Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 30, 2013 | |
Document And Entity Information | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'CIFC Corp. | ' |
Entity Central Index Key | '0001313918 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,776,028 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $59,930 | $47,692 |
Due from brokers | 3,988 | 1,150 |
Restricted cash and cash equivalents | 1,699 | 1,612 |
Investments | 26,569 | 5,058 |
Receivables | 3,421 | 2,432 |
Prepaid and other assets | 3,889 | 5,392 |
Deferred Tax Assets, Net | 54,331 | 50,545 |
Equipment and improvements, net | 3,929 | 3,979 |
Intangible assets, net | 31,417 | 43,136 |
Goodwill | 76,000 | 76,000 |
Subtotal | 265,173 | 236,996 |
TOTAL ASSETS | 11,095,897 | 10,504,911 |
LIABILITIES | ' | ' |
Due to brokers | 19,891 | ' |
Accrued and other liabilities | 13,575 | 15,734 |
Deferred Purchase Payments | 2,593 | 4,778 |
Contingent liabilities at fair value | 19,138 | 33,783 |
Long-term debt | 138,915 | 138,233 |
Subtotal | 194,112 | 192,528 |
TOTAL LIABILITIES | 10,823,744 | 10,305,563 |
EQUITY | ' | ' |
Common stock, par value $0.001: 500,000,000 shares authorized, 20,917,583 issued and 20,759,405 outstanding as of June 30, 2013 and 20,778,053 issued and 20,682,604 outstanding as of December 31, 2012 | 21 | 21 |
Treasury stock, at cost: 104,493 shares as of June 30, 2013, and 95,449 shares as of December 31, 2012 | -915 | -664 |
Additional paid-in capital | 959,201 | 955,407 |
Accumulated other comprehensive income (loss) | 0 | -3 |
Retained earnings (deficit) | -817,051 | -833,442 |
Stockholders' Equity Attributable to Parent | 141,256 | 121,319 |
TOTAL EQUITY | 272,153 | 199,348 |
TOTAL LIABILITIES AND EQUITY | 11,095,897 | 10,504,911 |
Consolidated Variable Interest Entities | ' | ' |
ASSETS | ' | ' |
Due from brokers | 169,209 | 103,008 |
Restricted cash and cash equivalents | 571,187 | 1,059,283 |
Investments | 10,041,772 | 9,066,779 |
Receivables | 48,556 | 38,845 |
TOTAL ASSETS | 10,830,724 | 10,267,915 |
LIABILITIES | ' | ' |
Due to brokers | 487,708 | 494,641 |
Accrued and other liabilities | 0 | 5,207 |
Interest payable | 24,058 | 16,753 |
Long-term debt at fair value | 10,117,866 | 9,596,434 |
TOTAL LIABILITIES | 10,629,632 | 10,113,035 |
EQUITY | ' | ' |
Retained earnings (deficit) | $130,897 | $78,029 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 20,917,583 | 20,778,053 |
Common stock, shares outstanding | 20,776,028 | 20,682,604 |
Treasury stock, shares | 130,444 | 95,449 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Revenues | ' | ' | ' | ' | ||||
Investment advisory fees | $1,763 | $2,750 | $6,646 | $8,048 | ||||
Net investment and interest income: | ' | ' | ' | ' | ||||
Net investment and interest income | 159 | 76 | 256 | 224 | ||||
Total net revenues | 1,922 | 2,826 | 6,902 | 8,272 | ||||
Expenses | ' | ' | ' | ' | ||||
Compensation and benefits | 6,717 | 5,188 | 21,227 | 16,479 | ||||
Professional services | 736 | 1,220 | 3,374 | 3,620 | ||||
General and administrative expenses | 1,963 | 1,237 | 5,290 | 4,401 | ||||
Depreciation and amortization | 3,755 | 3,802 | 12,251 | 13,325 | ||||
Impairment of intangible assets | ' | ' | 0 | 1,771 | ||||
Restructuring charges | ' | [1] | ' | [1] | 0 | [1] | 3,923 | [1] |
Total expenses | 13,171 | 11,447 | 42,142 | 43,519 | ||||
Gain (Loss) on Investments | 287 | 291 | 887 | 434 | ||||
Gain (Loss) on Liabilities at Fair Value | 1,099 | -6,059 | 1,598 | -9,400 | ||||
Other Nonoperating Income Expense, Net | 0 | 11 | -2 | -468 | ||||
Other Income (Expense) and Gain (Loss) | ' | ' | ' | ' | ||||
Corporate interest expense | -1,460 | -1,487 | -4,394 | -4,422 | ||||
Net gain on the sale of management contract | 634 | ' | 1,386 | 5,772 | ||||
Net other income (expense) and gain (loss) | 560 | -7,901 | -525 | -8,741 | ||||
Strategic transactions expenses | ' | 657 | 0 | 657 | ||||
Operating income (loss) | -10,689 | -16,522 | -35,765 | -43,988 | ||||
Results of Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Net results of Consolidated Variable Interest Entities | 22,765 | -153,548 | 122,925 | -97,335 | ||||
Net income (loss) | ' | ' | ' | ' | ||||
Income (loss) before income tax expense (benefit) | 12,076 | -170,070 | 87,160 | -141,323 | ||||
Income tax expense (benefit) | -6,214 | 1,757 | -15,812 | -2,741 | ||||
Net income (loss) | 5,862 | -168,313 | 71,348 | -144,064 | ||||
Net (income) loss attributable to noncontrolling interest and Consolidated Variable Interest Entities | 2,288 | 169,001 | -52,868 | 137,849 | ||||
Net income (loss) attributable to CIFC Corp. | 8,150 | 688 | 18,480 | -6,215 | ||||
Earnings Per Share, Basic | $0.39 | $0.03 | $0.89 | ($0.31) | ||||
Earnings Per Share, Diluted | $0.34 | $0.03 | $0.77 | ($0.31) | ||||
Weighted Average Number of Shares Outstanding, Basic | 20,798,102 | 19,957,041 | 20,801,531 | 20,201,304 | ||||
Weighted Average Number of Shares Outstanding, Diluted | 25,563,020 | 21,907,984 | 25,656,783 | 20,201,304 | ||||
Common Stock, Dividends, Per Share, Declared | $0.10 | ' | $0.10 | ' | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Expenses | ' | ' | ' | ' | ||||
Gain (Loss) on Investments | ' | ' | 10,784 | 266,614 | ||||
Gain (Loss) on Liabilities at Fair Value | ' | ' | -123,449 | -582,124 | ||||
Results of Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Net results of Consolidated Variable Interest Entities | 22,765 | -153,548 | 122,925 | -97,335 | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Net investment and interest income: | ' | ' | ' | ' | ||||
Investment and interest income | 117,075 | 99,097 | 356,957 | 295,545 | ||||
Interest expense | -33,285 | -25,246 | -92,308 | -71,857 | ||||
Net investment and interest income | 83,790 | 73,851 | 264,649 | 223,688 | ||||
Expenses | ' | ' | ' | ' | ||||
Gain (Loss) on Investments | -1,601 | 108,290 | 10,784 | 266,614 | ||||
Gain (Loss) on Liabilities at Fair Value | -49,721 | -332,752 | -123,449 | -582,124 | ||||
Results of Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Net gain (loss) from activities of Consolidated Variable Interest Entities | 32,580 | -150,612 | 152,048 | -90,961 | ||||
Expenses of Consolidated Variable Interest Entities | -9,815 | -2,936 | -29,123 | -6,374 | ||||
Net results of Consolidated Variable Interest Entities | $22,765 | [2] | ($153,548) | [2] | $122,925 | [2] | ($97,335) | [2] |
[1] | (1)During the nine months ended SeptemberB 30, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $0.6 million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office. | |||||||
[2] | (1)See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income (loss) | $5,862 | ($168,313) | $71,348 | ($144,064) |
Other comprehensive income (loss) from foreign currency translation | 0 | 2 | 3 | 2 |
Other Comprehensive Income (Loss), Net of Tax | 0 | 2 | 3 | 2 |
Comprehensive income (loss) | 5,862 | -168,311 | 71,351 | -144,062 |
Comprehensive (income) loss attributable to noncontrolling interest and Consolidated Variable Interest Entities | 2,288 | 169,001 | -52,868 | 137,849 |
Comprehensive income (loss) attributable to CIFC Corp. | $8,150 | $690 | $18,483 | ($6,213) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | $71,348 | ($144,064) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs | 1,119 | 690 |
Share-based compensation | 3,887 | 1,568 |
Net (gain) loss on investments and liabilities at fair value / other (gain) loss | -2,485 | 9,452 |
Net gain on the sale of management contract | -1,386 | -5,772 |
Depreciation and amortization | 12,251 | 13,325 |
Impairment of intangible assets | 0 | 1,771 |
Loss on disposal of equipment and improvements | ' | 1,417 |
Deferred income tax expense (benefit) | -3,786 | 2,798 |
Net (gain) loss on investments at fair value | -887 | -434 |
Net (gain) loss on liabilities at fair value | -1,598 | 9,400 |
Changes in operating assets and liabilities: | ' | ' |
Due from brokers | -2,838 | -5,504 |
Net (purchases) sales of investments at fair value | 95,352 | -39,982 |
Proceeds from Sale of Securities, Operating Activities | -110,691 | 40,417 |
Receivables | -989 | -1,392 |
Prepaid and other assets | 1,381 | 122 |
Due to brokers | 19,891 | 13,926 |
Accrued and other liabilities | -2,157 | -6,113 |
Net cash provided by (used in) operating activities | -851,394 | 118,945 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Change in restricted cash and cash equivalents | -87 | 497 |
Purchases of investments at fair value | -5,000 | 0 |
Proceeds from the sale of the DFR MM CLO | ' | 36,500 |
Proceeds from the sale of management contracts | 1,386 | 6,468 |
Net cash (paid) acquired from strategic transactions | ' | 4,525 |
Purchases of equipment and improvements | -482 | -1,763 |
Principal receipts on and proceeds from sale of loans previously classified as held for investment | ' | 1,118 |
Net cash provided by (used in) investing activities | 483,913 | -131,440 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repurchases of common stock | 251 | 3,768 |
Payment of stock and debt issuance costs | 93 | ' |
Dividends paid | -2,091 | 0 |
Payment to settle warrants and options | 0 | 72 |
Deferred purchase payments and payments on contingent liabilities | -15,547 | -16,455 |
Net cash provided by (used in) financing activities | 379,716 | 39,547 |
Foreign currency translation | 3 | 2 |
Net increase (decrease) in cash and cash equivalents | 12,238 | 27,054 |
Cash and cash equivalents at beginning of period | 47,692 | 35,973 |
Cash and cash equivalents at end of period | 59,930 | 63,027 |
SUPPLEMENTAL DISCLOSURE: | ' | ' |
Cash paid for interest | 2,581 | 2,996 |
Cash paid for income taxes | 23,220 | 1,624 |
Non-cash acquisition of equipment and improvements | 0 | 2,234 |
Consolidated Variable Interest Entities | ' | ' |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs | ' | -1,443 |
Net (gain) loss on investments at fair value | -10,784 | -266,614 |
Net (gain) loss on liabilities at fair value | 123,449 | 582,124 |
Net other (gain) loss | -64 | -294 |
Changes in operating assets and liabilities: | ' | ' |
Due from brokers | -66,201 | -46,072 |
Net (purchases) sales of investments at fair value | -6,804,922 | -3,225,541 |
Proceeds from Sale of Securities, Operating Activities | -5,840,777 | -3,010,576 |
Receivables | -9,711 | -17,212 |
Due to brokers | -6,933 | 196,577 |
Accrued and other liabilities | -5,207 | 4,221 |
Interest payable | 7,305 | -36 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Change in restricted cash and cash equivalents | 488,096 | -169,735 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of long-term debt | 2,405,048 | 884,091 |
Payments made on long-term debt | -2,007,350 | -824,249 |
SUPPLEMENTAL DISCLOSURE: | ' | ' |
Cash paid for interest | 84,249 | 66,305 |
Paid-in-Kind Interest | $2,087 | $3,887 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
ORGANIZATION | ' |
Organization and Business | |
Organization—CIFC Corp. (“CIFC” and, together with its subsidiaries, the “Company”) is a Delaware corporation that specializes in managing investment products which include corporate credit obligations and primarily senior secured corporate loans (“SSCLs”), as the primary underlying investments. | |
Business—The Company establishes and manages investment products for various types of investors, including pension funds, hedge funds and other asset management firms, banks, insurance companies and other types of institutional investors across the globe. The Company's existing investment products are primarily collateralized loan obligations ("CLOs"). In addition, the Company manages other loan-based products and certain legacy collateralized debt obligations ("CDOs"). The Company also makes investments in certain investment products it manages and SSCLs that the Company warehouses to launch new investment products. | |
The investment advisory fees paid to the Company by these investment products are the Company's primary source of revenue. These fees are generally paid on a quarterly basis and are ongoing as long as the Company manages the products. Investment advisory fees of CLOs typically consist of senior and subordinated management fees based on the amount of assets held in the CLOs and, in some cases, incentive fees based on the returns generated for certain investors. The Company also earns net investment income and incurs gains/losses from its investments in CLOs, warehouses and other investment products it manages. |
BASIS_OF_PRESENTATION_AND_PRIN
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' |
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, 2012. | |
Certain prior year amounts in the Condensed Consolidated Statements of Operations and Cash Flows have been combined to conform to current period presentation and did not have a material impact on cash flows from operating and investing activities. | |
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. | |
Principles of Consolidation—The Condensed Consolidated Financial Statements include the financial statements of CIFC and (i) its wholly-owned subsidiaries, (ii) subsidiaries in which the Company has a controlling interest and (iii) variable interest entities ("VIEs") for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated upon consolidation. This consolidation, particularly with respect to the VIEs, significantly impacts the Company's Condensed Consolidated Financial Statements. | |
Consolidated VIEs—As of September 30, 2013, the Company consolidated 26 CLOs. As of December 31, 2012, the Company consolidated 23 CLOs and 1 CDO (collectively, the “Consolidated CLOs”). See Note 5 for additional disclosures. | |
Other Consolidated Entities—Warehouses—The Company generally creates special purpose vehicles (“SPVs”) to warehouse SSCL's prior to the issuance of new CLOs. These SPVs generally enter into warehouse agreements that vary depending on the terms agreed to with the warehousing counterparties. In addition, the Company generally makes investments in these warehouse entities. During the nine months ended September 30, 2013, the Company consolidated five warehouses and deconsolidated four warehouses in conjunction with the sponsorship of the four newly issued CLOs. As of September 30, 2013, the Company consolidated two warehouses. During the nine months ended September 30, 2012, the Company consolidated two warehouses and deconsolidated one warehouse in conjunction with the sponsorship of one newly issued CLO. See Note 5 for more information. | |
Unconsolidated VIEs—As of September 30, 2013, the Company had variable interests in an additional 7 CLOs, 10 CDOs, and 1 other investment product, which the Company managed, that were not consolidated (the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the VIEs. As of December 31, 2012, the Company had variable interests in an additional 6 CLOs, 15 CDOs and 1 other investment product, which the Company managed, that were not consolidated (the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the VIEs. | |
The Company's maximum exposure to loss on unconsolidated VIEs includes its investment, investment advisory fee receivables and future investment advisory fees collectible by the Company. As of December 31, 2012, the Company's maximum exposure to loss associated with the Unconsolidated VIEs was limited to $5.1 million of investments made by the Company in the Unconsolidated VIEs. In addition, as of September 30, 2013 and December 31, 2012, the Company's investment advisory fee receivables was $0.3 million and $0.6 million, respectively. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES | ' |
Summary of Significant Accounting Policies and Recent Accounting Updates | |
As of September 30, 2013, the Company's significant accounting policies, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, have not changed. |
STRATEGIC_TRANSACTIONS
STRATEGIC TRANSACTIONS | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Business Combinations [Abstract] | ' | |||||||
STRATEGIC TRANSACTIONS | ' | |||||||
Strategic Transactions | ||||||||
GECC Transaction—On September 24, 2012 (the "Closing Date"), the Company closed a five year strategic relationship with General Electric Capital Corporation's (“GE Capital”) Bank Loan Group to provide new CIFC-managed investment products, including those involving GE Capital loan originations and/or vehicles to which GE Capital provides financing. Further, partnering with GE Capital positions the Company for unique opportunities given GE Capital's strength as a leading corporate lender coupled with CIFC's loan asset management platform. Pursuant to the transaction: (i) a commercial council (the “Commercial Council”) comprised of senior members of both GE Capital and the Company was formed to explore joint business opportunities; (ii) the Company and GE Capital entered into a referral agreement (the “Referral Agreement”) pursuant to which (a) GE Capital will refer certain potential investment advisory clients (“Referred Clients”) to the Company for a period of five years (which may be extended by mutual consent for up to two consecutive one year periods) and (b) the Company is obligated to pay GE Capital 15% of any advisory fees in excess of $9.0 million earned from Referred Clients in the aggregate, subject to certain exclusions, and (iii) GE Capital Debt Advisors LLC, a wholly owned indirect subsidiary of GE Capital (“GECDA”), exited the business of providing certain loan management services to third parties and assigned to CIFC Asset Management LLC ("CIFCAM") the right to manage four “Navigator” CLOs (the “Navigator Management Agreements”). The transaction described in this paragraph shall hereinafter be referred to as the “GECC Transaction”. | ||||||||
The GECC Transaction is considered a taxable business combination in accordance with Accounting Standards Codification ("ASC") Topic 805-Business Combinations (“ASC Topic 805”). As consideration for the GECC Transaction, on the Closing Date, the Company (i) issued 1.0 million shares of its common stock to GE Capital Equity Investments, Inc., a wholly-owned subsidiary of GE Capital (“GECEII”), with a Closing Date fair value of $7.5 million, (ii) issued a warrant to GECEII to purchase 2.0 million shares of a newly created class of non-voting stock (the “GECEII Warrant”) at a per share exercise price of $6.375 with an estimated Closing Date fair value of $3.7 million and (iii) paid to GECDA $4.5 million in cash, subject to certain adjustments. In addition, the Company and GECEII entered into an investment agreement setting forth certain rights and obligations of GECEII as a stockholder of the Company, including a right of GECEII to designate a member of the Board of Directors (the "Board") so long as GECEII (together with its affiliates) owns at least 5% of the outstanding capital stock of the Company, calculated assuming the full conversion of all outstanding Convertible Notes into common stock and the full exercise of the GECEII Warrant. The Company did not record contingent consideration for its obligation to pay GE Capital 15% of investment advisory fees in excess of the first $9.0 million as the estimated fair value was deemed immaterial as of the Closing Date. Future payments to GE Capital under the Referral Agreement, if any, will reduce operating income (loss). Calculation of the purchase consideration is as follows: | ||||||||
(In thousands, except share and per share information) | ||||||||
Shares issued | 1,000,000 | |||||||
Multiplied by Closing Date share price (1) | $ | 7.51 | ||||||
Value of shares | $ | 7,510 | ||||||
Warrants issued | 2,000,000 | |||||||
Multiplied by Closing Date estimated fair value per warrant (2) | $ | 1.83 | ||||||
Value of warrants | 3,660 | |||||||
Cash | 4,525 | |||||||
Total purchase consideration | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Represents the closing price of the Company's common stock on the Closing Date. | |||||||
-2 | The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm. | |||||||
The following is a summary of the recognized amounts of assets acquired and liabilities assumed in the GECC Transaction (1): | ||||||||
(In thousands) | ||||||||
Receivables | $ | 147 | ||||||
Identifiable intangible assets | 7,470 | |||||||
Excess of purchase consideration over identifiable net assets acquired - Goodwill (2) (3) | 8,078 | |||||||
Recognized assets acquired and liabilities assumed | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | During the quarter ended September 30, 2013, management finalized the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, based on its finalization of revenue projections. No provisional adjustments to intangible assets, goodwill and contingent liabilities resulted from the finalization. | |||||||
-2 | Total amount is tax deductible. | |||||||
-3 | Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in Assets Under Management ("AUM"), (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans. | |||||||
The fair values of the assets acquired were estimated by management with the assistance of an independent valuation firm. The identifiable intangible assets acquired by asset class are as follows: | ||||||||
Closing Date | Closing Date Estimated | |||||||
Estimated Fair Value | Average Remaining Useful Life | |||||||
(In thousands) | (In years) | |||||||
Intangible asset class: | ||||||||
Investment management contracts (1) | $ | 3,660 | 3 | |||||
Referral Agreement (2) | 3,810 | 7 | ||||||
$ | 7,470 | |||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives. | |||||||
-2 | Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 9 for additional disclosures regarding intangible assets. | |||||||
The Company expensed GECC Transaction-related costs as incurred. For the three and nine months ended September 30, 2012, the Company incurred costs related to the GECC Transaction of $0.7 million which was recorded within "Strategic Transaction Expenses" in the Condensed Consolidated Statements of Operations. | ||||||||
As a result of the GECC Transaction, the Company consolidated one Navigator CLO, Navigator 2006 CLO. As of the Closing Date, the Company consolidated assets of $318.3 million and non-recourse liabilities of $313.2 million related to this CLO. As of September 30, 2013 and December 31, 2012, the Company consolidated assets of $347.1 million and $328.0 million, respectively, and non-recourse liabilities of $342.0 million and $325.8 million, respectively, related to this CLO. | ||||||||
The Company recorded net income attributable to CIFC Corp. of $0.6 million and $2.1 million, respectively, for the three and nine months ended September 30, 2013, and a de minimus value for both periods ended September 30, 2012, which represents investment advisory fees from the acquisition of the rights to manage the Navigator CLOs. |
CONSOLIDATED_VIEs
CONSOLIDATED VIEs | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Clos and Consolidated Variable Interest Entities | ' | ||||||||||||||||||||||||
CLOS AND CONSOLIDATED VARIABLE INTEREST ENTITIES | ' | ||||||||||||||||||||||||
Consolidated VIEs | |||||||||||||||||||||||||
Although the Company consolidates all the assets and liabilities of the Consolidated VIEs, its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are generally held 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 equity of the Consolidated VIEs have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation. | |||||||||||||||||||||||||
Consolidated CLOs—The following table summarizes the consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1): | |||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Total Assets | $ | 10,731,999 | $ | 9,933,495 | |||||||||||||||||||||
Total Liabilities (non-recourse) | 10,547,151 | 9,806,010 | |||||||||||||||||||||||
Maximum exposure to loss: | |||||||||||||||||||||||||
Investments and beneficial interests (2) | $ | 50,452 | $ | 47,454 | |||||||||||||||||||||
Receivables (2) | 3,566 | 2,674 | |||||||||||||||||||||||
Total maximum exposure to loss | $ | 54,018 | $ | 50,128 | |||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs, which are not included in the table above. | ||||||||||||||||||||||||
-2 | Amounts are eliminated in consolidation. | ||||||||||||||||||||||||
Other Consolidated Entities—The following table summarizes the Company's consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets: | |||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
Consolidated Assets | Consolidated Total Non-Recourse Liabilities | Maximum Exposure to Loss (1) | Consolidated Assets | Consolidated Total Non-Recourse Liabilities | Maximum Exposure to Loss (1) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Warehouses (1) | $ | 98,725 | $ | 82,481 | $ | 16,175 | $ | 334,420 | $ | 307,025 | $ | 26,723 | |||||||||||||
Explanatory Note: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | Maximum exposure to loss is generally limited to the Company's investment in the entity. The Company consolidated two warehouses as of September 30, 2013, and one warehouse as of December 31, 2012. | ||||||||||||||||||||||||
The table below represents total net results of the Company's share of the Consolidated VIEs included on the Condensed Consolidated Statements of Operations as follows: | |||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Consolidated CLOs | $ | 21,669 | $ | (153,668 | ) | $ | 118,509 | $ | (98,717 | ) | |||||||||||||||
Warehouses (1) | 1,096 | 120 | 4,416 | 1,551 | |||||||||||||||||||||
DFR MM CLO (2) | — | — | — | (169 | ) | ||||||||||||||||||||
Net results of Consolidated VIEs | 22,765 | (153,548 | ) | 122,925 | (97,335 | ) | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interest in Consolidated VIEs | 2,288 | 169,001 | (52,868 | ) | 137,849 | ||||||||||||||||||||
Net results of Consolidated VIEs attributable to CIFC Corp. | $ | 25,053 | $ | 15,453 | $ | 70,057 | $ | 40,514 | |||||||||||||||||
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp: | |||||||||||||||||||||||||
Consolidated VIE investment advisory fees | $ | 20,874 | $ | 13,374 | $ | 62,588 | $ | 36,787 | |||||||||||||||||
Consolidated VIE net investment income | 4,179 | 2,079 | 7,469 | 3,727 | |||||||||||||||||||||
Net results of Consolidated VIEs attributable to CIFC Corp. | $ | 25,053 | $ | 15,453 | $ | 70,057 | $ | 40,514 | |||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | During the three and nine months ended September 30, 2013, the Company's results from warehouses included two and five warehouse investments, respectively. During both the three and nine months ended September 30, 2012, the Company's results from warehouses included two warehouse investments. | ||||||||||||||||||||||||
-2 | In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | |||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis—The following tables summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and by level: | ||||||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | |||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 | Level 3 | Estimated Fair Value | Level 1 (1) | Level 2 | Level 3 | Estimated Fair Value | |||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Investments at fair value (2) | $ | — | $ | 25,035 | $ | 1,534 | $ | 26,569 | $ | — | $ | 5,058 | $ | — | $ | 5,058 | ||||||||||||||||
Consolidated VIEs: | ||||||||||||||||||||||||||||||||
Loans | — | 8,520,137 | 1,413,610 | 9,933,747 | — | 7,740,574 | 1,177,058 | 8,917,632 | ||||||||||||||||||||||||
Corporate bonds | — | — | 7,225 | 7,225 | — | — | 67,438 | 67,438 | ||||||||||||||||||||||||
Other | — | — | 100,800 | 100,800 | — | — | 81,709 | 81,709 | ||||||||||||||||||||||||
Total Consolidated VIEs | — | 8,520,137 | 1,521,635 | 10,041,772 | — | 7,740,574 | 1,326,205 | 9,066,779 | ||||||||||||||||||||||||
Total Assets | $ | — | $ | 8,545,172 | $ | 1,523,169 | $ | 10,068,341 | $ | — | $ | 7,745,632 | $ | 1,326,205 | $ | 9,071,837 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 19,138 | $ | 19,138 | $ | — | $ | — | $ | 33,783 | $ | 33,783 | ||||||||||||||||
Consolidated VIEs: | ||||||||||||||||||||||||||||||||
Long-term debt | — | — | 10,117,866 | 10,117,866 | — | — | 9,596,434 | 9,596,434 | ||||||||||||||||||||||||
Total Consolidated VIEs | — | — | 10,117,866 | 10,117,866 | — | — | 9,596,434 | 9,596,434 | ||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | 10,137,004 | $ | 10,137,004 | $ | — | $ | — | $ | 9,630,217 | $ | 9,630,217 | ||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||
______________________________ | ||||||||||||||||||||||||||||||||
-1 | There have been no transfers in or out of Level 1 for the periods presented. | |||||||||||||||||||||||||||||||
-2 | As of September 30, 2013, total amount includes $16.0 million of loans and $10.6 million of investments in other-loan based products. During the three and nine months ended September 30, 2013, one loan was purchased and is classified as Level 3. Subsequent to quarter end, this loan was sold. | |||||||||||||||||||||||||||||||
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 at Fair Value | ||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2013 | For the Three Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||
Investment Assets of Consolidated Variable Interest Entities | Investment Assets of Consolidated Variable Interest Entities | |||||||||||||||||||||||||||||||
Loans | Corporate | Other | Total | Loans | Corporate | Other | Total | |||||||||||||||||||||||||
Bonds | Bonds | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 1,225,697 | $ | 16,830 | $ | 103,271 | $ | 1,345,798 | $ | 4,371 | $ | 107,912 | $ | 72,700 | $ | 184,983 | ||||||||||||||||
Transfers into Level 3 (1) | 219,206 | — | — | 219,206 | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3 (2) | (285,260 | ) | — | — | (285,260 | ) | — | — | — | — | ||||||||||||||||||||||
Transfers in due to consolidation or acquisition | — | — | — | — | 660 | — | 863 | 1,523 | ||||||||||||||||||||||||
Net realized/unrealized gains (losses) | (3,699 | ) | 22 | 1,906 | (1,771 | ) | 325 | 811 | 10,656 | 11,792 | ||||||||||||||||||||||
Purchases | 424,447 | 470 | — | 424,917 | 185 | — | — | 185 | ||||||||||||||||||||||||
Sales | (75,646 | ) | (10,097 | ) | (4,377 | ) | (90,120 | ) | — | (33,897 | ) | (432 | ) | (34,329 | ) | |||||||||||||||||
Settlements | (91,135 | ) | — | — | (91,135 | ) | (75 | ) | — | (4,889 | ) | (4,964 | ) | |||||||||||||||||||
Estimated fair value, end of period | $ | 1,413,610 | $ | 7,225 | $ | 100,800 | $ | 1,521,635 | $ | 5,466 | $ | 74,826 | $ | 78,898 | $ | 159,190 | ||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | (4,241 | ) | $ | (187 | ) | $ | (321 | ) | $ | (4,749 | ) | $ | 318 | $ | 572 | $ | 9,317 | $ | 10,207 | ||||||||||||
For the Nine Months Ended September 30, 2013 | For the Nine Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||
Investment Assets of Consolidated Variable Interest Entities | Investment Assets of Consolidated Variable Interest Entities | |||||||||||||||||||||||||||||||
Loans | Corporate | Other | Total | Loans | Corporate | Other | Total | |||||||||||||||||||||||||
Bonds | Bonds | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 1,177,058 | $ | 67,438 | $ | 81,709 | $ | 1,326,205 | $ | 19,729 | $ | 154,096 | $ | 53,087 | $ | 226,912 | ||||||||||||||||
Transfers into Level 3 (1) | 615,286 | — | — | 615,286 | 4,058 | — | — | 4,058 | ||||||||||||||||||||||||
Transfers out of Level 3 (2) | (1,040,172 | ) | — | — | (1,040,172 | ) | (5,453 | ) | — | — | (5,453 | ) | ||||||||||||||||||||
Transfers in due to consolidation or acquisition | — | — | — | — | 660 | — | 863 | 1,523 | ||||||||||||||||||||||||
Transfers out due to deconsolidation (3) | — | — | — | — | — | (5,708 | ) | — | (5,708 | ) | ||||||||||||||||||||||
Transfers between classes (4) | — | — | — | — | — | (33,290 | ) | 33,290 | — | |||||||||||||||||||||||
Net realized/unrealized gains (losses) | 5,423 | 379 | 12,085 | 17,887 | 1,658 | 6,341 | 7,399 | 15,398 | ||||||||||||||||||||||||
Purchases | 1,291,323 | 3,258 | 19,471 | 1,314,052 | 436 | — | 7,255 | 7,691 | ||||||||||||||||||||||||
Sales | (260,508 | ) | (63,353 | ) | (11,442 | ) | (335,303 | ) | (1,430 | ) | (45,450 | ) | (10,249 | ) | (57,129 | ) | ||||||||||||||||
Settlements | (374,800 | ) | (497 | ) | (1,023 | ) | (376,320 | ) | (14,192 | ) | (1,163 | ) | (12,747 | ) | (28,102 | ) | ||||||||||||||||
Estimated fair value, end of period | $ | 1,413,610 | $ | 7,225 | $ | 100,800 | $ | 1,521,635 | $ | 5,466 | $ | 74,826 | $ | 78,898 | $ | 159,190 | ||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | 636 | $ | (39 | ) | $ | 10,373 | $ | 10,970 | $ | 55 | $ | 4,922 | $ | 7,168 | $ | 12,145 | |||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||
______________________________ | ||||||||||||||||||||||||||||||||
-1 | 2013 transfers in represent loans valued currently by a third party pricing service using composite prices determined using less than two quotes which were valued at the beginning of the period by the same third party pricing service using composite prices determined using two or more quotes. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model. | |||||||||||||||||||||||||||||||
-2 | 2013 transfers out represent loans marked at the beginning of the period 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 using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs. | |||||||||||||||||||||||||||||||
-3 | The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which the management rights and investment was sold in 2012). | |||||||||||||||||||||||||||||||
-4 | The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011. | |||||||||||||||||||||||||||||||
Level 3 Financial Liabilities at Fair Value | ||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2013 | For the Three Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||
Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 23,777 | $ | 10,175,179 | $ | 10,198,956 | $ | 31,796 | $ | 7,894,238 | $ | 7,926,034 | ||||||||||||||||||||
Transfers into Level 3 (1) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | ||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,099 | ) | 49,721 | 48,622 | 6,059 | 332,752 | 338,811 | |||||||||||||||||||||||||
Purchases | — | 467,552 | 467,552 | — | 105 | 105 | ||||||||||||||||||||||||||
Sales | — | (65,843 | ) | (65,843 | ) | — | — | — | ||||||||||||||||||||||||
Issuances | — | — | — | — | 443,807 | 443,807 | ||||||||||||||||||||||||||
Settlements | (3,540 | ) | (508,743 | ) | (512,283 | ) | (3,131 | ) | (443,874 | ) | (447,005 | ) | ||||||||||||||||||||
Estimated fair value, end of period | $ | 19,138 | $ | 10,117,866 | $ | 10,137,004 | $ | 34,724 | $ | 8,535,621 | $ | 8,570,345 | ||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 1,346 | $ | 16,325 | $ | 17,671 | $ | (5,441 | ) | $ | (268,358 | ) | $ | (273,799 | ) | |||||||||||||||||
For the Nine Months Ended September 30, 2013 | For the Nine Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||
Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 33,783 | $ | 9,596,434 | $ | 9,630,217 | $ | 39,279 | $ | 7,559,568 | $ | 7,598,847 | ||||||||||||||||||||
Transfers into Level 3 (1) | — | 14,085 | 14,085 | — | — | — | ||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | ||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,598 | ) | 123,449 | 121,851 | 9,400 | 582,124 | 591,524 | |||||||||||||||||||||||||
Purchases | — | 2,390,964 | 2,390,964 | — | 62,905 | 62,905 | ||||||||||||||||||||||||||
Sales | — | (659,542 | ) | (659,542 | ) | — | (5,000 | ) | (5,000 | ) | ||||||||||||||||||||||
Issuances | — | — | — | — | 821,184 | 821,184 | ||||||||||||||||||||||||||
Settlements | (13,047 | ) | (1,347,524 | ) | (1,360,571 | ) | (13,955 | ) | (793,753 | ) | (807,708 | ) | ||||||||||||||||||||
Estimated fair value, end of period | $ | 19,138 | $ | 10,117,866 | $ | 10,137,004 | $ | 34,724 | $ | 8,535,621 | $ | 8,570,345 | ||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 2,036 | $ | 105,739 | $ | 107,775 | $ | (9,209 | ) | $ | (381,878 | ) | $ | (391,087 | ) | |||||||||||||||||
Explanatory Note: | ||||||||||||||||||||||||||||||||
__________________________ | ||||||||||||||||||||||||||||||||
-1 | The transfers into Level 3 represent the Company's sales of debt and subordinated notes of Consolidated CLOs during the period, which results in the debt and subordinated notes no longer being eliminated in consolidation. | |||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Assets & Liabilities—ASC Topic 820-Fair Value Measurement, as amended by Accounting Standards Update ("ASU") 2011-04, Fair Value Measurement, requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company. As such, the disclosure provided below provides quantitative information only about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs. | ||||||||||||||||||||||||||||||||
The valuation of both the contingent liabilities and the long-term debt of the Consolidated CLOs begins with a model of projected cash flows for the relevant CLO. In addition to the structure of each of the CLOs (as provided in the indenture for each CLO), the following table provides quantitative information about the significant unobservable inputs utilized in this projection. Significant increases in any of the significant unobservable inputs, in isolation, will generally have an increase or decrease correlation with the fair value measurement of contingent liabilities and the long-term debt of the Consolidated CLOs, as shown in the table. | ||||||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | Impact of Increase in | ||||||||||||||||||||||||||||||
Input on Fair Value | ||||||||||||||||||||||||||||||||
Significant Unobservable Input | Range | Range | Measurement (2) | |||||||||||||||||||||||||||||
Default rate (1) | 1-2% | 1-2% | Decrease | |||||||||||||||||||||||||||||
Recovery rate (1) | 70-75% | 70-75% | Increase | |||||||||||||||||||||||||||||
Pre-payment rate (1) | 25-30% | 25-30% | Decrease | |||||||||||||||||||||||||||||
Reinvestment spread of assets above LIBOR | 3.0-3.8% | 3.0-4.0% | Increase | |||||||||||||||||||||||||||||
Reinvestment price of assets | 99.5-100.0 | 99.5-100.0 | Increase | |||||||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||
____________________________ | ||||||||||||||||||||||||||||||||
-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 impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. | |||||||||||||||||||||||||||||||
The valuation model for contingent liabilities discounts the investment advisory fees subject to fee-sharing arrangements from projected cash flow models (described above). The discount rate varies by type of investment advisory fee (senior management fee, subordinated management fee, or incentive fee), the priority of that investment advisory fee in the waterfall of the CLO and the relative risk associated with the respective investment advisory fee cash flow projections. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement. As of September 30, 2013 and December 31, 2012, the Company used discount rates ranging from 5.4% to 15.0% and 6.0% to 15.0%, respectively. | ||||||||||||||||||||||||||||||||
The valuation of long-term debt of the Consolidated CLOs discounts the cash flows to each tranche of debt and subordinated notes provided from the projected cash flow models (described above). The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement. As of September 30, 2013 and December 31, 2012, for the debt tranches, the Company used discount rates above LIBOR ranging from 1.0% to 8.0% and 1.0% to 9.0%, respectively, and for the subordinated notes tranches the Company used a discount rate of 12% and discount ranging from 12% to 15%, respectively. | ||||||||||||||||||||||||||||||||
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, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||||||||||||||||||
Value | Fair | Value | Fair | |||||||||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||||||
Convertible Notes (1) | $ | 18,915 | $ | 32,603 | $ | 18,233 | $ | 33,058 | ||||||||||||||||||||||||
Junior Subordinated Notes (2) | $ | 120,000 | $ | 59,312 | $ | 120,000 | $ | 47,752 | ||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||
________________________________ | ||||||||||||||||||||||||||||||||
-1 | The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions. This methodology is classified as Level 3 within the fair value hierarchy. | |||||||||||||||||||||||||||||||
-2 | The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). 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 other financial instruments including cash and cash equivalents, due from brokers, restricted cash and cash equivalents, receivables, due to brokers, deferred purchase payments, Consolidated VIE due from brokers, Consolidated VIE restricted cash and cash equivalents, Consolidated VIE receivables and Consolidated VIE due to brokers approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy. The fair value of other financial instruments including investments at fair value, contingent liabilities at fair value, Consolidated VIE investment and derivative assets at fair value and Consolidated VIE long-term debt are included in the previous fair value hierarchy tables above. | ||||||||||||||||||||||||||||||||
Loans and other investments classified as investments at fair value of the Consolidated CLOs are diversified over multiple industries. In addition, indentures of each CLO outlines industry concentration limits. Management does not believe the Company has any significant concentration risks. | ||||||||||||||||||||||||||||||||
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. | ||||||||||||||||||||||||||||||||
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 2 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. Effective December 31, 2012, 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 inputs used in the third-party pricing services' valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. 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. | ||||||||||||||||||||||||||||||||
Other Assets—Other assets at fair value primarily represent investments in CLOs or CDOs which are generally valued via a third-party pricing service. The inputs to the valuation include recent trades, 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 services valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. 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 other assets are classified as Level 3 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Investments in Funds—The fair value of investments in funds are generally determined based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. The Company has the ability to redeem its investment at its proportionate share of NAV at, or within three months of the reporting date. The NAV calculation includes significant inputs including the valuation of assets and liabilities of the fund. A third-party pricing service provides the underlying asset prices in the fund, which are generally observable. Investments at fair value valued in this manner are classified as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Contingent Liabilities—The fair value of contingent liabilities is determined via a third-party valuation firm and is based on a discounted cash flow model. The model is based on projections of the relevant future investment advisory fee cash flows and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation model includes 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. The fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses is based upon discounted cash flow models and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation models include the structure of the Consolidated CLO or Warehouses and estimates related to loan default, recovery and discount rates. Accordingly, the debt and subordinated notes are classified as Level 3 within the fair value hierarchy |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Sep. 30, 2013 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Derivative Instruments | ' |
Derivative Instruments and Hedging Activities | |
Warrants—The Company and its Consolidated VIEs hold warrants to purchase equity interests in companies where they are/were, also a debt holder. These warrants are typically issued in connection with renegotiations and amendments of the loan agreements. As of September 30, 2013, the funds managed by the Company had 11 warrant contracts of which 9 warrant contracts were held by the Consolidated VIEs. As of December 31, 2012, the funds managed by the Company had 12 warrant contracts of which 10 warrant contracts were held by the Consolidated VIEs. |
NET_RESULTS_OF_CONSOLIDATED_VI
NET RESULTS OF CONSOLIDATED VIEs | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities | ' | |||||||||||||||
NET GAIN (LOSS) FROM ACTIVITIES OF CONSOLIDATED VARIABLE INTEREST ENTITIES | ' | |||||||||||||||
Net Results of Consolidated VIEs | ||||||||||||||||
The following table is a summary of the components of "Net results of Consolidated Variable Interest Entities": | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Investment income | $ | 117,075 | $ | 99,097 | $ | 356,957 | $ | 295,545 | ||||||||
Interest expense | (33,285 | ) | (25,246 | ) | (92,308 | ) | (71,857 | ) | ||||||||
Net investment income | 83,790 | 73,851 | 264,649 | 223,688 | ||||||||||||
Net gain (loss) on investments at fair value | (1,601 | ) | 108,290 | 10,784 | 266,614 | |||||||||||
Net gain (loss) on liabilities at fair value | (49,721 | ) | (332,752 | ) | (123,449 | ) | (582,124 | ) | ||||||||
Net gain (loss) on other investments and derivatives | 112 | (1 | ) | 64 | 861 | |||||||||||
Net gain (loss) from activities of Consolidated VIEs | $ | 32,580 | $ | (150,612 | ) | $ | 152,048 | $ | (90,961 | ) | ||||||
Expenses of Consolidated VIEs | (9,815 | ) | (2,936 | ) | (29,123 | ) | (6,374 | ) | ||||||||
Net Results of Consolidated VIEs (1) | $ | 22,765 | $ | (153,548 | ) | $ | 122,925 | $ | (97,335 | ) | ||||||
Explanatory Note: | ||||||||||||||||
________________________________ | ||||||||||||||||
-1 | See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. |
INTANGIBLE_ASSETS_AND_GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
INTANGIBLE ASSETS AND GOODWILL | ' | |||||||||||||
Intangible Assets | ||||||||||||||
Intangible assets comprised of the following (1): | ||||||||||||||
Weighted-Average Remaining Estimated Useful Life | Gross Carrying | Accumulated | Net Carrying | |||||||||||
Amount (1) | Amortization (2) | Amount | ||||||||||||
(In years) | (In thousands) | |||||||||||||
September 30, 2013: | ||||||||||||||
Investment management contracts | 5.2 | $ | 76,047 | $ | 49,861 | $ | 26,186 | |||||||
Referral agreement | 6 | 3,810 | 381 | 3,429 | ||||||||||
Non-compete agreements | 4.3 | 1,535 | 671 | 864 | ||||||||||
Trade name | 7.5 | 1,250 | 312 | 938 | ||||||||||
Total intangible assets | $ | 82,642 | $ | 51,225 | $ | 31,417 | ||||||||
December 31, 2012:: | ||||||||||||||
Investment management contracts | 5.4 | $ | 76,047 | $ | 38,727 | $ | 37,320 | |||||||
Referral agreement | 6.8 | 3,810 | 95 | 3,715 | ||||||||||
Non-compete agreements | 4.8 | 1,535 | 465 | 1,070 | ||||||||||
Trade name | 8.3 | 1,250 | 219 | 1,031 | ||||||||||
Total intangible assets | $ | 82,642 | $ | 39,506 | $ | 43,136 | ||||||||
Explanatory Notes: | ||||||||||||||
_________________________________ | ||||||||||||||
-1 | Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented. | |||||||||||||
-2 | The Company recorded amortization expense on its intangible assets of $3.6 million and $11.7 million, respectively, during the three and nine months ended September 30, 2013, and $3.6 million and $13.0 million, respectively, during the three and nine months ended September 30, 2012. | |||||||||||||
The following table presents expected amortization expense of the existing intangible assets: | ||||||||||||||
(In thousands) | ||||||||||||||
2013 (remaining 3 months) | $ | 3,453 | ||||||||||||
2014 | 10,818 | |||||||||||||
2015 | 7,096 | |||||||||||||
2016 | 4,165 | |||||||||||||
2017 | 2,286 | |||||||||||||
Thereafter | 3,599 | |||||||||||||
$ | 31,417 | |||||||||||||
In January 2012, the Company completed the sale of its rights to manage Gillespie CLO PLC (“Gillespie”), a European CLO. The sale price was comprised of a $7.1 million payment on the closing date and contingent payments of $1.4 million. During the three and nine months ended September 30, 2013, the Company recorded a net gain on the sale of Gillespie of $0.6 million and $1.4 million, respectively, and for the nine months ended September 30, 2012, the Company recorded a net gain on the sale of Gillespie of $5.8 million within "Net gain on the sale of management contract" in the Condensed Consolidated Statements of Operations. Contingent payments have been fully collected as of September 30, 2013. | ||||||||||||||
During the nine months ended September 30, 2012, the Company received notice that a holder of the majority of the subordinated notes of Primus CLO I, Ltd. (“Primus I”) exercised their rights to call the CLO for redemption. As a result of the call of Primus I, the Company recorded a $1.8 million expense to fully impair the intangible asset associated with the Primus I management contract. |
Deferred_Purchase_Payments_and
Deferred Purchase Payments and Contingent Liabilities at Fair Value | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements [Abstract] | ' | |||||||||||||||
CONTINGENT LIABILITIES AT FAIR VALUE | ' | |||||||||||||||
Deferred Purchase Payments and Contingent Liabilities at Fair Value | ||||||||||||||||
The Company's Deferred Purchase Payments and Contingent Liabilities at fair value are as follows: | ||||||||||||||||
30-Sep-13 | 31-Dec-12 | |||||||||||||||
(In thousands) | ||||||||||||||||
Deferred purchase payments | $ | 2,593 | $ | 4,778 | ||||||||||||
Contingent liabilities from the Merger (related party) - Note 15 | $ | 17,239 | $ | 29,152 | ||||||||||||
Contingent liabilities value assumed through the Merger | 1,899 | 4,631 | ||||||||||||||
Contingent liabilities at fair value | $ | 19,138 | $ | 33,783 | ||||||||||||
Deferred Purchase Payments—In April 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC"). As a result of the Merger, Legacy CIFC became CIFCAM, a wholly-owned subsidiary of CIFC. The consideration for the Merger includes the payment to CIFC Parent Holdings LLC ("CIFC Parent"), the sole stockholder of Legacy CIFC, $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). During the nine months ended September 30, 2013, the Company made the final deferred purchase payment related to the Merger of $2.5 million leaving no remaining amounts outstanding under this agreement. | ||||||||||||||||
In March 2010, the Company entered into an acquisition and investment agreement with DFR Holdings LLC ("DFR Holdings") and CNCIM pursuant to which it agreed to acquire all of the equity interests in CNCIM from DFR Holdings. The consideration for the acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The remaining two deferred purchase payments aggregate to $3.0 million, with the next $1.5 million payable on December 9, 2013. | ||||||||||||||||
As of September 30, 2013 and December 31, 2012, the present value of the remaining deferred purchase payments of $2.6 million and $4.8 million, respectively, were included in the Condensed Consolidated Balance Sheets. | ||||||||||||||||
Contingent Liabilities at Fair Value—The contingent liabilities from the Merger are payable to CIFC Parent. The terms of these payments are as follows: (i) the first $15.0 million of incentive fees received by the combined company from six of the CLOs managed by CIFCAM (the "Legacy CIFC CLOs") as of April 13, 2011 (the "Merger Closing Date"), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CLOs by the combined company over ten years from 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, 2013, the Company made payments of $2.9 million and $10.7 million, respectively, related to these contingent liabilities and during the three and nine months ended September 30, 2012, the Company made payments of $1.6 million and $3.9 million, respectively, related to these contingent liabilities. During the nine months ended September 30, 2013, the Company made the last payment to fulfill its obligation under (i) above. Accordingly, as of September 30, 2013, there are no remaining payments under item (i) and the Company made cumulative payments of $4.7 million under item (ii) to date. | ||||||||||||||||
In addition, there were contingent liabilities assumed in 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 advisory fees from the CypressTree CLOs. These fixed percentages vary by CLO and had a minimum fixed percentage of 55%, and effective July 2013, the minimum fixed percentage is 39%. During the three and nine months ended September 30, 2013, the Company made payments of $0.6 million and $2.4 million, respectively, related to these contingent liabilities. During the three and nine months ended September 30, 2012, the Company made payments of $1.6 million and $10.1 million, respectively, related to these contingent liabilities. In addition, the Company made earn-out payments which reduced the required future payments of $0.3 million for both the three and nine months ended September 30, 2013 and $0.3 million and $6.2 million for the three and nine months ended September 30, 2012, respectively. | ||||||||||||||||
The following table presents the changes in fair value of contingent liabilities recorded within "Net gain (loss) on liabilities at fair value" on the Condensed Consolidated Statements of Operations: | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Contingent liabilities from the Merger | $ | 882 | $ | (1,227 | ) | 1,227 | 1,012 | |||||||||
Contingent liabilities assumed through the Merger | 217 | (4,832 | ) | $ | 371 | $ | (10,412 | ) | ||||||||
Total net gain (loss) on contingent liabilities at fair value | $ | 1,099 | $ | (6,059 | ) | $ | 1,598 | $ | (9,400 | ) | ||||||
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
LONG-TERM DEBT | ' | |||||||||||||||||
Long-Term Debt | ||||||||||||||||||
The following table summarizes the Company's long-term debt: | ||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||
Carrying | Current | Weighted Average | Carrying | Current | Weighted Average | |||||||||||||
Value | Weighted Average | Remaining Maturity | Value | Weighted Average | Remaining Maturity | |||||||||||||
Borrowing Rate | Borrowing Rate | |||||||||||||||||
(In thousands) | (In years) | (In thousands) | (In years) | |||||||||||||||
Recourse debt: | ||||||||||||||||||
March Junior Subordinated Notes (1) | $ | 95,000 | 1 | % | 22.1 | $ | 95,000 | 1 | % | 22.8 | ||||||||
October Junior Subordinated Notes (2) | 25,000 | 3.77 | % | 22.1 | 25,000 | 3.81 | % | 22.8 | ||||||||||
Total Subordinated Notes Debt | $ | 120,000 | 1.58 | % | 22.1 | $ | 120,000 | 1.59 | % | 22.8 | ||||||||
Convertible Notes (3) | $ | 18,915 | 10 | % | 4.2 | $ | 18,233 | 9 | % | 4.9 | ||||||||
Total recourse debt | $ | 138,915 | $ | 138,233 | ||||||||||||||
Non-recourse Consolidated VIE debt: | ||||||||||||||||||
Consolidated CLOs (4) | $ | 10,059,785 | 1.38 | % | 8.4 | $ | 9,325,982 | 1.16 | % | 8.1 | ||||||||
Warehouses (5) | 58,081 | 1.36 | % | 0.2 | 270,452 | 2.12 | % | n/a | ||||||||||
Total non-recourse Consolidated VIE debt | $ | 10,117,866 | 1.38 | % | 8.3 | $ | 9,596,434 | 1.19 | % | 7.9 | ||||||||
Total long-term debt | $ | 10,256,781 | $ | 9,734,667 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035. | |||||||||||||||||
-2 | October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035. | |||||||||||||||||
-3 | As of September 30, 2013 and December 31, 2012, Convertible Notes were recorded net of a discount of $6.1 million and $6.8 million, respectively and paid interest at the stated rates of 10.00% and 9.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017. | |||||||||||||||||
-4 | Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. As of September 30, 2013 and December 31, 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion, respectively. | |||||||||||||||||
-5 | Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period, which have a par value of $15.1 million as of September 30, 2013 and $25.1 million as of December 31, 2012. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. In addition, the weighted average remaining maturity for warehouses is based on anticipated settlement dates. | |||||||||||||||||
Non-Recourse Consolidated VIE Debt | ||||||||||||||||||
Consolidated CLOs—During the nine months ended September 30, 2013, the Consolidated CLOs issued $2.0 billion of debt, paid down $1.3 billion of their outstanding debt, made net borrowings under revolving credit facilities of $20.6 million, and distributed $198.5 million to the holders of their subordinated notes. During the nine months ended September 30, 2012, the Consolidated CLOs issued $821.2 million of debt, paid down $622.3 million of their outstanding debt, made net borrowings under revolving credit facilities of $57.8 million, and distributed $171.5 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 $10.7 billion and $9.9 billion as of September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||||
Other Consolidated Entities—The debt and equity holders have recourse to the total assets of the respective Consolidated VIE's assets. See Note 5 for further details of the Company's exposure to loss on Consolidated VIEs. |
EQUITY
EQUITY | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
EQUITY | ' | ||||||||||||
Equity | |||||||||||||
Common Stock—In addition to common stock outstanding, the Company has Convertible Notes that are convertible into 4.1 million shares (the “Conversion Shares”) of common stock (such amount may be adjusted in certain events or increased in connection with the payment of in-kind interest at an initial conversion price of $6.05 per share, subject to adjustment). | |||||||||||||
During the three and nine months ended September 30, 2013, the Company paid a quarterly dividend of $0.10 per common share to shareholders of record as of August 27, 2013. No dividends were declared during 2012. | |||||||||||||
Treasury Stock/Stock Repurchases—For the nine months ended September 30, 2013, the Company repurchased 34,995 common shares in open-market transactions for an aggregate cost of $0.3 million with an average price per share of $7.16. As of September 30, 2013, the Company was authorized to repurchase up to $5.4 million of its common stock under its share repurchase program approved by the Board of Directors (the "Board"). | |||||||||||||
For the nine months ended September 30, 2012, the Company repurchased 572,608 common shares in open-market transactions for an aggregate cost of $3.8 million with an average price per share of $6.58. | |||||||||||||
Stock Options—The Company recorded total stock-based compensation expense of $0.7 million and $2.3 million for the three and nine months ended September 30, 2013, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2012, respectively, on the Condensed Consolidated Statements of Operations within "Compensation and benefits." As of September 30, 2013, there was $6.3 million of estimated unrecognized compensation expense related to unvested awards, net of estimated forfeitures, which is expected to be recognized over a weighted average vesting period of 2.7 years. As of September 30, 2013, an aggregate of 237,788 shares remain available for issuance under the Company's 2011 Stock Plan ("2011 Stock Plan"). | |||||||||||||
The following table summarizes certain 2011 Stock Plan activity: | |||||||||||||
Number of Shares | Weighted Average | Weighted Average | Aggregate Intrinsic | ||||||||||
Underlying Stock-Based Awards | Exercise Price | Remaining | Value | ||||||||||
Contractual Term | |||||||||||||
(In years) | (In thousands) | ||||||||||||
Outstanding at December 31, 2012 | 3,594,813 | $ | 6.05 | 9.07 | $ | 7,007 | |||||||
Granted | 430,000 | 8.65 | |||||||||||
Exercised | (100,000 | ) | 5.41 | ||||||||||
Forfeited (1) | (45,000 | ) | 8.65 | ||||||||||
Outstanding at September 30, 2013 | 3,879,813 | $ | 6.33 | 8.43 | $ | 6,364 | |||||||
Exercisable at September 30, 2013 | 1,364,149 | $ | 6.07 | 8.09 | $ | 2,478 | |||||||
Vested and Expected to vest at September 30, 2013 (2) | 3,491,832 | $ | 6.33 | 8.43 | $ | 5,727 | |||||||
Explanatory Notes: | |||||||||||||
________________________________ | |||||||||||||
-1 | The forfeited stock-based awards are returned to the grant pool for possible reissuance under the 2011 Stock Plan. | ||||||||||||
(2) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. | |||||||||||||
Management estimates the fair value of stock-based awards using the Black-Scholes option pricing model. The weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below (1): | |||||||||||||
For the Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | ||||||||||||
Expected dividend yield | — | — | |||||||||||
Expected volatility | 48.75 | % | 50.52 | % | |||||||||
Risk-free interest rate | 1.1 | % | 1.27 | % | |||||||||
Expected life (years) | 6.11 | 6.09 | |||||||||||
Explanatory Note: | |||||||||||||
________________________________ | |||||||||||||
-1 | No stock-based awards were issued during the three months ended September 30, 2013 and 2012. | ||||||||||||
The stock-based awards granted generally have exercise prices equal to the fair market value of the stock on the date of grant, a contractual term of 10 years and a vesting period of approximately 4 years. In addition to awards with service conditions, certain of the awards also contain performance conditions. The expected dividend yield is the expected annual dividend as a percentage of the fair market value of the stock on the date of grant. For all options granted to date, the Company did not expect to make dividend distributions in the foreseeable future at the grant date. The expected volatility is estimated by considering the historical volatility of the Company's stock, the historical and implied volatility of peer companies and the Company's expectations of volatility for the expected life of the stock-based awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for an instrument which closely approximates the expected option term. The expected option term is the number of years management estimates that the stock-based award will be outstanding prior to exercise. The expected life of the stock-based awards issued is determined using the simplified method. | |||||||||||||
Restricted Stock Units ("RSU")—The following table summarizes restricted stock units activity: | |||||||||||||
For the Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | ||||||||||||
Restricted stock units outstanding, beginning of period | 103,360 | 170,688 | |||||||||||
Settled (1) | (96,124 | ) | (67,328 | ) | |||||||||
Restricted stock units outstanding, end of period (2) | 7,236 | 103,360 | |||||||||||
Explanatory Notes: | |||||||||||||
_________________________________ | |||||||||||||
-1 | Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder. During the nine months ended September 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011. | ||||||||||||
-2 | Outstanding amount relates to the remaining 2011 grants to certain members of the Board. These RSUs are fully vested as of September 30, 2013. | ||||||||||||
Profits Interests Awards—During 2011, CIFC Parent (a related party, see Note 15) granted certain employees of the Company profits interests in CIFC Parent. During the three and nine months ended September 30, 2013, the Company recorded a non-cash compensation expense of $0.3 million and $1.4 million in "Compensation and benefits" on the Condensed Consolidated Statements of Operations related to the amortization and remeasurement of the value of the awards. In addition, during both the three and nine months ended September 30, 2012, there was a de minimus value attributable to these awards, therefore no expenses were recorded. As of September 30, 2013, there was $1.2 million of estimated unrecognized compensation expense related to these awards. | |||||||||||||
Appropriated Retained Earnings (Deficit) of Consolidated VIEs—Appropriated retained earnings (deficit) of Consolidated VIEs represents the excess fair value of the Consolidated CLOs’ assets over the Consolidated CLOs’ liabilities upon initial consolidation and is subsequently adjusted each period for the net income (loss) attributable to the Consolidated CLOs |
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
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, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net income (loss) attributable to CIFC Corp. - basic | $ | 8,150 | $ | 688 | $ | 18,480 | $ | (6,215 | ) | |||||||
Dilutive effect of Convertible Notes (1) | 460 | — | 1,364 | — | ||||||||||||
Net income (loss) attributable to CIFC Corp. - diluted | 8,610 | 688 | 19,844 | (6,215 | ) | |||||||||||
Weighted-average shares - basic | 20,798 | 19,957 | 20,802 | 20,201 | ||||||||||||
Warrants (2) | 408 | 117 | 494 | — | ||||||||||||
Stock options (2) | 225 | 1,834 | 229 | — | ||||||||||||
Convertible Notes (1) | 4,132 | — | 4,132 | — | ||||||||||||
Weighted-average shares - diluted | 25,563 | 21,908 | 25,657 | 20,201 | ||||||||||||
Earnings (loss) per share | ||||||||||||||||
Basic | $ | 0.39 | $ | 0.03 | $ | 0.89 | $ | (0.31 | ) | |||||||
Diluted | $ | 0.34 | $ | 0.03 | $ | 0.77 | $ | (0.31 | ) | |||||||
Explanatory Notes: | ||||||||||||||||
________________________________ | ||||||||||||||||
-1 | During the three and nine months months ended September 30, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | |||||||||||||||
-2 | During the three and nine months ended September 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. During the nine months ended September 30, 2012, 1.5 million of stock options and 2.2 million of warrants were considered anti-dilutive and excluded from diluted EPS. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
Income Taxes | |
The Condensed Consolidated Statements of Operations does not include a provision for income tax expense or (benefit) on the income or (loss) earned by Consolidated VIEs in which the Company is not a holder of the subordinated notes. The Consolidated VIEs are generally foreign entities exempt from U.S. federal and state income taxes. Income taxes, if any, are the responsibility of the individual holders of each security. As such, the Company does record a provision for income tax expense or (benefit) on the income or (loss) earned by the Consolidated VIEs in which the Company is a subordinated note holder. The provision is based on the Consolidated VIE's proportionate share of income or (loss) included in the Company's taxable income. The effective tax rate, excluding non-controlling interests in the Consolidated VIEs was 43.3% and n/m for the three months ended September 30, 2013 and 2012, respectively, and 46.1% and n/m for the nine months ended September 30, 2013 and 2012, respectively. | |
The effective tax rate, including non-controlling interests in Consolidated VIEs were 51.5% and 1.0% for the three months ended September 30, 2013 and 2012, respectively, and 18.1% and (1.9)% for the nine months ended September 30, 2013 and 2012, respectively. The difference between the statutory federal tax rate and the Company's effective tax rate for both the three and nine months ended September 30, 2013 and 2012, was primarily attributable to consolidation of VIEs, state income taxes and certain discrete and other permanent items including, purchase accounting adjustments for fair value changes of contingent liabilities related to the Merger and the sale of the Company's rights to manage Gillespie. | |
As of September 30, 2013 and December 31, 2012, total deferred tax assets were $54.3 million, net of a valuation allowance of $13.2 million and $50.5 million, net of a valuation allowance of $13.2 million, respectively. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||||||||||||||||||
Related Party Transactions | |||||||||||||||||||||||||
CIFC Parent—CIFC Parent owns 9.1 million shares of the Company's common stock, issued as part of the consideration for the Merger with Legacy CIFC. As such, related party transactions include (i) the deferred purchase payments including those classified as contingent liabilities (see Note 10), (ii) CIFC Parent's investments in CLOs managed by the Company; including seven CLOs (of which six were Consolidated CLOs) as of September 30, 2013 and nine CLOs (of which seven were Consolidated CLOs) as of December 31, 2012, (iii) fees to the Company for providing certain administrative services to CIFC Parent, (iv) profits interests granted during 2011 to certain employees of the Company (see Note 12) and (v) quarterly dividends (see Note 12). | |||||||||||||||||||||||||
DFR Holdings—DFR Holdings owns 4.6 million shares of the Company's common stock, predominately issued as part of the consideration for the acquisition of CNCIM. In addition, DFR Holdings owns $25.0 million aggregate principal amount of the Company's Convertible Notes which is convertible into 4.1 million shares of the Company's common stock. As such, related party transactions include (i) the interest expense on Convertible notes of $0.9 million and $2.6 million during the three and nine months ended September 30, 2013, respectively, and $0.9 million and $2.5 million during the three and nine months ended September 30, 2012, respectively, (ii) the deferred purchase payments (see Note 10) and (iii) fees to the Company for providing certain administrative services to DFR Holdings, and (iv) quarterly dividends (see Note 12). | |||||||||||||||||||||||||
Other—During the nine months ended September 30, 2013, a board member purchased $1.0 million of income notes in one of the Company's sponsored CLOs, CIFC 2013-II, through an entity in which he is a 50% shareholder. | |||||||||||||||||||||||||
Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows: | |||||||||||||||||||||||||
Receivables | Investment Advisory Fees | ||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
CIFC Parent | $ | 140 | $ | 19 | $ | 28 | $ | 50 | $ | 120 | $ | 150 | |||||||||||||
DFR Holdings | 54 | 17 | 12 | 15 | 37 | 55 | |||||||||||||||||||
Total | $ | 194 | $ | 36 | $ | 40 | $ | 65 | $ | 157 | $ | 205 | |||||||||||||
RESTRUCTURING_CHARGES
RESTRUCTURING CHARGES | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||
RESTRUCTURING CHARGES | ' | |||||||||||||||
Restructuring Charges | ||||||||||||||||
The table below provides a rollforward of the accrued restructuring charges: | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Accrued Restructuring Charges, beginning of period | $ | 750 | $ | 779 | $ | 1,410 | $ | 1,490 | ||||||||
Provision (1) | — | — | — | 3,923 | ||||||||||||
Payments | (67 | ) | (305 | ) | (727 | ) | (4,156 | ) | ||||||||
Non-Cash Settlement (2) | — | — | — | (783 | ) | |||||||||||
Accrued Restructuring Charges, end of period | $ | 683 | $ | 474 | $ | 683 | $ | 474 | ||||||||
Explanatory Notes: | ||||||||||||||||
_________________________________ | ||||||||||||||||
-1 | During the nine months ended September 30, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $0.6 million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office. | |||||||||||||||
-2 | For the nine months ended September 30, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | |||
Sep. 30, 2013 | ||||
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 Condensed Consolidated Financial Statements. | ||||
In addition, in connection with activities of one of the Company's investment advisor subsidiaries that occurred prior to the Company's acquisition of such investment advisor, the Company made certain voluntary reimbursements and other payments to certain investors and CLOs currently or formerly managed by such investment advisor. As a result of a contractual arrangement the Company was fully indemnified for these payments by the seller of such investment advisor and does not believe they had a material adverse impact on the Company's Condensed Consolidated Financial Statements. | ||||
In addition, a suit was filed against the Company (and certain of its affiliates and directors) by a former employee. The Company denies the allegations, intends to defend itself vigorously, believes that the pending lawsuit is without merit and has filed counterclaims against the plaintiff. | ||||
Lease Commitments | ||||
Total occupancy expense for both the three and nine months ended September 30, 2013 was $0.5 million and $1.2 million, respectively, and for the three and nine months ended September 30, 2012 was $0.4 million and $1.1 million, respectively. The future minimum commitments under the Company's lease agreement are as follows: | ||||
(In thousands) | ||||
2013 (remaining 3 months) | $ | 267 | ||
2014 | 1,607 | |||
2015 | 1,607 | |||
2016 | 1,607 | |||
2017 | 1,607 | |||
Thereafter | 8,690 | |||
$ | 15,385 | |||
Unfunded Loan Commitments—Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. The Consolidated CLOs have unfunded investment commitments on loans of $47.3 million and $55.3 million as of September 30, 2013 and December 31, 2012, 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, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Subsequent Events | |
Subsequent to quarter end, the Company priced a new CLO that represented approximately $500 million of new loan-based AUM. Funding for the new CLO is expected to occur in November 2013. | |
In addition, subsequent to quarter end, the Company declared a quarterly cash dividend of $0.10 per share. The dividend will be paid on December 10, 2013 to shareholders of record as of the close of business on November 25, 2013. |
STRATEGIC_TRANSACTIONS_Tables
STRATEGIC TRANSACTIONS (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of calculation of the purchase consideration | ' | |||||||
Calculation of the purchase consideration is as follows: | ||||||||
(In thousands, except share and per share information) | ||||||||
Shares issued | 1,000,000 | |||||||
Multiplied by Closing Date share price (1) | $ | 7.51 | ||||||
Value of shares | $ | 7,510 | ||||||
Warrants issued | 2,000,000 | |||||||
Multiplied by Closing Date estimated fair value per warrant (2) | $ | 1.83 | ||||||
Value of warrants | 3,660 | |||||||
Cash | 4,525 | |||||||
Total purchase consideration | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Represents the closing price of the Company's common stock on the Closing Date. | |||||||
-2 | The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm. | |||||||
Summary of the recognized amounts of assets acquired and liabilities assumed | ' | |||||||
The following is a summary of the recognized amounts of assets acquired and liabilities assumed in the GECC Transaction (1): | ||||||||
(In thousands) | ||||||||
Receivables | $ | 147 | ||||||
Identifiable intangible assets | 7,470 | |||||||
Excess of purchase consideration over identifiable net assets acquired - Goodwill (2) (3) | 8,078 | |||||||
Recognized assets acquired and liabilities assumed | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | During the quarter ended September 30, 2013, management finalized the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, based on its finalization of revenue projections. No provisional adjustments to intangible assets, goodwill and contingent liabilities resulted from the finalization. | |||||||
-2 | Total amount is tax deductible. | |||||||
-3 | Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in Assets Under Management ("AUM"), (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans. | |||||||
Schedule of identifiable intangible assets acquired by asset class | ' | |||||||
The fair values of the assets acquired were estimated by management with the assistance of an independent valuation firm. The identifiable intangible assets acquired by asset class are as follows: | ||||||||
Closing Date | Closing Date Estimated | |||||||
Estimated Fair Value | Average Remaining Useful Life | |||||||
(In thousands) | (In years) | |||||||
Intangible asset class: | ||||||||
Investment management contracts (1) | $ | 3,660 | 3 | |||||
Referral Agreement (2) | 3,810 | 7 | ||||||
$ | 7,470 | |||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives. | |||||||
-2 | Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 9 for additional disclosures regarding intangible assets. |
CONSOLIDATED_VIEs_Tables
CONSOLIDATED VIEs (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Clos and Consolidated Variable Interest Entities | ' | ||||||||||||||||||||||||
Schedule of Variable Interest Entities [Table Text Block] | ' | ||||||||||||||||||||||||
The following table summarizes the consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1): | |||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Total Assets | $ | 10,731,999 | $ | 9,933,495 | |||||||||||||||||||||
Total Liabilities (non-recourse) | 10,547,151 | 9,806,010 | |||||||||||||||||||||||
Maximum exposure to loss: | |||||||||||||||||||||||||
Investments and beneficial interests (2) | $ | 50,452 | $ | 47,454 | |||||||||||||||||||||
Receivables (2) | 3,566 | 2,674 | |||||||||||||||||||||||
Total maximum exposure to loss | $ | 54,018 | $ | 50,128 | |||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs, which are not included in the table above. | ||||||||||||||||||||||||
-2 | Amounts are eliminated in consolidation. | ||||||||||||||||||||||||
The table below represents total net results of the Company's share of the Consolidated VIEs included on the Condensed Consolidated Statements of Operations as follows: | |||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Consolidated CLOs | $ | 21,669 | $ | (153,668 | ) | $ | 118,509 | $ | (98,717 | ) | |||||||||||||||
Warehouses (1) | 1,096 | 120 | 4,416 | 1,551 | |||||||||||||||||||||
DFR MM CLO (2) | — | — | — | (169 | ) | ||||||||||||||||||||
Net results of Consolidated VIEs | 22,765 | (153,548 | ) | 122,925 | (97,335 | ) | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interest in Consolidated VIEs | 2,288 | 169,001 | (52,868 | ) | 137,849 | ||||||||||||||||||||
Net results of Consolidated VIEs attributable to CIFC Corp. | $ | 25,053 | $ | 15,453 | $ | 70,057 | $ | 40,514 | |||||||||||||||||
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp: | |||||||||||||||||||||||||
Consolidated VIE investment advisory fees | $ | 20,874 | $ | 13,374 | $ | 62,588 | $ | 36,787 | |||||||||||||||||
Consolidated VIE net investment income | 4,179 | 2,079 | 7,469 | 3,727 | |||||||||||||||||||||
Net results of Consolidated VIEs attributable to CIFC Corp. | $ | 25,053 | $ | 15,453 | $ | 70,057 | $ | 40,514 | |||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | During the three and nine months ended September 30, 2013, the Company's results from warehouses included two and five warehouse investments, respectively. During both the three and nine months ended September 30, 2012, the Company's results from warehouses included two warehouse investments. | ||||||||||||||||||||||||
-2 | In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment. | ||||||||||||||||||||||||
The following table summarizes the Company's consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets: | |||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
Consolidated Assets | Consolidated Total Non-Recourse Liabilities | Maximum Exposure to Loss (1) | Consolidated Assets | Consolidated Total Non-Recourse Liabilities | Maximum Exposure to Loss (1) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Warehouses (1) | $ | 98,725 | $ | 82,481 | $ | 16,175 | $ | 334,420 | $ | 307,025 | $ | 26,723 | |||||||||||||
Explanatory Note: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | Maximum exposure to loss is generally limited to the Company's investment in the entity. The Company consolidated two warehouses as of September 30, 2013, and one warehouse as of December 31, 2012. | ||||||||||||||||||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial instruments carried at fair value on a recurring basis | ' | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following tables summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and by level: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 | Level 3 | Estimated Fair Value | Level 1 (1) | Level 2 | Level 3 | Estimated Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments at fair value (2) | $ | — | $ | 25,035 | $ | 1,534 | $ | 26,569 | $ | — | $ | 5,058 | $ | — | $ | 5,058 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated VIEs: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | — | 8,520,137 | 1,413,610 | 9,933,747 | — | 7,740,574 | 1,177,058 | 8,917,632 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | — | 7,225 | 7,225 | — | — | 67,438 | 67,438 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | 100,800 | 100,800 | — | — | 81,709 | 81,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Consolidated VIEs | — | 8,520,137 | 1,521,635 | 10,041,772 | — | 7,740,574 | 1,326,205 | 9,066,779 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | — | $ | 8,545,172 | $ | 1,523,169 | $ | 10,068,341 | $ | — | $ | 7,745,632 | $ | 1,326,205 | $ | 9,071,837 | ||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 19,138 | $ | 19,138 | $ | — | $ | — | $ | 33,783 | $ | 33,783 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated VIEs: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | — | — | 10,117,866 | 10,117,866 | — | — | 9,596,434 | 9,596,434 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Consolidated VIEs | — | — | 10,117,866 | 10,117,866 | — | — | 9,596,434 | 9,596,434 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | 10,137,004 | $ | 10,137,004 | $ | — | $ | — | $ | 9,630,217 | $ | 9,630,217 | ||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
______________________________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | There have been no transfers in or out of Level 1 for the periods presented. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2 | As of September 30, 2013, total amount includes $16.0 million of loans and $10.6 million of investments in other-loan based products. During the three and nine months ended September 30, 2013, one loan was purchased and is classified as Level 3. Subsequent to quarter end, this loan was sold. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 at Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2013 | For the Three Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Assets of Consolidated Variable Interest Entities | Investment Assets of Consolidated Variable Interest Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Corporate | Other | Total | Loans | Corporate | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bonds | Bonds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 1,225,697 | $ | 16,830 | $ | 103,271 | $ | 1,345,798 | $ | 4,371 | $ | 107,912 | $ | 72,700 | $ | 184,983 | ||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (1) | 219,206 | — | — | 219,206 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (2) | (285,260 | ) | — | — | (285,260 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers in due to consolidation or acquisition | — | — | — | — | 660 | — | 863 | 1,523 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized/unrealized gains (losses) | (3,699 | ) | 22 | 1,906 | (1,771 | ) | 325 | 811 | 10,656 | 11,792 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases | 424,447 | 470 | — | 424,917 | 185 | — | — | 185 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | (75,646 | ) | (10,097 | ) | (4,377 | ) | (90,120 | ) | — | (33,897 | ) | (432 | ) | (34,329 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (91,135 | ) | — | — | (91,135 | ) | (75 | ) | — | (4,889 | ) | (4,964 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value, end of period | $ | 1,413,610 | $ | 7,225 | $ | 100,800 | $ | 1,521,635 | $ | 5,466 | $ | 74,826 | $ | 78,898 | $ | 159,190 | ||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | (4,241 | ) | $ | (187 | ) | $ | (321 | ) | $ | (4,749 | ) | $ | 318 | $ | 572 | $ | 9,317 | $ | 10,207 | ||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2013 | For the Nine Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Assets of Consolidated Variable Interest Entities | Investment Assets of Consolidated Variable Interest Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Corporate | Other | Total | Loans | Corporate | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bonds | Bonds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 1,177,058 | $ | 67,438 | $ | 81,709 | $ | 1,326,205 | $ | 19,729 | $ | 154,096 | $ | 53,087 | $ | 226,912 | ||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (1) | 615,286 | — | — | 615,286 | 4,058 | — | — | 4,058 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 (2) | (1,040,172 | ) | — | — | (1,040,172 | ) | (5,453 | ) | — | — | (5,453 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers in due to consolidation or acquisition | — | — | — | — | 660 | — | 863 | 1,523 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out due to deconsolidation (3) | — | — | — | — | — | (5,708 | ) | — | (5,708 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers between classes (4) | — | — | — | — | — | (33,290 | ) | 33,290 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized/unrealized gains (losses) | 5,423 | 379 | 12,085 | 17,887 | 1,658 | 6,341 | 7,399 | 15,398 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases | 1,291,323 | 3,258 | 19,471 | 1,314,052 | 436 | — | 7,255 | 7,691 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | (260,508 | ) | (63,353 | ) | (11,442 | ) | (335,303 | ) | (1,430 | ) | (45,450 | ) | (10,249 | ) | (57,129 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (374,800 | ) | (497 | ) | (1,023 | ) | (376,320 | ) | (14,192 | ) | (1,163 | ) | (12,747 | ) | (28,102 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value, end of period | $ | 1,413,610 | $ | 7,225 | $ | 100,800 | $ | 1,521,635 | $ | 5,466 | $ | 74,826 | $ | 78,898 | $ | 159,190 | ||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | 636 | $ | (39 | ) | $ | 10,373 | $ | 10,970 | $ | 55 | $ | 4,922 | $ | 7,168 | $ | 12,145 | |||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
______________________________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | 2013 transfers in represent loans valued currently by a third party pricing service using composite prices determined using less than two quotes which were valued at the beginning of the period by the same third party pricing service using composite prices determined using two or more quotes. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2 | 2013 transfers out represent loans marked at the beginning of the period 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 using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-3 | The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which the management rights and investment was sold in 2012). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-4 | The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of level 3 financial liabilities at fair value | ' | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 3 Financial Liabilities at Fair Value | For the Nine Months Ended September 30, 2013 | For the Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2013 | For the Three Months Ended September 30, 2012 | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Variable Interest Entities | Total | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Estimated fair value, beginning of period | $ | 33,783 | $ | 9,596,434 | $ | 9,630,217 | $ | 39,279 | $ | 7,559,568 | $ | 7,598,847 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value, beginning of period | $ | 23,777 | $ | 10,175,179 | $ | 10,198,956 | $ | 31,796 | $ | 7,894,238 | $ | 7,926,034 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (1) | — | 14,085 | 14,085 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 (1) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (4,500 | ) | (4,500 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,598 | ) | 123,449 | 121,851 | 9,400 | 582,124 | 591,524 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,099 | ) | 49,721 | 48,622 | 6,059 | 332,752 | 338,811 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases | — | 2,390,964 | 2,390,964 | — | 62,905 | 62,905 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases | — | 467,552 | 467,552 | — | 105 | 105 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | — | (659,542 | ) | (659,542 | ) | — | (5,000 | ) | (5,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | — | (65,843 | ) | (65,843 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuances | — | — | — | — | 821,184 | 821,184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuances | — | — | — | — | 443,807 | 443,807 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (13,047 | ) | (1,347,524 | ) | (1,360,571 | ) | (13,955 | ) | (793,753 | ) | (807,708 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (3,540 | ) | (508,743 | ) | (512,283 | ) | (3,131 | ) | (443,874 | ) | (447,005 | ) | Estimated fair value, end of period | $ | 19,138 | $ | 10,117,866 | $ | 10,137,004 | $ | 34,724 | $ | 8,535,621 | $ | 8,570,345 | |||||||||||||||||||||||||||||||||||||||
Estimated fair value, end of period | $ | 19,138 | $ | 10,117,866 | $ | 10,137,004 | $ | 34,724 | $ | 8,535,621 | $ | 8,570,345 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 2,036 | $ | 105,739 | $ | 107,775 | $ | (9,209 | ) | $ | (381,878 | ) | $ | (391,087 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 1,346 | $ | 16,325 | $ | 17,671 | $ | (5,441 | ) | $ | (268,358 | ) | $ | (273,799 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Note: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
__________________________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | The transfers into Level 3 represent the Company's sales of debt and subordinated notes of Consolidated CLOs during the period, which results in the debt and subordinated notes no longer being eliminated in consolidation. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quantitative information about level 3 liabilities | ' | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The valuation of both the contingent liabilities and the long-term debt of the Consolidated CLOs begins with a model of projected cash flows for the relevant CLO. In addition to the structure of each of the CLOs (as provided in the indenture for each CLO), the following table provides quantitative information about the significant unobservable inputs utilized in this projection. Significant increases in any of the significant unobservable inputs, in isolation, will generally have an increase or decrease correlation with the fair value measurement of contingent liabilities and the long-term debt of the Consolidated CLOs, as shown in the table. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | Impact of Increase in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Input on Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Unobservable Input | Range | Range | Measurement (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Default rate (1) | 1-2% | 1-2% | Decrease | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recovery rate (1) | 70-75% | 70-75% | Increase | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-payment rate (1) | 25-30% | 25-30% | Decrease | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinvestment spread of assets above LIBOR | 3.0-3.8% | 3.0-4.0% | Increase | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinvestment price of assets | 99.5-100.0 | 99.5-100.0 | Increase | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
____________________________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-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 impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value | Fair | Value | Fair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes (1) | $ | 18,915 | $ | 32,603 | $ | 18,233 | $ | 33,058 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Junior Subordinated Notes (2) | $ | 120,000 | $ | 59,312 | $ | 120,000 | $ | 47,752 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
________________________________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-1 | The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions. This methodology is classified as Level 3 within the fair value hierarchy. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2 | The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). 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_VI1
NET RESULTS OF CONSOLIDATED VIEs (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
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 Variable Interest Entities": | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Investment income | $ | 117,075 | $ | 99,097 | $ | 356,957 | $ | 295,545 | ||||||||
Interest expense | (33,285 | ) | (25,246 | ) | (92,308 | ) | (71,857 | ) | ||||||||
Net investment income | 83,790 | 73,851 | 264,649 | 223,688 | ||||||||||||
Net gain (loss) on investments at fair value | (1,601 | ) | 108,290 | 10,784 | 266,614 | |||||||||||
Net gain (loss) on liabilities at fair value | (49,721 | ) | (332,752 | ) | (123,449 | ) | (582,124 | ) | ||||||||
Net gain (loss) on other investments and derivatives | 112 | (1 | ) | 64 | 861 | |||||||||||
Net gain (loss) from activities of Consolidated VIEs | $ | 32,580 | $ | (150,612 | ) | $ | 152,048 | $ | (90,961 | ) | ||||||
Expenses of Consolidated VIEs | (9,815 | ) | (2,936 | ) | (29,123 | ) | (6,374 | ) | ||||||||
Net Results of Consolidated VIEs (1) | $ | 22,765 | $ | (153,548 | ) | $ | 122,925 | $ | (97,335 | ) | ||||||
Explanatory Note: | ||||||||||||||||
________________________________ | ||||||||||||||||
-1 | See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. |
INTANGIBLE_ASSETS_AND_GOODWILL1
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Schedule of intangible assets | ' | |||||||||||||
Intangible assets comprised of the following (1): | ||||||||||||||
Weighted-Average Remaining Estimated Useful Life | Gross Carrying | Accumulated | Net Carrying | |||||||||||
Amount (1) | Amortization (2) | Amount | ||||||||||||
(In years) | (In thousands) | |||||||||||||
September 30, 2013: | ||||||||||||||
Investment management contracts | 5.2 | $ | 76,047 | $ | 49,861 | $ | 26,186 | |||||||
Referral agreement | 6 | 3,810 | 381 | 3,429 | ||||||||||
Non-compete agreements | 4.3 | 1,535 | 671 | 864 | ||||||||||
Trade name | 7.5 | 1,250 | 312 | 938 | ||||||||||
Total intangible assets | $ | 82,642 | $ | 51,225 | $ | 31,417 | ||||||||
December 31, 2012:: | ||||||||||||||
Investment management contracts | 5.4 | $ | 76,047 | $ | 38,727 | $ | 37,320 | |||||||
Referral agreement | 6.8 | 3,810 | 95 | 3,715 | ||||||||||
Non-compete agreements | 4.8 | 1,535 | 465 | 1,070 | ||||||||||
Trade name | 8.3 | 1,250 | 219 | 1,031 | ||||||||||
Total intangible assets | $ | 82,642 | $ | 39,506 | $ | 43,136 | ||||||||
Explanatory Notes: | ||||||||||||||
_________________________________ | ||||||||||||||
-1 | Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented. | |||||||||||||
-2 | The Company recorded amortization expense on its intangible assets of $3.6 million and $11.7 million, respectively, during the three and nine months ended September 30, 2013, and $3.6 million and $13.0 million, respectively, during the three and nine months ended September 30, 2012. | |||||||||||||
Schedule of expected amortization expense of the existing intangible assets | ' | |||||||||||||
The following table presents expected amortization expense of the existing intangible assets: | ||||||||||||||
(In thousands) | ||||||||||||||
2013 (remaining 3 months) | $ | 3,453 | ||||||||||||
2014 | 10,818 | |||||||||||||
2015 | 7,096 | |||||||||||||
2016 | 4,165 | |||||||||||||
2017 | 2,286 | |||||||||||||
Thereafter | 3,599 | |||||||||||||
$ | 31,417 | |||||||||||||
Deferred_Purchase_Payments_and1
Deferred Purchase Payments and Contingent Liabilities at Fair Value (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements [Abstract] | ' | |||||||||||||||
Schedule of estimated fair value of the contingent liabilities | ' | |||||||||||||||
The Company's Deferred Purchase Payments and Contingent Liabilities at fair value are as follows: | ||||||||||||||||
30-Sep-13 | 31-Dec-12 | |||||||||||||||
(In thousands) | ||||||||||||||||
Deferred purchase payments | $ | 2,593 | $ | 4,778 | ||||||||||||
Contingent liabilities from the Merger (related party) - Note 15 | $ | 17,239 | $ | 29,152 | ||||||||||||
Contingent liabilities value assumed through the Merger | 1,899 | 4,631 | ||||||||||||||
Contingent liabilities at fair value | $ | 19,138 | $ | 33,783 | ||||||||||||
Schedule of changes in fair value of contingent liabilities recorded within net gain (loss) on investments, loans, derivatives and liabilities | ' | |||||||||||||||
The following table presents the changes in fair value of contingent liabilities recorded within "Net gain (loss) on liabilities at fair value" on the Condensed Consolidated Statements of Operations: | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Contingent liabilities from the Merger | $ | 882 | $ | (1,227 | ) | 1,227 | 1,012 | |||||||||
Contingent liabilities assumed through the Merger | 217 | (4,832 | ) | $ | 371 | $ | (10,412 | ) | ||||||||
Total net gain (loss) on contingent liabilities at fair value | $ | 1,099 | $ | (6,059 | ) | $ | 1,598 | $ | (9,400 | ) | ||||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
Schedule of long-term debt | ' | |||||||||||||||||
The following table summarizes the Company's long-term debt: | ||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||
Carrying | Current | Weighted Average | Carrying | Current | Weighted Average | |||||||||||||
Value | Weighted Average | Remaining Maturity | Value | Weighted Average | Remaining Maturity | |||||||||||||
Borrowing Rate | Borrowing Rate | |||||||||||||||||
(In thousands) | (In years) | (In thousands) | (In years) | |||||||||||||||
Recourse debt: | ||||||||||||||||||
March Junior Subordinated Notes (1) | $ | 95,000 | 1 | % | 22.1 | $ | 95,000 | 1 | % | 22.8 | ||||||||
October Junior Subordinated Notes (2) | 25,000 | 3.77 | % | 22.1 | 25,000 | 3.81 | % | 22.8 | ||||||||||
Total Subordinated Notes Debt | $ | 120,000 | 1.58 | % | 22.1 | $ | 120,000 | 1.59 | % | 22.8 | ||||||||
Convertible Notes (3) | $ | 18,915 | 10 | % | 4.2 | $ | 18,233 | 9 | % | 4.9 | ||||||||
Total recourse debt | $ | 138,915 | $ | 138,233 | ||||||||||||||
Non-recourse Consolidated VIE debt: | ||||||||||||||||||
Consolidated CLOs (4) | $ | 10,059,785 | 1.38 | % | 8.4 | $ | 9,325,982 | 1.16 | % | 8.1 | ||||||||
Warehouses (5) | 58,081 | 1.36 | % | 0.2 | 270,452 | 2.12 | % | n/a | ||||||||||
Total non-recourse Consolidated VIE debt | $ | 10,117,866 | 1.38 | % | 8.3 | $ | 9,596,434 | 1.19 | % | 7.9 | ||||||||
Total long-term debt | $ | 10,256,781 | $ | 9,734,667 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035. | |||||||||||||||||
-2 | October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035. | |||||||||||||||||
-3 | As of September 30, 2013 and December 31, 2012, Convertible Notes were recorded net of a discount of $6.1 million and $6.8 million, respectively and paid interest at the stated rates of 10.00% and 9.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017. | |||||||||||||||||
-4 | Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. As of September 30, 2013 and December 31, 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion, respectively. | |||||||||||||||||
-5 | Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period, which have a par value of $15.1 million as of September 30, 2013 and $25.1 million as of December 31, 2012. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. In addition, the weighted average remaining maturity for warehouses is based on anticipated settlement dates. |
EQUITY_Tables
EQUITY (Tables) | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | |||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ' | ||||||||||||||||||
Schedule of treasury stock activity [Table Text Block] | ' | ' | ||||||||||||||||||
The following table summarizes restricted stock units activity: | ||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Restricted stock units outstanding, beginning of period | 103,360 | 170,688 | ||||||||||||||||||
Settled (1) | (96,124 | ) | (67,328 | ) | ||||||||||||||||
Restricted stock units outstanding, end of period (2) | 7,236 | 103,360 | ||||||||||||||||||
Explanatory Notes: | ||||||||||||||||||||
_________________________________ | ||||||||||||||||||||
-1 | Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder. During the nine months ended September 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011. | |||||||||||||||||||
-2 | Outstanding amount relates to the remaining 2011 grants to certain members of the Board. These RSUs are fully vested as of September 30, 2013. | |||||||||||||||||||
Schedule of weighted average assumptions related to the entity's stock based awards | ' | ' | ||||||||||||||||||
Management estimates the fair value of stock-based awards using the Black-Scholes option pricing model. The weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below (1): | ||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Expected dividend yield | — | — | ||||||||||||||||||
Expected volatility | 48.75 | % | 50.52 | % | ||||||||||||||||
Risk-free interest rate | 1.1 | % | 1.27 | % | ||||||||||||||||
Expected life (years) | 6.11 | 6.09 | ||||||||||||||||||
Explanatory Note: | ||||||||||||||||||||
________________________________ | ||||||||||||||||||||
-1 | No stock-based awards were issued during the three months ended September 30, 2013 and 2012. | |||||||||||||||||||
Summary of 2011 Stock Plan activity | ' | ' | ||||||||||||||||||
The following table summarizes certain 2011 Stock Plan activity: | ||||||||||||||||||||
Number of Shares | Weighted Average | Weighted Average | Aggregate Intrinsic | |||||||||||||||||
Underlying Stock-Based Awards | Exercise Price | Remaining | Value | |||||||||||||||||
Contractual Term | ||||||||||||||||||||
(In years) | (In thousands) | |||||||||||||||||||
Outstanding at December 31, 2012 | 3,594,813 | $ | 6.05 | 9.07 | $ | 7,007 | ||||||||||||||
Granted | 430,000 | 8.65 | ||||||||||||||||||
Exercised | (100,000 | ) | 5.41 | |||||||||||||||||
Forfeited (1) | (45,000 | ) | 8.65 | |||||||||||||||||
Outstanding at September 30, 2013 | 3,879,813 | $ | 6.33 | 8.43 | $ | 6,364 | ||||||||||||||
Exercisable at September 30, 2013 | 1,364,149 | $ | 6.07 | 8.09 | $ | 2,478 | ||||||||||||||
Vested and Expected to vest at September 30, 2013 (2) | 3,491,832 | $ | 6.33 | 8.43 | $ | 5,727 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||||
________________________________ | ||||||||||||||||||||
-1 | The forfeited stock-based awards are returned to the grant pool for possible reissuance under the 2011 Stock Plan. | |||||||||||||||||||
(2) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. |
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
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, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net income (loss) attributable to CIFC Corp. - basic | $ | 8,150 | $ | 688 | $ | 18,480 | $ | (6,215 | ) | |||||||
Dilutive effect of Convertible Notes (1) | 460 | — | 1,364 | — | ||||||||||||
Net income (loss) attributable to CIFC Corp. - diluted | 8,610 | 688 | 19,844 | (6,215 | ) | |||||||||||
Weighted-average shares - basic | 20,798 | 19,957 | 20,802 | 20,201 | ||||||||||||
Warrants (2) | 408 | 117 | 494 | — | ||||||||||||
Stock options (2) | 225 | 1,834 | 229 | — | ||||||||||||
Convertible Notes (1) | 4,132 | — | 4,132 | — | ||||||||||||
Weighted-average shares - diluted | 25,563 | 21,908 | 25,657 | 20,201 | ||||||||||||
Earnings (loss) per share | ||||||||||||||||
Basic | $ | 0.39 | $ | 0.03 | $ | 0.89 | $ | (0.31 | ) | |||||||
Diluted | $ | 0.34 | $ | 0.03 | $ | 0.77 | $ | (0.31 | ) | |||||||
Explanatory Notes: | ||||||||||||||||
________________________________ | ||||||||||||||||
-1 | During the three and nine months months ended September 30, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | |||||||||||||||
-2 | During the three and nine months ended September 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. During the nine months ended September 30, 2012, 1.5 million of stock options and 2.2 million of warrants were considered anti-dilutive and excluded from diluted EPS. |
RELATED_PARTY_TRANSACTIONS_REL
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | ' | ||||||||||||||||||||||||
Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows: | |||||||||||||||||||||||||
Receivables | Investment Advisory Fees | ||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
CIFC Parent | $ | 140 | $ | 19 | $ | 28 | $ | 50 | $ | 120 | $ | 150 | |||||||||||||
DFR Holdings | 54 | 17 | 12 | 15 | 37 | 55 | |||||||||||||||||||
Total | $ | 194 | $ | 36 | $ | 40 | $ | 65 | $ | 157 | $ | 205 | |||||||||||||
RESTRUCTURING_CHARGES_Tables
RESTRUCTURING CHARGES (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Schedule of Restructuring and Related Costs [Abstract] | ' | |||||||||||||||
Schedule of Restructuring and Related Costs [Table Text Block] | ' | |||||||||||||||
The table below provides a rollforward of the accrued restructuring charges: | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Accrued Restructuring Charges, beginning of period | $ | 750 | $ | 779 | $ | 1,410 | $ | 1,490 | ||||||||
Provision (1) | — | — | — | 3,923 | ||||||||||||
Payments | (67 | ) | (305 | ) | (727 | ) | (4,156 | ) | ||||||||
Non-Cash Settlement (2) | — | — | — | (783 | ) | |||||||||||
Accrued Restructuring Charges, end of period | $ | 683 | $ | 474 | $ | 683 | $ | 474 | ||||||||
Explanatory Notes: | ||||||||||||||||
_________________________________ | ||||||||||||||||
-1 | During the nine months ended September 30, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $0.6 million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office. | |||||||||||||||
-2 | For the nine months ended September 30, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of future minimum commitments under the lease | ' | |||
Total occupancy expense for both the three and nine months ended September 30, 2013 was $0.5 million and $1.2 million, respectively, and for the three and nine months ended September 30, 2012 was $0.4 million and $1.1 million, respectively. The future minimum commitments under the Company's lease agreement are as follows: | ||||
(In thousands) | ||||
2013 (remaining 3 months) | $ | 267 | ||
2014 | 1,607 | |||
2015 | 1,607 | |||
2016 | 1,607 | |||
2017 | 1,607 | |||
Thereafter | 8,690 | |||
$ | 15,385 | |||
BASIS_OF_PRESENTATION_AND_PRIN1
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Feb. 01, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
item | item | Dfrmmclo [Member] | Investments [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | CypressTree | CypressTree | CypressTree | CypressTree | ||
clo | Variable Interest Entity, Not Primary Beneficiary [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | ||||||||
Schedule of Number of CLOs Consolidated [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Contingent Consideration One Time Earn Out Payments | ' | ' | ' | ' | ' | ' | ' | $300,000 | $300,000 | $300,000 | $6,200,000 |
Consolidated CLOs | 26 | ' | 23 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of CDOs consolidated | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Warehouses consolidated | 5 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warehouses deconsolidated | 4 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Newly Issued CLOs | 4 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated Warehouse Investments Held At | 2 | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Collateralized Loan Obligations Not Consolidated | 7 | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of CLOs and CDOs that were not consolidated | 10 | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Other Investment Products Not Consolidated | 1 | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | ' | ' | $69,000,000 | $5,100,000 | $300,000 | $600,000 | ' | ' | ' | ' |
STRATEGIC_TRANSACTIONS_Details
STRATEGIC TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | ||||||
item | item | item | General Electric Capital Corporation [Member] | Navigator Clos [Member] | Common Stock | Warrants | Investment management contracts | Referral Agreement | GE Capital Equity Investments, Inc [Member] | GECEII | GECEII | GE Capital Debt Advisors LLC [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Non-Recourse Debt [Member] | Non-Recourse Debt [Member] | Non-Recourse Debt [Member] | ||||||||
clo | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | Common Stock | General Electric Capital Corporation [Member] | Warrants | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | ||||||||||||
extension | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | clo | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | ||||||||||||||||||||
Business Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Term of strategic relationship | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Acquired Finite-lived Intangible Asset, Weighted-Average Period before Renewal or Extension | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Extensions available | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Duration of extension | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Percentage of fees in excess of initial advisory fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Initial advisory fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Navigator CLOs | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Shares or warrants issued | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 2,000,000 | ' | ' | 1,000,000 | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | |||||
Estimated fair value of shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | |||||
Exercise price (usd per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.38 | ' | ' | ' | ' | ' | ' | ' | |||||
Minimum share ownership (percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Multiplied by Closing Date fair value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $7.51 | [1] | $1.83 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Value of shares or warrants | ' | ' | ' | ' | ' | ' | ' | 7,510,000 | 3,660,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Cash | ' | ' | ' | ' | ' | 4,525,000 | ' | ' | ' | ' | ' | ' | ' | ' | 4,500,000 | ' | ' | ' | ' | ' | ' | |||||
Total purchase consideration | ' | ' | ' | ' | ' | 15,695,000 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | ' | ' | ' | ' | ' | 147,000 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | ' | ' | ' | 7,470,000 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Goodwill | 76,000,000 | ' | 76,000,000 | ' | 76,000,000 | 8,078,000 | [3],[4],[5] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Identifiable intangible assets acquired by asset class | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Closing Date Estimated Fair Value | ' | ' | ' | ' | ' | 7,470,000 | ' | ' | ' | 3,660,000 | [6] | 3,810,000 | [7] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Closing Date Estimated Average Remaining Useful Life (In years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | [6] | '7 years | [7] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Consolidated CLOs | 26 | ' | 26 | ' | 23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | |||||
Consolidated assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 347,100,000 | 328,000,000 | 318,300,000 | ' | ' | ' | |||||
Consolidated liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 342,000,000 | 325,800,000 | 313,200,000 | |||||
Net loss related to the consolidated CLO | ($22,765,000) | $153,548,000 | ($122,925,000) | $97,335,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
[1] | (1)Represents the closing price of the Company's common stock on the Closing Date. | |||||||||||||||||||||||||
[2] | (2)The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm. | |||||||||||||||||||||||||
[3] | (1)During the quarter ended SeptemberB 30, 2013, management finalized the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, based on its finalization of revenue projections. No provisional adjustments to intangible assets, goodwill and contingent liabilities resulted from the finalization. | |||||||||||||||||||||||||
[4] | (2)Total amount is tax deductible. | |||||||||||||||||||||||||
[5] | (3)Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in Assets Under Management ("AUM"), (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans. | |||||||||||||||||||||||||
[6] | (1)Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives. | |||||||||||||||||||||||||
[7] | (2)Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 9 for additional disclosures regarding intangible assets. |
STRATEGIC_TRANSACTIONS_Details1
STRATEGIC TRANSACTIONS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | |||
item | item | item | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | CypressTree | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Navigator Clos [Member] | Navigator Clos [Member] | Non-Recourse Debt [Member] | Non-Recourse Debt [Member] | Non-Recourse Debt [Member] | ||||||
Investment management contracts | Referral Agreement | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | Navigator 2006 CLO [Member] | |||||||||||
clo | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | General Electric Capital Corporation [Member] | |||||||||||||||||
MERGER WITH LEGACY CIFC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | ' | ' | ' | ' | ' | $147 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Strategic transactions expenses | ' | 657 | 0 | 657 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Number of Collateralized Loan Obligations Consolidated | 26 | ' | 26 | ' | 23 | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | |||
Carrying value of the assets for which debt holders have a recourse for repayment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 347,100 | 328,000 | 318,300 | ' | ' | ' | ' | ' | |||
Consolidated liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 342,000 | 325,800 | 313,200 | |||
Investment advisory fees | 1,763 | 2,750 | 6,646 | 8,048 | ' | ' | ' | ' | ' | ' | ' | ' | 600 | 2,100 | ' | ' | ' | |||
Cash | ' | ' | ' | ' | ' | 4,525 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Fair value of fixed deferred payments to the seller | 2,593 | ' | 2,593 | ' | 4,778 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Identifiable intangible assets acquired by asset class | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Closing Date Estimated Fair Value | ' | ' | ' | ' | ' | 7,470 | 3,660 | [2] | 3,810 | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Closing Date Estimated Average Remaining Useful Life (In years) | ' | ' | ' | ' | ' | ' | '3 years | [2] | '7 years | [3] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Business acquisition disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees | ' | ' | ' | ' | ' | ' | ' | ' | 55.00% | ' | ' | ' | ' | ' | ' | ' | ' | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | ' | ' | ' | 7,470 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Goodwill | 76,000 | ' | 76,000 | ' | 76,000 | 8,078 | [1],[4],[5] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ' | ' | ' | ' | ' | $15,695 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | (1)During the quarter ended SeptemberB 30, 2013, management finalized the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, based on its finalization of revenue projections. No provisional adjustments to intangible assets, goodwill and contingent liabilities resulted from the finalization. | |||||||||||||||||||
[2] | (1)Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives. | |||||||||||||||||||
[3] | (2)Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 9 for additional disclosures regarding intangible assets. | |||||||||||||||||||
[4] | (2)Total amount is tax deductible. | |||||||||||||||||||
[5] | (3)Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in Assets Under Management ("AUM"), (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans. |
CONSOLIDATED_VIEs_Details
CONSOLIDATED VIEs (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Feb. 01, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Feb. 01, 2012 | Mar. 31, 2012 | Feb. 01, 2012 | |||||||||
CIFC Warehouses [Member] | CIFC Warehouses [Member] | CIFC Warehouses [Member] | CIFC Warehouses [Member] | CIFC Warehouses [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | Consolidated CLO [Member] | DFR MM CLO | DFR MM CLO | DFR MM CLO | DFR MM CLO | DFR MM CLO | DFR MM CLO | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Interest Income [Member] | Debt [Member] | Subordinated notes of Consolidated CLOs | Subordinated notes of Consolidated CLOs | ||||||||||||||
Investment and beneficial interests in CLOs | Investment and beneficial interests in CLOs | Investment advisory fee receivables | Investment advisory fee receivables | DFR MM CLO | DFR MM CLO | DFR MM CLO | DFR MM CLO | ||||||||||||||||||||||||||||||||||||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Consolidated Warehouse Investments Held During | 2 | 2 | 5 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Consolidated assets | ' | ' | ' | ' | $98,725 | ' | $98,725 | ' | $334,420 | $10,731,999 | ' | $10,731,999 | ' | $9,933,495 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Consolidated liabilities | ' | ' | ' | ' | 82,481 | ' | 82,481 | ' | 307,025 | 10,547,151 | ' | 10,547,151 | ' | 9,806,010 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Maximum exposure to loss | ' | ' | ' | ' | 16,175 | [1] | ' | 16,175 | [1] | ' | 26,723 | [1] | 54,018 | ' | 54,018 | ' | 50,128 | 50,452 | 47,454 | 3,566 | 2,674 | ' | ' | ' | ' | ' | 69,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,000 | ' | 50,000 | ||||||
Net results of Consolidated VIEs | 22,765 | -153,548 | 122,925 | -97,335 | 1,096 | [2] | 120 | [2] | 4,416 | [2] | 1,551 | [2] | ' | 21,669 | -153,668 | 118,509 | -98,717 | ' | ' | ' | ' | ' | 0 | [3] | 0 | [3] | ' | 0 | [3] | -169 | [3] | ' | 22,765 | -153,548 | 122,925 | -97,335 | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income (losses) recorded in condensed consolidated statements of operations | -2,288 | -169,001 | 52,868 | -137,849 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Deconsolidation of Variable Interest Entities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Sale of investments in and rights to manage the VIE | ' | ' | ' | 36,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,800 | ' | 52,200 | ' | |||||||||
Net income (loss) attributable to CIFC Corp. | 8,150 | 688 | 18,480 | -6,215 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,053 | 15,453 | 70,057 | 40,514 | ' | ' | ' | ' | |||||||||
Investment advisory fees | 1,763 | 2,750 | 6,646 | 8,048 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,874 | 13,374 | 62,588 | 36,787 | ' | ' | ' | ' | |||||||||
Investment Gain Loss on Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,179 | 2,079 | 7,469 | 3,727 | ' | ' | ' | ' | |||||||||
Net investment and interest income | $159 | $76 | $256 | $224 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
[1] | (1)Maximum exposure to loss is generally limited to the Company's investment in the entity. The Company consolidated two warehouses as of SeptemberB 30, 2013, and one warehouse as of DecemberB 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||
[2] | (1)During the three and nine months ended SeptemberB 30, 2013, the Company's results from warehouses included two and five warehouse investments, respectively. During both the three and nine months ended SeptemberB 30, 2012, the Company's results from warehouses included two warehouse investments. | ||||||||||||||||||||||||||||||||||||||||||||
[3] | (2)In February 2012, the Company sold its investments in and the rights to manage the DFRB MMB CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFRB MMB CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment. |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | ||||
In Thousands, unless otherwise specified | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | ||||||
Level 1 | Level 1 | Level 1 | Level 1 | Level 2 | Level 2 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Estimated Fair Value | Estimated Fair Value | Estimated Fair Value | Estimated Fair Value | Estimated Fair Value | |||||||||
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Other Loan-Based Products [Member] | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Other Loan-Based Products [Member] | |||||||||||||||||
Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,520,137 | $7,740,574 | ' | ' | $1,413,610 | $1,177,058 | ' | ' | ' | $9,933,747 | $8,917,632 | $16,000 | ||||
Corporate bonds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,225 | 67,438 | ' | ' | ' | 7,225 | 67,438 | ' | ||||
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,800 | 81,709 | ' | ' | ' | 100,800 | 81,709 | ' | ||||
Total investments and derivative assets of Consolidated Variable Interest Entities | ' | ' | ' | ' | ' | ' | 0 | [1] | 0 | [1] | 25,035 | 5,058 | 8,520,137 | 7,740,574 | 1,534 | 0 | 1,521,635 | 1,326,205 | ' | 26,569 | 5,058 | 10,041,772 | 9,066,779 | 10,600 | ||
Total Assets | ' | ' | ' | ' | 0 | [1] | 0 | [1] | ' | ' | 8,545,172 | 7,745,632 | ' | ' | 1,523,169 | 1,326,205 | ' | ' | ' | 10,068,341 | 9,071,837 | ' | ' | ' | ||
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Contingent liabilities at fair value | 19,138 | 33,783 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,138 | 33,783 | ' | ' | ' | 19,138 | 33,783 | ' | ' | ' | ||||
Long-term debt | ' | ' | 10,117,866 | 9,596,434 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,117,866 | 9,596,434 | ' | ' | ' | 10,117,866 | 9,596,434 | ' | ||||
Total liabilities | ' | ' | ' | ' | $0 | [1] | $0 | [1] | $0 | [1] | $0 | [1] | $0 | $0 | $0 | $0 | $10,137,004 | $9,630,217 | $10,117,866 | $9,596,434 | ' | $10,137,004 | $9,630,217 | $10,117,866 | $9,596,434 | ' |
Number of Level 3 Loans Purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one | ' | ' | ' | ' | ' | ||||
[1] | (1)There have been no transfers in or out of Level 1 for the periods presented. |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ' | ' | ||||
Transfers in Due to consolidation or acquisition | $0 | $313,093 | ' | $313,093 | ||||
Loans | Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ' | ' | ||||
Transfers in Due to consolidation or acquisition | ' | 660 | ' | ' | ||||
Corporate Bonds | Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ' | ' | ||||
Transfers in Due to consolidation or acquisition | ' | 0 | ' | ' | ||||
Other | Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ' | ' | ||||
Transfers in Due to consolidation or acquisition | ' | 863 | ' | ' | ||||
Fair Value, Inputs, Level 3 [Member] | 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 | 1,225,697 | 4,371 | 1,177,058 | 19,729 | ||||
Transfers into Level 3 | 219,206 | [1] | 0 | [1] | 615,286 | [1] | 4,058 | [1] |
Transfers out of Level 3 | -285,260 | [2] | ' | -1,040,172 | [2] | -5,453 | [2] | |
Transfers in Due to consolidation or acquisition | ' | ' | ' | 660 | ||||
Transfers out due to deconsolidation | ' | ' | ' | 0 | [3] | |||
Transfers between classes | ' | ' | ' | 0 | [4] | |||
Net realized/unrealized gains (losses) | -3,699 | 325 | 5,423 | 1,658 | ||||
Purchases | 424,447 | 185 | 1,291,323 | 436 | ||||
Sales | -75,646 | ' | -260,508 | -1,430 | ||||
Settlements | -91,135 | -75 | -374,800 | -14,192 | ||||
Estimated fair value, end of period | 1,413,610 | 5,466 | 1,413,610 | 5,466 | ||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | -4,241 | 318 | 636 | 55 | ||||
Fair Value, Inputs, Level 3 [Member] | 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 | 16,830 | 107,912 | 67,438 | 154,096 | ||||
Transfers into Level 3 | ' | ' | ' | 0 | ||||
Transfers out of Level 3 | ' | ' | ' | 0 | ||||
Transfers in Due to consolidation or acquisition | ' | ' | ' | 0 | ||||
Transfers out due to deconsolidation | ' | ' | ' | -5,708 | [3] | |||
Transfers between classes | ' | ' | ' | -33,290 | [4] | |||
Net realized/unrealized gains (losses) | 22 | 811 | 379 | 6,341 | ||||
Purchases | 470 | ' | 3,258 | 0 | ||||
Sales | -10,097 | -33,897 | -63,353 | -45,450 | ||||
Settlements | 0 | 0 | -497 | -1,163 | ||||
Estimated fair value, end of period | 7,225 | 74,826 | 7,225 | 74,826 | ||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | -187 | 572 | -39 | 4,922 | ||||
Fair Value, Inputs, Level 3 [Member] | 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 | 103,271 | 72,700 | 81,709 | 53,087 | ||||
Transfers into Level 3 | ' | ' | ' | 0 | ||||
Transfers out of Level 3 | ' | ' | ' | 0 | ||||
Transfers in Due to consolidation or acquisition | ' | ' | ' | 863 | ||||
Transfers out due to deconsolidation | ' | ' | ' | 0 | [3] | |||
Transfers between classes | ' | ' | ' | 33,290 | [4] | |||
Net realized/unrealized gains (losses) | 1,906 | 10,656 | 12,085 | 7,399 | ||||
Purchases | 0 | 0 | 19,471 | 7,255 | ||||
Sales | -4,377 | -432 | -11,442 | -10,249 | ||||
Settlements | 0 | -4,889 | -1,023 | -12,747 | ||||
Estimated fair value, end of period | 100,800 | 78,898 | 100,800 | 78,898 | ||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | -321 | 9,317 | 10,373 | 7,168 | ||||
Fair Value, Inputs, Level 3 [Member] | 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 | 1,345,798 | 184,983 | 1,326,205 | 226,912 | ||||
Transfers into Level 3 | 219,206 | [1] | 0 | 615,286 | [1] | 4,058 | [1] | |
Transfers out of Level 3 | -285,260 | [2] | 0 | [2] | -1,040,172 | [2] | -5,453 | [2] |
Transfers in Due to consolidation or acquisition | 0 | 1,523 | 0 | 1,523 | ||||
Transfers out due to deconsolidation | ' | ' | 0 | [3] | -5,708 | [3] | ||
Transfers between classes | ' | ' | 0 | [4] | 0 | [4] | ||
Net realized/unrealized gains (losses) | -1,771 | 11,792 | 17,887 | 15,398 | ||||
Purchases | 424,917 | 185 | 1,314,052 | 7,691 | ||||
Sales | -90,120 | -34,329 | -335,303 | -57,129 | ||||
Settlements | -91,135 | -4,964 | -376,320 | -28,102 | ||||
Estimated fair value, end of period | 1,521,635 | 159,190 | 1,521,635 | 159,190 | ||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | ($4,749) | $10,207 | $10,970 | $12,145 | ||||
[1] | (1)2013 transfers in represent loans valued currently by a third party pricing service using composite prices determined using less than two quotes which were valued at the beginning of the period by the same third party pricing service using composite prices determined using two or more quotes. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model. | |||||||
[2] | (2)2013 transfers out represent loans marked at the beginning of the period 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 using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs. | |||||||
[3] | (3)The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which the management rights and investment was sold in 2012). | |||||||
[4] | (4)The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of DecemberB 31, 2011. |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ' | ' | ||
Estimated fair value, beginning of period | $10,198,956 | $7,926,034 | $9,630,217 | $7,598,847 | ||
Transfers Into Level 3 | ' | ' | 14,085 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | -4,500 | ' | -4,500 | ||
Transfers in Due to consolidation or acquisition | 0 | 313,093 | ' | 313,093 | ||
Net realized/unrealized (gains) losses | 48,622 | 338,811 | 121,851 | 591,524 | ||
Purchases | 467,552 | 105 | 2,390,964 | 62,905 | ||
Sales | -65,843 | 0 | -659,542 | -5,000 | ||
Issuances | 0 | 443,807 | 0 | 821,184 | ||
Settlements | -512,283 | -447,005 | -1,360,571 | -807,708 | ||
Estimated fair value, end of period | 10,137,004 | 8,570,345 | 10,137,004 | 8,570,345 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | 17,671 | -273,799 | 107,775 | -391,087 | ||
Contingent Liabilities at Fair Value | ' | ' | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ' | ' | ||
Estimated fair value, beginning of period | 23,777 | 31,796 | 33,783 | 39,279 | ||
Transfers Into Level 3 | ' | ' | 0 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | ' | ' | 0 | ||
Transfers in Due to consolidation or acquisition | 0 | ' | ' | 0 | ||
Net realized/unrealized (gains) losses | -1,099 | 6,059 | -1,598 | 9,400 | ||
Settlements | -3,540 | -3,131 | -13,047 | -13,955 | ||
Estimated fair value, end of period | 19,138 | 34,724 | 19,138 | 34,724 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | 1,346 | -5,441 | 2,036 | -9,209 | ||
Long-term Debt [Member] | Consolidated Variable Interest Entities | ' | ' | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ' | ' | ||
Estimated fair value, beginning of period | 10,175,179 | 7,894,238 | 9,596,434 | 7,559,568 | ||
Transfers Into Level 3 | ' | ' | 14,085 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | -4,500 | ' | -4,500 | ||
Transfers in Due to consolidation or acquisition | 0 | 313,093 | ' | 313,093 | ||
Net realized/unrealized (gains) losses | 49,721 | 332,752 | 123,449 | 582,124 | ||
Purchases | 467,552 | 105 | 2,390,964 | 62,905 | ||
Sales | -65,843 | 0 | -659,542 | -5,000 | ||
Issuances | 0 | 443,807 | 0 | 821,184 | ||
Settlements | -508,743 | -443,874 | -1,347,524 | -793,753 | ||
Estimated fair value, end of period | 10,117,866 | 8,535,621 | 10,117,866 | 8,535,621 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | $16,325 | ($268,358) | $105,739 | ($381,878) | ||
[1] | (1)The transfers into Level 3 represent the Company's sales of debt and subordinated notes of Consolidated CLOs during the period, which results in the debt and subordinated notes no longer being eliminated in consolidation. |
FAIR_VALUE_OF_FINANCIAL_INSTRU5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) (Projected cash flow model, Recurring basis, Level 3) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | |||||
Contingent Liabilities at Fair Value | Contingent Liabilities at Fair Value | Contingent Liabilities at Fair Value | Contingent Liabilities at Fair Value | Debt tranches of Consolidated CLOs | Debt tranches of Consolidated CLOs | Debt tranches of Consolidated CLOs | Debt tranches of Consolidated CLOs | Contingent liabilities and the long-term debt of the Consolidated CLOs | Contingent liabilities and the long-term debt of the Consolidated CLOs | Contingent liabilities and the long-term debt of the Consolidated CLOs | Contingent liabilities and the long-term debt of the Consolidated CLOs | Contingent liabilities and the long-term debt of the Consolidated CLOs | Subordinated notes of Consolidated CLOs | Subordinated notes of Consolidated CLOs | Subordinated notes of Consolidated CLOs | |||||
Minimum | Minimum | Maximum | Maximum | Minimum | Minimum | Maximum | Maximum | Minimum | Minimum | Maximum | Maximum | Minimum | Maximum | |||||||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Default rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | [1] | 1.00% | [1] | 2.00% | [1] | 2.00% | [1] | ' | ' | ' |
Recovery rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% | [1] | 70.00% | [1] | 75.00% | [1] | 75.00% | [1] | ' | ' | ' |
Pre-payment rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | [1] | 25.00% | [1] | 30.00% | [1] | 30.00% | [1] | ' | ' | ' |
Reinvestment spread over LIBOR (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 3.00% | 3.80% | 4.00% | ' | ' | ' | ||||
Reinvestment price | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99.50% | 99.50% | 100.00% | 100.00% | ' | ' | ' | ||||
Discount rate (as a percent) | 5.40% | 6.00% | 15.00% | 15.00% | 1.00% | 1.00% | 8.00% | 9.00% | ' | ' | ' | ' | ' | 12.00% | 12.00% | 15.00% | ||||
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | (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. |
FAIR_VALUE_OF_FINANCIAL_INSTRU6
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Long-term debt: | ' | ' | ||
Long-term debt | $138,915 | $138,233 | ||
Consolidated CLOs | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | 10,059,785 | [1] | 9,325,982 | [1] |
Estimated Fair Value | ' | ' | ||
Long-term debt: | ' | ' | ||
Convertible Notes | 32,603 | [2] | 33,058 | [2] |
Junior Subordinated Notes | 59,312 | [3] | 47,752 | [3] |
Convertible Debt [Member] | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | 18,915 | [4] | 18,233 | [4] |
Subordinated Debt Obligations [Member] | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | $120,000 | [3],[5],[6] | $120,000 | [3],[5],[6] |
[1] | (4)Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. As of SeptemberB 30, 2013 and DecemberB 31, 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion, respectively. | |||
[2] | (1)The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions. This methodology is classified as LevelB 3 within the fair value hierarchy. | |||
[3] | (2)The Junior Subordinated Notes include both the MarchB and OctoberB Junior Subordinated Notes (see Note 11). 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. | |||
[4] | (3)As of SeptemberB 30, 2013 and DecemberB 31, 2012, Convertible Notes were recorded net of a discount of $6.1 million and $6.8 million, respectively and paid interest at the stated rates of 10.00% and 9.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on DecemberB 9, 2017. | |||
[5] | (2)OctoberB Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on OctoberB 30, 2035. | |||
[6] | (1)MarchB Junior Subordinated Notes bear interest at an annual rate of 1% through AprilB 30, 2015 and LIBOR plus 2.58% thereafter until maturity, OctoberB 30, 2035. |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (Warrants) | Sep. 30, 2013 | Dec. 31, 2012 |
Warrant_contracts | Warrant_contracts | |
Derivative instruments | ' | ' |
Number of Contracts | 11 | 12 |
Consolidated Variable Interest Entities | ' | ' |
Derivative instruments | ' | ' |
Number of Contracts | 9 | 10 |
NET_RESULTS_OF_CONSOLIDATED_VI2
NET RESULTS OF CONSOLIDATED VIEs (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Net investment and interest income | $159 | $76 | $256 | $224 | ||||
Gain (Loss) on Investments | 287 | 291 | 887 | 434 | ||||
Gain (Loss) on Liabilities at Fair Value | 1,099 | -6,059 | 1,598 | -9,400 | ||||
Net results of Consolidated Variable Interest Entities | 22,765 | -153,548 | 122,925 | -97,335 | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Investment and interest income | 117,075 | 99,097 | 356,957 | 295,545 | ||||
Interest expense | -33,285 | -25,246 | -92,308 | -71,857 | ||||
Net investment and interest income | 83,790 | 73,851 | 264,649 | 223,688 | ||||
Gain (Loss) on Investments | -1,601 | 108,290 | 10,784 | 266,614 | ||||
Gain (Loss) on Liabilities at Fair Value | -49,721 | -332,752 | -123,449 | -582,124 | ||||
Net Gain (Loss) on other investments and derivatives | 112 | -1 | 64 | 861 | ||||
Net gain (loss) from activities of Consolidated Variable Interest Entities | 32,580 | -150,612 | 152,048 | -90,961 | ||||
Expenses of Consolidated Variable Interest Entities | 9,815 | 2,936 | 29,123 | 6,374 | ||||
Net results of Consolidated Variable Interest Entities | 22,765 | [1] | -153,548 | [1] | 122,925 | [1] | -97,335 | [1] |
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Consolidated Variable Interest Entities | ' | ' | ' | ' | ||||
Gain (Loss) on Investments | ' | ' | 10,784 | 266,614 | ||||
Gain (Loss) on Liabilities at Fair Value | ' | ' | -123,449 | -582,124 | ||||
Net results of Consolidated Variable Interest Entities | $22,765 | ($153,548) | $122,925 | ($97,335) | ||||
[1] | (1)See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. |
INTANGIBLE_ASSETS_AND_GOODWILL2
INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Investment management contracts | Investment management contracts | Investment management contracts | Investment management contracts | Investment management contracts | Referral Agreement | Referral Agreement | Non-compete agreements | Non-compete agreements | Trade name | Trade name | |||||||||||||||||
Primus CLO I Ltd [Member] | Gillespie | Gillespie | |||||||||||||||||||||||||
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Weighted-Average Remaining Estimated Useful Life (In years) | ' | ' | ' | ' | ' | '5 years 2 months 24 days | '5 years 4 months 24 days | ' | ' | ' | '6 years 0 months 18 days | '6 years 9 months 18 days | '4 years 3 months 18 days | '4 years 9 months 18 days | '7 years 6 months 18 days | '8 years 3 months 18 days | |||||||||||
Gross Carrying Amount | $82,642,000 | [1] | ' | $82,642,000 | [1] | ' | $82,642,000 | [1] | $76,047,000 | [1] | $76,047,000 | [1] | ' | ' | ' | $3,810,000 | [1] | $3,810,000 | [1] | $1,535,000 | [1] | $1,535,000 | [1] | $1,250,000 | [1] | $1,250,000 | [1] |
Accumulated Amortization | 51,225,000 | [2] | ' | 51,225,000 | [2] | ' | 39,506,000 | [2] | 49,861,000 | [2] | 38,727,000 | [2] | ' | ' | ' | 381,000 | [2] | 95,000 | [2] | 671,000 | [2] | 465,000 | [2] | 312,000 | [2] | 219,000 | [2] |
Net Carrying Amount | 31,417,000 | ' | 31,417,000 | ' | 43,136,000 | 26,186,000 | 37,320,000 | ' | ' | ' | 3,429,000 | 3,715,000 | 864,000 | 1,070,000 | 938,000 | 1,031,000 | |||||||||||
Amortization of intangible assets | 3,600,000 | 3,600,000 | 11,700,000 | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Expected amortization expense of the existing intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2013 | 3,453,000 | ' | 3,453,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2014 | 10,818,000 | ' | 10,818,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2015 | 7,096,000 | ' | 7,096,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2016 | 4,165,000 | ' | 4,165,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2017 | 2,286,000 | ' | 2,286,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Thereafter | 3,599,000 | ' | 3,599,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Expected amortization expense | 31,417,000 | ' | 31,417,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Intangible assets, other disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Proceeds from the sale of management contracts | ' | ' | 1,386,000 | 6,468,000 | ' | ' | ' | ' | 7,100,000 | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Contingent payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | |||||||||||
Gain on sale of intangible assets | 634,000 | ' | 1,386,000 | 5,772,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Impairment of intangible assets | ' | ' | $0 | $1,771,000 | ' | ' | ' | $1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
[1] | (1)Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented. | ||||||||||||||||||||||||||
[2] | (2)The Company recorded amortization expense on its intangible assets of $3.6 million and $11.7 million, respectively, during the three and nine months ended SeptemberB 30, 2013, and $3.6 million and $13.0 million, respectively, during the three and nine months ended SeptemberB 30, 2012. |
Deferred_Purchase_Payments_and2
Deferred Purchase Payments and Contingent Liabilities at Fair Value (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Contingent liabilities at fair value | ' | ' |
Deferred Purchase Payments | $2,593 | $4,778 |
Contingent liabilities | 19,138 | 33,783 |
Recurring basis | Estimated Fair Value | ' | ' |
Contingent liabilities at fair value | ' | ' |
Contingent liabilities | 19,138 | 33,783 |
CLOs Managed by CIFCAM [Member] | ' | ' |
Contingent liabilities at fair value | ' | ' |
Contingent liabilities | 17,239 | 29,152 |
Cypress Tree Investment Management LLC [Member] | ' | ' |
Contingent liabilities at fair value | ' | ' |
Contingent liabilities | $1,899 | $4,631 |
Deferred_Purchase_Payments_and3
Deferred Purchase Payments and Contingent Liabilities at Fair Value(Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 30, 2011 | Sep. 30, 2013 | Apr. 13, 2011 | Apr. 30, 2011 | Dec. 09, 2013 | Sep. 30, 2013 | Mar. 31, 2010 | Apr. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 13, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Commercial Industrial Finance Corp [Member] | Commercial Industrial Finance Corp [Member] | Commercial Industrial Finance Corp [Member] | Dfr Holdings [Member] | Dfr Holdings [Member] | Dfr Holdings [Member] | Dfr Holdings [Member] | CLOs Managed by CIFCAM [Member] | CLOs Managed by CIFCAM [Member] | CLOs Managed by CIFCAM [Member] | CLOs Managed by CIFCAM [Member] | CLOs Managed by CIFCAM [Member] | CLOs Managed by CIFCAM [Member] | CypressTree | CypressTree | CypressTree | CypressTree | ||||||
item | item | |||||||||||||||||||||
Contingent liabilities at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition Cost of Acquired Entity Cash Payable | ' | ' | ' | ' | ' | ' | ' | $7,500,000 | ' | ($1,500,000) | ($3,000,000) | $7,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Purchase Payments | 2,593,000 | ' | 2,593,000 | ' | 4,778,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (Loss) on Liabilities at Fair Value | 1,099,000 | -6,059,000 | 1,598,000 | -9,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 882,000 | -1,227,000 | 1,227,000 | 1,012,000 | ' | 217,000 | -4,832,000 | 371,000 | -10,412,000 |
Business Acquisition Cost of Acquired Entity Initial Incentive Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' |
Business Acquisition Cost of Acquired Entity Final Contingent Consideration Payment Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entity Percentage of Fees in Excess of Initial Incentive Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55.00% | ' |
Cash Payments Required under a Component of the Consideration for the Merger after a Reduction in Incentive Fee sharing Payments is Achieved | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,700,000 | ' | ' | ' | ' | ' | ' |
Deferred Purchase Payments and Payments on Contingent Liabilities | ' | ' | 15,547,000 | 16,455,000 | ' | ' | -2,500,000 | ' | ' | ' | ' | ' | ' | 2,900,000 | 1,600,000 | 10,700,000 | 3,900,000 | ' | 600,000 | 1,600,000 | 2,400,000 | 10,100,000 |
Business Acquisition, Contingent Consideration One Time Earn Out Payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 | 300,000 | 6,200,000 |
Business Acquisition Cost of Acquired Entity Cash Payable Number of Equal Installments | ' | ' | ' | ' | ' | 3 | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition Cost of Acquired Entity Fixed Deferred Payments Per Installment | ' | ' | ' | ' | ' | ' | ' | $2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 9 Months Ended | ||||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | $138,915,000 | ' | $138,233,000 | ||
Number of Collateralized Loan Obligations Consolidated | 26 | ' | 23 | ||
CIFC Warehouses [Member] | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 58,081,000 | [1] | ' | 270,452,000 | [1] |
Current Weighted Average Borrowing Rate (as a percent) | 1.36% | [1] | ' | 2.12% | [1] |
Weighted-Average Remaining Maturity | '0 years 2 months 0 days | [2] | ' | ' | |
Principal outstanding amount | 15,100,000 | ' | 25,100,000 | ||
Carrying value of the assets for which debt holders have a recourse for repayment | 98,725,000 | ' | 334,420,000 | ||
Consolidated CLOs | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 10,059,785,000 | [2] | ' | 9,325,982,000 | [2] |
Current Weighted Average Borrowing Rate (as a percent) | 1.38% | [2] | ' | 1.16% | [2] |
Weighted-Average Remaining Maturity | '8 years 5 months 0 days | [2] | ' | '8 years 1 month 6 days | [2] |
Principal outstanding amount | 10,600,000,000 | ' | 9,800,000,000 | ||
Carrying value of the assets for which debt holders have a recourse for repayment | 10,731,999,000 | ' | 9,933,495,000 | ||
Debt issued | 2,000,000,000 | 821,200,000 | ' | ||
Outstanding debt paid down | 1,300,000,000 | 622,300,000 | ' | ||
Consolidated Variable Interest Entities | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Current Weighted Average Borrowing Rate (as a percent) | 1.38% | ' | 1.19% | ||
Weighted-Average Remaining Maturity | '8 years 4 months 0 days | ' | '7 years 10 months 24 days | ||
Recourse Debt | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 138,915,000 | ' | 138,233,000 | ||
March Junior Subordinated Notes | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 95,000,000 | [3] | ' | 95,000,000 | [3] |
Current Weighted Average Borrowing Rate (as a percent) | 1.00% | [3] | ' | 1.00% | [3] |
Weighted-Average Remaining Maturity | '22 years 1 month 18 days | [3] | ' | '22 years 9 months 18 days | [3] |
March Junior Subordinated Notes | Through April 30, 2015 | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Annual rate (as a percent) | 1.00% | ' | ' | ||
March Junior Subordinated Notes | From April 30, 2015 until maturity on October 30, 2035 | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Annual interest rate (as a percent) | 'LIBOR | ' | ' | ||
Spread over annual interest rate (as a percent) | 2.58% | ' | ' | ||
October Junior Subordinated Notes | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 25,000,000 | [4] | ' | 25,000,000 | [4] |
Current Weighted Average Borrowing Rate (as a percent) | 3.77% | [4] | ' | 3.81% | [4] |
Weighted-Average Remaining Maturity | '22 years 1 month 18 days | [4] | ' | '22 years 9 months 18 days | [4] |
Annual interest rate (as a percent) | 'LIBOR | ' | ' | ||
Spread over annual interest rate (as a percent) | 3.50% | ' | ' | ||
Subordinated Debt Obligations [Member] | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 120,000,000 | [3],[4],[5] | ' | 120,000,000 | [3],[4],[5] |
Current Weighted Average Borrowing Rate (as a percent) | 1.58% | ' | 1.59% | ||
Weighted-Average Remaining Maturity | '22 years 1 month 18 days | ' | '22 years 9 months 18 days | ||
Convertible Debt [Member] | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 18,915,000 | [6] | ' | 18,233,000 | [6] |
Current Weighted Average Borrowing Rate (as a percent) | 10.00% | [6] | ' | 9.00% | [6] |
Weighted-Average Remaining Maturity | '4 years 2 months 24 days | [6] | ' | '4 years 10 months 24 days | [6] |
Principal outstanding amount | 25,000,000 | ' | ' | ||
Discount | 6,100,000 | ' | 6,800,000 | ||
Stated interest rate (as a percent) | 10.00% | ' | 9.00% | ||
Effective rate of interest (as a percent) | 18.14% | ' | 18.14% | ||
Subordinated notes of Consolidated CLOs | Consolidated CLOs | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Outstanding debt paid down | 198,500,000 | 171,500,000 | ' | ||
Class D Notes | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | 10,256,781,000 | ' | 9,734,667,000 | ||
Revolving credit facility | Consolidated CLOs | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Debt issued | 20,600,000 | 57,800,000 | ' | ||
Common Stock | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Debt Instrument, Convertible, Number of Equity Instruments | 4.1 | ' | ' | ||
Debt Instrument, Convertible, Conversion Price | $6.05 | ' | ' | ||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ' | ' | ' | ||
LONG-TERM DEBT | ' | ' | ' | ||
Carrying Value | $10,117,866,000 | ' | $9,596,434,000 | ||
[1] | (5)Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period, which have a par value of $15.1 million as of SeptemberB 30, 2013 and $25.1 million as of DecemberB 31, 2012. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. In addition, the weighted average remaining maturity for warehouses is based on anticipated settlement dates. | ||||
[2] | (4)Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. As of SeptemberB 30, 2013 and DecemberB 31, 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion, respectively. | ||||
[3] | (1)MarchB Junior Subordinated Notes bear interest at an annual rate of 1% through AprilB 30, 2015 and LIBOR plus 2.58% thereafter until maturity, OctoberB 30, 2035. | ||||
[4] | (2)OctoberB Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on OctoberB 30, 2035. | ||||
[5] | (2)The Junior Subordinated Notes include both the MarchB and OctoberB Junior Subordinated Notes (see Note 11). 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. | ||||
[6] | (3)As of SeptemberB 30, 2013 and DecemberB 31, 2012, Convertible Notes were recorded net of a discount of $6.1 million and $6.8 million, respectively and paid interest at the stated rates of 10.00% and 9.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on DecemberB 9, 2017. |
EQUITY_Details
EQUITY (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 24, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock options | Stock options | Stock options | Stock options | Common Stock | Warrants | GECEII | Share Repurchase Program [Member] | Share Repurchase Program [Member] | ||||||
General Electric Capital Corporation [Member] | Warrants | |||||||||||||
General Electric Capital Corporation [Member] | ||||||||||||||
Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock outstanding | 20,776,028 | ' | 20,776,028 | ' | 20,682,604 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | ' | ' | ' | ' |
Initial conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.05 | ' | ' | ' | ' |
Shares issued related to the GECC transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 2,000,000 | ' | ' |
Compensation expense (in dollars) | ' | ' | ' | ' | ' | $0.70 | $0.50 | $2.30 | $1.30 | ' | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared | $0.10 | $0.10 | $0.10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Repurchase Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares repurchased | ' | ' | 34,995 | 572,608 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, Value, Acquired, Cost Method | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | 3.8 |
Shares repurchased, average price per share (in dollars per share) | ' | ' | $7.16 | $6.58 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | ' | ' | 5.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased not yet retired (shares) | 130,444 | ' | 130,444 | ' | 95,449 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
GECEII Warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares or warrants issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 2,000,000 | ' | ' |
Exercise price (usd per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.38 | ' | ' |
Stock Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation cost not yet recognized | ' | ' | ' | ' | ' | $6.30 | ' | $6.30 | ' | ' | ' | ' | ' | ' |
Weighted average vesting period | ' | ' | ' | ' | ' | ' | ' | '2 years 8 months 0 days | ' | ' | ' | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | ' | ' | 48.75% | 50.52% | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | ' | ' | ' | 1.10% | 1.27% | ' | ' | ' | ' | ' |
Expected life (years) | ' | ' | ' | ' | ' | ' | ' | '6 years 1 month 10 days | '6 years 1 month 4 days | ' | ' | ' | ' | ' |
Contractual term | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | ' | ' | ' | ' | ' | 237,788 | ' | 237,788 | ' | ' | ' | ' | ' | ' |
EQUITY_Details_2
EQUITY (Details 2) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | |
Weighted Average Exercise Price | ' | ' | |
Expired/Canceled (in dollars per share) | $8.65 | [1] | ' |
Stock options | ' | ' | |
Number of Shares Underlying Stock-Based Awards | ' | ' | |
Outstanding at the beginning of the period (in shares) | 3,594,813 | ' | |
Granted (in shares) | 430,000 | ' | |
Exercised (in shares) | -100,000 | ' | |
Expired/Canceled (in shares) | -45,000 | [1] | ' |
Outstanding at the end of the period (in shares) | 3,879,813 | 3,594,813 | |
Exercisable at the end of the period (in shares) | 1,364,149 | ' | |
Vested and Expected to vest at the end of the period (in shares) | 3,491,832 | [2] | ' |
Weighted Average Exercise Price | ' | ' | |
Outstanding at the beginning of the period (in dollars per share) | $6.05 | ' | |
Granted (in dollars per share) | $8.65 | ' | |
Exercised (in dollars per share) | $5.41 | ' | |
Outstanding at the end of the period (in dollars per share) | $6.33 | $6.05 | |
Exercisable at the end of the period (in dollars per share) | $6.07 | ' | |
Vested and Expected to vest at the end of the period (in dollars per share) | $6.33 | [2] | ' |
Weighted Average Remaining Contractual Term | ' | ' | |
Outstanding at the end of the period | '8 years 5 months 6 days | '9 years 0 months 25 days | |
Exercisable at the end of the period | '8 years 1 month 2 days | ' | |
Vested and Expected to vest at the end of the period | '8 years 5 months 6 days | [2] | ' |
Aggregate Intrinsic Value | ' | ' | |
Outstanding at the end of the period (in dollars) | $6,364 | $7,007 | |
Exercisable at the end of the period (in dollars) | 2,478 | ' | |
Vested and Expected to vest at the end of the period (in dollars) | $5,727 | [2] | ' |
[1] | (1) The forfeited stock-based awards are returned to the grant pool for possible reissuance under the 2011 Stock Plan. | ||
[2] | (2) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. |
EQUITY_Details_3
EQUITY (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||
Stock Options [Member] | ' | ' | ' | ' | ' | ||
EQUITY | ' | ' | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | '4 years | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 3,879,813 | ' | 3,879,813 | ' | 3,594,813 | ||
Additional disclosures | ' | ' | ' | ' | ' | ||
Compensation expense (in dollars) | $700,000 | $500,000 | $2,300,000 | $1,300,000 | ' | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $6.33 | ' | $6.33 | ' | $6.05 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | 430,000 | ' | ' | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | ' | ' | $8.65 | ' | ' | ||
Exercised (in shares) | ' | ' | 100,000 | ' | ' | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | ' | ' | $5.41 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | ' | ' | '8 years 5 months 6 days | ' | '9 years 0 months 25 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 6,364,000 | ' | 6,364,000 | ' | 7,007,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 1,364,149 | ' | 1,364,149 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $6.07 | ' | $6.07 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | ' | ' | '8 years 1 month 2 days | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 2,478,000 | ' | 2,478,000 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 3,491,832 | [1] | ' | 3,491,832 | [1] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $6.33 | [1] | ' | $6.33 | [1] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | ' | ' | '8 years 5 months 6 days | [1] | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 5,727,000 | [1] | ' | 5,727,000 | [1] | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | 6,300,000 | ' | 6,300,000 | ' | ' | ||
Restricted Stock Units Time Vesting [Member] | Grants in 2011 [Member] | ' | ' | ' | ' | ' | ||
EQUITY | ' | ' | ' | ' | ' | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Vesting Period Increments | ' | ' | '1/3 | ' | ' | ||
CIFC Parent Profits Interest Awards[Member] [Member] | ' | ' | ' | ' | ' | ||
Additional disclosures | ' | ' | ' | ' | ' | ||
Compensation expense (in dollars) | 300,000 | ' | 1,400,000 | ' | ' | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $1,200,000 | ' | $1,200,000 | ' | ' | ||
[1] | (2) Represents 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 $) | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Sep. 24, 2012 | Sep. 24, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |||
Warrants | GECEII | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | Grants in 2009 [Member] | Grants in 2009 [Member] | Grants in 2011 [Member] | Grants in 2011 [Member] | |||
General Electric Capital Corporation [Member] | Warrants | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | Restricted Stock Units Time Vesting [Member] | |||||||
General Electric Capital Corporation [Member] | ||||||||||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Common Shares Issued to Satisfy Restricted Stock Units Net of Shares for Tax Withholdings | ' | ' | ' | ' | ' | ' | 88,888 | 88,888 | 7,236 | 7,236 | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Outstanding Number | ' | ' | 7,236 | [1] | 103,360 | [1] | 103,360 | 170,688 | ' | ' | ' | ' |
Warrants issued | 2,000,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercise price (usd per share) | ' | $6.38 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Settled in Period | ' | ' | -96,124 | [2] | -67,328 | [2] | ' | ' | ' | ' | ' | ' |
[1] | (2)Outstanding amount relates to the remaining 2011 grants to certain members of the Board. These RSUs are fully vested as of SeptemberB 30, 2013. | |||||||||||
[2] | (1)Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder. During the nine months ended SeptemberB 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011. |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ||||
Net Income (Loss) Available to Common Stockholders, Basic | $8,150 | $688 | $18,480 | ($6,215) | ||||
Interest on Convertible Debt, Net of Tax | 460 | [1] | 0 | [1] | 1,364 | [1] | 0 | [1] |
Net Income (Loss) Available to Common Stockholders, Diluted | $8,610 | $688 | $19,844 | ($6,215) | ||||
Weighted-average shares used in basic calculation | 20,798,102 | 19,957,041 | 20,801,531 | 20,201,304 | ||||
Incremental Common Shares Attributable to Call Options and Warrants | 408,195 | [2] | 117,380 | [2] | 494,413 | [2] | 0 | [2] |
Incremental Common Shares Attributable to Share-based Payment Arrangements | 225,492 | [3] | 1,833,563 | [3] | 228,608 | [3] | 0 | [3] |
Incremental Common Shares Attributable to Conversion of Debt Securities | 4,132,231 | [1] | 0 | [1] | 4,132,231 | [1] | 0 | [1] |
Weighted-average shares used in diluted calculation | 25,563,020 | 21,907,984 | 25,656,783 | 20,201,304 | ||||
Earnings Per Share, Basic | $0.39 | $0.03 | $0.89 | ($0.31) | ||||
Earnings Per Share, Diluted | $0.34 | $0.03 | $0.77 | ($0.31) | ||||
Warrants | ' | ' | ' | ' | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | ' | ' | 2,200,000 | ||||
Stock Options [Member] | ' | ' | ' | ' | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,200,000 | ' | 1,200,000 | 1,500,000 | ||||
[1] | (1)During the three and nine months months ended SeptemberB 30, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | |||||||
[2] | (2)During the three and nine months ended SeptemberB 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. | |||||||
[3] | During the nine months ended SeptemberB 30, 2012, 1.5 million of stock options and 2.2 million of warrants were considered anti-dilutive and excluded from diluted EPS. |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Income Tax [Line Items] | ' | ' | ' | ' | ' |
Effective Income Tax Rate, Continuing Operations | 51.50% | 1.00% | 18.10% | -1.90% | ' |
Deferred Tax Assets, Net | $54,331,000 | ' | $54,331,000 | ' | $50,545,000 |
effective tax rate after adjusting for non-controlling intersts in consoldiated VIEs | 43.30% | ' | 46.10% | ' | ' |
Deferred Tax Assets, Valuation Allowance | $13,200,000 | ' | $13,200,000 | ' | $13,200,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Share data in Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Related party transactions | ' | ' | ' | ' | ' |
Corporate interest expense | $1,460,000 | $1,487,000 | $4,394,000 | $4,422,000 | ' |
Receivables recorded | 194,000 | ' | 194,000 | ' | 36,000 |
Revenue from Related Parties | 40,000 | 65,000 | 157,000 | 205,000 | ' |
Dfr Holdings [Member] | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Number of shares owned (shares) | 4.6 | ' | 4.6 | ' | ' |
Receivables recorded | 54,000 | ' | 54,000 | ' | 17,000 |
Revenue from Related Parties | 12,000 | 15,000 | 37,000 | 55,000 | ' |
Cifc Parent Holdings Llc [Member] | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Number of shares owned (shares) | 9.1 | ' | 9.1 | ' | ' |
Number of CLOs held | 7 | ' | 7 | ' | 9 |
Receivables recorded | 140,000 | ' | 140,000 | ' | 19,000 |
Revenue from Related Parties | 28,000 | 50,000 | 120,000 | 150,000 | ' |
Cifc Parent Holdings Llc [Member] | Consolidated Variable Interest Entities | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Number of CLOs held | 6 | ' | 6 | ' | 7 |
Common Stock | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Number of Equity Instruments | ' | ' | 4.1 | ' | ' |
Convertible Debt [Member] | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | 25,000,000 | ' | 25,000,000 | ' | ' |
Corporate interest expense | ' | 900,000 | 2,600,000 | 2,500,000 | ' |
CIFC FUNDING 2013-II - Board Member Investment [Member] | ' | ' | ' | ' | ' |
Related party transactions | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $1,000,000 | ' | $1,000,000 | ' | ' |
Ownership percentage (percent) | 50.00% | ' | 50.00% | ' | ' |
RESTRUCTURING_CHARGES_Details
RESTRUCTURING CHARGES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Rollforward of accrued restructuring charges | ' | ' | ' | ' | ||||
Accrued Restructuring Charges at beginning of period | $750,000 | $779,000 | $1,410,000 | $1,490,000 | ||||
Provision for Restructuring Charges | ' | [1] | ' | [1] | 0 | [1] | 3,923,000 | [1] |
Payments for Restructuring Charges | -67,000 | -305,000 | -727,000 | -4,156,000 | ||||
Non-Cash Settlement of Restructuring Charges | ' | [2] | ' | [2] | 0 | [2] | -783,000 | [2] |
Accrued Restructuring Charges at end of period | 683,000 | 474,000 | 683,000 | 474,000 | ||||
Lease termination fees | ' | ' | ' | 3,100,000 | ||||
Loss on disposal of equipment and improvements | ' | ' | ' | 1,417,000 | ||||
Deferred rent reversal | ' | ' | ' | $600,000 | ||||
[1] | (1)During the nine months ended SeptemberB 30, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $0.6 million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office. | |||||||
[2] | (2)For the nine months ended SeptemberB 30, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above. |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Consolidated CLOs | Consolidated CLOs | |||||
Lease Commitments | ' | ' | ' | ' | ' | ' |
Occupancy, Net | $500,000 | $400,000 | $1,200,000 | $1,100,000 | ' | ' |
Future minimum commitments under the lease | ' | ' | ' | ' | ' | ' |
2013 | 267,000 | ' | 267,000 | ' | ' | ' |
2014 | 1,607,000 | ' | 1,607,000 | ' | ' | ' |
2015 | 1,607,000 | ' | 1,607,000 | ' | ' | ' |
2016 | 1,607,000 | ' | 1,607,000 | ' | ' | ' |
2017 | 1,607,000 | ' | 1,607,000 | ' | ' | ' |
Thereafter | 8,690,000 | ' | 8,690,000 | ' | ' | ' |
Future minimum commitments | 15,385,000 | ' | 15,385,000 | ' | ' | ' |
Other Commitments and Contingencies | ' | ' | ' | ' | ' | ' |
Unfunded investment commitments on loans within the consolidated CLOs | ' | ' | ' | ' | $47,300,000 | $55,300,000 |
SUBSEQUENT_EVENTS_Subsequent_E
SUBSEQUENT EVENTS Subsequent Events (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 |
Subsequent Event [Line Items] | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared | $0.10 | $0.10 | $0.10 |
Subsequent Event [Member] | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
New CLO Priced | 'a | ' | ' |
Common Stock, Dividends, Per Share, Declared | $0.10 | ' | ' |
Assets under Management, Carrying Amount | $500 | ' | $500 |