Rithm Capital Financials Restatement

TL;DR

Rithm Capital says old financials are bad, don't trust 'em.

AI Summary

Rithm Capital Corp. filed an 8-K on July 22, 2024, to report that previously issued financial statements should not be relied upon. This filing indicates a potential issue with their accounting or auditing processes that requires correction.

Why It Matters

Investors and stakeholders need to be aware that past financial reports may be inaccurate, potentially impacting investment decisions and company valuation.

Risk Assessment

Risk Level: medium — A restatement of financial statements can indicate internal control weaknesses or accounting errors, which poses a risk to investor confidence and financial reporting integrity.

Key Players & Entities

• Rithm Capital Corp. (company) — Registrant
• New Residential Investment Corp. (company) — Former Company Name
• July 22, 2024 (date) — Date of Report

FAQ

Key Financial Figures

• $0.01 — on which registered: Common Stock, $0.01 par value per share RITM New York S

Filing Documents

• ef20032788_8k.htm (8-K) — 46KB
• 0001140361-24-033746.txt ( ) — 237KB
• ritm-20240722.xsd (EX-101.SCH) — 4KB
• ritm-20240722_def.xml (EX-101.DEF) — 19KB
• ritm-20240722_lab.xml (EX-101.LAB) — 28KB
• ritm-20240722_pre.xml (EX-101.PRE) — 21KB
• ef20032788_8k_htm.xml (XML) — 9KB

02

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. Restatement of Historical Financial Results On July 22, 2024, the Audit Committee (the "Audit Committee") of the Board of Directors of Rithm Capital Corp. (the "Company"), based on the recommendation of management, after discussion with Ernst & Young LLP ("EY"), the Company's independent registered public accounting firm, concluded that (i) the Company's previously issued audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 included in the Company's Annual Reports on Form 10-K for the years ended December 31, 2023 , 2022 and 2021 and (ii) the Company's unaudited consolidated financial statements as of and for each of the quarters within 2023, 2022 and 2021 as well as the quarter ended March 31, 2024 included in the Company's Quarterly Reports on Form 10-Q for such periods (collectively, the "Affected Financial Statements"), need to be restated due to the need to consolidate certain mortgage securitization trusts (the "Trusts"). Accordingly, the Affected Financial Statements and related earnings releases, press releases, shareholder communications, investor presentations or other communications (collectively, "Other Investor Communications") describing relevant portions of the Affected Financial The Company expects the restatement will have no impact on the Company's net income, earnings available for distribution, book value, or cash and liquidity position in the Affected Financial Statements or the Other Investor Communications. As further described below, the restatement will result in grossing up the assets and liabilities for the consolidated mortgage securitization Trusts on the Company's consolidated financial statements as well as other immaterial adjustments. The adjustments to the Affected Financial Statements invo

Controls and Procedures

Controls and Procedures As a result of the restatement, management re-evaluated the effectiveness of the Company's internal control over financial reporting ("ICFR") as of December 31, 2023 and 2022 and identified a material weakness in the Company's ICFR. Accordingly, Management's Report on Internal Control Over Financial Reporting and the Opinion of EY on the effectiveness of the Company's Internal Control Over Financial Reporting as of December 31, 2023 and 2022, included in the Company's Annual Reports on Form 10-K for the years ended December 31, 2023 and 2022, respectively, should no longer be relied upon. The Company will provide further specifics on the material weakness in its internal control over financial reporting and its plan of remediation to address such weakness in an amendment to the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The adjustments that will be recorded in the restated financial statements did not result from any override of controls or misconduct. The Company expects that the material weakness will be remediated by the end of the year. Next Steps The Company continues to assess and quantify the necessary adjustments. The Company plans to restate its consolidated financial statements as of and for the years ended December 31, 2023, 2022 and 2021, as well as Management's Report on Internal Control Over Financial Reporting as of December 31, 2023 and 2022 and include them in an amendment to its Annual Report on Form 10-K for the year ended December 31, 2023. In addition, the Company plans to restate its unaudited consolidated financial statements as of and for the period ended March 31, 2024 and include them in an amendment to the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2024. The Company plans to file the amendments as soon as practicable. Management and the Audit Committee have discussed with EY the matters disclosed in this Item 4.02.

Forward-Looking Statements

Forward-Looking Statements. Certain information in this Current Report on Form 8-K and the exhibits hereto may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of current or historical fact, contained in this Current Report on Form 8-K may be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "may," "will," "should," "could," "estimate," "intend" (or the negative of these terms) and other similar expressions are intended to identify forward-looking statements. These statements are not historical facts. They represent management's current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are not a guarantee of performance, and accordingly, you should not place undue reliance on any forward-looking statements contained in this Current Report on Form 8-K. Uncertainties and risks that may affect the forward-looking statements herein include, but are not limited to, the Company's ability to complete the restatement and the revision of the accounting adjustments described in this Current Report on Form 8-K and the Company's ability to file any appropriate amendments to our Annual and Quarterly Reports on Form 10-K and Form 10-Q by the applicable due date, as well as other risks and important factors that could affect such forward-looking annual and quarterly reports and other filings filed with the SEC, whi

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits Exhibit Number Description 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RITHM CAPITAL CORP. (Registrant) /s/ Nicola Santoro, Jr. Nicola Santoro, Jr. Chief Financial Officer and Chief Accounting Officer Date: July 22, 2024

View Full Filing

View this 8-K filing on SEC EDGAR