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Separate Financial Information of Subsidiary Guarantors of Indebtedness
6 Months Ended 12 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Separate Financial Information of Subsidiary Guarantors of Indebtedness

24. Separate Financial Information of Subsidiary Guarantors of Indebtedness

Guarantor Financial Statement Information

In accordance with the indenture governing the 7.875% Senior Notes due December 2021, certain existing and future 100% owned domestic subsidiaries of the Company have fully and unconditionally guaranteed the Senior Notes on a joint and several basis. These guarantor subsidiaries also guarantee the Company’s obligations under the 2013 Secured Credit Facilities. The indenture governing the Senior Notes contains customary exceptions under which a guarantor subsidiary may be released from its guarantee without the consent of the holders of the Senior Notes, including (1) the permitted sale, transfer or other disposition of all or substantially all of a guarantor subsidiary’s assets or common stock; (2) the designation of a restricted guarantor subsidiary as an unrestricted subsidiary; (3) the release of a guarantor subsidiary from its obligations under the 2013 Secured Credit Facilities and its guarantee of all other indebtedness of the Company and other guarantor subsidiaries; and (4) the defeasance of the obligations of the guarantor subsidiary by payment of the Senior Notes. Presented below are the condensed consolidating financial information of the Company, the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis.

 

Condensed Consolidating Balance Sheet

June 30, 2014

Unaudited

(in thousands)

 

     Parent
Company
     Guarantor
Subsidiaries
     Non-Guarantor
Subsidiaries
and VIEs
     Eliminations
and
Reclassifications
    Consolidated  

ASSETS

             

Cash and cash equivalents

   $ 11,215       $ 286,933       $ 5,193       $ —        $ 303,341   

Restricted cash and cash equivalents

     15,505         726,848         69,317         —          811,670   

Residential loans at amortized cost, net

     6,989         14,530         1,339,634         —          1,361,153   

Residential loans at fair value

     —           10,710,615         557,786         —          11,268,401   

Receivables, net

     49,492         203,188         36,149         —          288,829   

Servicer and protective advances, net

     —           1,523,382         89,076         (16,508     1,595,950   

Servicing rights, net

     —           1,648,544         —           —          1,648,544   

Goodwill

     —           575,468         —           —          575,468   

Intangible assets, net

     —           105,870         6,643         —          112,513   

Premises and equipment, net

     217         143,375         —           —          143,592   

Other assets

     60,088         170,905         45,496         —          276,489   

Due from affiliates, net

     774,299         —           —           (774,299     —     

Investments in consolidated subsidiaries and variable interest entities

     2,650,332         14,754         —           (2,665,086     —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 3,568,137       $ 16,124,412       $ 2,149,294       $ (3,455,893   $ 18,385,950   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

             

Payables and accrued liabilities

   $ 42,594       $ 571,787       $ 31,764       $ (23,863   $ 622,282   

Servicer payables

     —           735,391         —           —          735,391   

Servicing advance liabilities

     —           939,118         101,323         —          1,040,441   

Warehouse borrowings

     —           1,151,216         —           —          1,151,216   

Debt

     2,266,632         2,958         —           —          2,269,590   

Mortgage-backed debt

     —           —           1,803,470         —          1,803,470   

HMBS related obligations at fair value

     —           9,472,666         —           —          9,472,666   

Deferred tax liability, net

     73,722         29,868         2,040         75        105,705   

Obligation to fund Non-Guarantor VIEs

     —           48,627         —           (48,627     —     

Due to affiliates, net

     —           764,498         6,883         (771,381     —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     2,382,948         13,716,129         1,945,480         (843,796     17,200,761   

Stockholders’ equity:

             

Total stockholders’ equity

     1,185,189         2,408,283         203,814         (2,612,097     1,185,189   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,568,137       $ 16,124,412       $ 2,149,294       $ (3,455,893   $ 18,385,950   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Balance Sheet

December 31, 2013

(in thousands)

 

     Parent
Company
     Guarantor
Subsidiaries
     Non-Guarantor
Subsidiaries
and VIEs
     Eliminations
and
Reclassifications
    Consolidated  

ASSETS

             

Cash and cash equivalents

   $ 100,009       $ 388,644       $ 3,232       $ —        $ 491,885   

Restricted cash and cash equivalents

     14,753         732,582         57,468         —          804,803   

Residential loans at amortized cost, net

     6,341         10,819         1,377,711         —          1,394,871   

Residential loans at fair value

     —           9,754,110         587,265         —          10,341,375   

Receivables, net

     51,681         223,767         43,747         —          319,195   

Servicer and protective advances, net

     —           1,337,218         62,647         (18,431     1,381,434   

Servicing rights, net

     —           1,304,900         —           —          1,304,900   

Goodwill

     —           657,737         —           —          657,737   

Intangible assets, net

     —           115,364         7,042         —          122,406   

Premises and equipment, net

     277         155,570         —           —          155,847   

Other assets

     65,293         291,529         56,254         —          413,076   

Due from affiliates, net

     711,797         —           —           (711,797     —     

Investments in consolidated subsidiaries and variable interest entities

     2,621,934         9,487         —           (2,631,421     —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 3,572,085       $ 14,981,727       $ 2,195,366       $ (3,361,649   $ 17,387,529   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

             

Payables and accrued liabilities

   $ 57,187       $ 429,199       $ 32,205       $ (24,452   $ 494,139   

Servicer payables

     —           735,225         —           —          735,225   

Servicing advance liabilities

     —           903,381         67,905         —          971,286   

Warehouse borrowings

     —           1,085,563         —           —          1,085,563   

Debt

     2,267,979         4,106         —           —          2,272,085   

Mortgage-backed debt

     —           —           1,887,862         —          1,887,862   

HMBS related obligations at fair value

     —           8,652,746         —           —          8,652,746   

Deferred tax liability, net

     79,903         38,846         2,920         (62     121,607   

Obligation to fund Non-Guarantor VIEs

     —           45,194         —           (45,194     —     

Due to affiliates, net

     —           703,170         6,139         (709,309     —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     2,405,069         12,597,430         1,997,031         (779,017     16,220,513   

Stockholders’ equity:

             

Total stockholders’ equity

     1,167,016         2,384,297         198,335         (2,582,632     1,167,016   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,572,085       $ 14,981,727       $ 2,195,366       $ (3,361,649   $ 17,387,529   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2014

Unaudited

(in thousands)

 

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and
VIEs
     Eliminations
and
Reclassifications
    Consolidated  

REVENUES

           

Net servicing revenue and fees

   $ —        $ 145,438      $ 25       $ (4,487   $ 140,976   

Net gains on sales of loans

     —          144,611        —           —          144,611   

Interest income on loans

     163        156        33,899         —          34,218   

Net fair value gains on reverse loans and related HMBS obligations

     —          26,936        —           —          26,936   

Insurance revenue

     —          18,396        1,410         —          19,806   

Other revenues

     267        46,693        5,137         (4,931     47,166   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     430        382,230        40,471         (9,418     413,713   

EXPENSES

           

Salaries and benefits

     —          145,502        —           —          145,502   

General and administrative

     (1,323     147,287        6,065         (9,688     142,341   

Interest expense

     36,809        17,284        20,597         —          74,690   

Depreciation and amortization

     30        18,163        198         —          18,391   

Goodwill impairment

     —          82,269        —           —          82,269   

Other expenses, net

     283        261        3,434         —          3,978   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     35,799        410,766        30,294         (9,688     467,171   

OTHER GAINS LOSSES

           

Other net fair value gains (losses)

     (5     (1,073     2,610         —          1,532   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total other (gains) losses

     (5     (1,073     2,610         —          1,532   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (35,374     (29,609     12,787         270        (51,926

Income tax expense (benefit)

     (60,493     19,950        1,440         106        (38,997
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     25,119        (49,559     11,347         164        (12,929

Equity in earnings of consolidated subsidiaries and variable interest entities

     (38,048     3,553        —           34,495        —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ (12,929   $ (46,006   $ 11,347       $ 34,659      $ (12,929
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income (loss)

   $ (12,924   $ (46,006   $ 11,343       $ 34,663      $ (12,924
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2013

Unaudited

(in thousands)

 

     Parent
Company
    Guarantor
Subsidiaries
     Non-Guarantor
Subsidiaries and
VIEs
     Eliminations
and
Reclassifications
    Consolidated  

REVENUES

            

Net servicing revenue and fees

   $ —        $ 262,158       $ —         $ (4,852   $ 257,306   

Net gains on sales of loans

     —          235,949         —           —          235,949   

Interest income on loans

     139        179         36,478         —          36,796   

Net fair value gains on reverse loans and related HMBS obligations

     —          26,731         —           —          26,731   

Insurance revenue

     —          16,605         1,445         —          18,050   

Other revenues

     164        20,790         5,206         (5,028     21,132   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues

     303        562,412         43,129         (9,880     595,964   

EXPENSES

            

Salaries and benefits

     —          145,282         —           —          145,282   

General and administrative

     3,134        125,140         6,928         (9,490     125,712   

Interest expense

     30,681        15,396         22,437         (224     68,290   

Depreciation and amortization

     30        17,374         210         —          17,614   

Other expenses, net

     217        373         1,561         —          2,151   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total expenses

     34,062        303,565         31,136         (9,714     359,049   

OTHER GAINS LOSSES

            

Other net fair value gains (losses)

     (1,050     386         2,320         —          1,656   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total other (gains) losses

     (1,050     386         2,320         —          1,656   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (34,809     259,233         14,313         (166     238,571   

Income tax expense (benefit)

     (12,319     105,957         1,768         (67     95,339   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     (22,490     153,276         12,545         (99     143,232   

Equity in earnings of consolidated subsidiaries and variable interest entities

     165,722        2,583         —           (168,305     —     
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Net income

   $ 143,232      $ 155,859       $ 12,545       $ (168,404   $ 143,232   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Comprehensive income

   $ 143,211      $ 155,859       $ 12,520       $ (168,379   $ 143,211   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2014

Unaudited

(in thousands)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and

VIEs
     Eliminations
and
Reclassifications
    Consolidated  

REVENUES

           

Net servicing revenue and fees

   $ —        $ 322,789      $ 48       $ (9,069   $ 313,768   

Net gains on sales of loans

     —          248,645        —           —          248,645   

Interest income on loans

     322        333        67,985         —          68,640   

Net fair value gains on reverse loans and related HMBS obligations

     —          44,172        —           —          44,172   

Insurance revenue

     —          40,334        2,860         —          43,194   

Other revenues

     536        64,275        9,928         (9,497     65,242   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     858        720,548        80,821         (18,566     783,661   

EXPENSES

           

Salaries and benefits

     —          281,399        —           —          281,399   

General and administrative

     424        257,837        12,845         (19,900     251,206   

Interest expense

     73,250        34,709        41,580         —          149,539   

Depreciation and amortization

     60        36,576        399         —          37,035   

Goodwill impairment

     —          82,269        —           —          82,269   

Other expenses, net

     449        607        3,147         —          4,203   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     74,183        693,397        57,971         (19,900     805,651   

OTHER GAINS LOSSES

           

Other net fair value gains (losses)

     (54     (1,484     567         —          (971
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total other (gains) losses

     (54     (1,484     567         —          (971
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (73,379     25,667        23,417         1,334        (22,961

Income tax expense (benefit)

     (70,973     40,013        2,983         568        (27,409
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     (2,406     (14,346     20,434         766        4,448   

Equity in earnings of consolidated subsidiaries and variable interest entities

     6,854        2,029        —           (8,883     —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 4,448      $ (12,317   $ 20,434       $ (8,117   $ 4,448   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income (loss)

   $ 4,457      $ (12,317   $ 20,426       $ (8,109   $ 4,457   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2013

Unaudited

(in thousands)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and
VIEs
     Eliminations
and
Reclassifications
    Consolidated  

REVENUES

           

Net servicing revenue and fees

   $ —        $ 404,123      $ —         $ (9,808   $ 394,315   

Net gains on sales of loans

     —          314,394        —           —          314,394   

Interest income on loans

     253        367        73,074         —          73,694   

Net fair value gains on reverse loans and related HMBS obligations

     —          63,519        —           —          63,519   

Insurance revenue

     —          32,603        2,981         —          35,584   

Other revenues

     431        28,201        10,397         (10,042     28,987   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     684        843,207        86,452         (19,850     910,493   

EXPENSES

           

Salaries and benefits

     (1,573     253,584        4         —          252,015   

General and administrative

     17,561        200,154        14,354         (18,917     213,152   

Interest expense

     55,987        21,555        45,358         (468     122,432   

Depreciation and amortization

     64        33,459        424         —          33,947   

Other expenses, net

     375        553        3,319         —          4,247   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     72,414        509,305        63,459         (19,385     625,793   

OTHER GAINS LOSSES

           

Other net fair value gains (losses)

     (4,754     (21     5,170         —          395   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total other (gains) losses

     (4,754     (21     5,170         —          395   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (76,484     333,881        28,163         (465     285,095   

Income tax expense (benefit)

     (25,677     136,346        3,633         (188     114,114   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     (50,807     197,535        24,530         (277     170,981   

Equity in earnings of consolidated subsidiaries and variable interest entities

     221,788        5,860        —           (227,648     —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 170,981      $ 203,395      $ 24,530       $ (227,925   $ 170,981   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income

   $ 170,958      $ 203,395      $ 24,469       $ (227,864   $ 170,958   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2014

Unaudited

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

Cash flows provided by (used in) operating activities

  $ (6,374   $ (49,030   $ (18,007   $ (431   $ (73,842
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

         

Purchases and originations of reverse loans held for investment

    —          (715,969     —          —          (715,969

Principal payments received on reverse loans held for investment

    —          234,779        —          —          234,779   

Principal payments received on forward loans related to Residual Trusts

    56        273        50,233        —          50,562   

Principal payments received on forward loans related to Non-Residual Trusts

    —          —          29,383        —          29,383   

Payments received on charged-off loans held for investment

    —          2,055        —          —          2,055   

Payments received on receivables related to Non-Residual Trusts

    —          —          5,696        —          5,696   

Cash proceeds from sales of real estate owned, net related to Residual Trusts

    178        235        5,857        —          6,270   

Cash proceeds from sales of other real estate owned, net

    —          13,263        2,860        —          16,123   

Purchases of premises and equipment

    —          (12,958     —          —          (12,958

Decrease (increase) in restricted cash and cash equivalents

    (752     4,749        (1,576     —          2,421   

Payments for acquisitions of businesses, net of cash acquired

    —          (167,955     —          —          (167,955

Acquisitions of servicing rights

    —          (101,244     —          —          (101,244

Acquisitions of charged-off loans held for investment

    —          (57,052     —          —          (57,052

Capital contributions to subsidiaries

    (33,431     (4,127     —          37,558        —     

Returns of capital from subsidiaries

    20,721        7,653        —          (28,374     —     

Change in due from affiliates

    (64,028     (23,326     (28,200     115,554        —     

Other

    —          (4,962     —          —          (4,962
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) investing activities

    (77,256     (824,586     64,253        124,738        (712,851
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

         

Payments on debt

    (7,500     (1,393     —          —          (8,893

Proceeds from securitizations of reverse loans

    —          839,431        —          —          839,431   

Payments on HMBS related obligations

    —          (267,904     —          —          (267,904

Issuances of servicing advance liabilities

    —          468,376        143,519        —          611,895   

Payments on servicing advance liabilities

    —          (432,639     (110,101     —          (542,740

Net change in warehouse borrowings related to forward loans

    —          126,425        —          —          126,425   

Net change in warehouse borrowings related to reverse loans

    —          (60,772     —          —          (60,772

Other debt issuance costs paid

    —          (13,509     —          —          (13,509

Payments on mortgage-backed debt related to Residual Trusts

    —          —          (51,442     —          (51,442

Payments on mortgage-backed debt related to Non-Residual Trusts

    —          —          (39,224     —          (39,224

Capital contributions

    —          33,431        4,127        (37,558     —     

Capital distributions

    —          (5,971     (22,403     28,374        —     

Change in due to affiliates

    (4,497     88,380        31,240        (115,123     —     

Other

    6,833        (1,950     (1     —          4,882   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) financing activities

    (5,164     771,905        (44,285     (124,307     598,149   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

    (88,794     (101,711     1,961        —          (188,544

Cash and cash equivalents at the beginning of the period

    100,009        388,644        3,232        —          491,885   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

  $ 11,215      $ 286,933      $ 5,193      $ —        $ 303,341   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2013

Unaudited

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

Cash flows provided by (used in) operating activities

  $ 762      $ (2,071,339   $ 15,924      $ 173      $ (2,054,480
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

         

Purchases and originations of reverse loans held for investment

    —          (1,864,687     —          —          (1,864,687

Principal payments received on reverse loans held for investment

    —          141,702        —          —          141,702   

Principal payments received on forward loans related to Residual Trusts

    41        253        53,227        —          53,521   

Principal payments received on forward loans related to Non-Residual Trusts

    —          —          30,524        —          30,524   

Payments received on receivables related to Non-Residual Trusts

    —          —          8,141        —          8,141   

Cash proceeds from sales of real estate owned, net related to Residual Trusts

    68        2        3,571        —          3,641   

Cash proceeds from sales of other real estate owned, net

    —          6,304        3,833        —          10,137   

Purchases of premises and equipment

    —          (17,240     —          —          (17,240

Decrease (increase) in restricted cash and cash equivalents

    (3     (34,142     1,720        —          (32,425

Payments for acquisitions of businesses, net of cash acquired

    (477,021     (1,063     —          —          (478,084

Acquisitions of servicing rights

    —          (537,296     —          —          (537,296

Capital contributions to subsidiaries

    (311,107     (1,700     —          312,807        —     

Returns of capital from subsidiaries

    18,852        4,510        —          (23,362     —     

Change in due from affiliates

    (390,390     (61,865     (45,685     497,940        —     

Other

    —          (919     —          —          (919
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) investing activities

    (1,159,560     (2,366,141     55,331        787,385        (2,682,985
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

         

Proceeds from issuance of debt, net of debt issuance costs

    1,012,713        —          —          —          1,012,713   

Payments on debt

    (38,386     (738     —          —          (39,124

Proceeds from securitizations of reverse loans

    —          1,983,878        —          —          1,983,878   

Payments on HMBS related obligations

    —          (155,312     —          —          (155,312

Issuances of servicing advance liabilities

    —          1,213,514        2,961        —          1,216,475   

Payments on servicing advance liabilities

    —          (577,002     (2,008     —          (579,010

Net change in warehouse borrowings related to forward loans

    —          1,568,301        —          —          1,568,301   

Net change in warehouse borrowings related to reverse loans

    —          (74,125     —          —          (74,125

Other debt issuance costs paid

    —          (6,364     —          —          (6,364

Payments on mortgage-backed debt related to Residual Trusts

    —          —          (55,685     —          (55,685

Payments on mortgage-backed debt related to Non-Residual Trusts

    —          —          (44,297     —          (44,297

Capital contributions

    —          311,107        1,700        (312,807     —     

Capital distributions

    —          (5,285     (18,077     23,362        —     

Change in due to affiliates

    17,438        433,983        46,692        (498,113     —     

Other

    1,302        (684     (37     —          581   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) financing activities

    993,067        4,691,273        (68,751     (787,558     4,828,031   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

    (165,731     253,793        2,504        —          90,566   

Cash and cash equivalents at the beginning of the period

    366,393        73,993        1,668        —          442,054   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

  $ 200,662      $ 327,786      $ 4,172      $ —        $ 532,620  
29. Separate Financial Information of Subsidiary Guarantors of Indebtedness

Guarantor Financial Statement Information

In accordance with the indenture governing the 7.875% Senior Notes due December 2021, certain existing and future 100% owned domestic subsidiaries of the Company have fully and unconditionally guaranteed the Senior Notes on a joint and several basis. These guarantor subsidiaries also guarantee the Company’s obligations under the 2013 Secured Credit Facilities. The indenture governing the Senior Notes contains customary exceptions under which a guarantor subsidiary may be released from its guarantee without the consent of the holders of the Senior Notes, including (1) the permitted sale, transfer or other disposition of all or substantially all of a guarantor subsidiary’s assets or common stock; (2) the designation of a restricted guarantor subsidiary as an unrestricted subsidiary; (3) the release of a guarantor subsidiary from its obligations under the 2013 Secured Credit Facilities and its guarantee of all other indebtedness of the Company and other guarantor subsidiaries; and (4) the defeasance of the obligations of the guarantor subsidiary by payment of the Senior Notes. Presented below are the condensed consolidating financial information of the Company, the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis.

Condensed Consolidating Balance Sheet

December 31, 2013

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

ASSETS

         

Cash and cash equivalents

  $ 100,009      $ 388,644      $ 3,232      $ —        $ 491,885   

Restricted cash and cash equivalents

    14,753        732,582        57,468        —          804,803   

Residential loans at amortized cost, net

    6,341        10,819        1,377,711        —          1,394,871   

Residential loans at fair value

    —          9,754,110        587,265        —          10,341,375   

Receivables, net

    51,681        223,767        43,747        —          319,195   

Servicer and protective advances, net

    —          1,337,218        62,647        (18,431     1,381,434   

Servicing rights, net

    —          1,304,900        —          —          1,304,900   

Goodwill

    —          657,737        —          —          657,737   

Intangible assets, net

    —          115,364        7,042        —          122,406   

Premises and equipment, net

    277        155,570        —          —          155,847   

Other assets

    65,293        291,529        56,254        —          413,076   

Due from affiliates, net

    711,797        —          —          (711,797     —     

Investments in consolidated subsidiaries and variable interest entities

    2,621,934        9,487        —          (2,631,421     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 3,572,085      $ 14,981,727      $ 2,195,366      $ (3,361,649   $ 17,387,529   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

         

Payables and accrued liabilities

  $ 57,187      $ 429,199      $ 32,205      $ (24,452   $ 494,139   

Servicer payables

    —          735,225        —          —          735,225   

Servicing advance liabilities

    —          903,381        67,905        —          971,286   

Debt

    2,267,979        1,089,669        —          —          3,357,648   

Mortgage-backed debt

    —          —          1,887,862        —          1,887,862   

HMBS related obligations at fair value

    —          8,652,746        —          —          8,652,746   

Deferred tax liability, net

    79,903        38,846        2,920        (62     121,607   

Obligation to fund Non-Guarantor VIEs

    —          45,194        —          (45,194     —     

Due to affiliates, net

    —          703,170        6,139        (709,309     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    2,405,069        12,597,430        1,997,031        (779,017     16,220,513   

Stockholders’ equity:

         

Total stockholders’ equity

    1,167,016        2,384,297        198,335        (2,582,632     1,167,016   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 3,572,085      $ 14,981,727      $ 2,195,366      $ (3,361,649   $ 17,387,529   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Balance Sheet

December 31, 2012

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

ASSETS

         

Cash and cash equivalents

  $ 366,393      $ 73,993      $ 1,668      $ —        $ 442,054   

Restricted cash and cash equivalents

    14,001        581,434        57,903        —          653,338   

Residential loans at amortized cost, net

    5,086        9,453        1,475,782        —          1,490,321   

Residential loans at fair value

    —          6,063,713        646,498        —          6,710,211   

Receivables, net

    23,094        183,123        54,281        (1,489     259,009   

Servicer and protective advances, net

    —          133,127        53,558        (13,638     173,047   

Servicing rights, net

    —          242,712        —          —          242,712   

Goodwill

    —          580,378        —          —          580,378   

Intangible assets, net

    —          136,615        7,877        —          144,492   

Premises and equipment, net

    401        137,384        —          —          137,785   

Deferred tax asset, net

    —          44,942        —          (44,942     —     

Other assets

    53,643        30,901        60,286        —          144,830   

Due from affiliates, net

    —          3,765        5,171        (8,936     —     

Investments in consolidated subsidiaries and variable interest entities

    1,456,715        15,449        —          (1,472,164     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 1,919,333      $ 8,236,989      $ 2,363,024      $ (1,541,169   $ 10,978,177   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

         

Payables and accrued liabilities

  $ 48,317      $ 204,984      $ 29,680      $ (22,371   $ 260,610   

Servicer payables

    —          587,929        —          —          587,929   

Servicing advance liabilities

    —          35,612        64,552        —          100,164   

Debt

    886,733        259,516        —          —          1,146,249   

Mortgage-backed debt

    —          —          2,072,728        —          2,072,728   

HMBS related obligations at fair value

    —          5,874,552        —          —          5,874,552   

Deferred tax liability, net

    83,462        —          2,641        (45,086     41,017   

Obligation to fund Non-Guarantor VIEs

    —          49,865        —          (49,865     —     

Due to affiliates, net

    5,893        —          —          (5,893     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    1,024,405        7,012,458        2,169,601        (123,215     10,083,249   

Stockholders’ equity:

         

Total stockholders’ equity

    894,928        1,224,531        193,423        (1,417,954     894,928   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 1,919,333      $ 8,236,989      $ 2,363,024      $ (1,541,169   $ 10,978,177   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income

For the Year Ended December 31, 2013

(in thousands)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and
VIEs
     Eliminations
and
Reclassifications
    Consolidated  

REVENUES

           

Net servicing revenue and fees

   $ —        $ 802,557      $ 111       $ (19,279   $ 783,389   

Net gains on sales of loans

     —          598,974        —           —          598,974   

Interest income on loans

     612        718        143,321         —          144,651   

Net fair value gains on reverse loans and related HMBS obligations

     —          120,382        —           —          120,382   

Insurance revenue

     —          78,469        6,009         —          84,478   

Other revenues

     739        69,184        20,135         (19,433     70,625   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     1,351        1,670,284        169,576         (38,712     1,802,499   

EXPENSES

           

Salaries and benefits

     918        548,874        7         —          549,799   

General and administrative

     30,497        456,423        30,387         (36,930     480,377   

Interest expense

     123,629        60,064        89,521         (559     272,655   

Depreciation and amortization

     124        70,068        835         —          71,027   

Provision for loan losses

     77        121        1,031         —          1,229   

Other expenses, net

     682        1,322        6,162         —          8,166   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     155,927        1,136,872        127,943         (37,489     1,383,253   

OTHER GAINS (LOSSES)

           

Losses on extinguishments

     (12,489     —          —           —          (12,489

Other net fair value gains (losses)

     (4,813     (657     11,531         —          6,061   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total other gains (losses)

     (17,302     (657     11,531         —          (6,428
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (171,878     532,755        53,164         (1,223     412,818   

Income tax expense (benefit)

     (55,556     208,459        6,921         (473     159,351   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     (116,322     324,296        46,243         (750     253,467   

Equity in earnings of consolidated subsidiaries and variable interest entities

     369,789        13,009        —           (382,798     —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 253,467      $ 337,305      $ 46,243       $ (383,548   $ 253,467   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income

   $ 253,472      $ 337,337      $ 46,168       $ (383,505   $ 253,472   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Year Ended December 31, 2012

(in thousands)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and
VIEs
    Eliminations
and
Reclassifications
    Consolidated  

REVENUES

          

Net servicing revenue and fees

   $ —        $ 387,087      $ 2,375      $ (20,953   $ 368,509   

Net gains on sales of loans

     —          648        —          —          648   

Interest income on loans

     328        696        153,327        —          154,351   

Net fair value gains on reverse loans and related HMBS obligations

     —          7,279        —          —          7,279   

Insurance revenue

     —          66,637        6,786        (174     73,249   

Other revenues

     382        17,729        19,286        (17,626     19,771   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     710        480,076        181,774        (38,753     623,807   

EXPENSES

          

Salaries and benefits

     2,998        223,902        3,207        —          230,107   

General and administrative

     8,845        130,231        38,791        (41,631     136,236   

Interest expense

     77,645        3,472        99,103        (549     179,671   

Depreciation and amortization

     131        47,955        1,181        —          49,267   

Provision for loan losses

     590        77        12,685        —          13,352   

Other expenses, net

     760        859        7,648        —          9,267   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     90,969        406,496        162,615        (42,180     617,900   

OTHER GAINS (LOSSES)

          

Losses on extinguishments

     (48,579     —          —          —          (48,579

Other net fair value gains (losses)

     (1,197     (1,178     9,596        —          7,221   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other gains (losses)

     (49,776     (1,178     9,596        —          (41,358
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (140,035     72,402        28,755        3,427        (35,451

Income tax expense (benefit)

     (48,808     28,569        5,535        1,387        (13,317
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

     (91,227     43,833        23,220        2,040        (22,134

Equity in earnings of consolidated subsidiaries and variable interest entities

     69,093        6,300        (438     (74,955     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (22,134   $ 50,133      $ 22,782      $ (72,915   $ (22,134
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ (22,057   $ 50,082      $ 22,884      $ (72,966   $ (22,057
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Year Ended December 31, 2011

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

REVENUES

         

Net servicing revenue and fees

  $ —        $ 171,730      $ 11,569      $ (25,745   $ 157,554   

Interest income on loans

    2,603        3,414        158,777        —          164,794   

Insurance revenue

    —          33,086        10,965        (2,400     41,651   

Other revenues

    4,126        7,863        6,604        (8,741     9,852   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    6,729        216,093        187,915        (36,886     373,851   

EXPENSES

         

Salaries and benefits

    3,478        104,614        9,644        —          117,736   

General and administrative

    41,280        46,472        27,666        (36,821     78,597   

Interest expense

    42,188        1,296        96,702        (3,940     136,246   

Depreciation and amortization

    —          22,925        1,530        —          24,455   

Provision for loan losses

    1,218        39        4,759        —          6,016   

Other expenses, net

    130        6,089        11,854        —          18,073   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    88,294        181,435        152,155        (40,761     381,123   

OTHER GAINS (LOSSES)

         

Gains on extinguishments

    —          —          95        —          95   

Other net fair value gains (losses)

    (324     2,304        (936     —          1,044   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other gains (losses)

    (324     2,304        (841     —          1,139   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    (81,889     36,962        34,919        3,875        (6,133

Income tax expense (benefit)

    58,098        (1,538     2,191        1,513        60,264   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before equity in earnings of consolidated subsidiaries and variable interest entities

    (139,987     38,500        32,728        2,362        (66,397

Equity in earnings of consolidated subsidiaries and variable interest entities

    73,590        (4,881     (254     (68,455     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ (66,397   $ 33,619      $ 32,474      $ (66,093   $ (66,397
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

  $ (67,232   $ 32,856      $ 32,320      $ (65,176   $ (67,232
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 31, 2013

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries and
VIEs
    Eliminations
and
Reclassifications
    Consolidated  

Cash flows provided by (used in) operating activities

  $ (99,050   $ (1,741,415   $ 29,860      $ 130      $ (1,810,475
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

         

Purchases and originations of reverse loans held for investment

    —          (3,020,937     —          —          (3,020,937

Principal payments received on reverse loans held for investment

    —          372,375        —          —          372,375   

Principal payments received on forward loans related to Residual Trusts

    84        458        107,732        —          108,274   

Principal payments received on forward loans related to Non-Residual Trusts

    —          —          61,385        —          61,385   

Payments received on receivables related to Non- Residual Trusts

    —          —          14,804        —          14,804   

Cash proceeds from sales of real estate owned, net related to Residual Trusts

    254        80        7,396        —          7,730   

Cash proceeds from sales of other real estate owned, net

    —          23,184        7,510        —          30,694   

Purchases of premises and equipment

    —          (38,639     —          —          (38,639

Decrease (increase) in restricted cash and cash equivalents

    (752     (7,282     (122     —          (8,156

Payments for acquisitions of businesses, net of cash acquired

    (477,021     (1,063     —          —          (478,084

Deposit for acquisitions

    —          (179,185     —          —          (179,185

Acquisitions of servicing rights

    —          (632,179     —          —          (632,179

Capital contributions to subsidiaries

    (331,107     (16,010     —          347,117        —     

Returns of capital from subsidiaries

    37,796        30,307        —          (68,103     —     

Change in due from affiliates

    (688,070     (65,619     (78,976     832,665        —     

Other

    (15,200     1,035        —          —          (14,165
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) investing activities

    (1,474,016     (3,533,475     119,729        1,111,679        (3,776,083
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

         

Proceeds from issuance of debt, net of debt issuance costs

    3,106,263        —          —          —          3,106,263   

Payments on debt

    (360,826     (2,105     —          —          (362,931

Proceeds from securitizations of reverse loans

    —          3,216,096        —          —          3,216,096   

Payments on HMBS related obligations

    —          (409,331     —          —          (409,331

Issuances of servicing advance liabilities

    —          1,597,043        7,229        —          1,604,272   

Payments on servicing advance liabilities

    —          (729,274     (3,876     —          (733,150

Net change in master repurchase agreements related to forward loans

    —          929,015        —          —          929,015   

Net change in master repurchase agreements related to reverse loans

    —          (98,837     —          —          (98,837

Other debt issuance costs paid

    (1,936     (7,897     —          —          (9,833

Payments on mortgage-backed debt related to Residual Trusts

    —          —          (112,449     —          (112,449

Payments on mortgage-backed debt related to Non-Residual Trusts

    —          —          (87,920     —          (87,920

Extinguishments and settlement of debt and mortgage-backed debt

    (1,405,424     —          —          —          (1,405,424

Capital contributions

    —          331,107        16,010        (347,117     —     

Capital distributions

    —          (10,837     (57,266)        68,103        —     

Change in due to affiliates

    (29,618     772,554        90,284        (833,220     —     

Other

    (1,777     2,007        (37     425        618   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) financing activities

    1,306,682        5,589,541        (148,025     (1,111,809     5,636,389   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

    (266,384     314,651        1,564        —          49,831   

Cash and cash equivalents at the beginning of the year

    366,393        73,993        1,668        —          442,054   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the year

  $ 100,009      $ 388,644      $ 3,232      $ —        $ 491,885   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 31, 2012

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

Cash flows provided by (used in) operating activities

  $ (78,619   $ 118,733      $ 25,633      $ 3,873      $ 69,620   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

         

Purchases and originations of reverse loans held for investment

    —          (594,315     —          —          (594,315

Principal payments received on reverse loans held for investment

    —          29,658        —          —          29,658   

Principal payments received on forward loans related to Residual Trusts

    148        124        96,766        —          97,038   

Principal payments received on forward loans related to Non-Residual Trusts

    —          —          62,884        —          62,884   

Payments received on receivables related to Non-Residual Trusts

    —          —          16,096        —          16,096   

Cash proceeds from sales of real estate owned, net related to Residual Trusts

    670        319        6,872        —          7,861   

Cash proceeds from sales of real estate owned, net

    —          3,198        8,185        —          11,383   

Purchases of premises and equipment

    —          (11,408     —          —          (11,408

Decrease (increase) in restricted cash and cash equivalents

    31,175        1,931        8,226        —          41,332   

Payments for acquisitions of businesses, net of cash acquired

    (115,000     —          —          26,408        (88,592

Deposit for business acquisition

    (15,000     —          —          —          (15,000

Acquisitions of servicing rights

    —          (5,539     —          —          (5,539

Returns of capital from subsidiaries

    37,536        2,257        —          (39,793     —     

Capital contributions to subsidiaries

    (31,118     (4,195     —          35,313        —     

Change in due from affiliate

    12,469        (204,144     (174,258     365,933        —     

Other

    —          (2,751     —          —          (2,751
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) investing activities

    (79,120     (784,865     24,771        387,861        (451,353
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

         

Proceeds from issuance of debt, net of debt issuance costs

    962,524        —          —          (5,487     957,037   

Payments on debt

    (65,000     (10,292     —          —          (75,292

Debt prepayment penalty

    (29,440     —          —          —          (29,440

Proceeds from securitizations of reverse loans

    —          583,925        —          —          583,925   

Payments on HMBS related obligations

    —          (33,496     —          —          (33,496

Issuances of servicing advance liabilities

    —          242,080        21,753        —          263,833   

Payments on servicing advance liabilities

    —          (264,771     (5,937     —          (270,708

Net change in master repurchase agreements related to forward loans

    —          6,055        —          —          6,055   

Net change in master repurchase agreements related to reverse loans

    —          11,832        —          —          11,832   

Other debt issuance costs paid

    (6,179     (188     (825     —          (7,192

Payments on mortgage-backed debt related to Residual Trusts

    —          —          (98,105     —          (98,105

Payments on mortgage-backed debt related to Non-Residual Trusts

    —          —          (92,716     —          (92,716

Extinguishments and settlement of debt and mortgage-backed debt

    (690,000     —          —          —          (690,000

Secondary equity offering, net of issuance costs

    276,013        —          —          —          276,013   

Capital contributions

    —          32,011        29,710        (61,721     —     

Capital distributions

    —          (4,225     (35,568     39,793        —     

Change in due to affiliate

    72,588        161,134        130,597        (364,319     —     

Other

    3,076        226        —          —          3,302   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) financing activities

    523,582        724,291        (51,091     (391,734     805,048   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

    365,843        58,159        (687     —          423,315   

Cash and cash equivalents at the beginning of the year

    550        15,834        2,355        —          18,739   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the year

  $ 366,393      $ 73,993      $ 1,668      $ —        $ 442,054   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Statement of Cash Flows

For the Year Ended December 31, 2011

(in thousands)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
and VIEs
    Eliminations
and
Reclassifications
    Consolidated  

Cash flows provided by (used in) operating activities

  $ (20,728   $ 62,865      $ 64,363      $ (1,594   $ 104,906   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

         

Purchases of forward loans related to Residual Trusts

    —          (44,794     —          —          (44,794

Principal payments received on forward loans related to Residual Trusts

    901        2,080        92,765        —          95,746   

Principal payments received on forward loans related to Non-Residual Trusts

    —          —          30,636        —          30,636   

Payments received on receivables related to Non-Residual Trusts

    —          —          9,126        —          9,126   

Purchase of held-to-maturity investments

    (1,338     —          —          1,338        —     

Proceeds from sales of held-to-maturity investments

    123,161        —          —          (123,161     —     

Cash proceeds from sales of real estate owned, net related to Residual Trusts

    —          654        2,435        —          3,089   

Cash proceeds from sales of other real estate owned, net

    —          425        4,687        —          5,112   

Purchases of premises and equipment

    —          (6,273     (14     —          (6,287

Decrease (increase) in restricted cash and cash equivalents

    (44,728     311        (3,501     —          (47,918

Payments for acquisitions of businesses, net of cash acquired

    (1,012,640     —          —          12,111        (1,000,529

Capital contributions to subsidiaries

    —          (100     —          100        —     

Returns of capital from subsidiaries

    261,535        1,278        —          (262,813     —     

Change in due from affiliate

    (129,554     102,955        28,835        (2,236     —     

Other

    —          (1,708     —          —          (1,708
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) investing activities

    (802,663     54,828        164,969        (374,661     (957,527
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

         

Proceeds from issuance of debt, net of debt issuance costs

    720,700        —          —          —          720,700   

Payments on debt

    (18,750     (5,527     —          —          (24,277

Issuances of servicing advance liabilities

    —          156,637        1,169        —          157,806   

Payments on servicing advance liabilities

    —          (157,750     (7,132     —          (164,882

Other debt issuance costs paid

    —          —          (2,213     (812     (3,025

Issuance of mortgage-backed debt related to Residual Trusts

    —          —          102,000        121,065        223,065   

Payments on mortgage-backed debt related to Residual Trusts

    —          —          (92,635     2,908        (89,727

Payments on mortgage-backed debt related to Non-Residual Trusts

    —          —          (47,760     —          (47,760

Extinguishments and settlement of debt and mortgage-backed debt

    —          —          —          (1,338     (1,338

Dividends and dividend equivalents paid

    (14,051     —          —          —          (14,051

Capital Contribution

    —          12,111        100        (12,211     —     

Capital Distributions

    —          (199,756     (63,057     262,813        —     

Change in due to affiliate

    27,481        91,602        (122,913     3,830        —     

Other

    181        316        —          —          497   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows provided by (used in) financing activities

    715,561        (102,367     (232,441     376,255        757,008   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

    (107,830     15,326        (3,109     —          (95,613

Cash and cash equivalents at the beginning of the year

    108,380        508        5,464        —          114,352   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the year

  $ 550      $ 15,834      $ 2,355      $ —        $ 18,739