Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 25, 2014 | Jun. 30, 2013 |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'CIFC Corp. | ' | ' |
Entity Central Index Key | '0001313918 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 20,790,889 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Public Float | ' | ' | $52 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
ASSETS | ' | ' | ||
Cash and cash equivalents | $25,497 | $47,692 | ||
Due from brokers | 18,813 | 1,150 | ||
Restricted cash and cash equivalents | 1,700 | 1,612 | ||
Investments | 16,883 | 5,058 | ||
Receivables | 2,120 | 2,432 | ||
Prepaid and other assets | 5,104 | 5,392 | ||
Deferred Tax Assets, Net | 57,675 | 53,914 | [1] | |
Property, Plant and Equipment, Net | 4,261 | 3,979 | ||
Intangible assets, net | 25,223 | 43,136 | ||
Goodwill | 76,000 | 76,000 | ||
Subtotal | 233,276 | 240,365 | ||
TOTAL ASSETS | 11,600,188 | 10,508,280 | ||
LIABILITIES | ' | ' | ||
Due to brokers | 5,499 | ' | ||
Accrued and other liabilities | 15,197 | 15,734 | ||
Contractual Obligation | 1,179 | 4,778 | ||
Contingent liabilities at fair value | 16,961 | 33,783 | ||
Long-term debt | 139,164 | 138,233 | ||
Subtotal | 178,000 | 192,528 | ||
TOTAL LIABILITIES | 11,292,435 | 10,305,563 | ||
EQUITY | ' | ' | ||
Common stock, par value $0.001: 500,000,000 shares authorized, 20,921,333 issued and 20,790,889 outstanding as of December 31, 2013 and 20,778,053 issued and 20,682,604 outstanding as of December 31, 2012 | 21 | 21 | ||
Treasury stock, at cost: 130,444 shares as of December 31, 2013, and 95,449 shares as of December 31, 2012 | -914 | -664 | ||
Additional paid-in capital | 963,011 | 955,407 | ||
Accumulated other comprehensive income (loss) | ' | -3 | ||
Retained Earnings (Accumulated Deficit) | -810,858 | -830,073 | [1] | |
Stockholders' Equity Attributable to Parent | 151,260 | 124,688 | ||
TOTAL EQUITY | 307,753 | 202,717 | [1] | |
TOTAL LIABILITIES AND EQUITY | 11,600,188 | 10,508,280 | [1] | |
Consolidated Entities | ' | ' | ||
ASSETS | ' | ' | ||
Due from brokers | 209,882 | [2] | 103,008 | [2] |
Restricted cash and cash equivalents | 699,387 | [2] | 1,059,283 | [2] |
Investments | 10,420,993 | [2] | 9,066,779 | [2] |
Receivables | 36,350 | [2] | 38,845 | [2] |
Prepaid and other assets | 300 | [2] | ' | |
TOTAL ASSETS | 11,366,912 | [2] | 10,267,915 | [2] |
LIABILITIES | ' | ' | ||
Due to brokers | 606,808 | [2] | 494,641 | [2] |
Accrued and other liabilities | 100 | [2] | 5,207 | [2] |
Interest payable | 22,552 | [2] | 16,753 | [2] |
Long-term debt at fair value | 10,484,975 | [2] | 9,596,434 | [2] |
TOTAL LIABILITIES | 11,114,435 | [2] | 10,113,035 | [2] |
Consolidated Funds [Member] | ' | ' | ||
EQUITY | ' | ' | ||
Stockholders' Equity Attributable to Noncontrolling Interest | 5,107 | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
EQUITY | ' | ' | ||
Retained Earnings (Accumulated Deficit) | $151,386 | $78,029 | ||
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||
[2] | Consolidated Entities represents the assets and liabilities of the Consolidated VIEs for both periods presented. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 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 | 20,921,333 | 20,778,053 |
Common stock, shares outstanding | 20,790,889 | 20,682,604 |
Treasury stock, shares | 130,444 | 95,449 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues | ' | ' | |
Investment advisory fees | $8,400 | $10,696 | |
Net investment and interest income | 333 | 226 | |
Total net revenues | 8,733 | 10,922 | |
Expenses | ' | ' | |
Compensation and benefits | 30,339 | 22,945 | |
Professional services | 5,277 | 6,221 | |
General and administrative expenses | 7,707 | 6,096 | |
Depreciation and amortization | 15,541 | 17,931 | |
Impairment of intangible assets | 3,106 | 1,771 | |
Restructuring charges | 0 | 5,877 | [1] |
Total expenses | 61,970 | 60,841 | |
Other Income (Expense) and Gain (Loss) | ' | ' | |
Gain (Loss) on Investments | 1,822 | 2,308 | |
Gain (Loss) on Liabilities at Fair Value | 1,644 | -11,452 | |
Corporate interest expense | -5,865 | -5,912 | |
Net gain on the sale of management contract | 1,386 | 5,772 | |
Strategic transactions expenses | 0 | -657 | |
Other Nonoperating Income Expense, Net | -2 | -421 | |
Net other income (expense) and gain (loss) | -1,015 | -10,362 | |
Operating income (loss) | -54,252 | -60,281 | |
Net income (loss) | ' | ' | |
Income (loss) before income tax expense (benefit) | 115,617 | -228,661 | |
Income tax expense (benefit) | -18,782 | -10,750 | [2] |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 96,835 | -239,411 | [2] |
Net income (loss) attributable to CIFC Corp. | 23,371 | -8,699 | [2] |
Earnings (loss) per share | ' | ' | |
Earnings Per Share, Basic | $1.12 | ($0.43) | [2] |
Earnings Per Share, Diluted | $0.98 | ($0.43) | [2] |
Weighted-average number of shares outstanding - | ' | ' | |
Weighted Average Number of Shares Outstanding, Basic | 20,800,580 | 20,355,807 | |
Weighted Average Number of Shares Outstanding, Diluted | 25,737,363 | 20,355,807 | |
Consolidated Entities | ' | ' | |
Revenues | ' | ' | |
Net investment and interest income | 347,089 | 305,493 | |
Other Income (Expense) and Gain (Loss) | ' | ' | |
Gain (Loss) on Investments | 56,321 | 321,321 | |
Gain (Loss) on Liabilities at Fair Value | -193,633 | -772,147 | |
Results of Consolidated Variable Interest Entities | ' | ' | |
Net Results of Consolidated Entities | 169,869 | -168,380 | |
Net income (loss) | ' | ' | |
Net Income (Loss) Attributable to Noncontrolling Interest | -73,464 | 230,712 | |
Net income (loss) attributable to CIFC Corp. | $96,405 | $62,332 | |
[1] | During the year ended DecemberB 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, severance and termination benefits of $2.0 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] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $96,835 | ($239,411) | [1] |
Other comprehensive income (loss) from foreign currency translation | 3 | 3 | |
Other Comprehensive Income (Loss), Net of Tax | 3 | 3 | |
Comprehensive income (loss) | 96,838 | -239,408 | [1] |
Comprehensive income (loss) attributable to CIFC Corp. | 23,374 | -8,696 | [1] |
Consolidated Entities | ' | ' | |
Comprehensive (income) loss attributable to noncontrolling interest and Consolidated Variable Interest Entities | ($73,464) | $230,712 | |
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | |
Net income (loss) | $96,835,000 | ($239,411,000) | [1] |
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 | 1,494,000 | 1,496,000 | |
Share-based compensation | 7,497,000 | 4,516,000 | |
Net (gain) loss on investments and liabilities at fair value / other (gain) loss | -3,466,000 | 9,630,000 | |
Net gain on the sale of management contract | -1,386,000 | -5,772,000 | |
Depreciation and amortization | 15,541,000 | 17,931,000 | |
Impairment of intangible assets | 3,106,000 | 1,771,000 | |
Loss on disposal of equipment and improvements | ' | 1,417,000 | |
Deferred income tax expense (benefit) | -3,761,000 | 6,294,000 | [1] |
Net (gain) loss on investments at fair value | -1,822,000 | -2,308,000 | |
Net (gain) loss on liabilities at fair value | -1,644,000 | 11,452,000 | |
Changes in operating assets and liabilities: | ' | ' | |
Due from brokers | -17,663,000 | -1,150,000 | |
Net (purchases) sales of investments at fair value | 126,783,000 | 39,982,000 | |
Proceeds from Sale of Securities, Operating Activities | -121,598,000 | -40,417,000 | |
Receivables | 312,000 | -70,000 | |
Prepaid and other assets | 128,000 | -789,000 | |
Due to brokers | 5,499,000 | ' | |
Accrued and other liabilities | -338,000 | -2,340,000 | |
Net cash provided by (used in) operating activities | -1,053,787,000 | -400,196,000 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | |
Change in restricted cash and cash equivalents | -88,000 | 617,000 | |
Purchases of investments at fair value | -5,000,000 | -5,000,000 | |
Proceeds from the sale of the DFR MM CLO | ' | 36,500,000 | |
Proceeds from the sale of management contracts | 1,386,000 | 6,468,000 | |
Net cash (paid) acquired from strategic transactions | ' | 4,525,000 | |
Purchases of equipment and improvements | -1,016,000 | -1,955,000 | |
Net cash provided by (used in) investing activities | 355,178,000 | -495,135,000 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | |
Repurchases of common stock | -250,000 | -4,381,000 | |
Payment of stock and debt issuance costs | -93,000 | ' | |
Dividends paid | -4,156,000 | 0 | |
Payment to settle warrants and options | 0 | -72,000 | |
Deferred purchase payments and payments on contingent liabilities | -19,179,000 | -20,948,000 | |
Net cash provided by (used in) financing activities | 676,411,000 | 907,047,000 | |
Foreign currency translation | 3,000 | 3,000 | |
Net increase (decrease) in cash and cash equivalents | -22,195,000 | 11,719,000 | |
Cash and cash equivalents at beginning of period | 47,692,000 | 35,973,000 | |
Cash and cash equivalents at end of period | 25,497,000 | 47,692,000 | |
SUPPLEMENTAL DISCLOSURE: | ' | ' | |
Cash paid for interest | 4,314,000 | 4,616,000 | |
Cash paid for income taxes | 24,347,000 | 1,624,000 | |
Non-cash acquisition of equipment and improvements | 0 | 2,234,000 | |
NoncashContributionsForStockBasedAwards | 197,000 | 0 | |
Consolidated 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 | ' | -1,443,000 | |
Net (gain) loss on investments at fair value | -56,321,000 | -321,321,000 | |
Net (gain) loss on liabilities at fair value | 193,633,000 | 772,147,000 | |
Net Gain (Loss) on other investments | 0 | -726,000 | |
Net other (gain) loss | 51,000 | -822,000 | |
Changes in operating assets and liabilities: | ' | ' | |
Due from brokers | -106,874,000 | -83,894,000 | |
Net (purchases) sales of investments at fair value | 7,897,636,000 | 5,516,138,000 | |
Proceeds from Sale of Securities, Operating Activities | 6,599,693,000 | 4,610,221,000 | |
Receivables | 2,195,000 | -10,894,000 | |
Due to brokers | 112,167,000 | 347,243,000 | |
Accrued and other liabilities | -5,107,000 | 10,058,000 | |
Interest payable | 5,799,000 | -37,000 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | |
Change in restricted cash and cash equivalents | 359,896,000 | -528,358,000 | |
Principal receipts on and proceeds from sale of loans previously classified as held for investment | ' | 1,118,000 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | |
Proceeds from Noncontrolling Interests | 5,000,000 | 0 | |
Proceeds from issuance of long-term debt | 3,089,087,000 | 1,880,194,000 | |
Payments made on long-term debt | -2,393,998,000 | -947,746,000 | |
SUPPLEMENTAL DISCLOSURE: | ' | ' | |
Cash paid for interest | 120,245,000 | 95,446,000 | |
Consolidated Variable Interest Entities | ' | ' | |
SUPPLEMENTAL DISCLOSURE: | ' | ' | |
Paid-in-Kind Interest | $2,754,000 | $4,599,000 | |
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total | Common Stock | Common Stock | Treasury Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Consolidated Entities | Consolidated Entities | Noncontrolling Interest | |||
USD ($) | Par Value | Par Value | USD ($) | USD ($) | USD ($) | USD ($) | Noncontrolling Interest | USD ($) | ||||||
USD ($) | USD ($) | USD ($) | ||||||||||||
Balance (Scenario, Previously Reported) | [1] | $423,316,000 | ' | $20,000 | ' | $0 | $943,440,000 | ($6,000) | ($823,826,000) | ' | $303,688,000 | ' | ||
Balance at Dec. 31, 2011 | 425,768,000 | ' | 20,000 | ' | 0 | 943,440,000 | -6,000 | -821,374,000 | ' | 303,688,000 | ' | |||
Shares, Issued (Scenario, Previously Reported) | [1] | ' | 20,255,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ||
Shares, Issued at Dec. 31, 2011 | ' | 20,255,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | |||
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Retained Earnings (Accumulated Deficit) | [1] | -830,073,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Retained Earnings (Accumulated Deficit) (Scenario, Previously Reported) | -833,442,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net Income (Loss) Attributable to Parent | -8,699,000 | [1] | ' | ' | ' | ' | ' | ' | -8,699,000 | [1] | 62,332,000 | ' | ' | |
Net Income (Loss) Attributable to Parent (Scenario, Previously Reported) | -9,616,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net Income (Loss) Attributable to Noncontrolling Interest | ' | ' | ' | ' | ' | ' | ' | ' | -230,712,000 | 230,712,000 | ' | |||
Net income (loss) | [1] | -239,411,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Net income (loss) (Scenario, Previously Reported) | -240,328,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Retained Earnings At Acquistiion Date for Consolidated Investment Products Added During Period | 5,053,000 | ' | ' | ' | ' | ' | ' | 0 | ' | 5,053,000 | ' | |||
Stock Issued During Period, Shares, New Issues | ' | 1,021,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Stock Issued During Period, Value, New Issues | 7,661,000 | ' | 1,000 | ' | ' | 7,660,000 | ' | ' | ' | ' | ' | |||
Adjustments to Additional Paid in Capital, Warrant Issued | 3,660,000 | ' | ' | ' | ' | 3,660,000 | ' | ' | ' | ' | ' | |||
Treasury Stock, Shares, Acquired | ' | ' | ' | 661,000 | ' | ' | ' | ' | ' | ' | ' | |||
Treasury Stock, Value, Acquired, Cost Method | -4,381,000 | ' | ' | ' | -4,381,000 | ' | ' | ' | ' | ' | ' | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | ' | 68,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Treasury Stock, Shares, Retired | ' | -566,000 | ' | -566,000 | ' | ' | ' | ' | ' | ' | ' | |||
Treasury Stock, Retired, Cost Method, Amount | ' | ' | ' | ' | 3,717,000 | -3,717,000 | ' | ' | ' | ' | ' | |||
Share-based compensation | 4,366,000 | ' | ' | ' | ' | 4,366,000 | ' | ' | ' | ' | ' | |||
Adjustments to Additional Paid in Capital, Other | 1,000 | ' | ' | ' | ' | -2,000 | 3,000 | ' | ' | ' | ' | |||
Balance (Scenario, Previously Reported) | [1] | 199,348,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Balance at Dec. 31, 2012 | 202,717,000 | [1] | ' | 21,000 | ' | -664,000 | 955,407,000 | -3,000 | -830,073,000 | ' | 78,029,000 | 0 | ||
Shares, Issued at Dec. 31, 2012 | ' | 20,778,000 | ' | 95,000 | ' | ' | ' | ' | ' | ' | ' | |||
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Retained Earnings (Accumulated Deficit) | -810,858,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net Income (Loss) Attributable to Parent | 23,371,000 | ' | ' | ' | ' | ' | ' | 23,371,000 | 96,405,000 | ' | ' | |||
Net Income (Loss) Attributable to Noncontrolling Interest | ' | ' | ' | ' | ' | ' | ' | ' | 73,464,000 | -73,357,000 | -107,000 | |||
Net income (loss) | 96,835,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Partners' Capital Account, Contributions | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | |||
Stock Issued During Period, Shares, New Issues | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Stock Issued During Period, Value, New Issues | 150,000 | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | |||
Treasury Stock, Shares, Acquired | ' | ' | ' | 35,000 | ' | ' | ' | ' | ' | ' | ' | |||
Treasury Stock, Value, Acquired, Cost Method | -250,000 | ' | ' | ' | -250,000 | ' | ' | ' | ' | ' | ' | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Exercised (in shares) | ' | 23,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Exercise of options | 107,000 | ' | ' | ' | ' | 107,000 | ' | ' | ' | ' | ' | |||
Share-based compensation | 7,347,000 | ' | ' | ' | ' | 7,347,000 | ' | ' | ' | ' | ' | |||
Dividends declared ($0.20 per share) | -4,156,000 | ' | ' | ' | ' | ' | ' | -4,156,000 | ' | ' | ' | |||
Adjustments to Additional Paid in Capital, Other | 3,000 | ' | ' | ' | ' | ' | 3,000 | ' | ' | ' | ' | |||
Balance at Dec. 31, 2013 | $307,753,000 | ' | $21,000 | ' | ($914,000) | $963,011,000 | $0 | ($810,858,000) | ' | $151,386,000 | $5,107,000 | |||
Shares, Issued at Dec. 31, 2013 | ' | 20,921,000 | ' | 130,000 | ' | ' | ' | ' | ' | ' | ' | |||
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
CONSOLIDATED_STATEMENTS_OF_EQU1
CONSOLIDATED STATEMENTS OF EQUITY (PARENTHETICAL) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Dividends [Abstract] | ' |
Dividends declared ($0.20 per share) | $0.20 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 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. The Company's asset management subsidiaries include: CIFC Asset Management LLC ("CIFCAM"), Columbus Nova Credit Investments Management LLC (“CNCIM”), CypressTree Investment Management, LLC ("CypressTree") and Deerfield Capital Management LLC ("DCM"). | |
During 2010, the Company acquired Columbus Nova Credit Investments Management, LLC (the "CNCIM Acquisition"), an investment manager with four Collateralized Loan Obligations ("CLOs") under management from Bounty Investments, LLC ("Bounty"). Bounty subsequently transferred its stock ownership and Convertible Notes from the acquisition to DFR Holdings, LLC ("DFR Holdings"). On April 13, 2011, the Company completed a merger (the “Merger”) with Commercial Industrial Finance Corp. (“Legacy CIFC”), an asset manager focused primarily on management of corporate credit investments for third party investors. In acquiring Legacy CIFC, the Company also acquired a credit asset manager that Legacy CIFC previously acquired and the related CLO management contracts. Since the merger, the Company has focused on growing its core asset management business as a fee-based corporate credit asset manager for third party investors and exited non-core and other activities. | |
On December 18, 2013, DFR Holdings purchased all 9,090,909 shares of the Company's outstanding common stock owned by CIFC Parent Holdings (a significant stockholder in the Company prior to this transaction) (see Notes 12 and 15). On February 25, 2014, the Company announced the appointment of Mr. Stephen Vaccaro, the Company's Chief Investment Officer, and Mr. Oliver Wriedt, the Company's Head of Capital Markets & Distribution, as Co-Presidents of the Company. Concurrent with the appointments, Peter Gleysteen, formerly the Company's Chief Executive Officer, President and member of its three-person management committee, resigned from such responsibilities but will continue to serve as the Vice Chairman of the Company's Board of Directors and remain actively involved in managing certain legacy CIFC funds. | |
In a related transaction, DFR Holdings also purchased all 1,000,000 of the Company's outstanding common stock and 2,000,000 of warrants owned by an affiliate of General Electric Capital Corporation ("GE Capital"). See Note 4. Following the transactions, DFR Holdings, on a fully-diluted basis, owns approximately 73% of the Company’s outstanding shares. | |
Business—The Company specializes in originating and managing investment products which have corporate credit obligations, primarily senior secured corporate loans (“SSCLs”), as the primary underlying investments. The Company manages investments for various types of investors, including pension funds, hedge funds and other asset management firms, banks, insurance companies and other types of institutional investors located across the world. | |
While CLO comprise the bulk of the Company's assets under management ("AUM"), during the past 18 months, the Company utilized its expertise as a fundamentals-based, relative value credit asset manager to expand into additional product lines, including managing U.S. corporate credit and credit-based structured products for total return. At the end of 2013, in addition to managing over 25 CLOs, the Company now also manages credit funds and separately managed accounts ("SMA", together "other-loan based products"). These credit products are opportunistic investment strategies where the Company seeks to generate both current income and capital appreciation through SSCL investments and, to a lesser extent, other investments. The Company also manages Collateralized Debt Obligations ("CDOs") which it does not expect to issue in the future. Management internally views the business as one reportable segment. | |
Investment advisory fees paid to the Company is its primary source of revenue and are generally paid on a quarterly basis for as long as the Company manages the products. Investment advisory fees typically consist of management fees based on the amount of assets held in the investment product and, in some cases, incentive fees based on the returns generated for certain investors. | |
As the manager of these investment products, the Company generally invests in the investment products it sponsors. In addition, the Company also invests in SSCLs that it warehouses to launch new CLOs. The Company earns net investment income and incurs gains/losses from these investments. |
BASIS_OF_PRESENTATION_AND_PRIN
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 12 Months Ended |
Dec. 31, 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 Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that estimates utilized in the preparation of the consolidated financial statements are prudent and reasonable. Actual results could differ from those estimates and such differences could be material. | |
In addition to the immaterial restatement as disclosed in Note 19, certain prior year amounts on the Consolidated Financial Statements and the related notes have been re-presented to conform to current period presentation and provide additional details. Certain line items in the Consolidated Statement of Operations and Consolidated Cash Flows have been combined to agree to current year presentation and did not have a material impact. | |
Principles of Consolidation—The Consolidated Financial Statements include the financial statements of CIFC and its wholly-owned subsidiaries, the entities in which the Company has a controlling interest ("Consolidated Funds") and variable interest entities ("VIEs" or "Consolidated VIEs") for which the Company is deemed to be the primary beneficiary (together the "Consolidated Entities" - see Note 3). All intercompany balances and transactions have been eliminated upon consolidation. This consolidation, particularly with respect to the Consolidated Entities, significantly impacts the Company's Consolidated Financial Statements. | |
Consolidated Entities—Consolidated Entities includes the operating results of the Consolidated Funds and the Consolidated VIEs. See Note 3 for a reconciliation of the Company's earnings from the net results of the Consolidated Entities to the characteristics of these results. | |
Consolidated Funds—The Company consolidates entities in which the Company has a controlling voting interest. As of December 31, 2013, the Company consolidated the following funds under the voting interest model (Note 3). | |
Tactical Income Fund—During the fourth quarter of 2013, the Company launched an open ended credit fund that initially shall invest primarily in second-lien loans (the "Tactical Income Fund"). As of December 31, 2013, the Company, as the general partner, invested $10.0 million into the fund and is the investment adviser of the fund. As of December 31, 2013, the Company held a controlling financial and voting interest in the Tactical Income Fund and consolidated the entity. | |
Co-Investment Fund—During the fourth quarter of 2013, the Company launched a structured credit fund that invests primarily in residual tranches of CLOs and, to a lesser extent, warehouses, managed by CIFC (the "Co-Investment Fund"). As of December 31, 2013, the Company held a $15.3 million investment and a limited partner held a $5.1 million investment. The limited partner's investment was reported in "Noncontrolling interest in Consolidated Funds" on the Consolidated Balance Sheet. In addition, the Company is the investment adviser of the fund, and as such, the Company held a controlling voting interest in the Co-Investment Fund and consolidated the entity. As of December 31, 2013, the Co-Investment Fund invested in 1 CLO and 2 warehouses managed by CIFC, which are Consolidated VIEs (see below). | |
Consolidated VIEs—The Company also consolidates variable interest entities in which it is deemed the primary beneficiary (Note 3). These Consolidated VIEs generally include CLOs and CDOs (collectively, the "Consolidated CLOs") and warehouses the Company manages, holds an investment in the entity or is entitled to incentive fees. | |
Consolidated CLOs—As of December 31, 2013, the Company consolidated 26 CLOs. As of December 31, 2012, the Company consolidated 23 CLOs and 1 CDO. See Note 5. | |
Warehouses—The Company generally creates special purpose vehicles (“SPVs”) to warehouse SSCL 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 year ended December 31, 2013, the Company consolidated 6 warehouses and deconsolidated 4 warehouses in conjunction with the sponsorship of newly issued CLOs. As of December 31, 2013, the Company consolidated 2 warehouses. During the year ended December 31, 2012, the Company consolidated 2 warehouses and deconsolidated 1 warehouse in conjunction with the sponsorship of newly issued CLOs. See Note 5 for more information. | |
DFR Middle Market CLO Ltd. ("DFR MM CLO")—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. | |
Unconsolidated Funds—During the fourth quarter of 2012, the Company launched an open ended credit fund that invests in U.S. performing senior secured corporate loans ("the "Senior Secured Corporate Loan Fund") to provide capital appreciation and risk-adjusted returns to its investors. Through the Company's investment in the general partner, the Company held a $10.8 million investment in the fund as of December 31, 2013 and through CIFCAM the Company was the investment adviser of the fund. The Company's investment is recorded in "Investments at fair value" on the Company's Consolidated Balance Sheet. | |
Unconsolidated VIEs | |
As of December 31, 2013, the Company had variable interests in an additional 5 CLOs, 8 CDOs, and 1 other investment product, which the Company managed, that were not consolidated (collectively the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the VIEs. As of December 31, 2012, the Company's unconsolidated VIEs included 9 CLOs, 12 CDOs and 1 other investment product. | |
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. The Company did not hold any investments in the Unconsolidated VIEs as of December 31, 2013. In addition, as of December 31, 2013 and 2012, the Company's investment advisory fee receivables were $0.2 million and $0.6 million, respectively. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of Significant Accounting [Abstract] | ' | ||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||
Summary of Significant Accounting Policies and Recent Accounting Updates | |||||||||
Consolidation -VIEs—The Company consolidates all VIEs in which it is the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest, has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to (a) determine whether an entity in which the Company holds a variable interest is a VIE and (b) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment. | |||||||||
For CLOs and CDOs, if the Company is deemed to (i) have the power to direct the activities of the CLO or CDO that most significantly impact the economic performance and (ii) either the obligation to absorb losses or the right to receive benefits that could be significant to the CLO or CDO, then the Company is deemed to be the primary beneficiary of the CLO or CDO and is required to consolidate the CLO or CDO. Generally, the Company's contractual relationship as collateral manager of the CLOs and CDOs described herein satisfies criteria (i) of the prior sentence, and its ownership interests in and/or ability to earn certain incentive or other management fees in certain of its CLOs and CDOs can (but does not always) satisfy criteria (ii). The Company has a variable interest in each of the CLOs and CDOs it manages due to the provisions of the respective management agreements and direct investments it holds in certain of the CLOs. | |||||||||
Consolidation - VOE—The Company consolidates all non-VIE entities that it has a controlling financial interest through direct or indirect ownership of a majority voting interest. Entities consolidated under the voting interest model ("VOE") will not be consolidated if the limited partners have the substantive participating rights over decision-making. | |||||||||
Business Combinations—Upon the acquisition of a business, the Company records all assets acquired and liabilities assumed at their estimated fair values, including intangible assets. Strategic transaction related costs are expensed as incurred. | |||||||||
Intangible Assets—The Company's intangible assets consist primarily of contractual rights to earn future management and advisory fees from CLOs. The Company determined that all intangible assets held are comprised of assets with finite lives and are amortized on a straight line basis or based on a ratio of expected discounted cash flows from the contracts. Intangible assets with finite lives are tested for impairment if events or changes in circumstances indicate that the assets may not be recoverable. If the Company determines the carrying value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets are recorded in "Impairment of intangible assets" on the Consolidated Statements of Operations. See Notes 4 and 10 for further details. | |||||||||
Goodwill—The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired (including identifiable intangible assets) and liabilities assumed is recorded as goodwill. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. Goodwill has been recognized as a result of the acquisitions of Columbus Nova Credit Investments Management, LLC ("CNCIM"), the Merger with Commercial Industrial Finance Corp. ("Legacy CIFC") and the GECC Transaction (see Note 4) and is not amortized. The Company reviews goodwill periodically, at least on an annual basis in the fourth quarter of each year, to determine whether the carrying value of goodwill is impaired. If goodwill is deemed to be impaired, the difference between the carrying amount reflected in the Consolidated Financial Statements and the estimated fair value is recognized as an expense in the period in which the impairment occurs. The Company has one reporting unit for which goodwill is tested for impairment. See Notes 4 and 10 for further details. | |||||||||
Contingent Consideration and Contingent Liabilities at Fair Value—Contingent consideration and contingent liabilities assumed in business combinations are recorded at fair value and measured at fair value at each reporting date with changes in fair value recorded within "Net gain (loss) on contingent liabilities at fair value" on the Consolidated Statements of Operations. See Notes 4 and 11 for further details. | |||||||||
Fair Value Measurements and Presentation—The Company categorizes its financial instruments carried at fair value into a three-level fair value hierarchy based on the transparency of the inputs to the valuation of the asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is determined by the lowest level of input that is significant to the fair value measurement. The assessment of significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The three levels are defined as follows: | |||||||||
• | Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Financial instruments included in Level 1 are generally equity securities or derivatives listed on an exchange with active markets. The Company held no Level 1 financial instruments during the periods presented. | ||||||||
• | Level 2—inputs to the valuation methodology include quoted prices for similar financial instruments in active markets, quoted prices for identical financial instruments in inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. The Company's financial instruments generally included in this category are loans where asset valuations are provided by third-party pricing services (effective December 31, 2012, loan valuations provided by third-party pricing services based on a composite price determined using fewer than two quotes are classified as Level 3) or the Company's comparable companies pricing model (prior to the valuation methodology change effective December 31, 2012), corporate bonds and investments in CLOs or CDOs where asset valuations are provided by third-party pricing services, investments in funds which the Company has the ability to redeem its investment at net asset value at, or within three months of, the reporting date, long-term debt of the Company's Consolidated CLOs and total return swap on warehouses. | ||||||||
• | Level 3—inputs to the valuation methodology include significant unobservable inputs to the fair value measurement. This includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The Company's financial instruments generally included in this category are corporate bonds, investments in CLOs or CDOs, loans where valuations are provided by third-party pricing services based on a composite price determined using fewer than two quotes (effective December 31, 2012), loans where asset valuations are not provided by third-party pricing services and whose fair value is determined using the Company's comparable companies pricing model (effective December 31, 2012) or other pricing models, warrants, long-term debt of the Consolidated CLOs (including the subordinated notes) and the previously bifurcated conversion feature contained in the Company's senior subordinated convertible notes ("Convertible Notes"). | ||||||||
Determination of Fair Values—Fair value is the price a market participant would receive in the sale of an asset, or pay to transfer a liability, in an orderly transaction at the measurement date. Where available, fair value is based on observable market prices or parameters or is derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are utilized. These valuation models involve estimation and judgment, the degree of which is dependent on both the price transparency for the instruments or market and the instruments’ complexity. Assets and liabilities recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based on the level of judgment associated with the inputs used to measure their value as described above. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period. | |||||||||
Many financial instruments have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that market participants are willing to pay for an asset. Ask prices represent the lowest price market participants are willing to accept for an asset. For financial instruments whose inputs are based on bid-ask prices, the Company's policy is to take the mid-point in the bid-ask spread to value these financial instruments as a practical expedient for determining fair value permissible under the guidance. Fair value is a market-based measure considered from the perspective of the market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, when market assumptions are not readily available, assumptions are set to reflect those that the Company believes market participants would use in pricing the financial instrument at the measurement date. | |||||||||
The availability of observable inputs can vary depending on the financial instrument and is affected by a variety of factors, including, for example, the type of product, age of the product, whether the product is traded on an active exchange or in the secondary market and, current market conditions. Determinations of fair value require more judgment to the extent that the valuation is based on inputs that are either less observable or unobservable in the market. Accordingly, the degree of judgment exercised in determining fair value is greatest for financial instruments classified as Level 3. | |||||||||
The fair value process is monitored by the Valuation Committee. The Valuation Committee is chaired by the Chief Investment Officer and is comprised of investment, finance, valuation and risk management professionals. The purpose of the committee is to oversee the pricing policy and procedures by ensuring objective and reliable valuation practices and pricing of financial instruments, as well as addressing fair valuation issues and approving changes to valuation methodologies and pricing sources. Meetings are held at least quarterly to discuss and analyze the significant assumptions utilized in the Company's internally developed models and to review the valuations provided by third-party pricing services for reasonableness. The Company engages reputable third-party pricing services and regularly reviews the valuation methodologies provided by those third-party pricing services to ensure the fair value measurement provided by those services. | |||||||||
Fair Value Option—The Company has elected the fair value option for its investments in the debt and subordinated notes of the Consolidated CLOs and investments in other funds it manages. The Company also elected the fair value option for all of the assets and liabilities of the Consolidated CLOs and warehouses. | |||||||||
Unrealized appreciation or depreciation and realized gains and losses on assets and liabilities of Consolidated VIEs are recorded in the Consolidated Statements of Operations within "Net results of Consolidated Entities." Unrealized appreciation or depreciation and realized gains and losses on liabilities at fair value are recorded in the Consolidated Statements of Operations within "Net gain (loss) on contingent liabilities at fair value." Unrealized appreciation or depreciation and realized gains and losses on all other assets at fair value are recorded in the Consolidated Statements of Operations within "Net gain (loss) on investments at fair value." | |||||||||
Revenue Recognition—Investment Advisory Fees—The Company receives investment advisory fees from the investment products it manages. These investment advisory fees are paid periodically in accordance with the terms of the individual management agreements for as long as the Company manages the products. The investment advisory fees paid to the Company by these investment products are the Company's primary source of revenue. Investment advisory fees typically consist of management fees based on the amount of assets held in the investment product and, in certain cases, incentive fees based on the returns generated for certain investors. Investment advisory fees are recognized as revenue when earned. The Company does not recognize investment advisory fees as revenue until all contingencies have been removed. | |||||||||
Revenue Recognition—Net Interest Income from Investments—Net interest income from investments includes interest revenue from investments in funds, warehouses or other assets held by the Company. | |||||||||
The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. The Company is generally required to consolidate these entities under the VIE rules, as noted above. Investment advisory and Net interest income from investments earning on the Consolidated VIEs is reported on the Consolidated Statements of Operations as the difference between "Net results of Consolidated Entities" and "Net income (loss) attributable to noncontrolling interest in Consolidated Entities." As of December 31, 2013 and 2012, the Company held $92.1 million and $74.2 million, respectively of investments in its Consolidated VIEs and recognized investment advisory fees and net interest income from investments of the Consolidated VIEs as follows: | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands) | |||||||||
Net results of Consolidated Entities | 169,869 | (168,380 | ) | ||||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities | (73,464 | ) | 230,712 | ||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | |||||
Characteristics of net results of Consolidated Entities attributable to CIFC Corp: | |||||||||
Consolidated Entities investment advisory fees | $ | 82,317 | $ | 51,657 | |||||
Consolidated Entities net investment income (1) | 14,088 | 10,675 | |||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | |||||
Explanatory Note: | |||||||||
________________________________ | |||||||||
-1 | Includes equity distributions earned from residual interests in CLOs | ||||||||
Long-Term Debt—The Company's junior subordinated notes are carried at their outstanding principal amounts. The Convertible Notes are recorded as two separate components: (i) the long-term debt initially recorded at a discount, which is being amortized into interest expense over the life of the debt and (ii) the conversion feature which has been classified to additional paid-in capital. | |||||||||
Consolidated Entity Long-Term Debt—Subordinated notes of the Consolidated Entities have certain characteristics of equity and are recorded as debt on the Consolidated Balance Sheets as they have stated maturities. The maturities indicate a date on which they are mandatorily redeemable and redemption is required only upon liquidation or termination of the CLO and not upon liquidation or termination of the Company. Interest expense of Consolidated Entities are recorded in "Net results of Consolidated Entities" on the Consolidated Statements of Operations. | |||||||||
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand, cash held in banks and liquid investments with original maturities of 90 days or less. | |||||||||
Restricted Cash and Cash Equivalents—Restricted cash and cash equivalents represent amounts held by third parties for settlement of certain obligations and cash, subject to certain restrictions, held in non-recourse entities (including Consolidated Entities). | |||||||||
Due from Brokers and Due to Brokers—Amounts due from brokers and due to brokers generally represent unsettled trades. Amounts due from brokers and due to brokers are recorded as assets and liabilities, respectively. | |||||||||
Equipment and Improvements—Equipment and Improvements are stated at cost, net of accumulated depreciation. Depreciation is generally recorded using the straight-line method over the estimated useful lives of the various classes of equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or remaining life of the lease using the straight-line method. The Company does not consider renewal options when determining the amortization of leasehold improvements unless renewal is considered reasonably assured at the inception of the lease. Equipment and Improvements are periodically reviewed for indications of impairment and written down to fair value if impaired. | |||||||||
Income Taxes—Current federal income taxes are recognized based on amounts estimated to be payable or recoverable as a result of taxable income for the current year. Deferred tax assets and liabilities are recognized for the future income tax consequences (temporary differences) attributable to the difference between the carrying amounts of assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The Company recognizes the effect of change in income tax laws or rates on deferred tax assets and liabilities in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount that is more likely than not to be realized. Components of deferred tax assets, liabilities and valuation allowance are included in Note 14 to the Company's Consolidated Financial Statements. | |||||||||
GAAP provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. The Company believes that there are no tax positions that would require disclosure under GAAP. The Company accrues interest and penalties, if applicable, in income tax expense. Tax years that remain open to examination by major tax jurisdictions include 2009 through the current year. | |||||||||
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. | |||||||||
Stock-Based Compensation—Compensation cost for stock-based awards are generally measured based on the grant-date fair value of the award. Stock-based awards that do not require future service (i.e. vested awards) are expensed immediately. Stock-based awards that require future service are amortized over the relevant service period. Amortization is recognized as "Compensation and benefits" in the Consolidated Statements of Operations. See Note 12 for the required disclosure relating to stock-based compensation. | |||||||||
Earnings Per Share—Basic earnings per share is calculated by dividing net income (loss) attributable to CIFC Corp. by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share adjusts basic earnings per share by the dilution that would have occurred had all contingent issuances of common stock that would have individually reduced earnings per share occurred at either the beginning of the period or the time of issuance of the potentially dilutive securities, if those securities were issued during the period. The Company uses the if-converted method to determine the dilutive effects of the Convertible Notes and the treasury stock method for stock options, warrants and unvested restricted stock units ("RSUs"). See Note 13 for the computation of earnings per share. | |||||||||
Recent Accounting Updates | |||||||||
In June 2013, the FASB issued ASU 2013-08, Financial Services—Investment Companies, which amends the scope, measurement, and disclosure requirements for investment companies. This ASU amends the requirements related to qualifying for the “investment-company deferral“ under ASU 2010-10, Consolidation. This guidance is effective for the Company's fiscal year beginning January 1, 2014. Earlier application is prohibited. The adoption of this guidance will not have a material impact on the Company's Consolidated Financial Statements. | |||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance will not have a material impact on the Company's Consolidated Financial Statements. | |||||||||
In December 2011, the FASB issued ASU 2011-11, Disclosures About Offsetting Assets and Liabilities (“ASU 2011-11”), which created new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. In January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”), that provides clarification about which instruments and transactions are subject to ASU 2011-11. The adoption of ASU 2011-11 and ASU 2013-01 on January 1, 2013 did not have an impact to the Company's Consolidated Financial Statements. |
STRATEGIC_TRANSACTIONS
STRATEGIC TRANSACTIONS | 12 Months Ended | |||||||
Dec. 31, 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 GE Capital 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. This investment agreement was subsequently terminated (see Note 18). 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) | 1,000,000 | |||||||
Multiplied by Closing Date share price (2) | $ | 7.51 | ||||||
Value of shares | $ | 7,510 | ||||||
Warrants issued (1) | 2,000,000 | |||||||
Multiplied by Closing Date estimated fair value per warrant (3) | $ | 1.83 | ||||||
Value of warrants | 3,660 | |||||||
Cash | 4,525 | |||||||
Total purchase consideration | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | GE Capital shares and warrants were purchased by DFR Holdings during 2013 (see DFR Holdings Stock Purchase above). | |||||||
-2 | Represents the closing price of the Company's common stock on the Closing Date. | |||||||
-3 | 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 third quarter of 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 Arrangement (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 year ended December 31, 2012, the Company incurred costs related to the GECC Transaction of $0.7 million which was recorded within "Strategic Transaction Expenses" in the 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 December 31, 2013 and 2012, the Company consolidated assets of $295.6 million and $328.0 million, respectively, and non-recourse liabilities of $290.1 million and $325.8 million, respectively, related to this CLO. | ||||||||
During the years ended December 31, 2013 and 2012, the Company recorded net income attributable to CIFC Corp. of $2.7 million and a de minimus value, respectively, which represents investment advisory fees from the acquisition of the rights to manage the Navigator CLOs. |
CONSOLIDATED_VIEs
CONSOLIDATED VIEs | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 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 (includes the Consolidated CLOs, CDOS and warehouses), its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of management fees from the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are administered by the trustee of each fund solely as collateral to satisfy the obligations of the Consolidated VIEs. If the Company were to liquidate, the assets of the Consolidated VIEs would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt and residual interests of the Consolidated VIEs have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation. | |||||||||||||||||||||||||
Consolidated CLOs—The following table summarizes the consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1): | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Total Assets | $ | 10,963,096 | $ | 9,933,495 | |||||||||||||||||||||
Total Liabilities (non-recourse) | 10,756,652 | 9,806,010 | |||||||||||||||||||||||
Maximum exposure to loss: | |||||||||||||||||||||||||
Investments and beneficial interests (2) | $ | 49,490 | $ | 47,454 | |||||||||||||||||||||
Receivables | 3,836 | 2,674 | |||||||||||||||||||||||
Total maximum exposure to loss | $ | 53,326 | $ | 50,128 | |||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | In addition, exposure to loss excludes future investment advisory fees on the Consolidated VIEs, which are not included in the table above. | ||||||||||||||||||||||||
-2 | Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $44.3 million directly in the residual interests of its Consolidated CLOs and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $5.2 million in the residual interests of its Consolidated CLOs. | ||||||||||||||||||||||||
Other Consolidated VIEs (Warehouses)—The following table summarizes the Company's consolidated assets and non-recourse liabilities of other Consolidated VIEs included in the Consolidated Balance Sheets: | |||||||||||||||||||||||||
31-Dec-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) | $ | 403,251 | $ | 357,725 | $ | 42,279 | $ | 334,420 | $ | 307,025 | $ | 26,723 | |||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | Maximum exposure to loss is generally limited to the Company's investment in the entity. As of December 31, 2013 and 2012, the Company consolidated two and one warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $9.7 million in the Warehouses. | ||||||||||||||||||||||||
The table below represents total net results of the Consolidated VIEs included in the net results of the Consolidated Entities on the Consolidated Statements of Operations: | |||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Consolidated CLOs | $ | 160,971 | $ | (171,967 | ) | ||||||||||||||||||||
Warehouses (1) | 8,898 | 3,756 | |||||||||||||||||||||||
DFR MM CLO (2) | — | (169 | ) | ||||||||||||||||||||||
Net results of Consolidated Entities | 169,869 | (168,380 | ) | ||||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | During the years ended December 31, 2013 and 2012, the Company's results from warehouses included six and two warehouse investments, respectively. | ||||||||||||||||||||||||
-2 | The Company's investment in and rights to manage DFR MM CLO were sold during February 2012 (see Note 2). |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 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: | |||||||||||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Estimated Fair Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | ||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments at fair value: | |||||||||||||||||||||||||||||||||
Investment in Funds | $ | — | $ | 10,827 | $ | — | $ | 10,827 | $ | — | $ | 5,058 | $ | — | $ | 5,058 | |||||||||||||||||
Loans (1) | — | 5,546 | 510 | 6,056 | — | — | — | — | |||||||||||||||||||||||||
Subtotal | — | 16,373 | 510 | 16,883 | — | 5,058 | — | 5,058 | |||||||||||||||||||||||||
Consolidated Entities: | |||||||||||||||||||||||||||||||||
Loans | — | 8,604,967 | 1,706,290 | 10,311,257 | — | 7,740,574 | 1,177,058 | 8,917,632 | |||||||||||||||||||||||||
Corporate bonds | — | — | 16,220 | 16,220 | — | — | 67,438 | 67,438 | |||||||||||||||||||||||||
Structured products & other | — | — | 93,516 | 93,516 | — | — | 81,709 | 81,709 | |||||||||||||||||||||||||
Total Consolidated Entities | — | 8,604,967 | 1,816,026 | 10,420,993 | — | 7,740,574 | 1,326,205 | 9,066,779 | |||||||||||||||||||||||||
Total Assets | $ | — | $ | 8,621,340 | $ | 1,816,536 | $ | 10,437,876 | $ | — | — | $ | 7,745,632 | $ | 1,326,205 | $ | 9,071,837 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 16,961 | $ | 16,961 | $ | — | $ | — | $ | 33,783 | $ | 33,783 | |||||||||||||||||
Consolidated Entities: | |||||||||||||||||||||||||||||||||
Derivative liabilities | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Long-term debt (2) | — | — | 10,484,975 | 10,484,975 | — | — | 9,596,434 | 9,596,434 | |||||||||||||||||||||||||
Total Consolidated Entities | — | — | 10,484,975 | 10,484,975 | — | — | 9,596,434 | 9,596,434 | |||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | 10,501,936 | $ | 10,501,936 | $ | — | $ | — | $ | 9,630,217 | $ | 9,630,217 | |||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||||||||||
______________________________ | |||||||||||||||||||||||||||||||||
-1 | During the year ended December 31, 2013, one loan was purchased and classified as Level 3. | ||||||||||||||||||||||||||||||||
-2 | The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. | ||||||||||||||||||||||||||||||||
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 Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||
Level 3 Financial Assets at Fair Value | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||
Investment Assets of Consolidated Entities | Investment Assets of Consolidated Entities | ||||||||||||||||||||||||||||||||
Loans | Corporate | Structured Products & Other | Total | Loans | Corporate | Structured Products & 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) | 177,504 | — | — | 177,504 | 1,167,456 | — | — | 1,167,456 | |||||||||||||||||||||||||
Transfers out of Level 3 (2) | (192,767 | ) | — | — | (192,767 | ) | (5,933 | ) | — | — | (5,933 | ) | |||||||||||||||||||||
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) | 6,746 | 686 | 13,041 | 20,473 | 1,058 | 7,027 | 10,295 | 18,380 | |||||||||||||||||||||||||
Purchases | 1,344,196 | 16,954 | 19,471 | 1,380,621 | 10,886 | — | 29,175 | 40,061 | |||||||||||||||||||||||||
Sales | (397,281 | ) | (68,361 | ) | (14,128 | ) | (479,770 | ) | (1,430 | ) | (53,523 | ) | (24,479 | ) | (79,432 | ) | |||||||||||||||||
Settlements | (409,166 | ) | (497 | ) | (6,577 | ) | (416,240 | ) | (15,368 | ) | (1,164 | ) | (20,522 | ) | (37,054 | ) | |||||||||||||||||
Estimated fair value, end of period | $ | 1,706,290 | $ | 16,220 | $ | 93,516 | $ | 1,816,026 | $ | 1,177,058 | $ | 67,438 | $ | 81,709 | $ | 1,326,205 | |||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | 7,493 | $ | 290 | $ | 10,214 | $ | 17,997 | $ | 14,748 | $ | 5,390 | $ | 11,204 | $ | 31,342 | |||||||||||||||||
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 quarterly by the same third party pricing service using composite prices determined using two or more quotes. Prior to December 31, 2012, the Company categorized all loans valued by a third-party pricing service or the Company's comparable companies pricing model as Level 2. Therefore, transfers in represented loans valued by an internally developed model utilizing unobservable market inputs. | ||||||||||||||||||||||||||||||||
-2 | 2013 transfers out represent loans marked quarterly 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 or broker quotes prior to December 31, 2012, 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, 2012. | ||||||||||||||||||||||||||||||||
Level 3 Financial Liabilities at Fair Value | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||
Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated 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 | |||||||||||||||||||||
Sale of investments in Consolidated CLOs (1) | — | 10,438 | 10,438 | — | 3,716 | 3,716 | |||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (9,050 | ) | (9,050 | ) | |||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | |||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,644 | ) | 193,633 | 191,989 | 11,452 | 772,147 | 783,599 | ||||||||||||||||||||||||||
Purchases | — | 30,906 | 30,906 | — | 62,946 | 62,946 | |||||||||||||||||||||||||||
Sales | — | (10,000 | ) | (10,000 | ) | — | (5,000 | ) | (5,000 | ) | |||||||||||||||||||||||
Issuances | — | 3,060,413 | 3,060,413 | — | 1,817,248 | 1,817,248 | |||||||||||||||||||||||||||
Settlements | (15,178 | ) | (2,396,849 | ) | (2,412,027 | ) | (16,948 | ) | (918,234 | ) | (935,182 | ) | |||||||||||||||||||||
Estimated fair value, end of period | $ | 16,961 | $ | 10,484,975 | $ | 10,501,936 | $ | 33,783 | $ | 9,596,434 | $ | 9,630,217 | |||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 2,118 | $ | 97,471 | $ | 99,589 | $ | (13,499 | ) | $ | (533,729 | ) | $ | (547,228 | ) | ||||||||||||||||||
Explanatory Note: | |||||||||||||||||||||||||||||||||
__________________________ | |||||||||||||||||||||||||||||||||
-1 | The transfers into Level 3 represent the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. | ||||||||||||||||||||||||||||||||
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 about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs and excludes the significant unobservable inputs used in valuing investments of the Consolidated CLOs as they were provided by a third party pricing service. | |||||||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||
31-Dec-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) | 25-40% | 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 December 31, 2013 and 2012, the Company used discount rates ranging from 5.1% 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 December 31, 2013 and 2012, for the debt tranches, the Company used discount rates above LIBOR ranging from 0.6% to 7.1% 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 December 31, 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) | $ | 19,164 | $ | 32,149 | $ | 18,233 | $ | 33,058 | |||||||||||||||||||||||||
Junior Subordinated Notes (2) | $ | 120,000 | $ | 63,535 | $ | 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 Entities' due from brokers, Consolidated Entities' restricted cash and cash equivalents, Consolidated Entities' receivables and Consolidated Entities' 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 Entities' investment at fair value and Consolidated Entities' 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 Entities are diversified over multiple industries. In addition, applicable agreements to CLOs and warehouses outline 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. | |||||||||||||||||||||||||||||||||
Investments in Funds—Investments in Funds represents the Company's investment in certain credit funds where the Company co-invests with third party investors. The balance as of December 31, 2013 represents an open-ended credit fund. 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 and third party investors have the ability to redeem their investments at their respective 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. | |||||||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||
Structured Products & Other—Structured products and other primarily represents the fair value of investments in third party 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. | |||||||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||
The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. As of December 31, 2013 and 2012, the fair value of the Company's investments in the Consolidated VIEs was $91.8 million and $74.2 million, respectively. As noted in Note 3, the Company is generally required to consolidate these entities under the VIE rules, therefore the total amount of the CLO and warehouse debt is reflected on the Consolidated Balance Sheets. |
NET_RESULTS_OF_CONSOLIDATED_VI
NET RESULTS OF CONSOLIDATED VIEs | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities | ' | ||||||||
Net Gain (Loss) from Activities of Consolidated Variable Interest Entities [Text Block] | ' | ||||||||
Net Results of Consolidated Entities | |||||||||
The following table is a summary of the components of "Net results of Consolidated Entities": | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Investment income | $ | 474,148 | $ | 402,168 | |||||
Interest expense | (127,059 | ) | (96,675 | ) | |||||
Net investment income | 347,089 | 305,493 | |||||||
Net gain (loss) on investments at fair value | 56,321 | 321,321 | |||||||
Net gain (loss) on liabilities at fair value | (193,633 | ) | (772,147 | ) | |||||
Net gain (loss) on other investments and derivatives | (51 | ) | 861 | ||||||
Net gain (loss) from activities of Consolidated Entities | $ | 209,726 | $ | (144,472 | ) | ||||
Expenses of Consolidated Entities | (39,857 | ) | (23,908 | ) | |||||
Net Results of Consolidated Entities (1) | $ | 169,869 | $ | (168,380 | ) | ||||
Explanatory Note: | |||||||||
________________________________ | |||||||||
-1 | See Note 3 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp. |
EQUIPMENT_AND_IMPROVEMENTS
EQUIPMENT AND IMPROVEMENTS | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Line Items] | ' | |||||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||||
Equipment and Improvements | ||||||||||
Equipment and improvements consisted of the following: | ||||||||||
As of December 31, | ||||||||||
Estimated initial | 2013 | 2012 | ||||||||
useful life | ||||||||||
(In years) | (In thousands) | |||||||||
Equipment and computer software | 5-Mar | $ | 2,410 | $ | 1,465 | |||||
Leasehold improvements | 11 | 2,409 | 2,461 | |||||||
Office furniture and fixtures | 7 | 644 | 623 | |||||||
Equipment and improvements, gross | 5,463 | 4,549 | ||||||||
Less: accumulated depreciation (1) | (1,202 | ) | (570 | ) | ||||||
Equipment and improvements, net | $ | 4,261 | $ | 3,979 | ||||||
Explanatory Note: | ||||||||||
________________________________ | ||||||||||
-1 | Depreciation expense related to equipment and improvements totaled $0.7 million and $0.5 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||
During the year ended December 31, 2013 and 2012, additions to equipment and improvements totaled $1.0 million and $4.2 million, respectively. |
INTANGIBLE_ASSETS_AND_GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
INTANGIBLE ASSETS AND GOODWILL | ' | |||||||||||||
Intangible Assets & Goodwill | ||||||||||||||
Intangible assets are 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) | |||||||||||||
December 31, 2013: | ||||||||||||||
Investment management contracts | 4 | $ | 72,941 | $ | 52,661 | $ | 20,280 | |||||||
Referral arrangement | 5.8 | 3,810 | 572 | 3,238 | ||||||||||
Non-compete agreements | 4.2 | 1,535 | 736 | 799 | ||||||||||
Trade name | 7.3 | 1,250 | 344 | 906 | ||||||||||
Total intangible assets | $ | 79,536 | $ | 54,313 | $ | 25,223 | ||||||||
December 31, 2012: | ||||||||||||||
Investment management contracts | 5.4 | $ | 76,047 | $ | 38,727 | $ | 37,320 | |||||||
Referral arrangement | 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 have been adjusted for impaired assets as of the date presented. | |||||||||||||
-2 | During the years ended December 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $14.8 million and $17.4 million, respectively. | |||||||||||||
The following table presents expected amortization expense of the existing intangible assets: | ||||||||||||||
(In thousands) | ||||||||||||||
2014 | 10,149 | |||||||||||||
2015 | 6,796 | |||||||||||||
2016 | 4,010 | |||||||||||||
2017 | 2,172 | |||||||||||||
2018 | 1,527 | |||||||||||||
Thereafter | 569 | |||||||||||||
$ | 25,223 | |||||||||||||
During the year ended December 31, 2013, the Company received notices from holders of certain CLOs exercising their rights to call the CLOs for redemption. As a result of these calls, the Company recorded a $1.0 million expense to fully impair the intangible asset associated with these management contracts. In addition, the Company also recorded a $2.1 million impairment charge to fully impair CDO related management contracts. The Company determined that the carrying value of intangible assets attributable to its non-core CDO assets were no longer recoverable. Assets held in CDOs are expected to continue to decline as the funds run-off per their contractual terms. | ||||||||||||||
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 which were collected as of December 31, 2013. During the years ended December 31, 2013 and 2012, the Company recorded a net gain on the sale of Gillespie of $1.4 million and $5.8 million within "Net gain on the sale of management contract" in the Consolidated Statements of Operations. | ||||||||||||||
During the year ended December 31, 2012, the Company received notice from a holder of Primus CLO I, Ltd. (“Primus I”) exercising their rights to call the CLO for redemption. As a result of the call, the Company recorded a $1.8 million expense to fully impair the intangible asset associated with the management contract. | ||||||||||||||
Goodwill | ||||||||||||||
The following table presents the changes in carrying amount of goodwill: | ||||||||||||||
As of December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Beginning balance: | ||||||||||||||
Goodwill | $ | 174,126 | $ | 166,050 | ||||||||||
Accumulated impairment losses (1) | (98,126 | ) | (98,126 | ) | ||||||||||
Net beginning balance | 76,000 | 67,924 | ||||||||||||
Additions (2) | — | 8,076 | ||||||||||||
Ending balance: | ||||||||||||||
Goodwill | 174,126 | 174,126 | ||||||||||||
Accumulated impairment losses (1) | (98,126 | ) | (98,126 | ) | ||||||||||
Net ending balance | $ | 76,000 | $ | 76,000 | ||||||||||
Explanatory Notes: | ||||||||||||||
________________________________ | ||||||||||||||
-1 | Goodwill associated with the acquisition of Deerfield & Company ("Deerfield") has been fully impaired. | |||||||||||||
-2 | During the year ended December 31, 2012, goodwill additions were related to the GECC Transaction. See Note 4. | |||||||||||||
For purposes of reviewing impairment and recoverability of goodwill, management must make various assumptions regarding estimated future cash flows and other factors in determining the fair value of the Company's only reporting unit. In evaluating the recoverability of goodwill, the fair value of the reporting unit is derived utilizing a blended the income and market approach. Under the income approach management makes various assumptions regarding estimated future cash flows and other factors in determining the fair value of the reporting unit. Under the market approach, management determined the fair value of the reporting unit based on multiples of EBITDA of comparable publicly-traded companies and guideline acquisitions. Based on the annual impairment review, management determined that goodwill was not impaired during the both the years ended December 31, 2013 and 2012. |
DEFERRED_PURCHASE_PAYMENTS_AND
DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE | 12 Months Ended | ||||||||
Dec. 31, 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: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
(In thousands) | |||||||||
Deferred purchase payments | $ | 1,179 | $ | 4,778 | |||||
Contingent liabilities from the Merger (related party) - Note 15 | $ | 15,349 | $ | 29,152 | |||||
Contingent liabilities value assumed through the Merger | 1,612 | 4,631 | |||||||
Contingent liabilities at fair value | $ | 16,961 | $ | 33,783 | |||||
Deferred Purchase Payments—The consideration for the Merger includes the payment to CIFC Parent of $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). As of December 31, 2013, no remaining amounts outstanding under this agreement. | |||||||||
The consideration for the CNCIM acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The remaining installment of $1.5 million is payable on December 9, 2014. | |||||||||
During the years ended December 31, 2013 and 2012, the Company made deferred purchase payments of $4.0 million for both years, respectively. As of December 31, 2013 and 2012, the fair value of the remaining deferred purchase payments of $1.2 million and $4.8 million, respectively, was included in the Consolidated Balance Sheets. | |||||||||
Contingent Liabilities at Fair Value—In addition to the consideration paid at Merger date, the Company was required to pay CIFC Parent a portion of incentives earned on six CLOs managed by CIFCAM (the "Legacy CIFC CLOs"). The terms of these payments were as follows: (i) the first $15.0 million of incentive fees received, (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CIFC CLOs by the combined company over ten years from April 13, 2011 (the "Merger Closing Date") and (iii) payments relating to the present value of any such incentive fees from the Legacy CIFC CLOs that remain payable to the combined company after the tenth anniversary of the Merger Closing Date. | |||||||||
During the years ended December 31, 2013 and 2012, the Company made total payments of $12.5 million and $6.1 million related to these contingent liabilities. In addition, during the year ended December 31, 2013, the Company made its last payment to fulfill its obligation under (i) above. Accordingly, as of December 31, 2013, there are no remaining payments under item (i) and the Company made cumulative payments of $6.5 million under item (ii) to date. | |||||||||
In addition, the Company also assumed contingent liabilities during the Merger that primarily represent contingent consideration related to Legacy CIFC’s acquisition of CypressTree in December 2010. The assumed contingent liabilities are based on a fixed percentage of certain advisory fees from the CypressTree CLOs. These fixed percentages vary by CLO. From Merger date to June 2013 the minimum fixed percentage was 55%, and effective July 2013, the minimum fixed percentage was 39%. During the years ended December 31, 2013 and 2012, the Company made payments of $2.6 million and $10.8 million related to these contingent liabilities. In addition, during the years ended ended December 31, 2013 and 2012 the Company made earn-out payments which reduced the required future payments of $0.3 million and $6.2 million, 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 Consolidated Statements of Operations: | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands) | |||||||||
Contingent liabilities from the Merger | $ | 1,269 | $ | (12,404 | ) | ||||
Contingent liabilities assumed through the Merger | 375 | 952 | |||||||
Total net gain (loss) on contingent liabilities at fair value | $ | 1,644 | $ | (11,452 | ) | ||||
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
LONG-TERM DEBT | ' | |||||||||||||||||
Long-Term Debt | ||||||||||||||||||
The following table summarizes the Company's long-term debt: | ||||||||||||||||||
December 31, 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 | % | 21.8 | $ | 95,000 | 1 | % | 22.8 | ||||||||
October Junior Subordinated Notes (2) | 25,000 | 3.73 | % | 21.8 | 25,000 | 3.81 | % | 22.8 | ||||||||||
Total Subordinated Notes Debt | $ | 120,000 | 1.57 | % | 21.8 | $ | 120,000 | 1.59 | % | 22.8 | ||||||||
Convertible Notes (3) | $ | 19,164 | 10 | % | 3.9 | $ | 18,233 | 9 | % | 4.9 | ||||||||
Total recourse debt | $ | 139,164 | $ | 138,233 | ||||||||||||||
Non-recourse Consolidated Entities' debt: | ||||||||||||||||||
Consolidated CLOs (4) | $ | 10,336,453 | 1.43 | % | 8.3 | $ | 9,325,982 | 1.16 | % | 8.1 | ||||||||
Warehouses (5) | 148,522 | 1.3 | % | n/m | 270,452 | 2.12 | % | n/m | ||||||||||
Total non-recourse Consolidated Entities' debt | $ | 10,484,975 | 1.43 | % | 8.2 | $ | 9,596,434 | 1.19 | % | 7.9 | ||||||||
Total long-term debt | $ | 10,624,139 | $ | 9,734,667 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and 3 month LIBOR plus 2.58% thereafter until maturity, October 30, 2035. | |||||||||||||||||
-2 | October Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on October 30, 2035. | |||||||||||||||||
-3 | As of December 31, 2013 and 2012, Convertible Notes were recorded net of a discount of $5.8 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. | |||||||||||||||||
-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 December 31, 2013 and 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.9 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 not held by the Company, which have a par value of $67.5 million and $25.6 million as of December 31, 2013 and 2012, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. | |||||||||||||||||
Recourse Debt | ||||||||||||||||||
Junior Subordinated Notes—The $95.0 million aggregate principal amount of junior subordinated notes (the "March Junior Subordinated Notes") are governed by a junior subordinated indenture (the "March Note Indenture"), dated March 4, 2010, between the Company and The Bank of New York Mellon Trust Company, National Association, as trustee. The $25.0 million aggregate principal amount of junior subordinated notes (the "October Junior Subordinated Notes") are governed by a junior subordinated indenture (the "October Note Indenture"), dated October 20, 2010, between the Company and The Bank of New York Mellon Trust Company, National Association, as trustee. The covenants contained in the March Note Indenture and October Note Indenture (together, the "Note Indentures") contain certain restrictive covenants including (i) a requirement that all asset management activities to be conducted by CIFC Corp. and its subsidiaries, and which permits the Company to sell equity and material assets of DCM only if all investment advisory fees and proceeds from equity and asset sales are subject to the limits on restricted payments set forth in the Note Indentures, (ii) a debt covenant that permits CIFC Corp. and DCM to incur indebtedness only if the proceeds of such indebtedness are subject to the limits on restricted payments set forth in the Note Indentures and (iii) a restricted payments covenant that restricts the Company's ability to pay dividends or make distributions in respect of the Company's equity securities, subject to a number of exceptions and conditions. | ||||||||||||||||||
Convertible Notes—The $25.0 million aggregate principal amount of Convertible Notes are held by a related party, DFR Holdings, and are convertible into 4,132,231 shares of common stock (as such amount may be adjusted in certain events or increased in connection with the payment of interest-in-kind ("PIK Interest")) at an initial conversion price of $6.05 per share, subject to adjustment. The Convertible Notes will mature on December 9, 2017. Interest is paid in cash at a per annum rate, currently at 10% and will increase to 11% on June 9, 2014; provided, that the Company may, at its sole discretion and upon notice to the holders of the Convertible Notes, elect to pay up to 50% of the interest payment due to any holder of the Convertible Notes in PIK Interest, subject to certain conditions. | ||||||||||||||||||
The Convertible Notes are redeemable at the Company's option at a price equal to 100% of their principal amount, plus, if the redemption occurs prior to June 9, 2014, an amount equal to 50% of the then outstanding interest rate multiplied by the outstanding principal amount. The Convertible Notes are redeemable at the Company's option on or after June 9, 2014 without prepayment penalty. | ||||||||||||||||||
The Convertible Notes Agreement contains customary events of default and covenants including (i) that the Company will not, and will not permit any of the Company's subsidiaries to, incur any indebtedness that is contractually subordinated in right of payment to other indebtedness of the Company unless such indebtedness is also contractually subordinated in right of payment to the Convertible Notes on substantially similar terms; (ii) that the Company will not consolidate or merge with or into another person or sell, transfer or otherwise dispose of all or substantially all of the Company's assets to another person unless certain conditions are satisfied; (iii) that, upon a change of control, the Company will offer to repurchase all or any part of the Convertible Notes of each holder of Convertible Notes at a purchase price in cash equal to 100% of the aggregate principal amount of the Convertible Notes repurchased, plus accrued and unpaid interest; and (iv) that the Company will use commercially reasonable efforts to keep the Conversion Shares listed on the NASDAQ Stock Market or another securities exchange on which the Company's common stock is listed or quoted. | ||||||||||||||||||
Non-Recourse Consolidated Entities Debt | ||||||||||||||||||
Consolidated CLOs—During the year ended December 31, 2013, the Consolidated CLOs issued $2.6 billion of debt, paid down $1.5 billion of their outstanding debt, made net borrowings under revolving credit facilities of $20.6 million, and distributed $256.2 million to the holders of their subordinated notes. During the year ended December 31, 2012, the Consolidated CLOs issued $1.6 billion of debt, paid down $690.4 million of their outstanding debt, made net borrowings under revolving credit facilities of $57.8 million, and distributed $228.4 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 $11.0 billion and $9.9 billion as of December 31, 2013 and 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 | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
EQUITY | ' | ||||||||||||
Equity | |||||||||||||
Common Stock—During the years ended December 31, 2013 and 2012, the Company granted and issued shares of common stock of 20,352 and 20,922, respectively, to its directors as a component of their compensation and recorded $0.2 million and $0.2 million, respectively of "Compensation and benefits" on the Consolidated Statements of Operations. These grants were fully vested and expensed based on the grant date fair value of the Company's common shares. | |||||||||||||
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). | |||||||||||||
The Company paid a $0.10 quarterly dividend during the third and fourth quarter of the year to shareholders of record as of August 27, 2013 and November 25, 2013, respectively. Subsequent to year end, the Company declared a cash dividend of $0.10 per share which will be paid on April 25, 2014 to shareholders of record as of the close of business on April 4, 2014 (see also Note 18). No dividends were declared during 2012. | |||||||||||||
Treasury Stock/Stock Repurchases—On March 29, 2012, the Board of Directors ("the Board") approved a $10.0 million share repurchase program. Shares may be repurchased from time to time and in such amounts as market conditions warrant, subject to price ranges set by management and regulatory considerations. The share repurchase program does not have an expiration date. During the year ended December 31, 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 December 31, 2013, the Company was authorized to repurchase up to $5.4 million of its common stock under its share repurchase program. | |||||||||||||
During the year ended December 31, 2012, the Company repurchased 661,076 common shares in open-market transactions for an aggregate cost of $4.4 million with an average price per share of $6.60. During the same year, the Board authorized the constructive retirement of 565,627 treasury shares with an aggregate cost of $3.7 million. As a result, the cost of the shares constructively retired was reclassified from "Treasury stock" to "Additional paid-in capital" on the Consolidated Balance Sheet. | |||||||||||||
Stock Options—The Company issues stock-based awards to certain of its employees and recognizes related stock-based compensation for these equity awards in the consolidated financial statements. These awards are issued pursuant to the CIFC Corp. 2011 Stock Option and Incentive Plan (the “2011 Stock Plan”). As of December 31, 2013, the aggregate number of shares authorized for issuance under the 2011 Stock Plan was 4,181,929 and 222,789 shares remained available for issuance under the 2011 Stock Plan. | |||||||||||||
Stock-based compensation for equity-classified awards is measured at the date of grant, based on an estimate of the fair value of the award and is generally expensed over the vesting period of the grant. On December 18, 2013, the Company entered into a multi-year employment contract with Peter Gleysteen to serve as Vice Chairman of the Board of Directors. The agreement accelerated the vesting of his stock option awards which resulted in an additional $1.8 million of compensation and benefits expense recognized during the current year. During the years ended December 31, 2013 and 2012, the Company recorded total stock-based compensation expense of $4.5 million and $2.1 million, respectively on the Consolidated Statements of Operations within "Compensation and benefits." As of December 31, 2013, there was $4.2 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 1.6 years. | |||||||||||||
The following table summarizes certain Stock Options 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, 2011 | 1,550,000 | $ | 7.2 | ||||||||||
Granted (1) | 2,779,501 | 5.48 | |||||||||||
Forfeited (2) | (734,688 | ) | 6.34 | ||||||||||
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 (2) | (45,000 | ) | 8.65 | ||||||||||
Outstanding at December 31, 2013 | 3,879,813 | $ | 6.33 | 5.77 | $ | 5,979 | |||||||
Exercisable at December 31, 2013 | 2,212,860 | $ | 6.19 | 3.69 | $ | 3,528 | |||||||
Vested and Expected to vest at December 31, 2013 (3) | 3,713,117 | $ | 6.32 | 5.65 | $ | 5,734 | |||||||
Explanatory Notes: | |||||||||||||
________________________________ | |||||||||||||
-1 | During the year ended December 31, 2013 and 2012, weighted average grant date fair value was $4.08 and $2.64, respectively. | ||||||||||||
-2 | The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. | ||||||||||||
-3 | Includes 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: | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Expected dividend yield | — | — | |||||||||||
Expected volatility | 48.75 | % | 50.15 | % | |||||||||
Risk-free interest rate | 1.1 | % | 1.2 | % | |||||||||
Expected life (years) | 6.11 | 6.1 | |||||||||||
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. All options were granted prior to the Company declaring a dividend therefore the expected dividend yield included the assumption that 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—Each of the restricted stock units outstanding represents the right to receive one share of the Company's common stock, subject to acceleration upon the occurrence of certain specified events. The number of restricted stock units may be adjusted, as determined by the Board, in connection with any stock dividends, stock splits, subdivisions or consolidations of shares (including reverse stock splits) or similar changes in the Company's capitalization. During the year ended December 31, 2013, the Company granted 15,000 restricted stock units to an employee with one quarter of the award vesting on December 21, 2013. The remainder of the award will vest ratably over the remaining three years. As these awards are not entitled to dividends, the fair value of these awards was determined using on the Company's grant date common stock price less the present value of the expected dividends forgone during the vesting period. | |||||||||||||
The following table summarizes restricted stock units activity: | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Restricted stock units outstanding, beginning of period | 103,360 | 170,688 | |||||||||||
Granted | 15,000 | — | |||||||||||
Settled (1) | (99,874 | ) | (67,328 | ) | |||||||||
Restricted stock units outstanding, end of period | 18,486 | 103,360 | |||||||||||
Explanatory Note: | |||||||||||||
_________________________________ | |||||||||||||
-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 year ended December 31, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2009, 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011 and 3,750 shares of common stock to settle the 1/4 annual installment of the RSUs granted in 2013. During the year ended December 31, 2012, the Company issued 60,095 shares of common stock to settle restricted stock grants from 2009 and 7,233 shares of common stock to settle the first 1/3 annual installment of the restricted stock units granted in 2011. | ||||||||||||
Profits Interests Awards—During June 2011, CIFC Parent (a related party until December 18, 2013, see Notes 1 and 15) granted certain employees of the Company profits interests in CIFC Parent that vests in thirds on the first, second and third anniversary of the grant date. The profits interests share in approximately 5% of the residual value of CIFC Parent above a specified value. These liability-based awards were measured at fair value on the grant date and are remeasured at each reporting date, with changes in fair value recorded as compensation expense, until the award is paid (or settled) by CIFC Parent. Compensation expense is recognized over the vesting period of the award on a straight line basis. In addition, a corresponding adjustment will be made to "Additional paid in capital" on the Consolidated Balance Sheets to reflect CIFC Parent's contribution to the Company's net book value. Management's estimate of the fair value of these awards was based on a discounted cash flow model that includes estimates related to the performance of CIFC Parent. | |||||||||||||
During the year ended December 31, 2013, the Company recorded a non-cash compensation expense of $2.8 million in "Compensation and benefits" on the Consolidated Statements of Operations related to the amortization and remeasurement of the value of the awards. During the year ended December 31, 2012, the Company recorded a non-cash compensation expense of $2.1 million in "Compensation and benefits" on the Consolidated Statement of Operations. As of December 31, 2013 and 2012, there was $0.2 million and $2.1 million, respectively, of estimated unrecognized compensation expense related to these awards. | |||||||||||||
Warrants—On the closing date of the GECC transaction, the Company issued the GECEII Warrant which gave the holder the right to purchase 2.0 million shares of a newly created class of non-voting stock. In December of 2013, DFR Holdings purchased these warrants from GE Capital (the "DFR Warrants"). The DFR Warrant maintained the same terms as the GECEII Warrant, however, upon transfer, they entitle the holder the right to purchase 2.0 million shares of the Company's voting common stock. This warrant has an exercise price of $6.375 per share, is immediately exercisable and expires September 24, 2014. The warrant will be automatically exercised on a net share issuance basis upon the consummation of a change of control transaction or a liquidation event involving the Company. During the year ended December 31, 2012, the Company recorded a $3.7 million increase to "Additional paid-in capital" on the Consolidated Balance Sheet for the Closing Date fair value of the warrants. See Note 4 for additional information. | |||||||||||||
In connection with the restructuring of an investment product formerly managed by the Company, the Company issued 250,000 warrants. These warrants provides the holders the right to purchase shares of the Company's common stock at an exercise price of $4.25 per share and expire on April 9, 2014. During the year ended December 31, 2012, the Company settled 25,000 of the then outstanding warrants for cash payment. The decision to settle the warrants in cash, rather than shares was at the Company's discretion. As of both December 31, 2013 and 2012, total warrants outstanding totaled 225,000. | |||||||||||||
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended | ||||||||
Dec. 31, 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 Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands, except per share data) | |||||||||
Net income (loss) attributable to CIFC Corp. - basic (1) | $ | 23,371 | $ | (8,699 | ) | ||||
Dilutive effect of Convertible Notes (2) | 1,830 | — | |||||||
Net income (loss) attributable to CIFC Corp. - diluted (1) | 25,201 | (8,699 | ) | ||||||
Weighted-average shares - basic | 20,801 | 20,356 | |||||||
Convertible Notes (2) | 4,132 | — | |||||||
Stock options (3) | 303 | — | |||||||
Warrants (3) | 490 | — | |||||||
Unvested RSUs | 11 | n/a | |||||||
Weighted-average shares - diluted | 25,737 | 20,356 | |||||||
Earnings (loss) per share (1) | |||||||||
Basic | $ | 1.12 | $ | (0.43 | ) | ||||
Diluted | $ | 0.98 | $ | (0.43 | ) | ||||
Explanatory Notes: | |||||||||
________________________________ | |||||||||
-1 | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
-2 | During the year ended December 31, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | ||||||||
-3 | During the year ended December 31, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. During the year ended December 31, 2012, 2.1 million of stock options and 2.2 million of warrants were considered anti-dilutive and excluded from diluted EPS. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
INCOME TAXES | ' | |||||||
Income Taxes | ||||||||
The Company will file separate U.S. federal and state income tax returns for the tax year ended December 31, 2013 as it is no longer part of a consolidated group. For the prior tax years, including the year ended December 31, 2012, the Company filed a consolidated U.S. federal and several state income tax returns with all of its domestic corporate subsidiaries. The entities that comprise the Company's Consolidated CLOs are foreign entities that are generally exempt from U.S. federal and state income taxes. Income taxes, if any, are the responsibility of the entity’s subordinated note owners. Consequently, the Consolidated Statements of Operations do not include a provision for income tax expense (benefit) related to the pre-tax income (loss) of the Company's Consolidated CLOs. However, to the extent that the Company holds a subordinated note interest in these entities, the Company is required to include its proportionate share of CLO income in the calculation of taxable income. | ||||||||
The components of income tax expense (benefit) are as follows: | ||||||||
For the Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Current: | ||||||||
Federal | $ | 15,597 | $ | 2,820 | ||||
State and local | 6,946 | 1,636 | ||||||
Total current expense | 22,543 | 4,456 | ||||||
Deferred: | ||||||||
Federal (1) | (2,767 | ) | 4,570 | |||||
State and local (1) | (994 | ) | 1,724 | |||||
Total deferred expense (benefit) (1) | (3,761 | ) | 6,294 | |||||
Total income tax expense (benefit) (1) | $ | 18,782 | $ | 10,750 | ||||
Explanatory Note: | ||||||||
________________________________ | ||||||||
(1) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
The following table reconciles the Company's effective tax rate to the U.S. federal statutory tax rate: | ||||||||
For the Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Statutory U.S. federal income tax rate | 35 | % | (35.00 | )% | ||||
Reconciling items: | ||||||||
Tax attributable to noncontrolling interest loss (1) | (22.24 | )% | 35.31 | % | ||||
State income taxes, net of federal effect (2) | 3.09 | % | 1.11 | % | ||||
Permanent items | 0.52 | % | 2.26 | % | ||||
Valuation allowance (2) | (0.01 | )% | 1.55 | % | ||||
Other (2) | (0.11 | )% | (0.53 | )% | ||||
Effective income tax rate (3) | 16.25 | % | 4.7 | % | ||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Includes income that is not taxable to the Company as such income is directly taxable to the noncontrolling interest holders in the Consolidated CLOs. | |||||||
-2 | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||||||
-3 | The effective tax rate is calculated on "Income (loss) before income tax expense (benefit)." | |||||||
The tax effects of temporary differences that result in significant deferred tax assets and deferred tax liabilities are as follows: | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Intangible assets and goodwill (1) | $ | 50,953 | $ | 49,097 | ||||
State net operating loss carryforwards (1) | 16,579 | 16,436 | ||||||
Federal net operating loss carryforwards | 9,070 | 8,607 | ||||||
Contingent liabilities | — | 1,850 | ||||||
Accrued and deferred subordinated management fees | — | 1,573 | ||||||
Other (1) | 10,468 | 10,992 | ||||||
Gross deferred tax asset (1) | 87,070 | 88,555 | ||||||
Less: Valuation allowance (1) | (15,333 | ) | (15,347 | ) | ||||
Deferred tax asset (1) | 71,737 | 73,208 | ||||||
Deferred tax liabilities: | ||||||||
Purchased intangibles | 6,869 | 10,432 | ||||||
Long-term debt | 4,519 | 4,325 | ||||||
Other (1) | 2,674 | 4,537 | ||||||
Deferred tax liability (1) | 14,062 | 19,294 | ||||||
Net deferred tax asset (1) | $ | 57,675 | $ | 53,914 | ||||
Explanatory Note: | ||||||||
________________________________ | ||||||||
(1) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
The Company evaluates its deferred income tax assets to determine if valuation allowances are required. The determination is based on all available evidence using a ‘more likely than not” standard. The Company’s ability to realize deferred tax assets depends upon the existence of sufficient taxable income of the appropriate character (ordinary vs. capital) within the carryback or carryforward periods. The Company considered all sources of taxable income in its deferred tax asset realization analysis. As of December 31, 2013 and 2012, the Company recognized a cumulative valuation allowance of $15.3 million and $15.3 million, respectively. The valuation allowance was recorded because management assessed that it is more likely than not that only a portion of the deferred tax asset will be realized. The valuation allowance relates to deferred tax assets for state net operating loss carryforwards and certain investments that are limited under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) due to the existence of built-in-losses at the time of the June 9, 2010 “ownership change” as defined under Section 382 of the Code (an “Ownership Change”).This limitation is effective for a five year period subsequent to the ownership change date. | ||||||||
Ownership Changes—The Company experienced an ownership change on June 9, 2010 as a result of the acquisition of CNCIM and on the April 13, 2011 Merger with Legacy CIFC causing a limitation on the annual use of its NOLs, NCLs, and certain recognized built-in losses. The annual limitation amount is approximately $1.3 million resulting from the June 9, 2010 ownership change. The Merger resulted in an annual limitation of approximately $9.5 million. However, as of December 31, 2012, the combined federal NOL carryforwards related to Legacy CIFC were fully utilized. For tax purposes, the Company also experienced a potential ownership change on December 20, 2013 as a result of DFR Holdings' acquisition of all of the Company’s common stock that was previously held by CIFC Parent. The Company does not anticipate further restrictions to the Section 382 limitation resulting from this transaction. | ||||||||
As of December 31, 2013, the Company had net operating loss carryforwards for US federal tax and state income tax purposes of $25.9 million which will expire in 2028 if not used. In addition, as of December 31, 2013, the Company had $1.3 million of capital loss carryforwards for U.S. Federal and state income tax purposes. These capital loss carryforwards will expire in 2014, if not utilized. As noted above, these NOLs and NCLs are subject to the annual limitation of $1.3 million. NOLs and NCLs that exceed the Section 382 Limitation in any year will continue to be allowed as carryforwards for the remainder of the carryforward period; however, if the carryforward period for any NOLs or NCLs expires before that loss is fully utilized, the unused portion will provide no future benefit. | ||||||||
The Company evaluates the appropriate level of tax reserves for uncertain tax positions. For the years ended December 31, 2013 and 2012, the Company did not record unrecognized tax benefits. | ||||||||
The Company and its subsidiaries filed income tax returns in the U.S. and various state jurisdictions. As of December 31, 2013, the Company's 2010 through 2012 U.S. federal income tax returns are open for Internal Revenue Service examination under the three-year statute of limitations. The New York state return of a subsidiary is under examination for tax years 2009 and 2010. The Company does not believe that the outcome of this audit will require the Company to record reserves for uncertain tax positions or that the outcome will have a material impact on the Consolidated Financial Statements for the years ended December 31, 2013 and 2012. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||||||||||
Related Party Transactions | |||||||||||||||||
DFR Holdings—In December 2013, DFR Holdings purchased approximately 9.1 million shares of the Company's outstanding common stock from CIFC Parent as well as 1.0 million shares of the Company's outstanding common stock and 2.0 million warrants from GE Capital (see Note 4). As of December 31, 2013, DFR Holdings owns approximately 14.7 million shares of the Company's common stock, $25.0 million aggregate principal amount of the Company's Convertible Notes which is convertible into approximately 4.1 million shares of the Company's common stock (see Note 12) and warrants that entitle DFR Holdings the right to purchase 2.0 million shares of the Company's voting common stock (see Note 12). As of December 31, 2012 , DFR Holdings owned approximately 4.6 million shares of the Company's common stock, predominately issued as part of the consideration for the acquisition of CNCIM and the Company's Convertible Notes. | |||||||||||||||||
In connection with the transaction, the Company entered into a Third Amended and Restated Stockholders Agreement with DFR Holdings, dated December 2, 2013 (the “Stockholders Agreement”). Pursuant to the Stockholders Agreement, at each annual or special meeting of stockholders at which an election of directors is held, the Company agreed to nominate to its Board of Directors six directors designated by DFR Holdings. As detailed in the Company's Form 8-K filed with the SEC on December 3, 2013, the number of directors that can be designated by DFR Holdings reduces as they decrease their ownership (on a diluted basis) in the Company. If DFR Holdings' ownership falls below 5%, it loses the right to designate any director. Following the transaction, three directors designated by CIFC Parent resigned and were subsequently replaced by three designees of DFR Holdings. | |||||||||||||||||
Related party transactions also included (i) the interest expense on Convertible notes of $3.5 million and $3.4 million during the years ended December 31, 2013 and 2012, respectively, (ii) deferred purchase payments (see Note 10), (iii) fees to the Company for providing certain administrative services to DFR Holdings, and (iv) quarterly dividends (see Note 12). | |||||||||||||||||
CIFC Parent—Following the sale of CIFC Parent's common shares to DFR Holdings, CIFC Parent no longer owns common shares of the Company. In addition, during the fourth quarter of 2013, the Company purchased CIFC Parent's CLO residual interests in five CLOs managed by CIFC for $13.2 million. As of December 31, 2012, CIFC Parent owned approximately 9.1 million shares of the Company's common stock, issued as part of the consideration for the Merger with Legacy CIFC. | |||||||||||||||||
Related party transactions also included (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 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). | |||||||||||||||||
Other—During the year ended December 31, 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% equity holder. | |||||||||||||||||
Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows: | |||||||||||||||||
Receivables | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | For the Years Ended December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
(in thousands) | |||||||||||||||||
CIFC Parent | $ | 167 | $ | 19 | $ | 148 | $ | 199 | |||||||||
DFR Holdings | — | 17 | (17 | ) | 68 | ||||||||||||
Total | $ | 167 | $ | 36 | $ | 131 | $ | 267 | |||||||||
RESTRUCTURING_CHARGES
RESTRUCTURING CHARGES | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||
RESTRUCTURING CHARGES | ' | |||||||||
Restructuring Charges | ||||||||||
The table below provides a rollforward of the accrued restructuring charges: | ||||||||||
For the Years Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
(in thousands) | ||||||||||
Accrued Restructuring Charges, beginning of period | $ | 1,410 | $ | 1,490 | ||||||
Provision | — | 5,877 | -1 | |||||||
Payments | (735 | ) | (4,971 | ) | ||||||
Non-Cash Settlement | — | (986 | ) | -2 | ||||||
Accrued Restructuring Charges, end of period | $ | 675 | $ | 1,410 | ||||||
Explanatory Notes: | ||||||||||
_________________________________ | ||||||||||
-1 | During the year ended December 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, severance and termination benefits of $2.0 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 year ended December 31, 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 | 12 Months Ended | |||
Dec. 31, 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 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 it is not probable and estimable that any loss will be incurred. | ||||
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—In July 2012, the Company entered into a lease agreement for its corporate headquarters (the "Lease"), which had a term of 10.5 years. During the years ended December 31, 2013 and 2012, total occupancy expense was $1.6 million and $1.4 million, respectively. The future minimum commitments under the Company's lease agreement are as follows: | ||||
(In thousands) | ||||
2014 | 1,607 | |||
2015 | 1,607 | |||
2016 | 1,607 | |||
2017 | 1,607 | |||
2018 | 1,680 | |||
Thereafter | 7,010 | |||
$ | 15,118 | |||
Unfunded Loan Commitments—Certain of the Consolidated CLOs have debt structures which include unfunded revolvers. Unfunded debt commitments represent the estimated fair value of those unfunded revolving debt facilities. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. | ||||
Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. As of December 31, 2013 and 2012, the Consolidated CLOs had unfunded investment commitments on loans of $36.8 million and $55.3 million, respectively. The timing and amount of additional funding on these loans are at the discretion of the borrower, to the extent the borrower satisfies certain requirements and provides certain documentation. The Company does not have any obligation to fund these commitments. | ||||
Other—As of December 31, 2013 and 2012, the Company fully funded the aggregate minimum commitment to invest $30.0 million and $5.0 million, respectively, in its CIFC sponsored funds. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Subsequent Events | |
Subsequent to year end, the Company sponsored the issuance of one new CLO that represents approximately $600 million of new loan-based AUM. | |
In addition, on March 27, 2014 the Company provided notice to GECEII that the Company intends to terminate the Investment Agreement that the Company entered into with GECEII on September 24, 2012. See Note 4. | |
In addition, subsequent to year end, the Company declared a cash dividend of $0.10 per share. The dividend will be paid on April 25, 2014 to shareholders of record as of the close of business on April 4, 2014. |
IMMATERIAL_RESTATEMENT_OF_PRIO
IMMATERIAL RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
(DETAILS) [Abstract] | ' | ||||||||||||
Accounting Changes and Error Corrections [Text Block] | ' | ||||||||||||
Immaterial Restatement of Prior Year Financial Statements | |||||||||||||
In conjunction with the 2013 financial statement close process, in an effort to ensure the completeness and accuracy of all deferred tax assets and liabilities, management identified immaterial errors in the net deferred tax assets for the years ended December 31, 2012, 2011 and 2010. These income tax errors were individually immaterial to the financial results of the respective prior years and related to the timing and recognition of temporary deferred tax items stemming from unusual or non-recurring transactions entered into before the Merger in April 2011. The correction of the cumulative amounts would be material to the 2013 Consolidated Financial Statements; therefore, the Company did not record the correcting entries in the current year and restated the 2012 Consolidated Financial Statements. The impact of the errors on the Net Income (loss) attributable to CIFC Corp. for the years ended December 31, 2012, 2011, and 2010 are as follows: | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
(in thousands) | |||||||||||||
Net income (loss), as previously reported | $ | (240,328 | ) | $ | (343,754 | ) | $ | (14,290 | ) | ||||
Net income (loss) attributable to CIFC Corp., as previously reported | $ | (9,616 | ) | $ | (32,592 | ) | $ | 85,921 | |||||
Prior period adjustment - income tax benefit (expense) | $ | 917 | $ | (274 | ) | $ | 2,726 | ||||||
Net income (loss), as adjusted | $ | (239,411 | ) | $ | (344,028 | ) | $ | (11,564 | ) | ||||
Net income (loss) attributable to CIFC Corp., as adjusted | $ | (8,699 | ) | $ | (32,866 | ) | $ | 88,647 | |||||
Earnings per share-basic, as previously reported | $ | (0.47 | ) | $ | (1.82 | ) | $ | 9.16 | |||||
Earnings per share-basic, as adjusted | $ | (0.43 | ) | $ | (1.84 | ) | $ | 9.45 | |||||
Earnings per share-diluted, as previously reported | $ | (0.47 | ) | $ | (1.82 | ) | $ | 7.81 | |||||
Earnings per share-diluted, as adjusted | $ | (0.43 | ) | $ | (1.84 | ) | $ | 8.05 | |||||
As part of the immaterial restatement, a cumulative adjustment of approximately $2.5 million was reflected in the opening balance of retained earnings as of January 1, 2012. For the year ended December 31, 2012, the $0.9 million immaterial restatement of income taxes was to correct an improper entry that was recorded in the fourth quarter of 2012. As a result, the first three quarters of 2012 were not impacted by the immaterial restatement. Further, comparative period disclosures in Note 14—Income Taxes have been restated to reflect the correction of these immaterial errors. Any other footnotes impacted by the restatement have been noted as such. There was no net impact on total cash flows from operating, investing and financing activities. The following changes have been made to the Company's Consolidated Balance Sheets as of December 31, 2012 (in thousands): | |||||||||||||
As Previously Reported | Restated | ||||||||||||
Consolidated Balance Sheet as of December 31, 2012 | |||||||||||||
Deferred tax asset, net | $ | 50,545 | $ | 53,914 | |||||||||
Total Assets | $ | 10,504,911 | $ | 10,508,280 | |||||||||
Retained earnings (deficit) | $ | (833,442 | ) | $ | (830,073 | ) | |||||||
Total CIFC Corp. Stockholders' Equity | $ | 121,319 | $ | 124,688 | |||||||||
Total Equity | $ | 199,348 | $ | 202,717 | |||||||||
Total Liabilities and Equity | $ | 10,504,911 | $ | 10,508,280 | |||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (POLICIES) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | |||||||||||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||||||||||
Consolidation -VIEs—The Company consolidates all VIEs in which it is the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest, has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to (a) determine whether an entity in which the Company holds a variable interest is a VIE and (b) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment. | ||||||||||||||||||
For CLOs and CDOs, if the Company is deemed to (i) have the power to direct the activities of the CLO or CDO that most significantly impact the economic performance and (ii) either the obligation to absorb losses or the right to receive benefits that could be significant to the CLO or CDO, then the Company is deemed to be the primary beneficiary of the CLO or CDO and is required to consolidate the CLO or CDO. Generally, the Company's contractual relationship as collateral manager of the CLOs and CDOs described herein satisfies criteria (i) of the prior sentence, and its ownership interests in and/or ability to earn certain incentive or other management fees in certain of its CLOs and CDOs can (but does not always) satisfy criteria (ii). The Company has a variable interest in each of the CLOs and CDOs it manages due to the provisions of the respective management agreements and direct investments it holds in certain of the CLOs. | ||||||||||||||||||
Consolidation - VOE—The Company consolidates all non-VIE entities that it has a controlling financial interest through direct or indirect ownership of a majority voting interest. Entities consolidated under the voting interest model ("VOE") will not be consolidated if the limited partners have the substantive participating rights over decision-making. | ||||||||||||||||||
Business Combinations Policy [Policy Text Block] | ' | |||||||||||||||||
Business Combinations—Upon the acquisition of a business, the Company records all assets acquired and liabilities assumed at their estimated fair values, including intangible assets. Strategic transaction related costs are expensed as incurred. | ||||||||||||||||||
Intangible Assets—The Company's intangible assets consist primarily of contractual rights to earn future management and advisory fees from CLOs. The Company determined that all intangible assets held are comprised of assets with finite lives and are amortized on a straight line basis or based on a ratio of expected discounted cash flows from the contracts. Intangible assets with finite lives are tested for impairment if events or changes in circumstances indicate that the assets may not be recoverable. If the Company determines the carrying value of an intangible asset is not recoverable it will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangible assets are recorded in "Impairment of intangible assets" on the Consolidated Statements of Operations. See Notes 4 and 10 for further details. | ||||||||||||||||||
Goodwill—The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired (including identifiable intangible assets) and liabilities assumed is recorded as goodwill. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. Goodwill has been recognized as a result of the acquisitions of Columbus Nova Credit Investments Management, LLC ("CNCIM"), the Merger with Commercial Industrial Finance Corp. ("Legacy CIFC") and the GECC Transaction (see Note 4) and is not amortized. The Company reviews goodwill periodically, at least on an annual basis in the fourth quarter of each year, to determine whether the carrying value of goodwill is impaired. If goodwill is deemed to be impaired, the difference between the carrying amount reflected in the Consolidated Financial Statements and the estimated fair value is recognized as an expense in the period in which the impairment occurs. The Company has one reporting unit for which goodwill is tested for impairment. See Notes 4 and 10 for further details. | ||||||||||||||||||
Contingent Consideration and Contingent Liabilities at Fair Value—Contingent consideration and contingent liabilities assumed in business combinations are recorded at fair value and measured at fair value at each reporting date with changes in fair value recorded within "Net gain (loss) on contingent liabilities at fair value" on the Consolidated Statements of Operations. See Notes 4 and 11 for further details. | ||||||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | ' | |||||||||||||||||
Fair Value Measurements and Presentation—The Company categorizes its financial instruments carried at fair value into a three-level fair value hierarchy based on the transparency of the inputs to the valuation of the asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is determined by the lowest level of input that is significant to the fair value measurement. The assessment of significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The three levels are defined as follows: | ||||||||||||||||||
• | Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Financial instruments included in Level 1 are generally equity securities or derivatives listed on an exchange with active markets. The Company held no Level 1 financial instruments during the periods presented. | |||||||||||||||||
• | Level 2—inputs to the valuation methodology include quoted prices for similar financial instruments in active markets, quoted prices for identical financial instruments in inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. The Company's financial instruments generally included in this category are loans where asset valuations are provided by third-party pricing services (effective December 31, 2012, loan valuations provided by third-party pricing services based on a composite price determined using fewer than two quotes are classified as Level 3) or the Company's comparable companies pricing model (prior to the valuation methodology change effective December 31, 2012), corporate bonds and investments in CLOs or CDOs where asset valuations are provided by third-party pricing services, investments in funds which the Company has the ability to redeem its investment at net asset value at, or within three months of, the reporting date, long-term debt of the Company's Consolidated CLOs and total return swap on warehouses. | |||||||||||||||||
• | Level 3—inputs to the valuation methodology include significant unobservable inputs to the fair value measurement. This includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The Company's financial instruments generally included in this category are corporate bonds, investments in CLOs or CDOs, loans where valuations are provided by third-party pricing services based on a composite price determined using fewer than two quotes (effective December 31, 2012), loans where asset valuations are not provided by third-party pricing services and whose fair value is determined using the Company's comparable companies pricing model (effective December 31, 2012) or other pricing models, warrants, long-term debt of the Consolidated CLOs (including the subordinated notes) and the previously bifurcated conversion feature contained in the Company's senior subordinated convertible notes ("Convertible Notes"). | |||||||||||||||||
Determination of Fair Values—Fair value is the price a market participant would receive in the sale of an asset, or pay to transfer a liability, in an orderly transaction at the measurement date. Where available, fair value is based on observable market prices or parameters or is derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are utilized. These valuation models involve estimation and judgment, the degree of which is dependent on both the price transparency for the instruments or market and the instruments’ complexity. Assets and liabilities recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based on the level of judgment associated with the inputs used to measure their value as described above. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period. | ||||||||||||||||||
Many financial instruments have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that market participants are willing to pay for an asset. Ask prices represent the lowest price market participants are willing to accept for an asset. For financial instruments whose inputs are based on bid-ask prices, the Company's policy is to take the mid-point in the bid-ask spread to value these financial instruments as a practical expedient for determining fair value permissible under the guidance. Fair value is a market-based measure considered from the perspective of the market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, when market assumptions are not readily available, assumptions are set to reflect those that the Company believes market participants would use in pricing the financial instrument at the measurement date. | ||||||||||||||||||
The availability of observable inputs can vary depending on the financial instrument and is affected by a variety of factors, including, for example, the type of product, age of the product, whether the product is traded on an active exchange or in the secondary market and, current market conditions. Determinations of fair value require more judgment to the extent that the valuation is based on inputs that are either less observable or unobservable in the market. Accordingly, the degree of judgment exercised in determining fair value is greatest for financial instruments classified as Level 3. | ||||||||||||||||||
The fair value process is monitored by the Valuation Committee. The Valuation Committee is chaired by the Chief Investment Officer and is comprised of investment, finance, valuation and risk management professionals. The purpose of the committee is to oversee the pricing policy and procedures by ensuring objective and reliable valuation practices and pricing of financial instruments, as well as addressing fair valuation issues and approving changes to valuation methodologies and pricing sources. Meetings are held at least quarterly to discuss and analyze the significant assumptions utilized in the Company's internally developed models and to review the valuations provided by third-party pricing services for reasonableness. The Company engages reputable third-party pricing services and regularly reviews the valuation methodologies provided by those third-party pricing services to ensure the fair value measurement provided by those services. | ||||||||||||||||||
Debt, Policy [Policy Text Block] | ' | |||||||||||||||||
Long-Term Debt—The Company's junior subordinated notes are carried at their outstanding principal amounts. The Convertible Notes are recorded as two separate components: (i) the long-term debt initially recorded at a discount, which is being amortized into interest expense over the life of the debt and (ii) the conversion feature which has been classified to additional paid-in capital. | ||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||||||||||||
The following table summarizes the Company's long-term debt: | ||||||||||||||||||
December 31, 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 | % | 21.8 | $ | 95,000 | 1 | % | 22.8 | ||||||||
October Junior Subordinated Notes (2) | 25,000 | 3.73 | % | 21.8 | 25,000 | 3.81 | % | 22.8 | ||||||||||
Total Subordinated Notes Debt | $ | 120,000 | 1.57 | % | 21.8 | $ | 120,000 | 1.59 | % | 22.8 | ||||||||
Convertible Notes (3) | $ | 19,164 | 10 | % | 3.9 | $ | 18,233 | 9 | % | 4.9 | ||||||||
Total recourse debt | $ | 139,164 | $ | 138,233 | ||||||||||||||
Non-recourse Consolidated Entities' debt: | ||||||||||||||||||
Consolidated CLOs (4) | $ | 10,336,453 | 1.43 | % | 8.3 | $ | 9,325,982 | 1.16 | % | 8.1 | ||||||||
Warehouses (5) | 148,522 | 1.3 | % | n/m | 270,452 | 2.12 | % | n/m | ||||||||||
Total non-recourse Consolidated Entities' debt | $ | 10,484,975 | 1.43 | % | 8.2 | $ | 9,596,434 | 1.19 | % | 7.9 | ||||||||
Total long-term debt | $ | 10,624,139 | $ | 9,734,667 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and 3 month LIBOR plus 2.58% thereafter until maturity, October 30, 2035. | |||||||||||||||||
-2 | October Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on October 30, 2035. | |||||||||||||||||
-3 | As of December 31, 2013 and 2012, Convertible Notes were recorded net of a discount of $5.8 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. | |||||||||||||||||
-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 December 31, 2013 and 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.9 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 not held by the Company, which have a par value of $67.5 million and $25.6 million as of December 31, 2013 and 2012, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. | |||||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||||||||||
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand, cash held in banks and liquid investments with original maturities of 90 days or less. | ||||||||||||||||||
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||||||||||
Restricted Cash and Cash Equivalents—Restricted cash and cash equivalents represent amounts held by third parties for settlement of certain obligations and cash, subject to certain restrictions, held in non-recourse entities (including Consolidated Entities). | ||||||||||||||||||
Brokers and Dealers Disclosure [Text Block] | ' | |||||||||||||||||
Due from Brokers and Due to Brokers—Amounts due from brokers and due to brokers generally represent unsettled trades. Amounts due from brokers and due to brokers are recorded as assets and liabilities, respectively. | ||||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||||||||||
Equipment and Improvements—Equipment and Improvements are stated at cost, net of accumulated depreciation. Depreciation is generally recorded using the straight-line method over the estimated useful lives of the various classes of equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or remaining life of the lease using the straight-line method. The Company does not consider renewal options when determining the amortization of leasehold improvements unless renewal is considered reasonably assured at the inception of the lease. Equipment and Improvements are periodically reviewed for indications of impairment and written down to fair value if impaired. | ||||||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | |||||||||||||||||
Income Taxes—Current federal income taxes are recognized based on amounts estimated to be payable or recoverable as a result of taxable income for the current year. Deferred tax assets and liabilities are recognized for the future income tax consequences (temporary differences) attributable to the difference between the carrying amounts of assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The Company recognizes the effect of change in income tax laws or rates on deferred tax assets and liabilities in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount that is more likely than not to be realized. Components of deferred tax assets, liabilities and valuation allowance are included in Note 14 to the Company's Consolidated Financial Statements. | ||||||||||||||||||
GAAP provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. The Company believes that there are no tax positions that would require disclosure under GAAP. The Company accrues interest and penalties, if applicable, in income tax expense. Tax years that remain open to examination by major tax jurisdictions include 2009 through the current year. | ||||||||||||||||||
Appropriated Retained Earnings (Deficit) of Consolidated VIEs [Policy Text Block] | ' | |||||||||||||||||
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. | ||||||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |||||||||||||||||
Stock-Based Compensation—Compensation cost for stock-based awards are generally measured based on the grant-date fair value of the award. Stock-based awards that do not require future service (i.e. vested awards) are expensed immediately. Stock-based awards that require future service are amortized over the relevant service period. Amortization is recognized as "Compensation and benefits" in the Consolidated Statements of Operations. See Note 12 for the required disclosure relating to stock-based compensation. | ||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||||||
Earnings Per Share—Basic earnings per share is calculated by dividing net income (loss) attributable to CIFC Corp. by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share adjusts basic earnings per share by the dilution that would have occurred had all contingent issuances of common stock that would have individually reduced earnings per share occurred at either the beginning of the period or the time of issuance of the potentially dilutive securities, if those securities were issued during the period. The Company uses the if-converted method to determine the dilutive effects of the Convertible Notes and the treasury stock method for stock options, warrants and unvested restricted stock units ("RSUs"). See Note 13 for the computation of earnings per share. | ||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||||||
Recent Accounting Updates | ||||||||||||||||||
In June 2013, the FASB issued ASU 2013-08, Financial Services—Investment Companies, which amends the scope, measurement, and disclosure requirements for investment companies. This ASU amends the requirements related to qualifying for the “investment-company deferral“ under ASU 2010-10, Consolidation. This guidance is effective for the Company's fiscal year beginning January 1, 2014. Earlier application is prohibited. The adoption of this guidance will not have a material impact on the Company's Consolidated Financial Statements. | ||||||||||||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance will not have a material impact on the Company's Consolidated Financial Statements. | ||||||||||||||||||
In December 2011, the FASB issued ASU 2011-11, Disclosures About Offsetting Assets and Liabilities (“ASU 2011-11”), which created new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. In January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”), that provides clarification about which instruments and transactions are subject to ASU 2011-11. The adoption of ASU 2011-11 and ASU 2013-01 on January 1, 2013 did not have an impact to the Company's Consolidated Financial Statements. | ||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | |||||||||||||||||
Revenue Recognition—Investment Advisory Fees—The Company receives investment advisory fees from the investment products it manages. These investment advisory fees are paid periodically in accordance with the terms of the individual management agreements for as long as the Company manages the products. The investment advisory fees paid to the Company by these investment products are the Company's primary source of revenue. Investment advisory fees typically consist of management fees based on the amount of assets held in the investment product and, in certain cases, incentive fees based on the returns generated for certain investors. Investment advisory fees are recognized as revenue when earned. The Company does not recognize investment advisory fees as revenue until all contingencies have been removed. | ||||||||||||||||||
Revenue Recognition—Net Interest Income from Investments—Net interest income from investments includes interest revenue from investments in funds, warehouses or other assets held by the Company. | ||||||||||||||||||
The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. The Company is generally required to consolidate these entities under the VIE rules, as noted above. Investment advisory and Net interest income from investments earning on the Consolidated VIEs is reported on the Consolidated Statements of Operations as the difference between "Net results of Consolidated Entities" and "Net income (loss) attributable to noncontrolling interest in Consolidated Entities." As of December 31, 2013 and 2012, the Company held $92.1 million and $74.2 million, respectively of investments in its Consolidated VIEs and recognized investment advisory fees and net interest income from investments of the Consolidated VIEs as follows: | ||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Net results of Consolidated Entities | 169,869 | (168,380 | ) | |||||||||||||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities | (73,464 | ) | 230,712 | |||||||||||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | ||||||||||||||
Characteristics of net results of Consolidated Entities attributable to CIFC Corp: | ||||||||||||||||||
Consolidated Entities investment advisory fees | $ | 82,317 | $ | 51,657 | ||||||||||||||
Consolidated Entities net investment income (1) | 14,088 | 10,675 | ||||||||||||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | ||||||||||||||
Explanatory Note: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | Includes equity distributions earned from residual interests in CLOs | |||||||||||||||||
Consolidated Entities | ' | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | |||||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||||||
Fair Value Option—The Company has elected the fair value option for its investments in the debt and subordinated notes of the Consolidated CLOs and investments in other funds it manages. The Company also elected the fair value option for all of the assets and liabilities of the Consolidated CLOs and warehouses. | ||||||||||||||||||
Unrealized appreciation or depreciation and realized gains and losses on assets and liabilities of Consolidated VIEs are recorded in the Consolidated Statements of Operations within "Net results of Consolidated Entities." Unrealized appreciation or depreciation and realized gains and losses on liabilities at fair value are recorded in the Consolidated Statements of Operations within "Net gain (loss) on contingent liabilities at fair value." Unrealized appreciation or depreciation and realized gains and losses on all other assets at fair value are recorded in the Consolidated Statements of Operations within "Net gain (loss) on investments at fair value." | ||||||||||||||||||
Debt, Policy [Policy Text Block] | ' | |||||||||||||||||
Consolidated Entity Long-Term Debt—Subordinated notes of the Consolidated Entities have certain characteristics of equity and are recorded as debt on the Consolidated Balance Sheets as they have stated maturities. The maturities indicate a date on which they are mandatorily redeemable and redemption is required only upon liquidation or termination of the CLO and not upon liquidation or termination of the Company. Interest expense of Consolidated Entities are recorded in "Net results of Consolidated Entities" on the Consolidated Statements of Operations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Net Results of Consolidated Entities Attributable to CIFC Corp. [Abstract] | ' | ||||||||
Net Results of Consolidated Entities Attributable to CIFC Corp. [Table Text Block] | ' | ||||||||
As of December 31, 2013 and 2012, the Company held $92.1 million and $74.2 million, respectively of investments in its Consolidated VIEs and recognized investment advisory fees and net interest income from investments of the Consolidated VIEs as follows: | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands) | |||||||||
Net results of Consolidated Entities | 169,869 | (168,380 | ) | ||||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities | (73,464 | ) | 230,712 | ||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | |||||
Characteristics of net results of Consolidated Entities attributable to CIFC Corp: | |||||||||
Consolidated Entities investment advisory fees | $ | 82,317 | $ | 51,657 | |||||
Consolidated Entities net investment income (1) | 14,088 | 10,675 | |||||||
Net results from Consolidated Entities attributable to CIFC Corp. | $ | 96,405 | $ | 62,332 | |||||
Explanatory Note: | |||||||||
________________________________ | |||||||||
-1 | Includes equity distributions earned from residual interests in CLOs |
STRATEGIC_TRANSACTIONS_Tables
STRATEGIC TRANSACTIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 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) | 1,000,000 | |||||||
Multiplied by Closing Date share price (2) | $ | 7.51 | ||||||
Value of shares | $ | 7,510 | ||||||
Warrants issued (1) | 2,000,000 | |||||||
Multiplied by Closing Date estimated fair value per warrant (3) | $ | 1.83 | ||||||
Value of warrants | 3,660 | |||||||
Cash | 4,525 | |||||||
Total purchase consideration | $ | 15,695 | ||||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | GE Capital shares and warrants were purchased by DFR Holdings during 2013 (see DFR Holdings Stock Purchase above). | |||||||
-2 | Represents the closing price of the Company's common stock on the Closing Date. | |||||||
-3 | 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 third quarter of 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 Arrangement (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) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 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 Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1): | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Total Assets | $ | 10,963,096 | $ | 9,933,495 | |||||||||||||||||||||
Total Liabilities (non-recourse) | 10,756,652 | 9,806,010 | |||||||||||||||||||||||
Maximum exposure to loss: | |||||||||||||||||||||||||
Investments and beneficial interests (2) | $ | 49,490 | $ | 47,454 | |||||||||||||||||||||
Receivables | 3,836 | 2,674 | |||||||||||||||||||||||
Total maximum exposure to loss | $ | 53,326 | $ | 50,128 | |||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | In addition, exposure to loss excludes future investment advisory fees on the Consolidated VIEs, which are not included in the table above. | ||||||||||||||||||||||||
-2 | Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $44.3 million directly in the residual interests of its Consolidated CLOs and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $5.2 million in the residual interests of its Consolidated CLOs | ||||||||||||||||||||||||
The following table summarizes the Company's consolidated assets and non-recourse liabilities of other Consolidated VIEs included in the Consolidated Balance Sheets: | |||||||||||||||||||||||||
31-Dec-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) | $ | 403,251 | $ | 357,725 | $ | 42,279 | $ | 334,420 | $ | 307,025 | $ | 26,723 | |||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | Maximum exposure to loss is generally limited to the Company's investment in the entity. As of December 31, 2013 and 2012, the Company consolidated two and one warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $9.7 million in the Warehouses. | ||||||||||||||||||||||||
The table below represents total net results of the Consolidated VIEs included in the net results of the Consolidated Entities on the Consolidated Statements of Operations: | |||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Consolidated CLOs | $ | 160,971 | $ | (171,967 | ) | ||||||||||||||||||||
Warehouses (1) | 8,898 | 3,756 | |||||||||||||||||||||||
DFR MM CLO (2) | — | (169 | ) | ||||||||||||||||||||||
Net results of Consolidated Entities | 169,869 | (168,380 | ) | ||||||||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||
________________________________ | |||||||||||||||||||||||||
-1 | During the years ended December 31, 2013 and 2012, the Company's results from warehouses included six and two warehouse investments, respectively. | ||||||||||||||||||||||||
-2 | The Company's investment in and rights to manage DFR MM CLO were sold during February 2012 (see Note 2). |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value | ' | ||||||||||||||||||||||||||||||||
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: | |||||||||||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Estimated Fair Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | ||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments at fair value: | |||||||||||||||||||||||||||||||||
Investment in Funds | $ | — | $ | 10,827 | $ | — | $ | 10,827 | $ | — | $ | 5,058 | $ | — | $ | 5,058 | |||||||||||||||||
Loans (1) | — | 5,546 | 510 | 6,056 | — | — | — | — | |||||||||||||||||||||||||
Subtotal | — | 16,373 | 510 | 16,883 | — | 5,058 | — | 5,058 | |||||||||||||||||||||||||
Consolidated Entities: | |||||||||||||||||||||||||||||||||
Loans | — | 8,604,967 | 1,706,290 | 10,311,257 | — | 7,740,574 | 1,177,058 | 8,917,632 | |||||||||||||||||||||||||
Corporate bonds | — | — | 16,220 | 16,220 | — | — | 67,438 | 67,438 | |||||||||||||||||||||||||
Structured products & other | — | — | 93,516 | 93,516 | — | — | 81,709 | 81,709 | |||||||||||||||||||||||||
Total Consolidated Entities | — | 8,604,967 | 1,816,026 | 10,420,993 | — | 7,740,574 | 1,326,205 | 9,066,779 | |||||||||||||||||||||||||
Total Assets | $ | — | $ | 8,621,340 | $ | 1,816,536 | $ | 10,437,876 | $ | — | — | $ | 7,745,632 | $ | 1,326,205 | $ | 9,071,837 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 16,961 | $ | 16,961 | $ | — | $ | — | $ | 33,783 | $ | 33,783 | |||||||||||||||||
Consolidated Entities: | |||||||||||||||||||||||||||||||||
Derivative liabilities | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Long-term debt (2) | — | — | 10,484,975 | 10,484,975 | — | — | 9,596,434 | 9,596,434 | |||||||||||||||||||||||||
Total Consolidated Entities | — | — | 10,484,975 | 10,484,975 | — | — | 9,596,434 | 9,596,434 | |||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | 10,501,936 | $ | 10,501,936 | $ | — | $ | — | $ | 9,630,217 | $ | 9,630,217 | |||||||||||||||||
Explanatory Notes: | |||||||||||||||||||||||||||||||||
______________________________ | |||||||||||||||||||||||||||||||||
-1 | During the year ended December 31, 2013, one loan was purchased and classified as Level 3. | ||||||||||||||||||||||||||||||||
-2 | The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. | ||||||||||||||||||||||||||||||||
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 Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||
Level 3 Financial Assets at Fair Value | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||
Investment Assets of Consolidated Entities | Investment Assets of Consolidated Entities | ||||||||||||||||||||||||||||||||
Loans | Corporate | Structured Products & Other | Total | Loans | Corporate | Structured Products & 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) | 177,504 | — | — | 177,504 | 1,167,456 | — | — | 1,167,456 | |||||||||||||||||||||||||
Transfers out of Level 3 (2) | (192,767 | ) | — | — | (192,767 | ) | (5,933 | ) | — | — | (5,933 | ) | |||||||||||||||||||||
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) | 6,746 | 686 | 13,041 | 20,473 | 1,058 | 7,027 | 10,295 | 18,380 | |||||||||||||||||||||||||
Purchases | 1,344,196 | 16,954 | 19,471 | 1,380,621 | 10,886 | — | 29,175 | 40,061 | |||||||||||||||||||||||||
Sales | (397,281 | ) | (68,361 | ) | (14,128 | ) | (479,770 | ) | (1,430 | ) | (53,523 | ) | (24,479 | ) | (79,432 | ) | |||||||||||||||||
Settlements | (409,166 | ) | (497 | ) | (6,577 | ) | (416,240 | ) | (15,368 | ) | (1,164 | ) | (20,522 | ) | (37,054 | ) | |||||||||||||||||
Estimated fair value, end of period | $ | 1,706,290 | $ | 16,220 | $ | 93,516 | $ | 1,816,026 | $ | 1,177,058 | $ | 67,438 | $ | 81,709 | $ | 1,326,205 | |||||||||||||||||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $ | 7,493 | $ | 290 | $ | 10,214 | $ | 17,997 | $ | 14,748 | $ | 5,390 | $ | 11,204 | $ | 31,342 | |||||||||||||||||
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 quarterly by the same third party pricing service using composite prices determined using two or more quotes. Prior to December 31, 2012, the Company categorized all loans valued by a third-party pricing service or the Company's comparable companies pricing model as Level 2. Therefore, transfers in represented loans valued by an internally developed model utilizing unobservable market inputs. | ||||||||||||||||||||||||||||||||
-2 | 2013 transfers out represent loans marked quarterly 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 or broker quotes prior to December 31, 2012, 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, 2012. | ||||||||||||||||||||||||||||||||
Level 3 Financial Liabilities at Fair Value | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||
Contingent Liabilities at Fair Value | Long-term Debt of Consolidated Entities | Total | Contingent Liabilities at Fair Value | Long-term Debt of Consolidated 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 | |||||||||||||||||||||
Sale of investments in Consolidated CLOs (1) | — | 10,438 | 10,438 | — | 3,716 | 3,716 | |||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | (9,050 | ) | (9,050 | ) | |||||||||||||||||||||||||
Transfer in due to consolidation or acquisition | — | — | — | — | 313,093 | 313,093 | |||||||||||||||||||||||||||
Net realized/unrealized (gains) losses | (1,644 | ) | 193,633 | 191,989 | 11,452 | 772,147 | 783,599 | ||||||||||||||||||||||||||
Purchases | — | 30,906 | 30,906 | — | 62,946 | 62,946 | |||||||||||||||||||||||||||
Sales | — | (10,000 | ) | (10,000 | ) | — | (5,000 | ) | (5,000 | ) | |||||||||||||||||||||||
Issuances | — | 3,060,413 | 3,060,413 | — | 1,817,248 | 1,817,248 | |||||||||||||||||||||||||||
Settlements | (15,178 | ) | (2,396,849 | ) | (2,412,027 | ) | (16,948 | ) | (918,234 | ) | (935,182 | ) | |||||||||||||||||||||
Estimated fair value, end of period | $ | 16,961 | $ | 10,484,975 | $ | 10,501,936 | $ | 33,783 | $ | 9,596,434 | $ | 9,630,217 | |||||||||||||||||||||
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period | $ | 2,118 | $ | 97,471 | $ | 99,589 | $ | (13,499 | ) | $ | (533,729 | ) | $ | (547,228 | ) | ||||||||||||||||||
Explanatory Note: | |||||||||||||||||||||||||||||||||
__________________________ | |||||||||||||||||||||||||||||||||
-1 | The transfers into Level 3 represent the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. | ||||||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||
31-Dec-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) | 25-40% | 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 December 31, 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) | $ | 19,164 | $ | 32,149 | $ | 18,233 | $ | 33,058 | |||||||||||||||||||||||||
Junior Subordinated Notes (2) | $ | 120,000 | $ | 63,535 | $ | 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) | 12 Months Ended | ||||||||
Dec. 31, 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 Entities": | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Investment income | $ | 474,148 | $ | 402,168 | |||||
Interest expense | (127,059 | ) | (96,675 | ) | |||||
Net investment income | 347,089 | 305,493 | |||||||
Net gain (loss) on investments at fair value | 56,321 | 321,321 | |||||||
Net gain (loss) on liabilities at fair value | (193,633 | ) | (772,147 | ) | |||||
Net gain (loss) on other investments and derivatives | (51 | ) | 861 | ||||||
Net gain (loss) from activities of Consolidated Entities | $ | 209,726 | $ | (144,472 | ) | ||||
Expenses of Consolidated Entities | (39,857 | ) | (23,908 | ) | |||||
Net Results of Consolidated Entities (1) | $ | 169,869 | $ | (168,380 | ) | ||||
Explanatory Note: | |||||||||
________________________________ | |||||||||
-1 | See Note 3 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp. |
EQUIPMENT_AND_IMPROVEMENTS_Tab
EQUIPMENT AND IMPROVEMENTS (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Line Items] | ' | |||||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||||
Equipment and improvements consisted of the following: | ||||||||||
As of December 31, | ||||||||||
Estimated initial | 2013 | 2012 | ||||||||
useful life | ||||||||||
(In years) | (In thousands) | |||||||||
Equipment and computer software | 5-Mar | $ | 2,410 | $ | 1,465 | |||||
Leasehold improvements | 11 | 2,409 | 2,461 | |||||||
Office furniture and fixtures | 7 | 644 | 623 | |||||||
Equipment and improvements, gross | 5,463 | 4,549 | ||||||||
Less: accumulated depreciation (1) | (1,202 | ) | (570 | ) | ||||||
Equipment and improvements, net | $ | 4,261 | $ | 3,979 | ||||||
Explanatory Note: | ||||||||||
________________________________ | ||||||||||
-1 | Depreciation expense related to equipment and improvements totaled $0.7 million and $0.5 million for the years ended December 31, 2013 and 2012, respectively. |
INTANGIBLE_ASSETS_AND_GOODWILL1
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Schedule of Goodwill | ' | |||||||||||||
The following table presents the changes in carrying amount of goodwill: | ||||||||||||||
As of December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Beginning balance: | ||||||||||||||
Goodwill | $ | 174,126 | $ | 166,050 | ||||||||||
Accumulated impairment losses (1) | (98,126 | ) | (98,126 | ) | ||||||||||
Net beginning balance | 76,000 | 67,924 | ||||||||||||
Additions (2) | — | 8,076 | ||||||||||||
Ending balance: | ||||||||||||||
Goodwill | 174,126 | 174,126 | ||||||||||||
Accumulated impairment losses (1) | (98,126 | ) | (98,126 | ) | ||||||||||
Net ending balance | $ | 76,000 | $ | 76,000 | ||||||||||
Explanatory Notes: | ||||||||||||||
________________________________ | ||||||||||||||
-1 | Goodwill associated with the acquisition of Deerfield & Company ("Deerfield") has been fully impaired. | |||||||||||||
-2 | During the year ended December 31, 2012, goodwill additions were related to the GECC Transaction. See Note 4. | |||||||||||||
Schedule of intangible assets | ' | |||||||||||||
Intangible assets are 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) | |||||||||||||
December 31, 2013: | ||||||||||||||
Investment management contracts | 4 | $ | 72,941 | $ | 52,661 | $ | 20,280 | |||||||
Referral arrangement | 5.8 | 3,810 | 572 | 3,238 | ||||||||||
Non-compete agreements | 4.2 | 1,535 | 736 | 799 | ||||||||||
Trade name | 7.3 | 1,250 | 344 | 906 | ||||||||||
Total intangible assets | $ | 79,536 | $ | 54,313 | $ | 25,223 | ||||||||
December 31, 2012: | ||||||||||||||
Investment management contracts | 5.4 | $ | 76,047 | $ | 38,727 | $ | 37,320 | |||||||
Referral arrangement | 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 have been adjusted for impaired assets as of the date presented. | |||||||||||||
-2 | During the years ended December 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $14.8 million and $17.4 million, respectively. | |||||||||||||
Schedule of expected amortization expense of the existing intangible assets | ' | |||||||||||||
The following table presents expected amortization expense of the existing intangible assets: | ||||||||||||||
(In thousands) | ||||||||||||||
2014 | 10,149 | |||||||||||||
2015 | 6,796 | |||||||||||||
2016 | 4,010 | |||||||||||||
2017 | 2,172 | |||||||||||||
2018 | 1,527 | |||||||||||||
Thereafter | 569 | |||||||||||||
$ | 25,223 | |||||||||||||
DEFERRED_PURCHASE_PAYMENTS_AND1
DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 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: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
(In thousands) | |||||||||
Deferred purchase payments | $ | 1,179 | $ | 4,778 | |||||
Contingent liabilities from the Merger (related party) - Note 15 | $ | 15,349 | $ | 29,152 | |||||
Contingent liabilities value assumed through the Merger | 1,612 | 4,631 | |||||||
Contingent liabilities at fair value | $ | 16,961 | $ | 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 Consolidated Statements of Operations: | |||||||||
For the Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands) | |||||||||
Contingent liabilities from the Merger | $ | 1,269 | $ | (12,404 | ) | ||||
Contingent liabilities assumed through the Merger | 375 | 952 | |||||||
Total net gain (loss) on contingent liabilities at fair value | $ | 1,644 | $ | (11,452 | ) | ||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||||||||||||
The following table summarizes the Company's long-term debt: | ||||||||||||||||||
December 31, 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 | % | 21.8 | $ | 95,000 | 1 | % | 22.8 | ||||||||
October Junior Subordinated Notes (2) | 25,000 | 3.73 | % | 21.8 | 25,000 | 3.81 | % | 22.8 | ||||||||||
Total Subordinated Notes Debt | $ | 120,000 | 1.57 | % | 21.8 | $ | 120,000 | 1.59 | % | 22.8 | ||||||||
Convertible Notes (3) | $ | 19,164 | 10 | % | 3.9 | $ | 18,233 | 9 | % | 4.9 | ||||||||
Total recourse debt | $ | 139,164 | $ | 138,233 | ||||||||||||||
Non-recourse Consolidated Entities' debt: | ||||||||||||||||||
Consolidated CLOs (4) | $ | 10,336,453 | 1.43 | % | 8.3 | $ | 9,325,982 | 1.16 | % | 8.1 | ||||||||
Warehouses (5) | 148,522 | 1.3 | % | n/m | 270,452 | 2.12 | % | n/m | ||||||||||
Total non-recourse Consolidated Entities' debt | $ | 10,484,975 | 1.43 | % | 8.2 | $ | 9,596,434 | 1.19 | % | 7.9 | ||||||||
Total long-term debt | $ | 10,624,139 | $ | 9,734,667 | ||||||||||||||
Explanatory Notes: | ||||||||||||||||||
________________________________ | ||||||||||||||||||
-1 | March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and 3 month LIBOR plus 2.58% thereafter until maturity, October 30, 2035. | |||||||||||||||||
-2 | October Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on October 30, 2035. | |||||||||||||||||
-3 | As of December 31, 2013 and 2012, Convertible Notes were recorded net of a discount of $5.8 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. | |||||||||||||||||
-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 December 31, 2013 and 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.9 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 not held by the Company, which have a par value of $67.5 million and $25.6 million as of December 31, 2013 and 2012, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. |
EQUITY_Tables
EQUITY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Schedule of treasury stock activity | ' | ||||||||||||
The following table summarizes restricted stock units activity: | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Restricted stock units outstanding, beginning of period | 103,360 | 170,688 | |||||||||||
Granted | 15,000 | — | |||||||||||
Settled (1) | (99,874 | ) | (67,328 | ) | |||||||||
Restricted stock units outstanding, end of period | 18,486 | 103,360 | |||||||||||
Explanatory Note: | |||||||||||||
_________________________________ | |||||||||||||
-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 year ended December 31, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2009, 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011 and 3,750 shares of common stock to settle the 1/4 annual installment of the RSUs granted in 2013. During the year ended December 31, 2012, the Company issued 60,095 shares of common stock to settle restricted stock grants from 2009 and 7,233 shares of common stock to settle the first 1/3 annual installment of the restricted stock units granted in 2011. | ||||||||||||
Schedule of weighted average assumptions related to the entity's stock based awards | ' | ||||||||||||
The weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below: | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Expected dividend yield | — | — | |||||||||||
Expected volatility | 48.75 | % | 50.15 | % | |||||||||
Risk-free interest rate | 1.1 | % | 1.2 | % | |||||||||
Expected life (years) | 6.11 | 6.1 | |||||||||||
Schedule of Share-based Compensation Stock Options Activity | ' | ||||||||||||
The following table summarizes certain Stock Options 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, 2011 | 1,550,000 | $ | 7.2 | ||||||||||
Granted (1) | 2,779,501 | 5.48 | |||||||||||
Forfeited (2) | (734,688 | ) | 6.34 | ||||||||||
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 (2) | (45,000 | ) | 8.65 | ||||||||||
Outstanding at December 31, 2013 | 3,879,813 | $ | 6.33 | 5.77 | $ | 5,979 | |||||||
Exercisable at December 31, 2013 | 2,212,860 | $ | 6.19 | 3.69 | $ | 3,528 | |||||||
Vested and Expected to vest at December 31, 2013 (3) | 3,713,117 | $ | 6.32 | 5.65 | $ | 5,734 | |||||||
Explanatory Notes: | |||||||||||||
________________________________ | |||||||||||||
-1 | During the year ended December 31, 2013 and 2012, weighted average grant date fair value was $4.08 and $2.64, respectively. | ||||||||||||
-2 | The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. | ||||||||||||
-3 | Includes 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) | 12 Months Ended | ||||||||
Dec. 31, 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 Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(In thousands, except per share data) | |||||||||
Net income (loss) attributable to CIFC Corp. - basic (1) | $ | 23,371 | $ | (8,699 | ) | ||||
Dilutive effect of Convertible Notes (2) | 1,830 | — | |||||||
Net income (loss) attributable to CIFC Corp. - diluted (1) | 25,201 | (8,699 | ) | ||||||
Weighted-average shares - basic | 20,801 | 20,356 | |||||||
Convertible Notes (2) | 4,132 | — | |||||||
Stock options (3) | 303 | — | |||||||
Warrants (3) | 490 | — | |||||||
Unvested RSUs | 11 | n/a | |||||||
Weighted-average shares - diluted | 25,737 | 20,356 | |||||||
Earnings (loss) per share (1) | |||||||||
Basic | $ | 1.12 | $ | (0.43 | ) | ||||
Diluted | $ | 0.98 | $ | (0.43 | ) | ||||
Explanatory Notes: | |||||||||
________________________________ | |||||||||
-1 | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
-2 | During the year ended December 31, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | ||||||||
-3 | During the year ended December 31, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. During the year ended December 31, 2012, 2.1 million of stock options and 2.2 million of warrants were considered anti-dilutive and excluded from diluted EPS. |
INCOME_TAXES_INCOME_TAXES_Tabl
INCOME TAXES INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Components of Income Tax Expense (Benefit) [Abstract] | ' | |||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | |||||||
The tax effects of temporary differences that result in significant deferred tax assets and deferred tax liabilities are as follows: | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Intangible assets and goodwill (1) | $ | 50,953 | $ | 49,097 | ||||
State net operating loss carryforwards (1) | 16,579 | 16,436 | ||||||
Federal net operating loss carryforwards | 9,070 | 8,607 | ||||||
Contingent liabilities | — | 1,850 | ||||||
Accrued and deferred subordinated management fees | — | 1,573 | ||||||
Other (1) | 10,468 | 10,992 | ||||||
Gross deferred tax asset (1) | 87,070 | 88,555 | ||||||
Less: Valuation allowance (1) | (15,333 | ) | (15,347 | ) | ||||
Deferred tax asset (1) | 71,737 | 73,208 | ||||||
Deferred tax liabilities: | ||||||||
Purchased intangibles | 6,869 | 10,432 | ||||||
Long-term debt | 4,519 | 4,325 | ||||||
Other (1) | 2,674 | 4,537 | ||||||
Deferred tax liability (1) | 14,062 | 19,294 | ||||||
Net deferred tax asset (1) | $ | 57,675 | $ | 53,914 | ||||
Explanatory Note: | ||||||||
________________________________ | ||||||||
(1) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | |||||||
The components of income tax expense (benefit) are as follows: | ||||||||
For the Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Current: | ||||||||
Federal | $ | 15,597 | $ | 2,820 | ||||
State and local | 6,946 | 1,636 | ||||||
Total current expense | 22,543 | 4,456 | ||||||
Deferred: | ||||||||
Federal (1) | (2,767 | ) | 4,570 | |||||
State and local (1) | (994 | ) | 1,724 | |||||
Total deferred expense (benefit) (1) | (3,761 | ) | 6,294 | |||||
Total income tax expense (benefit) (1) | $ | 18,782 | $ | 10,750 | ||||
Explanatory Note: | ||||||||
________________________________ | ||||||||
(1) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | |||||||
The following table reconciles the Company's effective tax rate to the U.S. federal statutory tax rate: | ||||||||
For the Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Statutory U.S. federal income tax rate | 35 | % | (35.00 | )% | ||||
Reconciling items: | ||||||||
Tax attributable to noncontrolling interest loss (1) | (22.24 | )% | 35.31 | % | ||||
State income taxes, net of federal effect (2) | 3.09 | % | 1.11 | % | ||||
Permanent items | 0.52 | % | 2.26 | % | ||||
Valuation allowance (2) | (0.01 | )% | 1.55 | % | ||||
Other (2) | (0.11 | )% | (0.53 | )% | ||||
Effective income tax rate (3) | 16.25 | % | 4.7 | % | ||||
Explanatory Notes: | ||||||||
________________________________ | ||||||||
-1 | Includes income that is not taxable to the Company as such income is directly taxable to the noncontrolling interest holders in the Consolidated CLOs. | |||||||
-2 | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||||||
-3 | The effective tax rate is calculated on "Income (loss) before income tax expense (benefit)." |
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Schedule of Related Party Transactions | ' | ||||||||||||||||
Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows: | |||||||||||||||||
Receivables | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | For the Years Ended December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
(in thousands) | |||||||||||||||||
CIFC Parent | $ | 167 | $ | 19 | $ | 148 | $ | 199 | |||||||||
DFR Holdings | — | 17 | (17 | ) | 68 | ||||||||||||
Total | $ | 167 | $ | 36 | $ | 131 | $ | 267 | |||||||||
RESTRUCTURING_CHARGES_Tables
RESTRUCTURING CHARGES (Tables) | 12 Months Ended | |||||||||
Dec. 31, 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 Years Ended December 31, | ||||||||||
2013 | 2012 | |||||||||
(in thousands) | ||||||||||
Accrued Restructuring Charges, beginning of period | $ | 1,410 | $ | 1,490 | ||||||
Provision | — | 5,877 | -1 | |||||||
Payments | (735 | ) | (4,971 | ) | ||||||
Non-Cash Settlement | — | (986 | ) | -2 | ||||||
Accrued Restructuring Charges, end of period | $ | 675 | $ | 1,410 | ||||||
Explanatory Notes: | ||||||||||
_________________________________ | ||||||||||
-1 | During the year ended December 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, severance and termination benefits of $2.0 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 year ended December 31, 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) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of future minimum commitments under the lease | ' | |||
The future minimum commitments under the Company's lease agreement are as follows: | ||||
(In thousands) | ||||
2014 | 1,607 | |||
2015 | 1,607 | |||
2016 | 1,607 | |||
2017 | 1,607 | |||
2018 | 1,680 | |||
Thereafter | 7,010 | |||
$ | 15,118 | |||
IMMATERIAL_RESTATEMENT_OF_PRIO1
IMMATERIAL RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Statement Restatement | ' | ||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | ' | ||||||||||||
The impact of the errors on the Net Income (loss) attributable to CIFC Corp. for the years ended December 31, 2012, 2011, and 2010 are as follows: | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
(in thousands) | |||||||||||||
Net income (loss), as previously reported | $ | (240,328 | ) | $ | (343,754 | ) | $ | (14,290 | ) | ||||
Net income (loss) attributable to CIFC Corp., as previously reported | $ | (9,616 | ) | $ | (32,592 | ) | $ | 85,921 | |||||
Prior period adjustment - income tax benefit (expense) | $ | 917 | $ | (274 | ) | $ | 2,726 | ||||||
Net income (loss), as adjusted | $ | (239,411 | ) | $ | (344,028 | ) | $ | (11,564 | ) | ||||
Net income (loss) attributable to CIFC Corp., as adjusted | $ | (8,699 | ) | $ | (32,866 | ) | $ | 88,647 | |||||
Earnings per share-basic, as previously reported | $ | (0.47 | ) | $ | (1.82 | ) | $ | 9.16 | |||||
Earnings per share-basic, as adjusted | $ | (0.43 | ) | $ | (1.84 | ) | $ | 9.45 | |||||
Earnings per share-diluted, as previously reported | $ | (0.47 | ) | $ | (1.82 | ) | $ | 7.81 | |||||
Earnings per share-diluted, as adjusted | $ | (0.43 | ) | $ | (1.84 | ) | $ | 8.05 | |||||
Other Statement Restatement | ' | ||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | ' | ||||||||||||
The following changes have been made to the Company's Consolidated Balance Sheets as of December 31, 2012 (in thousands): | |||||||||||||
As Previously Reported | Restated | ||||||||||||
Consolidated Balance Sheet as of December 31, 2012 | |||||||||||||
Deferred tax asset, net | $ | 50,545 | $ | 53,914 | |||||||||
Total Assets | $ | 10,504,911 | $ | 10,508,280 | |||||||||
Retained earnings (deficit) | $ | (833,442 | ) | $ | (830,073 | ) | |||||||
Total CIFC Corp. Stockholders' Equity | $ | 121,319 | $ | 124,688 | |||||||||
Total Equity | $ | 199,348 | $ | 202,717 | |||||||||
Total Liabilities and Equity | $ | 10,504,911 | $ | 10,508,280 | |||||||||
ORGANIZATION_AND_BUSINESS_Orga
ORGANIZATION AND BUSINESS Organization and Business (Details) | Dec. 31, 2012 | Apr. 13, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 18, 2013 | Dec. 31, 2012 | Dec. 18, 2013 | Dec. 18, 2013 | Dec. 31, 2013 |
DFR Holdings LLC | Minimum | DFR Holdings LLC | DFR Holdings LLC | DFR Holdings LLC | Warrant | Common Stock [Member] | Common Stock [Member] | |||
CLOs | DFR Holdings LLC | DFR Holdings LLC | Minimum | |||||||
DFR Holdings LLC | ||||||||||
DFR Holdings LLC Transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares owned (shares) | ' | ' | ' | ' | 14,700,000 | 9,090,909 | 4,600,000 | ' | 1,000,000 | ' |
Class of Warrant or Right, Outstanding | 225,000 | 250,000 | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Ownership percentage (percent) | ' | ' | 73.00% | ' | ' | ' | ' | ' | ' | 5.00% |
CLOs Managed by CIFC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of CLOs managed | ' | ' | ' | '25 | ' | ' | ' | ' | ' | ' |
BASIS_OF_PRESENTATION_AND_PRIN1
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
item | |||||
Number of CLOs, CDOs, Other loan-based products and warehouses | ' | ' | ' | ||
Number of CLOs consolidated | 26 | 23 | ' | ||
Number of CDOs consolidated | ' | 1 | ' | ||
Number of Collateralized Loan Obligations Not Consolidated | 5 | 9 | ' | ||
Number of CLOs and CDOs that were not consolidated | 8 | 12 | ' | ||
Number of Other Investment Products Not Consolidated | 1 | 1 | ' | ||
DFR MM CLO | ' | ' | ' | ||
Proceeds from the sale of the DFR MM CLO | ' | $36,500,000 | ' | ||
Investments in Funds | ' | ' | ' | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 307,753,000 | 202,717,000 | [1] | 425,768,000 | |
Tactical Income Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Equity Method Investments | 10,000,000 | ' | ' | ||
Co-Investment Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Equity Method Investments | 15,300,000 | ' | ' | ||
Warehouses | ' | ' | ' | ||
Number of CLOs, CDOs, Other loan-based products and warehouses | ' | ' | ' | ||
Warehouses consolidated | 6 | 2 | ' | ||
Warehouses deconsolidated | 4 | 1 | ' | ||
Consolidated Warehouse Investments Held | 2 | 1 | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 42,279,000 | [2] | 26,723,000 | [2] | ' |
DFR MM CLO | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Proceeds from the sale of the DFR MM CLO | ' | 36,500,000 | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | 69,000,000 | ' | ||
Proceeds from Issuance of Subordinated Long-term Debt | ' | 52,200,000 | ' | ||
Proceeds from Interest Received | ' | 4,800,000 | ' | ||
Senior Secured Loan Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Equity Method Investments | 10,800,000 | ' | ' | ||
Investments | Co-Investment Fund | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 5,200,000 | ' | ' | ||
Investments | Variable Interest Entity, Not Primary Beneficiary | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | 5,100,000 | ' | ||
Accounts Receivable | Variable Interest Entity, Not Primary Beneficiary | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 200,000 | 600,000 | ' | ||
Subordinated notes of Consolidated CLOs | DFR MM CLO | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | 50,000,000 | ' | ||
Debt | DFR MM CLO | ' | ' | ' | ||
DFR MM CLO | ' | ' | ' | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | 19,000,000 | ' | ||
Noncontrolling Interest | Co-Investment Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $5,107,000 | ' | ' | ||
CLOs | Co-Investment Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Number of investments | 1 | ' | ' | ||
Warehouses | Co-Investment Fund | ' | ' | ' | ||
Investments in Funds | ' | ' | ' | ||
Number of investments | 2 | ' | ' | ||
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | ||||
[2] | Maximum exposure to loss is generally limited to the Company's investment in the entity. As of DecemberB 31, 2013 and 2012, the Company consolidated two and one warehouses, respectively. Amounts are eliminated in consolidation. As of DecemberB 31, 2013, the Company invested $32.5 million directly in its warehouses and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $9.7 million in the Warehouses. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (DETAILS) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
Net Results of Consolidated Entities Attributable to CIFC Corp. | ' | ' | ' | ' | ||
Investments | $16,883 | $5,058 | ' | ' | ||
Net results of Consolidated Entities | 169,869 | -168,380 | ' | ' | ||
Net income (loss) attributable to CIFC Corp. | 23,371 | -8,699 | [1] | -32,866 | 88,647 | |
Consolidated Entities | ' | ' | ' | ' | ||
Net Results of Consolidated Entities Attributable to CIFC Corp. | ' | ' | ' | ' | ||
Investments | 10,420,993 | [2] | 9,066,779 | [2] | ' | ' |
Net results of Consolidated Entities | 169,869 | [3] | -168,380 | [3] | ' | ' |
Net Income (Loss) Attributable to Noncontrolling Interest | 73,464 | -230,712 | ' | ' | ||
Characteristics of Net Results - Investment Gain Loss on Investments | 14,088 | [4] | 10,675 | [4] | ' | ' |
Net income (loss) attributable to CIFC Corp. | 96,405 | 62,332 | ' | ' | ||
Characteristics of Net Results - Investment Advisory Fees | 82,317 | 51,657 | ' | ' | ||
Consolidated CLOs | ' | ' | ' | ' | ||
Net Results of Consolidated Entities Attributable to CIFC Corp. | ' | ' | ' | ' | ||
Investments | 92,100 | 74,200 | ' | ' | ||
Net results of Consolidated Entities | $160,971 | ($171,967) | ' | ' | ||
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||||
[2] | Consolidated Entities represents the assets and liabilities of the Consolidated VIEs for both periods presented. | |||||
[3] | See Note 3 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp. | |||||
[4] | Includes equity distributions earned from residual interests in CLOs |
STRATEGIC_TRANSACTIONS_Details
STRATEGIC TRANSACTIONS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 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 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 24, 2012 | ||||||
General Electric Capital Corporation | Navigator CLOs | Common Stock [Member] | Warrant | Investment management contracts | Referral Agreement | GE Capital Equity Investments, Inc | GECEII | GECEII | GE Capital Debt Advisors LLC | Navigator 2006 CLO | Navigator 2006 CLO | Navigator 2006 CLO | Navigator CLOs | Non-Recourse Debt | Non-Recourse Debt | Non-Recourse Debt | |||||||||
clo | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | Common Stock [Member] | General Electric Capital Corporation | Warrant | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | Navigator 2006 CLO | Navigator 2006 CLO | Navigator 2006 CLO | ||||||||||
extension | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | General Electric Capital Corporation | ||||||||||||||||||||
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 | 67,924,000 | 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 | 23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | |||||
Consolidated assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 295,600,000 | 328,000,000 | 318,300,000 | ' | ' | ' | ' | |||||
Consolidated liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 290,100,000 | 325,800,000 | 313,200,000 | |||||
Strategic transactions expenses | 0 | 657,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Investment advisory fees | $8,400,000 | $10,696,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,700,000 | ' | ' | ' | |||||
[1] | GE Capital shares and warrants were purchased by DFR Holdings during 2013 (see DFR Holdings Stock Purchase above). | ||||||||||||||||||||||||
[2] | Represents the closing price of the Company's common stock on the Closing Date. | ||||||||||||||||||||||||
[3] | During the third quarter of 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] | Total amount is tax deductible. | ||||||||||||||||||||||||
[5] | 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] | 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] | 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_Details
CONSOLIDATED VIEs (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Consolidated Variable Interest Entities | ' | ' | ||
Net results of Consolidated Entities | $169,869,000 | ($168,380,000) | ||
Consolidated Warehouse Investments Held During | 6 | 2 | ||
Consolidated CLOs excluding Co-Investment Fund | Investment and beneficial interests in CLOs | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Maximum exposure to loss | 44,300,000 | ' | ||
Warehouses | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Consolidated assets | 403,251,000 | 334,420,000 | ||
Consolidated liabilities | 357,725,000 | 307,025,000 | ||
Maximum exposure to loss | 42,279,000 | [1] | 26,723,000 | [1] |
Short-term Investments | 32,500,000 | ' | ||
Consolidated Warehouse Investments Held | 2 | 1 | ||
Net results of Consolidated Entities | 8,898,000 | [2] | 3,756,000 | [2] |
Consolidated CLOs | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Consolidated assets | 10,963,096,000 | 9,933,495,000 | ||
Consolidated liabilities | 10,756,652,000 | 9,806,010,000 | ||
Maximum exposure to loss | 53,326,000 | 50,128,000 | ||
Net results of Consolidated Entities | 160,971,000 | -171,967,000 | ||
Consolidated CLOs | Investment and beneficial interests in CLOs | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Maximum exposure to loss | 49,490,000 | [3] | 47,454,000 | [3] |
Consolidated CLOs | Investment advisory fee receivables | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Maximum exposure to loss | 3,836,000 | 2,674,000 | ||
DFR MM CLO | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Maximum exposure to loss | ' | 69,000,000 | ||
Net results of Consolidated Entities | 0 | [4] | -169,000 | [4] |
Co-Investment Fund | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Short-term Investments | 9,700,000 | ' | ||
Co-Investment Fund | Investment and beneficial interests in CLOs | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Maximum exposure to loss | $5,200,000 | ' | ||
[1] | Maximum exposure to loss is generally limited to the Company's investment in the entity. As of DecemberB 31, 2013 and 2012, the Company consolidated two and one warehouses, respectively. Amounts are eliminated in consolidation. As of DecemberB 31, 2013, the Company invested $32.5 million directly in its warehouses and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $9.7 million in the Warehouses. | |||
[2] | During the years ended DecemberB 31, 2013 and 2012, the Company's results from warehouses included six and two warehouse investments, respectively. | |||
[3] | Amounts are eliminated in consolidation. As of DecemberB 31, 2013, the Company invested $44.3 million directly in the residual interests of its Consolidated CLOs and through its ownership of the Co-Investment Fund (see Note 2), the Company invested an additional $5.2 million in the residual interests of its Consolidated CLOs. | |||
[4] | The Company's investment in and rights to manage DFR MM CLO were sold during February 2012 (see Note 2). |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |||||||
In Thousands, unless otherwise specified | Level 2 | Level 2 | Level 3 | Level 3 | Estimated Fair Value | Estimated Fair Value | Consolidated Entities | Consolidated Entities | Consolidated Entities | Consolidated Entities | Consolidated Entities | Consolidated Entities | Consolidated Entities | Consolidated Entities | Loans | |||||||||
Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Level 2 | Level 2 | Level 3 | Level 3 | Estimated Fair Value | Estimated Fair Value | Level 3 | ||||||||||||
Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | ||||||||||||||||||
Assets, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Investments and Derivative Assets | ' | ' | $10,827 | $5,058 | ' | ' | $10,827 | $5,058 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Loans Receivable, Fair Value Disclosure | ' | ' | 5,546 | ' | 510 | [1] | ' | 6,056 | ' | ' | ' | 8,604,967 | 7,740,574 | 1,706,290 | 1,177,058 | 10,311,257 | 8,917,632 | ' | ||||||
Financial Instruments, Owned, Corporate Debt, at Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,220 | 67,438 | 16,220 | 67,438 | ' | |||||||
Investments in loans, corporate bonds and other products | ' | ' | 16,373 | 5,058 | 510 | ' | 16,883 | 5,058 | ' | ' | 8,604,967 | 7,740,574 | 1,816,026 | 1,326,205 | 10,420,993 | 9,066,779 | ' | |||||||
Other Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 93,516 | 81,709 | 93,516 | 81,709 | ' | |||||||
Assets, Fair Value Disclosure | ' | ' | 8,621,340 | 7,745,632 | 1,816,536 | 1,326,205 | 10,437,876 | 9,071,837 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Liabilities, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Contingent liabilities at fair value | 16,961 | 33,783 | ' | ' | 16,961 | 33,783 | 16,961 | 33,783 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Long-term debt at fair value | ' | ' | ' | ' | ' | ' | ' | ' | 10,484,975 | [2] | 9,596,434 | [2] | ' | ' | 10,484,975 | [3] | 9,596,434 | [3] | 10,484,975 | [3] | 9,596,434 | [3] | ' | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | ' | ' | ' | ' | $10,501,936 | $9,630,217 | $10,501,936 | $9,630,217 | ' | ' | ' | ' | $10,484,975 | $9,596,434 | $10,484,975 | $9,596,434 | ' | |||||||
Number of Level 3 Loans Purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one | |||||||
[1] | During the year ended DecemberB 31, 2013, one loan was purchased and classified as Level 3. | |||||||||||||||||||||||
[2] | Consolidated Entities represents the assets and liabilities of the Consolidated VIEs for both periods presented. | |||||||||||||||||||||||
[3] | The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues. |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (Level 3, Recurring basis, Consolidated Variable Interest Entities, USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Loans | ' | ' | ||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ||
Estimated fair value, beginning of period | $1,177,058 | $19,729 | ||
Transfers into Level 3 | 177,504 | [1] | 1,167,456 | [1] |
Transfers out of Level 3 | -192,767 | [2] | -5,933 | [2] |
Net realized/unrealized gains (losses) | 6,746 | 1,058 | ||
Purchases | 1,344,196 | 10,886 | ||
Sales | -397,281 | -1,430 | ||
Settlements | -409,166 | -15,368 | ||
Estimated fair value, end of period | 1,706,290 | 1,177,058 | ||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 7,493 | 14,748 | ||
Corporate Bonds | ' | ' | ||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ||
Estimated fair value, beginning of period | 67,438 | 154,096 | ||
Transfers out due to deconsolidation | ' | -5,708 | [3] | |
Transfers between classes | ' | -33,290 | [4] | |
Net realized/unrealized gains (losses) | 686 | 7,027 | ||
Purchases | 16,954 | ' | ||
Sales | -68,361 | -53,523 | ||
Settlements | -497 | -1,164 | ||
Estimated fair value, end of period | 16,220 | 67,438 | ||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 290 | 5,390 | ||
Other | ' | ' | ||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ||
Estimated fair value, beginning of period | 81,709 | 53,087 | ||
Transfers between classes | ' | 33,290 | [4] | |
Net realized/unrealized gains (losses) | 13,041 | 10,295 | ||
Purchases | 19,471 | 29,175 | ||
Sales | -14,128 | -24,479 | ||
Settlements | -6,577 | -20,522 | ||
Estimated fair value, end of period | 93,516 | 81,709 | ||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | 10,214 | 11,204 | ||
Investment and Derivative Assets | ' | ' | ||
Changes in financial asset measured at fair value classified within Level 3 | ' | ' | ||
Estimated fair value, beginning of period | 1,326,205 | 226,912 | ||
Transfers into Level 3 | 177,504 | [1] | 1,167,456 | [1] |
Transfers out of Level 3 | -192,767 | [2] | -5,933 | [2] |
Transfers out due to deconsolidation | ' | -5,708 | [3] | |
Net realized/unrealized gains (losses) | 20,473 | 18,380 | ||
Purchases | 1,380,621 | 40,061 | ||
Sales | -479,770 | -79,432 | ||
Settlements | -416,240 | -37,054 | ||
Estimated fair value, end of period | 1,816,026 | 1,326,205 | ||
Change in unrealized gains (losses) for the period for the assets held as of the end of the period | $17,997 | $31,342 | ||
[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 quarterly by the same third party pricing service using composite prices determined using two or more quotes. Prior to DecemberB 31, 2012, the Company categorized all loans valued by a third-party pricing service or the Company's comparable companies pricing model as Level 2. Therefore, transfers in represented loans valued by an internally developed model utilizing unobservable market inputs. | |||
[2] | 2013 transfers out represent loans marked quarterly 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 or broker quotes prior to DecemberB 31, 2012, 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 DecemberB 31, 2012. |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Estimated fair value, beginning of period | $9,630,217 | $7,598,847 | ||
Transfers Into Level 3 | 10,438 | [1] | 3,716 | [1] |
Transfers out of Level 3 | ' | -9,050 | ||
Transfers in Due to consolidation or acquisition | ' | 313,093 | ||
Net realized/unrealized (gains) losses | 191,989 | 783,599 | ||
Purchases | 30,906 | 62,946 | ||
Sales | -10,000 | -5,000 | ||
Issuances | 3,060,413 | 1,817,248 | ||
Settlements | -2,412,027 | -935,182 | ||
Estimated fair value, end of period | 10,501,936 | 9,630,217 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | 99,589 | -547,228 | ||
Contingent Liabilities at Fair Value | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Estimated fair value, beginning of period | 33,783 | 39,279 | ||
Net realized/unrealized (gains) losses | -1,644 | 11,452 | ||
Settlements | -15,178 | -16,948 | ||
Estimated fair value, end of period | 16,961 | 33,783 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | 2,118 | -13,499 | ||
Long-term Debt | Consolidated Entities | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Estimated fair value, beginning of period | 9,596,434 | 7,559,568 | ||
Transfers Into Level 3 | 10,438 | [1] | 3,716 | [1] |
Transfers out of Level 3 | ' | -9,050 | ||
Transfers in Due to consolidation or acquisition | ' | 313,093 | ||
Net realized/unrealized (gains) losses | 193,633 | 772,147 | ||
Purchases | 30,906 | 62,946 | ||
Sales | -10,000 | -5,000 | ||
Issuances | 3,060,413 | 1,817,248 | ||
Settlements | -2,396,849 | -918,234 | ||
Estimated fair value, end of period | 10,484,975 | 9,596,434 | ||
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period | 97,471 | -533,729 | ||
Loans | Recurring basis | Fair Value, Inputs, Level 3 [Member] | Consolidated Entities | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Transfers in Due to consolidation or acquisition | ' | 660 | ||
Other Investments Excluding Derivatives [Member] | Recurring basis | Fair Value, Inputs, Level 3 [Member] | Consolidated Entities | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Transfers in Due to consolidation or acquisition | ' | 863 | ||
Investment and Derivative Assets | Recurring basis | Fair Value, Inputs, Level 3 [Member] | Consolidated Entities | ' | ' | ||
Level 3 Financial Liabilities at Fair Value | ' | ' | ||
Transfers in Due to consolidation or acquisition | ' | $1,523 | ||
[1] | The transfers into Level 3 represent the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation. |
FAIR_VALUE_OF_FINANCIAL_INSTRU5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) (Projected cash flow model, Recurring basis, Level 3) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Contingent Liabilities at Fair Value | Minimum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | 5.10% | 6.00% | ||
Contingent Liabilities at Fair Value | Maximum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | 15.00% | 15.00% | ||
Debt tranches of Consolidated CLOs | Minimum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | 0.60% | 1.00% | ||
Debt tranches of Consolidated CLOs | Maximum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | 7.10% | 9.00% | ||
Contingent liabilities and the long-term debt of the Consolidated CLOs | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Variable rate basis | 'LIBOR | ' | ||
Contingent liabilities and the long-term debt of the Consolidated CLOs | Minimum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Default rate (as a percent) | 1.00% | [1] | 1.00% | [1] |
Recovery rate (as a percent) | 70.00% | [1] | 70.00% | [1] |
Pre-payment rate (as a percent) | 25.00% | [1] | 25.00% | [1] |
Reinvestment spread over LIBOR (as a percent) | 3.00% | 3.00% | ||
Reinvestment price | 99.50% | 99.50% | ||
Contingent liabilities and the long-term debt of the Consolidated CLOs | Maximum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Default rate (as a percent) | 2.00% | [1] | 2.00% | [1] |
Recovery rate (as a percent) | 75.00% | [1] | 75.00% | [1] |
Pre-payment rate (as a percent) | 40.00% | [1] | 30.00% | [1] |
Reinvestment spread over LIBOR (as a percent) | 3.80% | 4.00% | ||
Reinvestment price | 100.00% | 100.00% | ||
Subordinated notes of Consolidated CLOs | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | 12.00% | ' | ||
Subordinated notes of Consolidated CLOs | Minimum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | ' | 12.00% | ||
Subordinated notes of Consolidated CLOs | Maximum | ' | ' | ||
Quantitative Information about Level 3 Assets & Liabilities | ' | ' | ||
Discount rate (as a percent) | ' | 15.00% | ||
[1] | Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rate |
FAIR_VALUE_OF_FINANCIAL_INSTRU6
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
Long-term debt: | ' | ' | ||
Long-term debt | $139,164,000 | $138,233,000 | ||
Consolidated VIEs | ' | ' | ||
Carrying Value and Estimated Fair Value of Financial Assets and Liabilities | ' | ' | ||
Investments, Fair Value Disclosure | 91,800,000 | 74,200,000 | ||
Consolidated CLOs | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | 10,336,453,000 | [1] | 9,325,982,000 | [1] |
Estimated Fair Value | ' | ' | ||
Long-term debt: | ' | ' | ||
Convertible Notes | 32,149,000 | [2] | 33,058,000 | [2] |
Junior Subordinated Notes | 63,535,000 | [3] | 47,752,000 | [3] |
Convertible Debt | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | 19,164,000 | [2],[4] | 18,233,000 | [2],[4] |
Subordinated Debt Obligations | ' | ' | ||
Long-term debt: | ' | ' | ||
Long-term debt | $120,000,000 | [3] | $120,000,000 | [3] |
[1] | 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 DecemberB 31, 2013 and 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.9 billion and $9.8 billion, respectively. | |||
[2] | 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] | 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] | As of DecemberB 31, 2013 and 2012, Convertible Notes were recorded net of a discount of $5.8 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. |
NET_RESULTS_OF_CONSOLIDATED_VI2
NET RESULTS OF CONSOLIDATED VIEs (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Consolidated Variable Interest Entities | ' | ' | ||
Net investment and interest income | $333 | $226 | ||
Gain (Loss) on Investments | 1,822 | 2,308 | ||
Gain (Loss) on Liabilities at Fair Value | 1,644 | -11,452 | ||
Net results of Consolidated Variable Interest Entities | 169,869 | -168,380 | ||
Consolidated Entities | ' | ' | ||
Consolidated Variable Interest Entities | ' | ' | ||
Investment and interest income | 474,148 | 402,168 | ||
Interest expense | -127,059 | -96,675 | ||
Net investment and interest income | 347,089 | 305,493 | ||
Gain (Loss) on Investments | 56,321 | 321,321 | ||
Gain (Loss) on Liabilities at Fair Value | -193,633 | -772,147 | ||
Net Gain (Loss) on other investments and derivatives | -51 | 861 | ||
Net gain (loss) from activities of Consolidated Variable Interest Entities | 209,726 | -144,472 | ||
Expenses of Consolidated Variable Interest Entities | -39,857 | -23,908 | ||
Net results of Consolidated Variable Interest Entities | $169,869 | [1] | ($168,380) | [1] |
[1] | See Note 3 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp. |
EQUIPMENT_AND_IMPROVEMENTS_Equ
EQUIPMENT AND IMPROVEMENTS Equipment (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Gross | $5,463,000 | $4,549,000 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -1,202,000 | [1] | -570,000 | [1] |
Property, Plant and Equipment, Net | 4,261,000 | 3,979,000 | ||
Depreciation | 700,000 | 500,000 | ||
Property, Plant and Equipment, Additions | 1,000,000 | 4,200,000 | ||
Equipment and Computer Software | ' | ' | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Gross | 2,410,000 | 1,465,000 | ||
Equipment and Computer Software | Minimum | ' | ' | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Useful Life | '3 years | ' | ||
Equipment and Computer Software | Maximum | ' | ' | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Useful Life | '5 years | ' | ||
Leasehold Improvements | ' | ' | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Useful Life | '11 years | ' | ||
Property, Plant and Equipment, Gross | 2,409,000 | 2,461,000 | ||
Furniture and Fixtures | ' | ' | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ' | ' | ||
Property, Plant and Equipment, Useful Life | '7 years | ' | ||
Property, Plant and Equipment, Gross | $644,000 | $623,000 | ||
[1] | Depreciation expense related to equipment and improvements totaled $0.7 million and $0.5 million for the years ended DecemberB 31, 2013 and 2012, respectively. |
INTANGIBLE_ASSETS_AND_GOODWILL2
INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Jan. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
Collateralized Loan Obligations | Collateralized Debt Obligations | 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 | Gillespie | Gillespie | ||||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Weighted-Average Remaining Estimated Useful Life (In years) | ' | ' | ' | ' | ' | ' | '4 years 0 months 0 days | '5 years 4 months 24 days | ' | ' | ' | '5 years 10 months | '6 years 9 months 18 days | '4 years 2 months 15 days | '4 years 9 months 18 days | '7 years 3 months | '8 years 3 months 18 days | |||||||||||
Gross Carrying Amount | $79,536,000 | [1] | $82,642,000 | [1] | ' | ' | ' | ' | $72,941,000 | [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 | 54,313,000 | [2] | 39,506,000 | [2] | ' | ' | ' | ' | 52,661,000 | [2] | 38,727,000 | [2] | ' | ' | ' | 572,000 | [2] | 95,000 | [2] | 736,000 | [2] | 465,000 | [2] | 344,000 | [2] | 219,000 | [2] | |
Net Carrying Amount | 25,223,000 | 43,136,000 | ' | ' | ' | ' | 20,280,000 | 37,320,000 | ' | ' | ' | 3,238,000 | 3,715,000 | 799,000 | 1,070,000 | 906,000 | 1,031,000 | |||||||||||
Amortization of intangible assets | 14,800,000 | 17,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Expected amortization expense of the existing intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2014 | 10,149,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2015 | 6,796,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2016 | 4,010,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2017 | 2,172,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
2018 | 1,527,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Thereafter | 569,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Expected amortization expense | 25,223,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
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 | 1,386,000 | 5,772,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Impairment of intangible assets | 3,106,000 | 1,771,000 | ' | ' | 1,000,000 | 2,100,000 | ' | ' | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill, Gross | 174,126,000 | 166,050,000 | 174,126,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill, Impaired, Accumulated Impairment Loss | -98,126,000 | -98,126,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill | 76,000,000 | 76,000,000 | ' | 67,924,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill, Acquired During Period | 0 | 8,076,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill, Impaired, Accumulated Impairment Loss | -98,126,000 | -98,126,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Goodwill | $76,000,000 | $76,000,000 | ' | $67,924,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
[1] | Gross carrying amounts have been adjusted for impaired assets as of the date presented. | |||||||||||||||||||||||||||
[2] | During the years ended DecemberB 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $14.8 million and $17.4 million, respectively. |
DEFERRED_PURCHASE_PAYMENTS_AND2
DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 13, 2011 | Dec. 31, 2013 | Mar. 31, 2010 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
CIFC Parent Holdings LLC | CIFC Parent Holdings LLC | CIFC Parent Holdings LLC | CIFC Parent Holdings LLC | DFR Holdings LLC | DFR Holdings LLC | CLOs Managed by CIFCAM | Cypress Tree Investment Management LLC | Cypress Tree Investment Management LLC | Cypress Tree Investment Management LLC | Estimated Fair Value | Estimated Fair Value | |||
item | Recurring basis | Recurring basis | ||||||||||||
Deferred Purchase Payments and Contingent Liabilities [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual Obligation | $1,179,000 | $4,778,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent liabilities | 16,961,000 | 33,783,000 | ' | 15,349,000 | ' | ' | ' | ' | 29,152,000 | ' | 1,612,000 | 4,631,000 | 16,961,000 | 33,783,000 |
Business Acquisition Cost of Acquired Entity Cash Payable | ' | ' | ' | ' | ' | 7,500,000 | -1,500,000 | 7,500,000 | ' | ' | ' | ' | ' | ' |
Business Acquisition Cost of Acquired Entity Cash Payable Number of Equal Installments | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition Cost of Acquired Entity Fixed Deferred Payments Per Installment | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Purchase Payments during year | 4,000,000 | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (Loss) on Liabilities at Fair Value | 1,644,000 | -11,452,000 | ' | 1,269,000 | -12,404,000 | ' | ' | ' | ' | ' | 375,000 | 952,000 | ' | ' |
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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments On Contingent Liabilities - 100% fee sharing | ' | ' | ' | 12,500,000 | 6,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments on Contingent Liabilities - 50% fee sharing | ' | ' | ' | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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% | 39.00% | ' | ' | ' |
Deferred Purchase Payments and Payments on Contingent Liabilities | 19,179,000 | 20,948,000 | ' | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | 10,800,000 | ' | ' |
Business Acquisition, Contingent Consideration One Time Earn Out Payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $300,000 | $6,200,000 | ' | ' |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 09, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||||||||||||
Warehouses | Warehouses | Consolidated CLOs | Consolidated CLOs | Consolidated Variable Interest Entities | Consolidated Variable Interest Entities | Recourse Debt | Recourse Debt | March Junior Subordinated Notes | March Junior Subordinated Notes | March Junior Subordinated Notes | March Junior Subordinated Notes | March Junior Subordinated Notes | March Junior Subordinated Notes | October Junior Subordinated Notes | October Junior Subordinated Notes | Subordinated Debt Obligations | Subordinated Debt Obligations | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Subordinated Debt [Member] | Subordinated notes of Consolidated CLOs | Subordinated notes of Consolidated CLOs | Class D Notes | Class D Notes | Revolving credit facility | Revolving credit facility | Common Stock | LIBOR duration [Member] | LIBOR duration [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | Maximum | Before June 9, 2014 [Member] | After June 9, 2014 [Member] | |||||||||||||||
Through April 30, 2015 | Through April 30, 2015 | From April 30, 2015 until maturity on October 30, 2035 | From April 30, 2015 until maturity on October 30, 2035 | Consolidated CLOs | Consolidated CLOs | Consolidated CLOs | Consolidated CLOs | March Junior Subordinated Notes | March Junior Subordinated Notes | Convertible Debt | Convertible Debt | Convertible Debt | ||||||||||||||||||||||||||||||||||||||
From April 30, 2015 until maturity on October 30, 2035 | From April 30, 2015 until maturity on October 30, 2035 | |||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Carrying Value | $139,164,000 | $138,233,000 | $148,522,000 | [1] | $270,452,000 | [1] | $10,336,453,000 | [2] | $9,325,982,000 | [2] | ' | ' | $139,164,000 | $138,233,000 | $95,000,000 | [3] | $95,000,000 | [3] | ' | ' | ' | ' | $25,000,000 | [4] | $25,000,000 | [4] | $120,000,000 | [5] | $120,000,000 | [5] | $19,164,000 | [6],[7] | ' | $18,233,000 | [6],[7] | $25,000,000 | ' | ' | $10,624,139,000 | $9,734,667,000 | ' | ' | ' | ' | ' | $10,484,975,000 | $9,596,434,000 | ' | ' | ' |
Current Weighted Average Borrowing Rate (as a percent) | ' | ' | 1.30% | [1] | 2.12% | [1] | 1.43% | [2] | 1.16% | [2] | 1.43% | 1.19% | ' | ' | 1.00% | [3] | 1.00% | [3] | ' | ' | ' | ' | 3.73% | [4] | 3.81% | [4] | 1.57% | 1.59% | 10.00% | [7] | ' | 9.00% | [7] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Weighted-Average Remaining Maturity | ' | ' | ' | ' | '8 years 3 months 0 days | [2] | '8 years 1 month 0 days | [2] | '8 years 2 months 0 days | '7 years 10 months 24 days | ' | ' | '21 years 10 months 0 days | [3] | '22 years 9 months 18 days | [3] | ' | ' | ' | ' | '21 years 10 months 0 days | [4] | '22 years 9 months 18 days | [4] | '21 years 10 months 0 days | '22 years 9 months 18 days | '3 years 11 months 0 days | [7] | ' | '4 years 10 months 24 days | [7] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Principal outstanding amount | ' | ' | 67,500,000 | 25,600,000 | 10,900,000,000 | 9,800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Annual rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Annual interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | 'LIBOR | 'LIBOR | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 month | '3 month | ' | ' | ' | ' | ' | ||||||||||||
Spread over annual interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.58% | 2.58% | 3.50% | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,800,000 | ' | 6,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Stated interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Percentage of Interest Paid-in-Kind | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ||||||||||||
Effective rate of interest (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.14% | ' | 18.14% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Carrying value of the assets for which debt holders have a recourse for repayment | ' | ' | 403,251,000 | 334,420,000 | 10,963,096,000 | 9,933,495,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Debt issued | ' | ' | ' | ' | 2,600,000,000 | 1,600,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,600,000 | 57,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Outstanding debt paid down | ' | ' | ' | ' | $1,500,000,000 | $690,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $256,200,000 | $228,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Consolidated CLOs | 26 | 23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Debt Instrument, Convertible, Number of Equity Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,132,231 | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Purchase Price Percentage Upon Change of Control | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 50.00% | ||||||||||||
Company Redemption Conversion Price Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.05 | ' | ' | ' | ' | ' | ' | $6.05 | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
[1] | 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 not held by the Company, which have a par value of $67.5 million and $25.6 million as of DecemberB 31, 2013 and 2012, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. | |||||||||||||||||||||||||||||||||||||||||||||||||
[2] | 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 DecemberB 31, 2013 and 2012, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.9 billion and $9.8 billion, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||
[3] | MarchB Junior Subordinated Notes bear interest at an annual rate of 1% through AprilB 30, 2015 and 3 month LIBOR plus 2.58% thereafter until maturity, OctoberB 30, 2035. | |||||||||||||||||||||||||||||||||||||||||||||||||
[4] | OctoberB Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on OctoberB 30, 2035. | |||||||||||||||||||||||||||||||||||||||||||||||||
[5] | 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] | 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. | |||||||||||||||||||||||||||||||||||||||||||||||||
[7] | As of DecemberB 31, 2013 and 2012, Convertible Notes were recorded net of a discount of $5.8 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. |
EQUITY_Details
EQUITY (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 04, 2014 | |
CIFC Parent Profits Interest Awards | CIFC Parent Profits Interest Awards | Common Stock | Common Stock | Stock options | Stock options | Common Stock | Share Repurchase Program | Share Repurchase Program | Share Repurchase Program | Share Repurchase Program | Dividend Declared | |||||
Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Share-based Compensation, Gross | ' | ' | ' | ' | ' | ' | 20,352 | 20,922 | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | ' | ' | ' | ' | $2,800,000 | $2,100,000 | $200,000 | $200,000 | $4,500,000 | $2,100,000 | ' | ' | ' | ' | ' | ' |
Conversion shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,132,231 | ' | ' | ' | ' | ' |
Initial conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.05 | ' | ' | ' | ' | ' |
Dividends, Cash | 0.1 | 0.1 | -4,156,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.1 |
Share Repurchase Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' |
Treasury Stock, Shares, Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 34,995 | ' | ' |
Treasury Stock, Value, Acquired, Cost Method | ' | ' | 250,000 | 4,381,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 251,000 | 4,363,000 | ' |
Shares repurchased, average price per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.16 | $6.60 | ' |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,367,000 | ' | ' | ' | ' |
Stock Repurchased and Retired During Period, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -565,627 | ' |
Stock Repurchased During Period, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 661,076 | ' |
Treasury Stock, Retired, Cost Method, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,717,000 | ' |
EQUITY_Details_2
EQUITY (Details 2) (Stock options, USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 4,181,929 | 4,181,929 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 222,789 | 222,789 | ' |
Allocated Share-based Compensation Expense | ' | $4,500 | $2,100 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 4,200 | 4,200 | ' |
Weighted average vesting period | '1 year 7 months | ' | ' |
Contractual term | ' | '10 years | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | '4 years | ' |
Grant Date-Stock Based Awards - Weighted Average Assumptions | ' | ' | ' |
Expected volatility | ' | 48.75% | 50.15% |
Risk-free interest rate | ' | 1.10% | 1.20% |
Expected life (years) | ' | '6 years 1 month 11 days | '6 years 1 month 6 days |
Acceleration of Stock Option Vesting - Vice Chairman [Member] | ' | ' | ' |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | ' | $1,800 | ' |
EQUITY_Details_3
EQUITY (Details 3) (Stock options, USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Stock options | ' | ' | ||
Stock Options Rollforward | ' | ' | ||
Outstanding at the beginning of the period (in shares) | 3,594,813 | 1,550,000 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $6.05 | $7.20 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 430,000 | 2,779,501 | [1] | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $8.65 | $5.48 | [1] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, gross | -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 | '5 years 9 months 8 days | '9 years 0 months 26 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $5,979 | $7,007 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | -45,000 | [2] | -734,688 | [2] |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $8.65 | [2] | $6.34 | [2] |
Outstanding at the end of the period (in shares) | 3,879,813 | 3,594,813 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $6.33 | $6.05 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 2,212,860 | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $6.19 | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | '3 years 8 months 9 days | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 3,528 | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 3,713,117 | [3] | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $6.32 | [3] | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | '5 years 7 months 24 days | [3] | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $5,734 | [3] | ' | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $4.08 | $2.64 | ||
[1] | During the year ended DecemberB 31, 2013 and 2012, weighted average grant date fair value was $4.08 and $2.64, respectively. | |||
[2] | The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan. | |||
[3] | Includes a reduction to outstanding options at period end for expected forfeiture rate over the life of the options. |
EQUITY_Details_4
EQUITY (Details 4) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2012 | Apr. 13, 2011 | Sep. 24, 2012 | Sep. 24, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | ||
Warrants | GECEII | GECEII | Restricted Stock | Restricted Stock Units Time Vesting | Restricted Stock Units Time Vesting | CIFC Parent Profits Interest Awards | CIFC Parent Profits Interest Awards | CIFC Parent Profits Interest Awards | Grants in 2009 | Grants in 2009 | Grants in 2011 | Grants in 2011 | Grants in 2013 | |||||
General Electric Capital Corporation | Warrants | Warrants | Restricted Stock Units Time Vesting | Restricted Stock Units Time Vesting | Restricted Stock Units Time Vesting | Restricted Stock Units Time Vesting | Restricted Stock Units Time Vesting | |||||||||||
General Electric Capital Corporation | General Electric Capital Corporation | |||||||||||||||||
Profits Interest Awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | ' | ' | ' | ' | ' | ' | ' | ' | '0.05 | ' | ' | ' | ' | ' | ' | ' | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Vesting Period Increments | ' | ' | ' | ' | ' | ' | ' | ' | 'thirds | ' | ' | ' | ' | '1/3 | '1/3 | '1/4 | ||
Allocated Share-based Compensation Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,800 | $2,100 | ' | ' | ' | ' | ' | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200 | 2,100 | ' | ' | ' | ' | ' | ||
Restricted Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Outstanding Number | ' | ' | ' | ' | ' | ' | 103,360 | 170,688 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | ' | ' | 15,000 | 15,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Settled in Period | ' | ' | ' | ' | ' | ' | -99,874 | [1] | -67,328 | [1] | ' | ' | ' | ' | ' | ' | ' | ' |
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Outstanding Number | ' | ' | ' | ' | ' | ' | 18,486 | 103,360 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Common Shares Issued to Satisfy Restricted Stock Units Net of Shares for Tax Withholdings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,888 | 60,095 | 7,236 | 7,233 | ' | ||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,750 | ||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Vested Period Investments | ' | ' | ' | ' | ' | 'one quarter | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Right to Receive Common Stock per RSU | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Warrants and Rights Note Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Adjustments to Additional Paid in Capital, Warrant Issued | $3,660 | ' | ' | ' | $3,660 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Class of Warrant or Right, Outstanding | 225,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Warrants issued | ' | ' | 2,000,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Exercise price (usd per share) | ' | ' | ' | $6.38 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | 4.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Class Of Warrant Or Right Number Of Warrants Settled For Cash Payments | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[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 year ended DecemberB 31, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2009, 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011 and 3,750 shares of common stock to settle the 1/4 annual installment of the RSUs granted in 2013. During the year ended December 31, 2012, the Company issued 60,095 shares of common stock to settle restricted stock grants from 2009 and 7,233 shares of common stock to settle the first 1/3 annual installment of the restricted stock units granted in 2011. |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ' | ' | ' | ' | ||
Net Income (Loss) Available to Common Stockholders, Basic | $23,371 | ($8,699) | [1] | ' | ' | |
Interest on Convertible Debt, Net of Tax | 1,830 | [2] | 0 | ' | ' | |
Net Income (Loss) Available to Common Stockholders, Diluted | $25,201 | ($8,699) | [1] | ' | ' | |
Weighted-average shares used in basic calculation | 20,800,580 | 20,355,807 | ' | ' | ||
Incremental Common Shares Attributable to Call Options and Warrants | 490,000 | [3] | ' | ' | ' | |
Incremental Common Shares Attributable to Share-based Payment Arrangements | 303,000 | [3] | ' | ' | ' | |
Incremental Common Shares Attributable to Conversion of Debt Securities | 4,132,000 | [2] | ' | ' | ' | |
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | 11,000 | ' | ' | ' | ||
Weighted-average shares used in diluted calculation | 25,737,363 | 20,355,807 | ' | ' | ||
Earnings Per Share, Basic | $1.12 | ($0.43) | [1] | ($1.84) | $9.45 | |
Earnings Per Share, Diluted | $0.98 | ($0.43) | [1] | ($1.84) | $8.05 | |
Warrants | ' | ' | ' | ' | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ' | ' | ' | ' | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | 2,200,000 | ' | ' | ||
Stock options | ' | ' | ' | ' | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ' | ' | ' | ' | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,200,000 | 2,100,000 | ' | ' | ||
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||||
[2] | During the year ended DecemberB 31, 2012, the Convertible Notes were considered anti-dilutive and excluded from diluted EPS. | |||||
[3] | During the year ended DecemberB 31, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS. During the year ended DecemberB 31, 2012, 2.1 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 $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Components of Income Tax Expense (Benefit) | ' | ' | |
Current Federal Tax Expense (Benefit) | $15,597 | $2,820 | |
Current State and Local Tax Expense (Benefit) | 6,946 | 1,636 | |
Current Income Tax Expense (Benefit) | 22,543 | 4,456 | |
Deferred Federal Income Tax Expense (Benefit) | -2,767 | 4,570 | [1] |
Deferred State and Local Income Tax Expense (Benefit) | -994 | 1,724 | [1] |
Deferred income tax expense (benefit) | -3,761 | 6,294 | [1] |
Income Tax Expense (Benefit) | $18,782 | $10,750 | [1] |
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Income Tax Disclosure [Abstract] | ' | ' | ||
Statutory U.S. federal income tax rate | 35.00% | -35.00% | ||
Tax attributable to noncontrolling interest loss | -22.24% | [1] | 35.31% | [1] |
State income taxes, net of federal effect | 3.09% | 1.11% | [2] | |
Permanent items | 0.52% | 2.26% | ||
Valuation allowance | -0.01% | [3] | 1.55% | [2],[3] |
Other | -0.11% | [2],[3] | -0.53% | [2],[3] |
Effective Income Tax Rate Reconciliation, Percent | 16.25% | 4.70% | [2] | |
[1] | Includes income that is not taxable to the Company as such income is directly taxable to the noncontrolling interest holders in the Consolidated CLOs. | |||
[2] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. | |||
[3] | The effective tax rate is calculated on "Income (loss) before income tax expense (benefit)." |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 0 Months Ended | |||
Jun. 09, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Deferred Tax Assets and Liabilities [Line Items] | ' | ' | ' | |
Intangible assets and goodwill | ' | $50,953,000 | $49,097,000 | [1] |
State net operating loss carryforwards | ' | 16,579,000 | 16,436,000 | [1] |
Federal net operating loss carryforwards | ' | 9,070,000 | 8,607,000 | |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Contingencies | ' | ' | 1,850,000 | |
Accrued and deferred subordinated management fees | ' | ' | 1,573,000 | |
Other | ' | 10,468,000 | 10,992,000 | [1] |
Gross deferred tax asset | ' | 87,070,000 | 88,555,000 | [1] |
Less: Valuation allowance | ' | 15,333,000 | 15,347,000 | [1] |
Operating Loss Carryforwards, Limitations on Use | 'five | ' | ' | |
Deferred tax asset | ' | 71,737,000 | 73,208,000 | [1] |
Purchased intangibles | ' | 6,869,000 | 10,432,000 | |
Long-term debt | ' | 4,519,000 | 4,325,000 | |
Other | ' | 2,674,000 | 4,537,000 | [1] |
Deferred tax liability | ' | 14,062,000 | 19,294,000 | [1] |
Net deferred tax asset | ' | 57,675,000 | 53,914,000 | [1] |
Operating and capital loss carryforwards | ' | 25,900,000 | ' | |
CNCIM Acquisition | ' | ' | ' | |
Deferred Tax Assets and Liabilities [Line Items] | ' | ' | ' | |
Operating and capital loss carryforwards annual limitation on use | ' | 1,300,000 | ' | |
Legacy CIFC | ' | ' | ' | |
Deferred Tax Assets and Liabilities [Line Items] | ' | ' | ' | |
Operating and capital loss carryforwards annual limitation on use | ' | ' | $9,500,000 | |
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Apr. 13, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 18, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 18, 2013 | Dec. 18, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
DFR Holdings LLC | DFR Holdings LLC | DFR Holdings LLC | DFR Holdings LLC | CIFC Parent Holdings LLC | CIFC Parent Holdings LLC | CIFC Parent Holdings LLC | Common Stock | Convertible Debt | Convertible Debt | DFR Holdings LLC | CIFC FUNDING 2013-II - Board Member Investment | Common Stock | Warrants | Cost-method Investments | Minimum | ||||
item | Consolidated Variable Interest Entities | DFR Holdings LLC | DFR Holdings LLC | CIFC Parent Holdings LLC | Common Stock | ||||||||||||||
item | DFR Holdings LLC | ||||||||||||||||||
Related party transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares owned (shares) | ' | ' | ' | 14,700,000 | 14,700,000 | 4,600,000 | 9,090,909 | 9,090,909 | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Class of Warrant or Right, Outstanding | ' | 225,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Debt Instrument, Convertible, Number of Equity Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,132,231 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of directors | ' | ' | ' | 'six | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage (percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 73.00% | 50.00% | ' | ' | ' | 5.00% |
Corporate interest expense | $5,865,000 | $5,912,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,500,000 | $3,400,000 | ' | ' | ' | ' | ' | ' |
Related Party Transaction, Purchases from Related Party | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to Acquire Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,200,000 | ' |
Number of CLOs held | ' | ' | ' | ' | ' | ' | ' | ' | 9 | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' |
Receivables recorded from Related Parties | 167,000 | 36,000 | ' | 0 | 0 | 17,000 | ' | 167,000 | 19,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue from Related Parties | $131,000 | $267,000 | ' | ' | ($17,000) | $68,000 | ' | $148,000 | $199,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RESTRUCTURING_CHARGES_Details
RESTRUCTURING CHARGES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Rollforward of accrued restructuring charges | ' | ' | |
Accrued Restructuring Charges at beginning of period | $1,410,000 | $1,490,000 | |
Provision for Restructuring Charges | 0 | 5,877,000 | [1] |
Payments for Restructuring Charges | -735,000 | -4,971,000 | |
Non-Cash Settlement of Restructuring Charges | 0 | -986,000 | [2] |
Accrued Restructuring Charges at end of period | 675,000 | 1,410,000 | |
Lease termination fees | ' | 3,100,000 | |
Loss on disposal of equipment and improvements | ' | 1,417,000 | |
Severance Costs | ' | 2,000,000 | |
Deferred rent reversal | ' | $600,000 | |
[1] | During the year ended DecemberB 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, severance and termination benefits of $2.0 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 year ended DecemberB 31, 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 $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Lease Commitments | ' | ' |
Operating Lease Term | '10 years 6 months | ' |
Occupancy, Net | $1,600,000 | $1,400,000 |
Future minimum commitments under the lease | ' | ' |
2014 | 1,607,000 | ' |
2015 | 1,607,000 | ' |
2016 | 1,607,000 | ' |
2017 | 1,607,000 | ' |
2018 | 1,680,000 | ' |
Thereafter | 7,010,000 | ' |
Future minimum commitments | 15,118,000 | ' |
Consolidated CLOs | ' | ' |
Other Commitments and Contingencies | ' | ' |
Unfunded investment commitments | 36,800,000 | 55,300,000 |
CIFC Funds | ' | ' |
Other Commitments and Contingencies | ' | ' |
Unfunded investment commitments | $30,000,000 | $5,000,000 |
SUBSEQUENT_EVENTS_Subsequent_E
SUBSEQUENT EVENTS Subsequent Events (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 06, 2014 | Apr. 04, 2014 |
New CLO sponsored [Member] | Dividend Declared | ||
Subsequent Event [Line Items] | ' | ' | ' |
Assets under Management, Average Balance | ' | $600,000 | ' |
Common Stock, Dividends, Per Share, Declared | $0.20 | ' | $0.10 |
IMMATERIAL_RESTATEMENT_OF_PRIO2
IMMATERIAL RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Details) (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
Net income (loss) | $96,835 | ($239,411) | [1] | ($344,028) | ($11,564) | |
Net Income (Loss) Attributable to Parent | 23,371 | -8,699 | [1] | -32,866 | 88,647 | |
Prior Period Reclassification Adjustment | ' | 917 | -274 | 2,726 | ||
Earnings Per Share, Basic | $1.12 | ($0.43) | [1] | ($1.84) | $9.45 | |
Earnings Per Share, Diluted | $0.98 | ($0.43) | [1] | ($1.84) | $8.05 | |
Deferred Tax Assets, Net | 57,675 | 53,914 | [1] | ' | ' | |
TOTAL ASSETS | 11,600,188 | 10,508,280 | ' | ' | ||
Retained Earnings (Accumulated Deficit) | -810,858 | -830,073 | [1] | 2,452 | ' | |
Total CIFC Corp. Stockholders' Equity | 151,260 | 124,688 | ' | ' | ||
TOTAL EQUITY | 307,753 | 202,717 | [1] | 425,768 | ' | |
TOTAL LIABILITIES AND EQUITY | 11,600,188 | 10,508,280 | [1] | ' | ' | |
Comprehensive income (loss) | 96,838 | -239,408 | [1] | ' | ' | |
Comprehensive income (loss) attributable to CIFC Corp. | 23,374 | -8,696 | [1] | ' | ' | |
Scenario, Previously Reported | ' | ' | ' | ' | ||
Net income (loss) | ' | -240,328 | -343,754 | -14,290 | ||
Net Income (Loss) Attributable to Parent | ' | -9,616 | -32,592 | 85,921 | ||
Earnings Per Share, Basic | ' | ($0.47) | ($1.82) | $9.16 | ||
Earnings Per Share, Diluted | ' | ($0.47) | ($1.82) | $7.81 | ||
Deferred Tax Assets, Net | ' | 50,545 | ' | ' | ||
TOTAL ASSETS | ' | 10,504,911 | ' | ' | ||
Retained Earnings (Accumulated Deficit) | ' | -833,442 | ' | ' | ||
Total CIFC Corp. Stockholders' Equity | ' | 121,319 | ' | ' | ||
TOTAL EQUITY | ' | 199,348 | [1] | 423,316 | [1] | ' |
TOTAL LIABILITIES AND EQUITY | ' | 10,504,911 | [1] | ' | ' | |
Comprehensive income (loss) | ' | -240,325 | [1] | ' | ' | |
Comprehensive income (loss) attributable to CIFC Corp. | ' | ($9,613) | [1] | ' | ' | |
[1] | Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. See Note 19. |