Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

(18)   Segment Information

The Company operates in two reportable business segments: financing premiums for individual life insurance policies and purchasing life insurance policies and structured settlements. The life finance segment provides (i) financing in the form of loans to trusts and individuals for the payment of premiums on life insurance policies and the loans are collateralized by the life insurance policies, and (ii) purchasing life insurance policies in the life settlement and secondary markets. The structured settlements segment purchases settlements from individuals who are plaintiffs in lawsuits and the Company will pay the plaintiff a lump sum at a negotiated discount and take title to the settlement payments.

The performance of the segments is evaluated on the segment level by members of the Company's senior management team. Cash and income taxes generally are managed centrally. Performance of the segments is based on revenue and cost control.

Segment results and reconciliation to consolidated net income were as follows (in thousands):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2011			2010			2011			2010
Life finance
Income
Agency fee income	$	1,569			2,439			5,627		$	7,717
Interest income		2,547			5,895			4,567			11,329
Origination income		1,824			5,592			4,105			12,891
Realized gain on sale of life settlements		5			474			5			474
Gain on forgiveness of debt		2,139			2,768			4,682			4,533
Unrealized change in fair value of life settlements		17,687			1			28,885			(201	)
Servicing fee income		567			—			1,071			—
Other income		12			96			174			104
		26,350			17,265			49,116			36,847
Direct segment expenses
Interest expense		2,538			7,563			5,475			15,329
Provision for losses on laon receivables		21			(257	)		129			3,019
Loss on loans payoffs and settlements, net		1,095			1,844			3,666			3,313
Amortization of deferred costs		1,597			5,786			3,504			11,633
Selling, general and administrative expenses		2,571			2,096			5,157			4,739
		7,822			17,032			17,931			38,033
Segment operating income (loss)	$	18,528		$	233		$	31,185		$	(1,186	)
Structured settlements
Income
Realized gain on sale of structured settlements	$	2,049		$	3,263		$	3,217		$	3,263
Interest income		175			63			175			212
Unrealized change in fair value of structured settlements		375			—			1,217			—
Other income		100			34			145			49
		2,699			3,360			4,754			3,524
Direct segment expenses
Selling, general and administrative expenses		4,334			3,102			8,334			5,730
Segment operating (loss) income	$	(1,635	)	$	258		$	(3,580	)	$	(2,206	)
Consolidated
Segment operating (loss) income		16,893			491			27,605			(3,392	)
Unallocated income
Other income		162			—			201			—
Unallocated expenses
Selling, general and administrative expenses		3,263			1,723			6,296			4,124
Interest expense		4			863			296			2,066
		3,267			2,586			6,592			6,190
Income (loss) before income taxes		13,788			(2,095	)		21,214			(9,582	)
Provision for income taxes		1,183						9,179			—
Net income (loss)	$	12,605		$	(2,095	)	$	12,035		$	(9,582	)

Segment assets and reconciliation to consolidated total assets were as follows (in thousands):

	June 30		December 31
	2011		2010
Direct segment assets
Life finance	$	160,399	$	141,518
Structured settlements		5,253		3,527
		165,652		145,045
Other unallocated assets		126,517		8,372
	$	292,169	$	153,417