Note 27—Parent Company Information

The Company’s debt financing agreements require PLS, the Company’s indirect controlled subsidiary, to comply with financial covenants that include a minimum tangible net worth of $500 million. PLS is limited from transferring funds to the Parent by this minimum tangible net worth requirement.

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED BALANCE SHEETS


	December 31,
	2019		2018
	(in thousands)
ASSETS
Cash	$	2,250	$	—
Investments in subsidiaries		2,443,407		1,975,231
Due from subsidiaries		100		582
Total assets	$	2,445,757	$	1,975,813
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to subsidiaries	$	4,194	$	575
Income taxes payable		380,056		321,447
Total liabilities		384,250		322,022
Stockholders' equity		2,061,507		1,653,791
Total liabilities and stockholders' equity	$	2,445,757	$	1,975,813

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF INCOME


	Year ended December 31,
	2019		2018		2017
	(in thousands)
Revenues
Dividends from subsidiary	$	36,376	$	10,054	$	—
Repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		—		—		32,940
Total revenue		36,376		10,054		32,940
Expenses
Interest		153		32		—
Total expenses		153		32		—
Income before provision for income taxes and equity in undistributed earnings in subsidiaries		36,223		10,022		32,940
Provision for income taxes		91,291		20,897		24,387
Income (loss) before equity in undistributed earnings of subsidiaries		(55,068)		(10,875)		8,553
Equity in undistributed earnings of subsidiaries		448,033		98,569		92,204
Net income	$	392,965	$	87,694	$	100,757

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF CASH FLOWS


	Year ended December 31,
	2019		2018		2017
	(in thousands)
Cash flows from operating activities
Net income	$	392,965	$	87,694	$	100,757
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries		(448,033)		(98,569)		(92,204)
Repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		—		—		(32,940)
Decrease (increase) in intercompany receivable		8,962		(3,737)		5,646
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		—		—		(6,726)
Increase in income taxes payable		58,609		22,889		29,912
Net cash provided by operating activities		12,503		8,277		4,445
Cash flows from investing activities
Increase in investments in subsidiaries		—		(77)		—
Net cash used by investing activities		—		(77)		—
Cash flows from financing activities
Payment of dividend to common stock and Class A common stockholders		(9,708)		(10,054)		—
Issuance of common stock pursuant to exercise of stock options		5,145		803		1,254
Repurchase of common stock and Class A common stock		(1,056)		(1,554)		(8,599)
Payment of withholding taxes relating to stock-based compensation		(4,634)		—		—
Net cash used in financing activities		(10,253)		(10,805)		(7,345)
Net change in cash and restricted cash		2,250		(2,605)		(2,900)
Cash and restricted cash at beginning of year		—		2,605		5,505
Cash and restricted cash at end of year	$	2,250	$	—	$	2,605