Acquisition of LNR Property LLC (Tables)

9 Months Ended

Sep. 30, 2013

Acquisition of LNR Property LLC

Schedule of the initial and adjusted provisional estimates of identified assets acquired and liabilities assumed

The following table summarizes the initial and adjusted provisional estimates of identified assets acquired and liabilities assumed at the acquisition date, before consolidation of securitization VIEs, which had no impact on the purchase price (in thousands):

	Initial Provisional Amounts		Measurement Period Adjustments			Adjusted Provisional Amounts
Assets acquired:
Cash and cash equivalents	$	143,771	$	—		$	143,771
Restricted cash	24,413		—			24,413
Loans held-for-investment	8,015		—			8,015
Loans held-for-sale	256,502		—			256,502
Investment securities	314,471		—			314,471
Intangible assets — servicing rights	276,989		—			276,989
Investment in unconsolidated entities	97,588		(1,170		)	96,418
Derivative assets	3,103		—			3,103
Interest receivable	1,315		—			1,315
Other assets	60,853		(152		)	60,701
Total assets acquired	1,187,020		(1,322		)	1,185,698
Liabilities assumed:
Accounts payable, accrued expenses and other liabilities	118,621		4,927			123,548
Secured financing agreements	438,377		—			438,377
Derivative liabilities	354		—			354
Total liabilities assumed	557,352		4,927			562,279
Net assets acquired	$	629,668	$	(6,249	)	$	623,419

Schedule of Goodwill amount represents the purchase price over the fair value of net tangible and identifiable intangible assets

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed. This determination of goodwill is as follows (amounts in thousands):

	Initial Provisional Amounts		Measurement Period Adjustments		Adjusted Provisional Amounts
Purchase price	$	730,518	—		$	730,518
Provisional estimates of the fair value of net assets acquired	629,668		(6,249	)	623,419
Goodwill	$	100,850	6,249		$	107,099

Schedule of pro forma revenue and net earnings assuming the acquisition occurred on January 1, 2012

The pro forma revenue and net income of the combined entity for the three and nine months ended September 30, 2013 and 2012, assuming the business combination was consummated on January 1, 2012, are as follows (amounts in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Revenues	$	155,536	$	150,058	$	459,856	$	416,109
Net income	97,288		112,757		299,338		263,908

Schedule of adjustments related to pro forma revenue and net income assuming the acquisition occurred on January 1, 2012

Pro forma revenues and expenses were adjusted to exclude interest expense on LNR’s senior credit facility, which was repaid at the acquisition date, and certain other non-recurring acquisition related costs.  We included an estimated income tax provision and management fee expense for periods prior to the acquisition date and estimated interest expense for the term loan facility discussed in Note 10.  The amounts of these adjustments are as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net interest expense addition (deduction)	$	—		$	(1,416	)	$	752		$	(4,385	)
Non-recurring acquisition costs addition (deduction)	(7,291		)	7,699			(125,936		)	23,097
Income tax provision addition	1,604			15,722			15,577			28,647
Management fee expense addition	—			23,164			18,657			32,907