19. Business Segment Reporting

Upon consummation of the Merger with Nationstar, the Company has identified four reportable segments: Servicing, Originations, Xome and Corporate/Other. The Company’s segments are based upon the Company’s organizational structure, which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on the actual cost of services performed based on direct resource utilization, estimate of percentage use for shared services or headcount percentage for certain functions. Facility costs are allocated to individual segments based on cost per headcount for specific facilities utilized. Group insurance costs are allocated to individual segments based on global cost per headcount. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties.

The following tables present financial information by segment.



	Successor
	Three Months Ended June 30, 2019
	Servicing			Originations			Xome		Elimination/ Reclassification⁽¹⁾			Total Operating Segments			Corporate/Other			Consolidated
Revenues
Service related, net	$	27		$	20		$	108	$	(18	)	$	137		$	—		$	137
Net gain on mortgage loans held for sale	—			244			—		18			262			—			262
Total revenues	27			264			108		—			399			—			399
Total Expenses	189			145			101		—			435			57			492
Other income (expenses)
Interest income	136			23			—		—			159			3			162
Interest expense	(109		)	(25		)	—		—			(134		)	(53		)	(187		)
Other	—			1			—		—			1			—			1
Total Other Income (Expenses), Net	27			(1		)	—		—			26			(50		)	(24		)
(Loss) income before income tax (benefit) expense	$	(135	)	$	118		$	7	$	—		$	(10	)	$	(107	)	$	(117	)
Depreciation and amortization for property and equipment and intangible assets	$	4		$	6		$	3	$	—		$	13		$	11		$	24
Total assets	$	12,806		$	7,478		$	493	$	(4,687	)	$	16,090		$	2,315		$	18,405



	Predecessor
	Three Months Ended June 30, 2018
	Servicing			Originations			Xome		Elimination/ Reclassification⁽¹⁾			Total Operating Segments			Corporate/Other			Consolidated
Revenues
Service related, net	$	248		$	17		$	62	$	(11	)	$	316		$	1		$	317
Net gain on mortgage loans held for sale	—			116			—		11			127			—			127
Total revenues	248			133			62		—			443			1			444
Total Expenses	166			102			52		—			320			19			339
Other income (expenses)
Interest income	121			17			—		—			138			2			140
Interest expense	(115		)	(16		)	—		—			(131		)	(33		)	(164		)
Other	—			—			—		—			—			(2		)	(2		)
Total Other Income (Expenses), Net	6			1			—		—			7			(33		)	(26		)
Income (loss) before income tax expense (benefit)	$	88		$	32		$	10	$	—		$	130		$	(51	)	$	79
Depreciation and amortization for property and equipment and intangible assets	$	6		$	3		$	3	$	—		$	12		$	2		$	14
Total assets	$	14,640		$	4,794		$	423	$	(3,538	)	$	16,319		$	871		$	17,190


⁽¹⁾	For Servicing segment results purposes, all revenue is attributable to servicing portfolio. Therefore, $18 and $11 of net gain on mortgage loans is moved to service related, net during the three months ended June 30, 2019 and 2018, respectively. For consolidated results purposes, these amounts were reclassed back to net gain on mortgage loans held for sale.



	Successor
	Six Months Ended June 30, 2019
	Servicing			Originations			Xome		Elimination/ Reclassification⁽¹⁾			Total Operating Segments			Corporate/Other			Consolidated
Revenues
Service related, net	$	35		$	35		$	204	$	(53	)	$	221		$	—		$	221
Net gain on mortgage loans held for sale	—			375			—		53			428			—			428
Total revenues	35			410			204		—			649			—			649
Total Expenses	384			249			200		—			833			102			935
Other income (expenses)
Interest income	251			40			—		—			291			5			296
Interest expense	(223		)	(43		)	—		—			(266		)	(110		)	(376		)
Other	—			5			11		—			16			—			16
Total Other Income (Expenses), Net	28			2			11		—			41			(105		)	(64		)
(Loss) income before income tax (benefit) expense	$	(321	)	$	163		$	15	$	—		$	(143	)	$	(207	)	$	(350	)
Depreciation and amortization for property and equipment and intangible assets	$	8		$	9		$	7	$	—		$	24		$	21		$	45
Total assets	$	12,806		$	7,478		$	493	$	(4,687	)	$	16,090		$	2,315		$	18,405



	Predecessor
	Six Months Ended June 30, 2018
	Servicing			Originations			Xome		Elimination/ Reclassification⁽¹⁾			Total Operating Segments			Corporate/Other			Consolidated
Revenues
Service related, net	$	643		$	32		$	127	$	(22	)	$	780		$	1		$	781
Net gain on mortgage loans held for sale	—			229			—		22			251			—			251
Total revenues	643			261			127		—			1,031			1			1,032
Total Expenses	348			211			104		—			663			40			703
Other income (expenses)
Interest income	247			32			—		—			279			6			285
Interest expense	(233		)	(31		)	—		—			(264		)	(71		)	(335		)
Other	(1		)	—			9		—			8			(2		)	6
Total Other Income (Expenses), Net	13			1			9		—			23			(67		)	(44		)
Income (loss) before income tax expense (benefit)	$	308		$	51		$	32	$	—		$	391		$	(106	)	$	285
Depreciation and amortization for property and equipment and intangible assets	$	13		$	6		$	6	$	—		$	25		$	4		$	29
Total assets	$	14,640		$	4,794		$	423	$	(3,538	)	$	16,319		$	871		$	17,190


⁽¹⁾	For Servicing segment results purposes, all revenue is attributable to servicing portfolio. Therefore, $53 and $22 of net gain on mortgage loans is moved to service related, net during the six months ended June 30, 2019 and 2018, respectively. For consolidated results purposes, these amounts were reclassed back to net gain on mortgage loans held for sale.