Parent Company Information

12 Months Ended

Dec. 31, 2022

Parent Company Information

Parent Company Information

Note 24—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,
	2022		2021
	(in thousands)
ASSETS
Cash	$	45,496	$	9,276
Investments in subsidiaries		4,421,906		4,217,461
Receivable from PennyMac Mortgage Investment Trust		27		27
Due from subsidiaries		1,509,103		1,477,332
Total assets	$	5,976,532	$	5,704,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Unsecured senior notes	$	1,779,920	$	1,776,219
Accounts payable and accrued expenses		26,356		28,135
Payable to subsidiaries		135		116
Income taxes payable		699,072		481,301
Total liabilities		2,505,483		2,285,771
Stockholders' equity		3,471,049		3,418,325
Total liabilities and stockholders' equity	$	5,976,532	$	5,704,096

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF INCOME

	Year ended December 31,
	2022		2021		2020
	(in thousands)
Revenues
Dividends from subsidiaries	$	417,391	$	982,740	$	602,606
Net interest income:
Interest income from subsidiary		121,452		77,162		15,830
Interest expense:
To non-affiliates		95,014		70,208		8,774
To subsidiary		—		—		83
		95,014		70,208		8,857
Net interest income		26,438		6,954		6,973
Total net revenues		443,829		989,694		609,579
Expenses
Charitable contributions		—		5,800		2,314
Professional services		—		2,236		42
Other		267		449		327
Total expenses		267		8,485		2,683
Income before provision for income taxes and equity in undistributed earnings of subsidiaries		443,562		981,209		606,896
Provision for income taxes		129,948		238,803		395,340
Income before equity in undistributed earnings of subsidiaries		313,614		742,406		211,556
Equity in undistributed earnings of subsidiaries		161,893		261,084		1,435,328
Net income	$	475,507	$	1,003,490	$	1,646,884

PENNYMAC FINANCIAL SERVICES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2022		2021		2020
	(in thousands)
Cash flows from operating activities
Net income	$	475,507	$	1,003,490	$	1,646,884
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed earnings of subsidiaries		(161,893)		(261,084)		(1,435,328)
Amortization of net debt issuance cost		3,701		2,321		225
Increase in receivable from PennyMac Mortgage Investment Trust		—		(27)		—
(Increase) decrease in intercompany receivable		(31,566)		(897,063)		(574,518)
Increase in accounts payable and accrued expenses		(1,779)		13,545		14,590
(Decrease) increase in payable to subsidiaries		19		(22,289)		18,211
Increase in income taxes payable		217,771		35,839		65,406
Net cash provided by (used in) operating activities		501,760		(125,268)		(264,530)
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		(54,621)		(52,896)		(30,947)
Issuance of common stock pursuant to exercise of stock options		2,947		7,536		9,389
Payment of withholding taxes relating to stock-based compensation		(7,780)		(8,993)		(5,265)
Repurchase of common stock		(406,086)		(958,194)		(337,479)
Net cash (used in) provided by financing activities		(465,540)		115,531		281,293
Net increase (decrease) in cash (1)		36,220		(9,737)		16,763
Cash at beginning of year		9,276		19,013		2,250
Cash at end of year	$	45,496	$	9,276	$	19,013
Supplemental cash flow information:
Non-cash financing activity:
Issuance of common stock in settlement of directors' fees	$	205	$	200	$	194

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