XML 31 R20.htm IDEA: XBRL DOCUMENT
v3.19.2

Derivatives | 6 Months Ended
--- | ---
Jun. 30, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivatives |
(1 1) | Derivatives
Newmark accounts for its derivatives at fair value, and recognized all derivatives as either assets or liabilities in its unaudited condensed consolidated balance sheets. In its normal course of business, Newmark enters into commitments to extend credit for mortgage loans at a specific rate (rate lock commitments) and commitments to deliver these loans to third-party investors at a fixed price (forward sale contracts). These transactions are accounted for as derivatives. The fair value of derivative contracts, computed in accordance with Newmark’s netting policy, is set forth below (in thousands):
|  | As of June 30, 2019 |  |  | As of December 31, 2018 |  |
Derivative contract |  | Assets |  |  | Liabilities |  |  | Notional Amounts |  |  | Assets |  |  | Liabilities |  |  | Notional Amounts |  |
Forwards |  | $ | 51,497 |  | (1) | $ | 27,261 |  |  | $ | 1,794,842 |  | (2) | $ | 85,796 |  | (1) | $ | 9,208 |  |  | $ | 1,574,114 |  | (2)
Rate lock commitments |  |  | 21,951 |  |  |  | 2,428 |  |  |  | 640,671 |  |  |  | 6,732 |  |  |  | 7,470 |  |  |  | 240,720 |  |
Total |  | $ | 73,448 |  |  | $ | 29,689 |  |  | $ | 2,435,513 |  |  | $ | 92,528 |  |  | $ | 16,678 |  |  | $ | 1,814,834 |  |
| (1) | Included in Forwards is $48.7 million and $77.6 million of the Nasdaq Forwards as of June 30, 2019 and December 31, 2018, respectively (See Note 1 — Organization and Basis of Presentation). Newmark recorded $29.0 million and $(19.0) million of unrealized (gains)/losses for a change in the fair value of the Nasdaq Forwards as of June 30, 2019 and December 31, 2018, respectively.
| (2) | Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and does not represent anticipated losses. Included in the notional amounts of forwards is $361.0 million for the Nasdaq Forwards as of June 30, 2019 and December 31, 2018.
The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Gains from mortgage banking activities, net” in Newmark’s unaudited condensed consolidated statements of operations. The change in fair value of rate lock commitments are disclosed net of $(0.2) million and $1.9 million of expenses for the three and six months ended June 30, 2019, respectively, and $0.8 million and $3.3 million of expenses for the three and six months ended June 30, 2018, respectively, which are reported as part of “Compensation and employee benefits” in Newmark’s unaudited condensed consolidated statements of operations. The table below summarizes gains and losses on derivative contracts which are included in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018 (in thousands):
|  | Location of gain (loss) recognized |  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | in income for derivatives |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Derivatives not designed as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nasdaq Forwards |  | Other income (loss) |  | $ | (15,638 | ) |  | $ | 2,808 |  |  | $ | (28,967 | ) |  | $ | 2,808 |
Rate lock commitments |  | Gains from mortgage banking activities/originations, net |  |  | 14,292 |  |  |  | 1,515 |  |  |  | 21,379 |  |  |  | 3,784 |
Rate lock commitments |  | Compensation and employee benefits |  |  | 211 |  |  |  | (782 | ) |  |  | (1,856 | ) |  |  | (3,282 | )
Forward sale contracts |  | Gains from mortgage banking activities/originations, net |  |  | (20,784 | ) |  |  | 8,536 |  |  |  | (24,416 | ) |  |  | 15,802 |
|  |  |  | $ | (21,919 | ) |  | $ | 12,077 |  |  | $ | (33,860 | ) |  | $ | 19,112 |
Derivative assets and derivative liabilities are included in “Other current assets,” “Other assets” and the current portion of “Accounts payable, accrued expenses and other liabilities,” in Newmark’s unaudited condensed consolidated balance sheets.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration