax | (6,887) | ||
Retained Earnings, Appropriated [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | (127,877) | ||
Cumulative Effect on Retained Earnings, before Tax | (6,887) | ||
Noncontrolling Interest [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | $ (204,393) |
CONSOLIDATED VIEs (Details)
CONSOLIDATED VIEs (Details) $ in Thousands | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Consolidated Variable Interest Entities | |||
Maximum exposure to loss | $ 60,119 | $ 50,851 | |
Investment and beneficial interests in CLOs | |||
Consolidated Variable Interest Entities | |||
Maximum exposure to loss | [1] | 59,916 | 46,651 |
Investment advisory fee receivables | |||
Consolidated Variable Interest Entities | |||
Maximum exposure to loss | $ 203 | 4,200 | |
Warehouses | |||
Consolidated Variable Interest Entities | |||
Consolidated Warehouse Investments Held | 0 | ||
Consolidated CLOs | |||
Consolidated Variable Interest Entities | |||
Consolidated assets | $ 699,390 | $ 12,557,293 | |
[1] | Investments made in our consolidated VIEs are eliminated in consolidation. |
FAIR VALUE OF FINANCIAL INSTR39
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Aggregate unpaid principal balance of Loans | $ 700,000 | $ 12,000,000 | |
Liabilities, Fair Value Disclosure | |||
Contingent liabilities at fair value | 10,861 | 12,668 | |
Recurring basis | |||
Assets, Fair Value Disclosure | |||
Investment in Funds | [1] | 34,668 | 27,169 |
Loans | 3,926 | ||
Structured products & other | 50,243 | 7,604 | |
Investments in loans, corporate bonds and other products | 84,911 | 38,699 | |
Assets, Fair Value Disclosure | 719,219 | 11,811,525 | |
Liabilities, Fair Value Disclosure | |||
Contingent liabilities at fair value | 10,861 | 12,668 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 10,861 | 12,061,702 | |
Level 2 | Recurring basis | |||
Assets, Fair Value Disclosure | |||
Loans | 2,959 | ||
Structured products & other | 2,877 | ||
Investments in loans, corporate bonds and other products | 2,877 | 2,959 | |
Assets, Fair Value Disclosure | 511,210 | 9,187,447 | |
Level 3 | Recurring basis | |||
Assets, Fair Value Disclosure | |||
Loans | 967 | ||
Structured products & other | 47,366 | 7,604 | |
Investments in loans, corporate bonds and other products | 47,366 | 8,571 | |
Assets, Fair Value Disclosure | 173,341 | 2,596,909 | |
Liabilities, Fair Value Disclosure | |||
Contingent liabilities at fair value | 10,861 | 12,668 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 10,861 | 12,061,702 | |
Consolidated Entities | Recurring basis | |||
Assets, Fair Value Disclosure | |||
Loans | [2] | 632,855 | 11,702,375 |
Corporate bonds | 478 | ||
Structured products & other | 1,453 | 69,973 | |
Investments in loans, corporate bonds and other products | 634,308 | 11,772,826 | |
Liabilities, Fair Value Disclosure | |||
Long-term debt at fair value | [2] | 12,049,034 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 12,049,034 | ||
Consolidated Entities | Level 2 | Recurring basis | |||
Assets, Fair Value Disclosure | |||
Loans | [2] | 508,178 | 9,184,488 |
Structured products & other | 155 | ||
Investments in loans, corporate bonds and other products | 508,333 | 9,184,488 | |
Consolidated Entities | Level 3 | Recurring basis | |||
Assets, Fair Value Disclosure | |||
Loans | [2] | 124,677 | 2,517,887 |
Corporate bonds | 478 | ||
Structured products & other | 1,298 | 69,973 | |
Investments in loans, corporate bonds and other products | 125,975 | 2,588,338 | |
Liabilities, Fair Value Disclosure | |||
Long-term debt at fair value | [2] | 12,049,034 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 12,049,034 | ||
Long-term Debt | |||
Liabilities, Fair Value Disclosure | |||
Contractual Obligation | $ 800,000 | $ 12,800,000 | |
[1] | Pursuant to ASU 2015-07, disclosure in the fair value hierarchy of assets measured at NAV as a practical expedient is no longer required. | ||
[2] | From time to time, the Company may invest in the residual equity of the CLOs it sponsors and invest in warehouses it issues. For all assets and liabilities of the Consolidated Entities, the Company elected the fair value option. As of September 30, 2015 and December 31, 2014, the total aggregate unpaid principal balance of loans was $0.7 billion and $12.0 billion, respectively, and total contractual principal amounts on long-term debt was $0.8 billion and $12.8 billion, respectively. As of September 30, 2015, Long-term debt of the Consolidated VIEs is no longer measured using a third-party pricing service due to the adoption of ASU 2014-13 (Note 3). |
FAIR VALUE OF FINANCIAL INSTR40
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015 | Jan. 01, 2015 | Dec. 31, 2014 | ||||
Level 3 Financial Assets at Fair Value | ||||||||||
Fair Value, Description of Composite quotes | 2 | |||||||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Redemption Restriction, Description | 30 | |||||||||
Number of CLOs Deconsolidated | 30 | |||||||||
Number of CLOs consolidated | 2 | 1 | 31 | |||||||
Number of Other Investment Products Consolidated | 2 | 2 | 1 | |||||||
Level 3 | Recurring basis | Loans | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | $ 1,996,000 | [1] | $ 1,008,000 | $ 967,000 | $ 510,000 | |||||
Transfers in due to consolidation or acquisition | 1,008,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | 0 | |||||||||
Transfers between classes | (510,000) | |||||||||
Net realized/unrealized gains (losses) | 4,000 | (15,000) | 33,000 | (15,000) | ||||||
Purchases | 0 | 0 | 2,971,000 | [1] | 0 | |||||
Sales | (2,000,000) | (3,971,000) | [1] | |||||||
Settlements | 0 | 0 | ||||||||
Estimated fair value, end of period | 0 | 993,000 | $ 0 | 993,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 0 | (15,000) | (15,000) | |||||||
Level 3 | Recurring basis | Loans | Consolidated Variable Interest Entities | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 73,151,000 | [1] | 1,852,974,000 | $ 2,517,887,000 | 1,706,290,000 | |||||
Transfers into Level 3 | [2] | 4,717,000 | 457,528,000 | 11,237,000 | 1,410,158,000 | |||||
Transfers out of Level 3 | [3] | (15,930,000) | (341,431,000) | (21,758,000) | (1,492,244,000) | |||||
Transfers in due to consolidation or acquisition | 33,283,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | [1] | (2,476,625,000) | ||||||||
Transfers between classes | (2,021,000) | |||||||||
Net realized/unrealized gains (losses) | (726,000) | (3,547,000) | (1,352,000) | (31,483,000) | ||||||
Purchases | 85,147,000 | 915,677,000 | 201,860,000 | [1] | 1,966,501,000 | |||||
Sales | (20,400,000) | (264,421,000) | (91,240,000) | [1] | (577,880,000) | |||||
Settlements | (1,282,000) | (105,176,000) | (15,332,000) | [1] | (505,042,000) | |||||
Estimated fair value, end of period | 124,677,000 | 2,511,604,000 | 124,677,000 | 2,511,604,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | (370,000) | (5,385,000) | (369,000) | (14,895,000) | ||||||
Level 3 | Recurring basis | Investments in Funds [Member] | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 17,082,000 | 0 | ||||||||
Transfers into Level 3 | [2] | 0 | 0 | |||||||
Transfers in due to consolidation or acquisition | 15,964,000 | |||||||||
Net realized/unrealized gains (losses) | 209,000 | 1,317,000 | ||||||||
Purchases | 0 | 10,000 | ||||||||
Settlements | 0 | 0 | ||||||||
Estimated fair value, end of period | 17,291,000 | 17,291,000 | ||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 209,000 | 1,317,000 | ||||||||
Level 3 | Recurring basis | Corporate Bonds | Consolidated Variable Interest Entities | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 0 | [1] | 6,210,000 | 478,000 | 16,220,000 | |||||
Transfers in due to consolidation or acquisition | 314,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | [1] | (478,000) | ||||||||
Net realized/unrealized gains (losses) | 0 | (148,000) | 0 | 369,000 | ||||||
Purchases | 0 | 0 | ||||||||
Sales | 0 | (5,255,000) | 0 | [1] | (16,096,000) | |||||
Settlements | 0 | 0 | ||||||||
Estimated fair value, end of period | 0 | 807,000 | 0 | 807,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 0 | (206,000) | 0 | (11,000) | ||||||
Level 3 | Recurring basis | Other | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 43,439,000 | [1] | 5,065,000 | 7,604,000 | 0 | |||||
Transfers into Level 3 | [2] | 0 | 0 | 0 | 0 | |||||
Transfers out of Level 3 due to Deconsolidation | 0 | |||||||||
Net realized/unrealized gains (losses) | (2,459,000) | (23,000) | (2,212,000) | (44,000) | ||||||
Purchases | 11,870,000 | 1,832,000 | 76,192,000 | [1] | 6,918,000 | |||||
Sales | (5,484,000) | (34,218,000) | [1] | |||||||
Settlements | 0 | 0 | ||||||||
Estimated fair value, end of period | 47,366,000 | 6,874,000 | 47,366,000 | 6,874,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | (3,806,000) | (23,000) | (4,028,000) | (44,000) | ||||||
Level 3 | Recurring basis | Other | Consolidated Variable Interest Entities | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 3,494,000 | [1] | 86,153,000 | 69,973,000 | 93,516,000 | |||||
Transfers out of Level 3 | [3] | 0 | (8,322,000) | (1,803,000) | (8,322,000) | |||||
Transfers in due to consolidation or acquisition | 6,256,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | [1] | (67,383,000) | ||||||||
Net realized/unrealized gains (losses) | (209,000) | 3,936,000 | (2,000) | 11,533,000 | ||||||
Purchases | 0 | 435,000 | 3,742,000 | [1] | 1,910,000 | |||||
Sales | (1,987,000) | (2,240,000) | (3,229,000) | [1] | (18,469,000) | |||||
Settlements | 0 | (9,170,000) | 0 | [1] | (15,632,000) | |||||
Estimated fair value, end of period | 1,298,000 | 70,792,000 | 1,298,000 | 70,792,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | (69,000) | (50,000) | (21,000) | 2,115,000 | ||||||
Level 3 | Recurring basis | Investment and Derivative Assets | Consolidated Variable Interest Entities | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 76,645,000 | [1] | 1,945,337,000 | 2,588,338,000 | 1,816,026,000 | |||||
Transfers into Level 3 | [2] | 4,717,000 | 457,528,000 | 11,237,000 | 1,410,158,000 | |||||
Transfers out of Level 3 | [3] | (15,930,000) | (349,753,000) | (23,561,000) | (1,500,566,000) | |||||
Transfers in due to consolidation or acquisition | 39,853,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | [1] | (2,544,486,000) | ||||||||
Transfers between classes | (2,021,000) | |||||||||
Net realized/unrealized gains (losses) | (935,000) | 241,000 | (1,354,000) | (19,581,000) | ||||||
Purchases | 85,147,000 | 916,112,000 | 205,602,000 | [1] | 1,968,411,000 | |||||
Sales | (22,387,000) | (271,916,000) | (94,469,000) | [1] | (612,445,000) | |||||
Settlements | (1,282,000) | (114,346,000) | (15,332,000) | [1] | (520,674,000) | |||||
Estimated fair value, end of period | 125,975,000 | 2,583,203,000 | 125,975,000 | 2,583,203,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | (439,000) | (5,641,000) | (390,000) | (12,791,000) | ||||||
Level 3 | Recurring basis | Investment in Funds [Member] | ||||||||||
Changes in financial asset measured at fair value classified within Level 3 | ||||||||||
Estimated fair value, beginning of period | 45,435,000 | [1] | 23,155,000 | 8,571,000 | 510,000 | |||||
Transfers into Level 3 | [2] | 0 | 0 | 0 | 0 | |||||
Transfers in due to consolidation or acquisition | 16,972,000 | |||||||||
Transfers out of Level 3 due to Deconsolidation | 0 | |||||||||
Transfers between classes | (510,000) | |||||||||
Net realized/unrealized gains (losses) | (2,455,000) | 171,000 | (2,179,000) | 1,258,000 | ||||||
Purchases | 11,870,000 | 1,832,000 | 79,163,000 | [1] | 6,928,000 | |||||
Sales | (7,484,000) | (38,189,000) | [1] | |||||||
Settlements | 0 | 0 | ||||||||
Estimated fair value, end of period | 47,366,000 | 25,158,000 | 47,366,000 | 25,158,000 | ||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ (3,806,000) | $ 171,000 | $ (4,028,000) | $ 1,258,000 | ||||||
[1] | The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. Purchases, sales and settlements for the nine months ended September 30, 2015, also reflect the deconsolidation. | |||||||||
[2] | Transfers in represent loans currently valued by a third-party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third-party pricing service using composite prices determined from two or more quotes. | |||||||||
[3] | Transfers out represent loans previously valued by an internally developed pricing model, broker quotes, or a third-party pricing service using composite prices determined using less than two quotes and are now being marked by a third-party pricing service using composite prices determined from two or more quotes. |
FAIR VALUE OF FINANCIAL INSTR41
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
Level 3 Financial Liabilities at Fair Value | |||||||
Estimated fair value, beginning of period | $ 11,054 | [1] | $ 11,495,091 | [1] | $ 12,061,702 | $ 10,501,936 | |
Sale of investments in Consolidated CLOs | [2] | 0 | 27,403 | 0 | 89,850 | ||
Transfer in due to consolidation | 0 | 247,303 | |||||
Transfer due to deconsolidation or sale | [1],[3] | (12,049,034) | 0 | ||||
Net realized/unrealized (gains) losses | 502 | 62,729 | 1,792 | 150,503 | |||
Purchases | 0 | 40,900 | 0 | 65,567 | |||
Issuances | 0 | 1,557,934 | 0 | 4,016,389 | |||
Settlements | [4] | (695) | (1,134,424) | (3,599) | (3,021,915) | ||
Estimated fair value, end of period | 10,861 | 12,049,633 | 10,861 | 12,049,633 | |||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | (502) | (7,857) | (1,792) | 37,724 | |||
Contingent Liabilities at Fair Value | |||||||
Level 3 Financial Liabilities at Fair Value | |||||||
Estimated fair value, beginning of period | 11,054 | [1] | 14,450 | [1] | 12,668 | 16,961 | |
Sale of investments in Consolidated CLOs | [2] | 0 | 0 | 0 | 0 | ||
Net realized/unrealized (gains) losses | 502 | 416 | 1,792 | 2,174 | |||
Settlements | [4] | (695) | (1,621) | (3,599) | (5,890) | ||
Estimated fair value, end of period | 10,861 | 13,245 | 10,861 | 13,245 | |||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | (502) | (416) | (1,792) | (2,174) | |||
Long-term Debt | Consolidated Entities | |||||||
Level 3 Financial Liabilities at Fair Value | |||||||
Estimated fair value, beginning of period | 0 | [1] | 11,480,641 | [1] | 12,049,034 | 10,484,975 | |
Sale of investments in Consolidated CLOs | [2] | 0 | 27,403 | 0 | 89,850 | ||
Transfer in due to consolidation | 0 | 247,303 | |||||
Transfer due to deconsolidation or sale | [1],[3] | (12,049,034) | 0 | ||||
Net realized/unrealized (gains) losses | 0 | 62,313 | 0 | 148,329 | |||
Purchases | 0 | 40,900 | 0 | 65,567 | |||
Issuances | 0 | 1,557,934 | 0 | 4,016,389 | |||
Settlements | [4] | 0 | (1,132,803) | 0 | (3,016,025) | ||
Estimated fair value, end of period | 0 | 12,036,388 | 0 | 12,036,388 | |||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ 0 | $ (7,441) | $ 0 | $ 39,898 | |||
[1] | The adoption of ASU 2015-02 was applied on a modified retrospective basis. Beginning balances for the three months ended September 30, 2015 reflect the deconsolidation of CLOs as of January 1, 2015. | ||||||
[2] | Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. | ||||||
[3] | Transfers out due to adoption of ASU 2014-13. Pursuant to the adoption, the Liabilities of the consolidated CLOs have been remeasured in accordance with the ASU. (See Note 3 for details). As the guidance was adopted as of January 1, 2015, there are no transfers for the three months ended September 30, 2015. | ||||||
[4] | For Contingent Liabilities, amount represents payments made related to the contingent liabilities from the Merger (as defined and described in the Company's 2014 Annual Report) with Legacy CIFC. |
FAIR VALUE OF FINANCIAL INSTR42
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | ||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Contingent liabilities at fair value | $ 10,861 | $ 10,861 | $ 12,668 | |
Recurring basis | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Contingent liabilities at fair value | 10,861 | 10,861 | 12,668 | |
Recurring basis | Level 3 | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Contingent liabilities at fair value | $ 10,861 | $ 10,861 | $ 12,668 | |
Projected Cash Flow Approach Valuation Technique [Member] | Recurring basis | Contingent Liabilities at Fair Value | Level 3 | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Default rate (as a percent) | [1] | 2.00% | 2.00% | |
Recovery rate (as a percent) | [1] | 70.00% | 70.00% | |
Reinvestment price | 100.00% | 100.00% | ||
Projected Cash Flow Approach Valuation Technique [Member] | Recurring basis | Contingent Liabilities at Fair Value | Level 3 | Minimum | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Discount rate (as a percent) | [2] | 5.80% | 1.20% | |
Pre-payment rate (as a percent) | [1] | 35.00% | ||
Reinvestment spread over LIBOR (as a percent) | 3.00% | 3.00% | ||
Projected Cash Flow Approach Valuation Technique [Member] | Recurring basis | Contingent Liabilities at Fair Value | Level 3 | Maximum | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Discount rate (as a percent) | [2] | 12.50% | 12.50% | |
Pre-payment rate (as a percent) | [1] | 40.00% | ||
Reinvestment spread over LIBOR (as a percent) | 3.80% | 3.80% | ||
Projected Cash Flow Approach Valuation Technique [Member] | Recurring basis | Contingent liabilities and the long-term debt of the Consolidated CLOs | Level 3 | ||||
Quantitative Information about Level 3 Assets & Liabilities | ||||
Pre-payment rate (as a percent) | [1] | 40.00% | ||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |||
[1] | Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates. | |||
[2] | The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR. |
FAIR VALUE OF FINANCIAL INSTR43
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Estimated Fair Value | |||
Long-term debt: | |||
Junior Subordinated Notes | [1] | $ 56,752 | $ 57,314 |
Subordinated Debt Obligations | Carrying Value | |||
Long-term debt: | |||
Junior Subordinated Notes | [1] | $ 120,000 | $ 120,000 |
Recurring basis | Level 3 | Contingent liabilities and the long-term debt of the Consolidated CLOs | Projected Cash Flow Approach Valuation Technique [Member] | |||
Carrying Value and Estimated Fair Value of Financial Assets and Liabilities | |||
Debt Instrument, Description of Variable Rate Basis | LIBOR | ||
[1] | The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy. |
NET RESULTS OF CONSOLIDATED E44
NET RESULTS OF CONSOLIDATED ENTITIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Jan. 01, 2015 | |
Consolidated Variable Interest Entities | |||||
Number of CLOs Deconsolidated | 30 | ||||
Net investment income | $ 1,145 | $ 108 | $ 4,949 | $ 302 | |
Net gain (loss) on investments | (2,645) | 414 | 1,045 | 2,942 | |
Net gain (loss) on liabilities | (502) | (416) | (1,792) | (2,174) | |
Consolidated Entities | |||||
Consolidated Variable Interest Entities | |||||
Investment income | 4,143 | 128,397 | 9,934 | 377,543 | |
Interest expense | (1,587) | (46,383) | (3,254) | (123,256) | |
Net investment income | 2,556 | 82,014 | 6,680 | 254,287 | |
Net gain (loss) on investments | (4,642) | (124,239) | (529) | (114,293) | |
Net gain (loss) on liabilities | 11,178 | (59,010) | 8,512 | (141,711) | |
Net gain (loss) on other investments and derivatives | 1,228 | (355) | 2,970 | 1,966 | |
Net gain (loss) from activities of Consolidated Entities | 10,320 | (101,590) | 17,633 | 249 | |
Expenses of Consolidated Entities | (8,565) | (15,987) | (10,268) | (31,699) | |
Net results of Consolidated Entities | $ 1,755 | $ (117,577) | $ 7,365 | $ (31,450) |
DERIVATIVE INSTRUMENTS AND HE45
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative [Line Items] | ||||
Net income/expense related to derivative instruments | $ 2.4 | $ (0.3) | $ 4.1 | $ 2 |
Contingent liabilities and the long-term debt of the Consolidated CLOs | Projected Cash Flow Approach Valuation Technique [Member] | Level 3 | Recurring basis | ||||
Derivative [Line Items] | ||||
Debt Instrument, Description of Variable Rate Basis | LIBOR |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||
Gross Carrying Amount | [1] | $ 78,333 | $ 78,333 | $ 79,536 | ||
Accumulated Amortization | [2] | 69,692 | 69,692 | 64,462 | ||
Net Carrying Amount | 8,641 | 8,641 | 15,074 | |||
Amortization of intangible assets | 1,400 | $ 2,400 | 5,200 | $ 7,900 | ||
Expected amortization expense of the existing intangible assets | ||||||
2,015 | 1,193 | 1,193 | ||||
2,016 | 3,337 | 3,337 | ||||
2,017 | 2,014 | 2,014 | ||||
2,018 | 1,527 | 1,527 | ||||
2,019 | 413 | 413 | ||||
Thereafter | 157 | 157 | ||||
Expected amortization expense | 8,641 | 8,641 | ||||
Impairment of intangible assets | 461 | $ 0 | 1,203 | $ 0 | ||
Investment management contracts | ||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||
Gross Carrying Amount | [1] | 71,738 | 71,738 | 72,941 | ||
Accumulated Amortization | [2] | 66,148 | 66,148 | 61,723 | ||
Net Carrying Amount | 5,590 | $ 5,590 | $ 11,218 | |||
Finite Lived Intangible Assets Remaining, Weighted Average - Remaining Useful Life | 2 years 8 months | 3 years 2 months | ||||
Referral Agreement | ||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||
Gross Carrying Amount | [1] | 3,810 | $ 3,810 | $ 3,810 | ||
Accumulated Amortization | [2] | 1,905 | 1,905 | 1,334 | ||
Net Carrying Amount | 1,905 | $ 1,905 | $ 2,476 | |||
Finite Lived Intangible Assets Remaining, Weighted Average - Remaining Useful Life | 4 years | 4 years 9 months | ||||
Non-compete agreements | ||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||
Gross Carrying Amount | [1] | 1,535 | $ 1,535 | $ 1,535 | ||
Accumulated Amortization | [2] | 1,076 | 1,076 | 936 | ||
Net Carrying Amount | 459 | $ 459 | $ 599 | |||
Finite Lived Intangible Assets Remaining, Weighted Average - Remaining Useful Life | 2 years 6 months | 3 years 2 months | ||||
Trade name | ||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||
Gross Carrying Amount | [1] | 1,250 | $ 1,250 | $ 1,250 | ||
Accumulated Amortization | [2] | 563 | 563 | 469 | ||
Net Carrying Amount | $ 687 | $ 687 | $ 781 | |||
Finite Lived Intangible Assets Remaining, Weighted Average - Remaining Useful Life | 5 years 6 months | 6 years 4 months | ||||
[1] | Gross carrying amounts have been adjusted for impaired assets as of the date presented. | |||||
[2] | During the three and nine months ended September 30, 2015, the Company recorded amortization expense on its intangible assets of $1.4 million and $5.2 million, respectively. During the three and nine months ended September 30, 2014, the Company recorded amortization expense on its intangible assets of $2.4 million and $7.9 million, respectively. |
CONTINGENT LIABILITIES AT FAI47
CONTINGENT LIABILITIES AT FAIR VALUE (Details) - USD ($) $ in Thousands | Apr. 13, 2011 | Apr. 30, 2011 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Contingent liabilities at fair value | ||||||
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees | 39.00% | |||||
Payments on contingent liabilities | $ 3,599 | $ 5,890 | ||||
CIFC Parent Holdings LLC | ||||||
Contingent liabilities at fair value | ||||||
Number of Legacy CIFC CLOs subject to fee-sharing arrangements | six | |||||
Business Acquisition Cost of Acquired Entity Initial Incentive Fees | $ 15,000 | |||||
Business Acquisition Cost of Acquired Entity Final Contingent Consideration Payment Date | 10 years | |||||
Payments On Contingent Liabilities - 100% fee sharing | $ 700 | $ 1,500 | 2,500 | 5,400 | ||
Business Acquisition, Cost of Acquired Entity Percentage of Fees in Excess of Initial Incentive Fees | 50.00% | |||||
Cypress Tree Investment Management LLC | ||||||
Contingent liabilities at fair value | ||||||
Payments on contingent liabilities | $ 100 | $ 1,100 | $ 500 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015USD ($) | Sep. 30, 2014 | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jan. 01, 2015 | |||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 120,000,000 | $ 120,000,000 | $ 120,000,000 | |||||
Number of CLOs Deconsolidated | 30 | |||||||
Number of CLOs consolidated | 2 | 2 | 31 | 1 | ||||
Number of Other Investment Products Consolidated | 1 | 1 | ||||||
Warehouses | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | [1] | $ 0 | $ 0 | $ 51,000,000 | ||||
Current Weighted Average Borrowing Rate (as a percent) | [1] | 0.00% | 0.00% | 1.89% | ||||
Consolidated CLOs | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | [2] | $ 720,391,000 | $ 720,391,000 | $ 11,998,034,000 | ||||
Current Weighted Average Borrowing Rate (as a percent) | [2] | 0.02% | 0.02% | 1.77% | ||||
Debt instruments - Weighted Average, Remaining Maturity | [2] | 8 years 6 months | 8 years 8 months | |||||
Debt Instrument, Face Amount | $ 800,000,000 | $ 800,000,000 | $ 12,800,000,000 | |||||
Carrying value of the assets for which debt holders have a recourse for repayment | 699,390,000 | 699,390,000 | $ 12,557,293,000 | |||||
Debt issued | 500,000,000 | $ 2,700,000,000 | ||||||
Outstanding debt paid down | 100,000,000 | 1,400,000,000 | ||||||
Other VIEs [Member] | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | [2] | $ 140,766,000 | $ 140,766,000 | |||||
Consolidated Variable Interest Entities | ||||||||
LONG-TERM DEBT | ||||||||
Current Weighted Average Borrowing Rate (as a percent) | 0.02% | 0.02% | 1.77% | |||||
Debt instruments - Weighted Average, Remaining Maturity | 8 years 6 months | 8 years 8 months | ||||||
March Junior Subordinated Debt [Member] | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 | [3] | ||||
Current Weighted Average Borrowing Rate (as a percent) | [3] | 2.88% | 2.88% | 1.00% | ||||
Debt instruments - Weighted Average, Remaining Maturity | [3] | 20 years 1 month | 20 years 10 months | |||||
March Junior Subordinated Debt [Member] | Through April 30, 2015 | ||||||||
LONG-TERM DEBT | ||||||||
Annual rate (as a percent) | 1.00% | 1.00% | ||||||
March Junior Subordinated Debt [Member] | From April 30, 2015 until maturity on October 30, 2035 | ||||||||
LONG-TERM DEBT | ||||||||
Annual interest rate (as a percent) | LIBOR | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2.58% | |||||||
Subordinated notes of Consolidated CLOs | Consolidated CLOs | ||||||||
LONG-TERM DEBT | ||||||||
Outstanding debt paid down | $ 2,000,000 | 172,200,000 | ||||||
Class D Notes | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 840,391,000 | 840,391,000 | $ 12,169,034,000 | |||||
Revolving credit facility | Consolidated CLOs | ||||||||
LONG-TERM DEBT | ||||||||
Debt issued | 140,700,000 | $ 19,600,000 | ||||||
October Junior Subordinated Debt [Member] | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | [4] | ||||
Current Weighted Average Borrowing Rate (as a percent) | [4] | 3.80% | 3.80% | 3.73% | ||||
Debt instruments - Weighted Average, Remaining Maturity | [4] | 20 years 1 month | 20 years 10 months | |||||
Annual interest rate (as a percent) | LIBOR | |||||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |||||||
Subordinated Debt Obligations | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 120,000,000 | $ 120,000,000 | $ 120,000,000 | |||||
Current Weighted Average Borrowing Rate (as a percent) | 3.07% | 3.07% | 1.57% | |||||
Debt instruments - Weighted Average, Remaining Maturity | 20 years 1 month | 20 years 10 months | ||||||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | ||||||||
LONG-TERM DEBT | ||||||||
Long-term debt | $ 720,391,000 | $ 720,391,000 | $ 12,049,034,000 | |||||
LIBOR [Member] | March Junior Subordinated Debt [Member] | From April 30, 2015 until maturity on October 30, 2035 | ||||||||
LONG-TERM DEBT | ||||||||
Annual interest rate (as a percent) | LIBOR | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2.58% | |||||||
LIBOR [Member] | October Junior Subordinated Debt [Member] | ||||||||
LONG-TERM DEBT | ||||||||
Annual interest rate (as a percent) | LIBOR | |||||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |||||||
[1] | Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of warehouses not held by the Company. As warehouses are generally terminated before the end of their terms, they are excluded from the calculation of the weighted average remaining maturity. | |||||||
[2] | Pursuant to the adoption of ASU 2014-13, Long-term debt of the Consolidated CLOs has been remeasured in accordance with the new guidance (Note 3 and 5). The subordinated notes of the Consolidated CLOs' do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of September 30, 2015 and December 31, 2014, the par value of the Consolidated CLOs' long-term debt (including subordinated notes) was $0.8 billion and $12.8 billion , respectively. As of September 30, 2015, long-term debt of the Consolidated CLOs includes $140.8 million of other investment products (Note 4). | |||||||
[3] | March Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 2.58% until maturity on October 30, 2035. Prior to April 30, 2015, these notes bore interest at an annual rate of 1%. | |||||||
[4] | October Junior Subordinated Notes bear interest at an annual rate of three month LIBOR plus 3.50% and mature on October 30, 2035. |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Common Stock | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 | |
Treasury Stock, Value, Acquired, Cost Method | $ 246 | ||||
Treasury Stock | |||||
Common Stock | |||||
Treasury Stock Acquired, Average Cost Per Share | $ 7.09 | $ 7.10 | |||
Treasury Stock, Shares, Acquired | 31,726 | 34,573 | 0 | ||
Treasury Stock, Value, Acquired, Cost Method | $ 225 | $ 246 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 5,100 | $ 5,100 | |||
Subsequent Event | |||||
Common Stock | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.10 |
EQUITY (Details 2)
EQUITY (Details 2) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Stock Options and Restricted Stock Units [Member] | |
Stock-based Compensation | |
Nonvested Awards, Compensation Not yet Recognized, Stock Options and RSUs | $ 9 |
Stock Options | |
Stock-based Compensation | |
Weighted average vesting period | 6 months 15 days |
Restricted Stock Units [Member] | |
Stock-based Compensation | |
Weighted average vesting period | 4 years 6 months 29 days |
EQUITY (Details 3)
EQUITY (Details 3) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2015 | ||
Stock Options Rollforward | |||||
Outstanding at the beginning of the period (in shares) | 3,635,313 | ||||
Outstanding Options, Weighted Average Exercise Price at the beginning of the period | $ 6.68 | ||||
Options, Exercises in Period, gross | [1] | (25,000) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (99,063) | ||||
Outstanding at the end of the period (in shares) | 3,511,250 | 3,635,313 | |||
Options, Exercisable, Number | 2,972,604 | ||||
Options, Vested and Expected to Vest, Outstanding, Number | [2] | 3,483,674 | |||
Options, Exercises in Period, Weighted Average Exercise Price | [1] | $ 4.83 | |||
Options, Forfeitures in Period, Weighted Average Exercise Price | 4.46 | ||||
Outstanding Options, Weighted Average Exercise Price at the end of the period | $ 6.68 | $ 6.68 | |||
Options, Exercisable, Weighted Average Exercise Price | $ 6.50 | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | [2] | $ 6.67 | |||
Options, Outstanding, Weighted Average Remaining Contractual Term at the beginning of the period | 4 years 6 months 29 days | 5 years 1 month 28 days | |||
Options, Exercisable, Weighted Average Remaining Contractual Term | 4 years 4 days | ||||
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | [2] | 4 years 6 months 18 days | |||
Options, Outstanding, Intrinsic Value at the beginning of the period | $ 3,005 | $ 6,146 | $ 3,005 | ||
Options, Outstanding, Intrinsic Value at the end of the period | 3,005 | $ 6,146 | |||
Options, Exercisable, Intrinsic Value | 2,710 | ||||
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | [2] | $ 2,997 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 100 | $ 300 | |||
[1] | During the nine months ended September 30, 2015 and 2014, total intrinsic value of options exercised was $0.1 million and $0.3 million, respectively. | ||||
[2] | Includes a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. |
EQUITY (Details 4)
EQUITY (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 18, 2013 | ||
Equity (Details 4) | ||||||
Treasury Stock, Value, Acquired, Cost Method | $ 246 | |||||
Warrants | ||||||
Adjustments to Additional Paid in Capital, Other | 350 | $ 200 | ||||
Proceeds from Other Equity | $ 350 | $ 200 | ||||
Restricted Stock Units [Member] | ||||||
Restricted Stock | ||||||
Restricted Stock Units, Outstanding Number | 1,260,332 | 1,260,332 | 1,248,444 | |||
Restricted Stock Units, Grants in Period | [1] | 232,919 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (191,402) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | [2] | (29,629) | ||||
Restricted Stock Units, Grants in Period, Weighted Average Grant Date Fair Value | $ 7.13 | |||||
Weighted average vesting period | 4 years 6 months 29 days | |||||
Restricted Stock Units (RSUs), Service-based [Member] | ||||||
Restricted Stock | ||||||
Restricted Stock Units, Grants in Period | 40,000 | |||||
Restricted Stock Units, Vesting Annual Installments | 1/3 | |||||
Weighted average vesting period | 3 years | |||||
Restricted Stock Units (RSUs), Performance-based [Member] | ||||||
Restricted Stock | ||||||
Restricted Stock Units, Grants in Period | 190,000 | |||||
DFR Holdings LLC | Warrants | ||||||
Warrants | ||||||
Class of Warrant or Right, Outstanding | 2,000,000 | 2,000,000 | 2,000,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 6.375 | |||||
Quarterly | Restricted Stock Units (RSUs), Service-based [Member] | ||||||
Restricted Stock | ||||||
Weighted average vesting period | 2 years | |||||
[1] | The weighted average grant date fair value of all awards granted above during the nine months ended September 30, 2015 was $7.13. | |||||
[2] | The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | |||||
Net income (loss) attributable to CIFC Corp. - basic & diluted | $ 1,469 | $ 934 | $ 8,000 | $ 7,613 | |
Net income (loss) attributable to CIFC Corp. - diluted | $ 1,469 | $ 8,000 | $ 934 | $ 7,613 | |
Weighted-average shares - basic | 25,367,832 | 24,607,999 | 25,316,796 | 22,153,526 | |
Dilutive securities, Effect on Basic Earnings Per Share, Stock options | [1] | 633,000 | 731,000 | 660,000 | 651,000 |
Dilutive securities, Effect on Basic Earnings Per Share, Warrants | [2] | 275,000 | 583,000 | 365,000 | 508,000 |
Dilutive securities, Effect on Basic Earnings Per Share, Restricted Stock Units | 189,000 | 149,000 | 152,000 | 56,000 | |
Weighted-average shares - diluted | 26,464,883 | 26,070,692 | 26,493,549 | 23,368,861 | |
Earnings (loss) per share, Basic | $ 0.06 | $ 0.04 | $ 0.32 | $ 0.34 | |
Earnings (loss) per share, Diluted | $ 0.06 | $ 0.04 | $ 0.30 | $ 0.33 | |
Stock Options | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 800,000 | 800,000 | 800,000 | 900,000 | |
[1] | For both the three and nine months ended September 30, 2015, the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and for the three and nine months ended September 30, 2014, the Company excluded anti-dilutive stock options from the calculation of diluted EPS of 0.8 million and 0.9 million, respectively. | ||||
[2] | On September 24, 2015, the term of the warrants was extended to January 24, 2017 (Note 11). |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Income (loss) before income taxes | $ 1,811 | $ (134,967) | $ 22,074 | $ (75,237) |
Income tax expense | $ 526 | $ 1,883 | $ 13,441 | $ 21,124 |
Effective income tax rate | 29.04% | (1.40%) | 60.89% | (28.08%) |
NEW YORK | ||||
Operating Loss Carryforwards [Line Items] | ||||
Current State and Local Tax Expense (Benefit) | $ 6,300 | $ 6,600 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)itemshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)itemshares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)itemshares | |
Related party transactions | |||||
Proceeds from Other Equity | $ 350,000 | $ 200,000 | |||
Adjustments to Additional Paid in Capital, Other | 350,000 | 200,000 | |||
Professional services | $ 2,912,000 | $ 3,166,000 | $ 6,634,000 | 4,918,000 | |
Number of related Party investments in CIFC CLOs | 1 | 1 | 1 | ||
Related Party investments | $ 84,911,000 | $ 84,911,000 | $ 38,699,000 | ||
DFR Holdings Board of Directors [Member] | |||||
Related party transactions | |||||
Base Compensation | $ 200,000 | 200,000 | $ 500,000 | 500,000 | |
DFR Holdings LLC | |||||
Related party transactions | |||||
Number of shares owned (shares) | shares | 18.8 | 18.8 | 18.8 | ||
Prepaid Expense | $ 2,000,000 | $ 2,000,000 | |||
Professional services | $ 500,000 | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | |
Directors designated by DFR Holdings | 6 | ||||
CIFC FUNDING 2013-II - Board Member Investment | |||||
Related party transactions | |||||
DFR Holdings ownership percentage (minimum) | 50.00% | 50.00% | 50.00% | ||
Debt Instrument, Face Amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||
CIFC Funds | CIFC Employees | |||||
Related party transactions | |||||
Aggregate related party investment in funds | item | 4 | 4 | 4 | ||
Related Party investments | $ 5,300,000 | $ 5,300,000 | $ 4,700,000 | ||
Warrants | DFR Holdings LLC | |||||
Related party transactions | |||||
Class of Warrant or Right, Outstanding | shares | 2 | 2 | 2 | ||
Minimum | Common Stock | DFR Holdings LLC | |||||
Related party transactions | |||||
DFR Holdings ownership percentage (minimum) | 5.00% | 5.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Lease Commitments | |||||
Occupancy, Net | $ 0.5 | $ 0.4 | $ 1.3 | $ 1.3 | |
Consolidated CLOs | |||||
Other Commitments and Contingencies | |||||
Unfunded investment commitments | $ 2.1 | $ 2.1 | $ 5.9 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 02, 2015 | Nov. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Subsequent Event [Line Items] | |||||||
Dividends declared, usd per share | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 | |||
Long-term debt | $ 120,000 | $ 120,000 | $ 120,000 | ||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared, usd per share | $ 0.10 | ||||||
Long-term debt | $ 40,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.50% | ||||||
Debt Instrument, Call Date, Earliest | 5 |