Company: RITM-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001556593-25-000007
Chunk: 189

Company: Rithm Capital Corp.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 189
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. If we were to fail to meet the REIT requirements, we would be subject to U.S. federal, state and local income and franchise taxes, and we would face a variety of adverse consequences. See “Risk Factors—Risks Related to Our Taxation as a REIT.” Rithm Capital operates various business segments, including Origination and Servicing, Asset Management and portions of our Investment Portfolio, through TRSs that are subject to regular corporate income taxes.

Accounting Impact of Valuation Changes

Rithm Capital’s assets fall into three general categories as disclosed in the table below. These categories are:

Marked-to-Market Assets (“MTM Assets”) — Assets that are marked-to-market through the consolidated statements of operations. Changes in the value of these assets (i) are recorded in the consolidated statement of operations, as unrealized gains or losses that impact net income and (ii) impact our total Rithm Capital stockholders’ equity (net book value).

Other Comprehensive Income Assets (“OCI Assets”) — Assets that are marked-to-market through the consolidated statements of comprehensive income. Changes in the value of these assets (i) are recorded in the consolidated statements of comprehensive income as unrealized gains or losses, and therefore do not impact net income on the consolidated statement of operations and (ii) impact our total Rithm Capital stockholders’ equity (net book value).

Cost Assets — Assets that are not marked-to-market. Changes in value of these assets do not impact net income in the consolidated statements of operations nor do they impact our total Rithm Capital stockholders’ equity (net book value).

An exception to these descriptions results from changes in value that represent impairment. Any such change (i) is recorded in the consolidated statements of operations, as impairment that impacts net income and (ii) impacts our total Rithm Capital 

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stockholders’ equity (net book value). In the case of residential mortgage loans, HFS, at lower of cost or fair value, any reductions in value are considered impairment. Impairment on loans and REO, as well as securities, is subject to reversal if values subsequently increase.

All of Rithm Capital’s liabilities, with the exception of derivatives, residential mortgage loan repurchase liability, notes payable of consolidated CFEs and certain debt accounted for under the fair value option, are recorded at their amortized cost basis.

The table below summarizes Rithm Capital’s assets by category as of December 31, 2024:

MTM AssetsOCI