Discontinued Operations

6 Months Ended

Jun. 30, 2011


12.	Discontinued Operations

Our Purchased Paper businesses are presented in discontinued operations for the current and prior periods. In the fourth quarter of 2010, we began actively marketing our Purchased Paper — Non-Mortgage business for sale and concluded it was probable this business would be sold within one year at which time we would exit the business. The Purchased Paper — Non-Mortgage business comprises operations and cash flows that can be clearly distinguished operationally and for financial reporting purposes from the rest of the Company. As a result, we have classified the business as held-for-sale, and, as such, the results of operations of this business were required to be presented in discontinued operations beginning in the fourth quarter of 2010. In connection with this classification, we are required to carry this business at the lower of fair value or historical cost basis. This resulted in us recording an after-tax loss of $52 million from discontinued operations in the fourth quarter of 2010, primarily due to adjusting the value of this business to its estimated fair value. We are currently seeking bids for this portfolio and anticipate closing on the sale in the second half of 2011.

The following table summarizes the discontinued assets and liabilities at June 30, 2011 and December 31, 2010, respectively.


	June 30,		December 31,
	2011		2010

Assets:
Cash and equivalents	$	11,912	$	3,848
Other assets		139,087		176,916

Assets of discontinued operations	$	150,999	$	180,764

Liabilities:
Liabilities of discontinued operations	$	5,336	$	6,300

At June 30, 2011 and December 31, 2010, other assets of our discontinued operations consist primarily of the Purchased Paper — Non-Mortgage loan portfolio and a deferred tax asset for intangibles that will be realized upon the sale of our Purchased Paper — Non-Mortgage business. At June 30, 2011 and December 31, 2010, liabilities of our discontinued operations consist primarily of restructuring liabilities related to severance and contract termination costs.

The following table summarizes the discontinued operations for the three and six months ended June 30, 2011 and 2010.


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010

Discontinued operations:
Income (loss) from discontinued operations before income taxes	$	18,217	$	(9,829	)	$	15,273	$	(19,808	)
Income tax expense (benefit)		6,735		(2,875	)		5,521		(6,240	)

Income (loss) from discontinued operations, net of taxes	$	11,482	$	(6,954	)	$	9,752	$	(13,568	)