Parent Company Information

12 Months Ended

Dec. 31, 2021

Parent Company Information

Parent Company Information

Note 25—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. The Company’s Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company’s existing and future wholly-owned domestic subsidiaries (other than certain excluded subsidiaries defined in the indentures under which the Unsecured Notes were issued).

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED BALANCE SHEETS

	December 31,
	2021		2020
	(in thousands)
ASSETS
Cash	$	9,276	$	19,013
Investments in subsidiaries		4,217,461		3,918,583
Receivable from PennyMac Mortgage Investment Trust		27		—
Due from subsidiaries		1,477,332		580,069
Total assets	$	5,704,096	$	4,517,665
LIABILITIES AND STOCKHOLDERS' EQUITY
Unsecured senior notes	$	1,776,219	$	645,820
Accounts payable and accrued expenses		28,135		14,590
Payable to subsidiaries		116		22,405
Income taxes payable		481,301		445,462
Total liabilities		2,285,771		1,128,277
Stockholders' equity		3,418,325		3,389,388
Total liabilities and stockholders' equity	$	5,704,096	$	4,517,665

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF INCOME

	Year ended December 31,
	2021		2020		2019
	(in thousands)
Revenues
Dividends from subsidiaries	$	982,740	$	602,606	$	36,376
Net interest income (expense):
Interest income from subsidiary		77,162		15,830		—
Interest expense:
To non-affiliates		70,208		8,774		—
To subsidiary		—		83		153
		70,208		8,857		153
Net interest income (expense)		6,954		6,973		(153)
Total revenues		989,694		609,579		36,223
Expenses
Charitable contributions		5,800		2,314		—
Professional services		2,236		42		—
Other		449		327		—
Total expenses		8,485		2,683		—
Income before provision for income taxes and equity in undistributed earnings of subsidiaries		981,209		606,896		36,223
Provision for income taxes		238,803		395,340		91,291
Income (loss) before equity in undistributed earnings of subsidiaries		742,406		211,556		(55,068)
Equity in undistributed earnings of subsidiaries		261,084		1,435,328		448,033
Net income	$	1,003,490	$	1,646,884	$	392,965

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2021		2020		2019
	(in thousands)
Cash flows from operating activities
Net income	$	1,003,490	$	1,646,884	$	392,965
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries		(261,084)		(1,435,328)		(448,033)
Amortization of net debt issuance cost		2,321		225		—
Increase in receivable from PennyMac Mortgage Investment Trust		(27)		—		—
(Increase) decrease in intercompany receivable		(897,063)		(574,518)		8,962
Increase in accounts payable and accrued expenses		13,545		14,590		—
(Decrease) increase in payable to subsidiaries		(22,289)		18,211		—
Increase in income taxes payable		35,839		65,406		58,609
Net cash (used in) provided by operating activities		(125,268)		(264,530)		12,503
Cash flows from financing activities
Issuance of unsecured senior notes		1,150,000		650,000		—
Payment of debt issuance costs		(21,922)		(4,405)		—
Payment of dividend to holders of common stock		(52,896)		(30,947)		(9,708)
Issuance of common stock pursuant to exercise of stock options		7,536		9,389		5,145
Payment of withholding taxes relating to stock-based compensation		(8,993)		(5,265)		(4,634)
Repurchase of common stock and Class A common stock		(958,194)		(337,479)		(1,056)
Net cash provided by (used in) financing activities		115,531		281,293		(10,253)
Net increase (decrease) in cash (1)		(9,737)		16,763		2,250
Cash at beginning of year		19,013		2,250		—
Cash at end of year	$	9,276	$	19,013	$	2,250
Supplemental cash flow information:
Non-cash financing activity:
Issuance of common stock in settlement of directors' fees	$	200	$	194	$	233

(1) The Company did not hold restricted cash during the years presented.