Nationstar Mortgage Announces Third Quarter 2012 Financial Results
Stock quotes in this article:
NSM
Pro-forma AEBITDA per Share
This disclaimer applies to every usage of pro-forma AEBITDA per share in this presentation. Pro-forma AEBITDA per share is a metric that is used by management to exclude certain non-recurring items in an attempt to provide a better AEBITDA per share comparison to prior periods. Pro-forma Q3 ’12 AEBITDA per share excludes certain expenses related ResCap and other transactions. These expenses include the advance hiring of servicing staff, recruiting expenses and travel and licensing expenses. Pro-forma Q2 ’12 AEBITDA per share excluded certain expenses incurred in advance of the Aurora transaction.
Conference Call Webcast and Investor Presentation
Chief Executive Officer, Jay Bray, and Chief Financial Officer, David Hisey, will host a conference call for investors and analysts to discuss Nationstar’s third quarter results and other general business matters at 10:00 a.m. (ET) on Tuesday, November 6, 2012. To listen to the event live or in an archive which will be available for 14 days, visit Nationstar's website at http://investors.nationstarholdings.com. The conference call will also be accessible by dialing 866-788-0545, or 857-350-1683 internationally. Please use the participant passcode 83308800 to access the live conference call. An investor presentation will also be available at http://investors.nationstarholdings.com.
Financial Tables| NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (dollars and shares in thousands, except per share data) | ||||||||||||||||
| Three months ended | ||||||||||||||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | ||||||||||||||
| Revenues | ||||||||||||||||
| Servicing fee income | $ | 135,504 | $ | 86,092 | $ | 53,031 | ||||||||||
| Other fee income | 2,396 | 11,610 | 7,660 | |||||||||||||
| Total fee income | 137,900 | 97,702 | 60,691 | |||||||||||||
| Gain on mortgage loans held for sale | 139,259 | 102,345 | 30,232 | |||||||||||||
| Total revenues | 277,159 | 200,047 | 90,923 | |||||||||||||
| Total expenses and impairments | 154,828 | 130,372 | 83,194 | |||||||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | 23,542 | 15,650 | 16,201 | |||||||||||||
| Interest expense | (65,015 | ) | (35,913 | ) | (26,376 | ) | ||||||||||
| Loss on interest rate swaps and caps | (1,077 | ) | (357 | ) | – | |||||||||||
| Fair value changes in ABS securitizations | – | – | (654 | ) | ||||||||||||
| Total other income (expense) | (42,550 | ) | (20,620 | ) | (10,829 | ) | ||||||||||
| Income before taxes | 79,781 | 49,055 | (3,100 | ) | ||||||||||||
| Income tax expense | 24,714 | 12,780 | – | |||||||||||||
| Net income | 55,067 | 36,275 | (3,100 | ) | ||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||
| Change in value of designated cash flow hedges | – | (423 | ) | – | ||||||||||||
| Reclassification adjustments for gain (loss) | 423 | – | – | |||||||||||||
| Comprehensive income | $ | 55,490 | $ | 35,852 | $ | (3,100 | ) | |||||||||
| Earnings per share: | ||||||||||||||||
| Basic earnings per share | $ | 0.62 | $ | 0.41 | $ | (0.04 | ) | |||||||||
| Diluted earnings per share | $ | 0.61 | $ | 0.41 | $ | (0.04 | ) | |||||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 89,168 | 88,500 | 70,000 | |||||||||||||
| Dilutive effect of stock awards | 597 | 1,028 | – | |||||||||||||
| Diluted | 89,765 | 89,528 | 70,000 | |||||||||||||
| Dividends declared per share | $ | – | $ | – | $ | – | ||||||||||
| NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) | |||||||||||||
| September 30, | June 30, | September 30, | |||||||||||
| 2012 | 2012 | 2011 | |||||||||||
| Assets | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Cash and cash equivalents | $ | 430,815 | $ | 15,892 | $ | 24,005 | |||||||
| Restricted cash | 258,858 | 119,512 | 72,813 | ||||||||||
| Accounts receivable | 2,852,985 | 2,487,991 | 471,474 | ||||||||||
| Mortgage loans held for sale | 703,214 | 837,906 | 377,932 | ||||||||||
| Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets | 238,178 | 238,173 | 246,159 | ||||||||||
| Mortgage loans held for investment, subject to ABS nonrecourse debt | – | – | 477,748 | ||||||||||
| Reverse mortgage interests | 452,886 | 310,074 | – | ||||||||||
| Receivables from affiliates | 13,301 | 13,083 | 6,082 | ||||||||||
| Mortgage servicing rights – fair value | 592,692 | 596,462 | 246,916 | ||||||||||
| Mortgage servicing rights – amortized cost | 8,036 | 8,357 | – | ||||||||||
| Property and equipment, net | 48,714 | 39,090 | 20,990 | ||||||||||
| Real estate owned (REO), net | 3,193 | 3,429 | 15,411 | ||||||||||
| Other assets | 338,359 | 226,261 | 44,795 | ||||||||||
| Total assets | $ | 5,941,231 | $ | 4,896,230 | $ | 2,004,325 | |||||||
| Liabilities and equity | |||||||||||||
| Notes payable | $ | 2,532,316 | $ | 2,412,364 | $ | 738,783 | |||||||
| Unsecured senior notes | 1,062,423 | 555,938 | 245,109 | ||||||||||
| Payables and accrued liabilities | 762,268 | 639,839 | 177,452 | ||||||||||
| Derivative financial instruments | 37,835 | 18,911 | 15,778 | ||||||||||
| Derivative financial instruments, subject to ABS nonrecourse debt | – | – | 11,889 | ||||||||||
| Mortgage servicing liabilities | 82,313 | 81,979 | – | ||||||||||
| Nonrecourse debt - Legacy Assets | 101,898 | 106,271 | 116,200 | ||||||||||
| ABS nonrecourse debt (at fair value) | – | – | 434,326 | ||||||||||
| Excess spread financing (at fair value) | 255,484 | 266,693 | – | ||||||||||
| Participating interest financing | 415,448 | 181,114 | – | ||||||||||
| Total liabilities | 5,249,985 | 4,263,109 | 1,739,537 | ||||||||||
| Total equity | 691,246 | 633,121 | 264,788 | ||||||||||
| Total liabilities and equity | $ | 5,941,231 | $ | 4,896,230 | $ | 2,004,325 | |||||||
| SERVICING FEE INCOME DETAIL (dollars in thousands) | |||||||||||||||
| Three months ended | |||||||||||||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Total servicing fee income before MSR fair value adjustments | $ | 152,963 | $ | 109,222 | $ | 73,255 | |||||||||
| Fair value adjustments on excess spread financing | 2,213 | (2,412 | ) | – | |||||||||||
| Reverse mortgage servicing amortization/accretion | 2,652 | (9 | ) | – | |||||||||||
| MSR changes in fair value | (22,430 | ) | (20,875 | ) | (19,035 | ) | |||||||||
| Servicing fee income | 135,398 | 85,926 | 54,220 | ||||||||||||
| Other fee income | 6,457 | 5,969 | 3,772 | ||||||||||||
| Total servicing fee income | $ | 141,855 | $ | 91,895 | $ | 57,992 | |||||||||
| PRO-FORMA EARNINGS PER SHARE RECONCILIATION (dollars in thousands) | |||||||||||
| Three months ended | |||||||||||
| September 30, 2012 | June 30, 2012 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||
| Net Income | $ | 55,067 | $ | 36,275 | |||||||
| Income taxes | 24,714 | 12,780 | |||||||||
| Income before taxes | 79,781 | 49,055 | |||||||||
| ResCap and other transaction related expenses | 3,888 | 4,136 | |||||||||
| Pro-forma pre-tax income | 83,669 | 53,191 | |||||||||
| Income taxes | (25,918 | ) | (13,856 | ) | |||||||
| Pro-forma Income | $ | 57,751 | $ | 39,335 | |||||||
| Average shares outstanding | 89,765 | 89,528 | |||||||||
| Pro-forma EPS | $ | 0.64 | $ | 0.44 | |||||||
| PRO-FORMA OPERATING AEBITDA PER SHARE RECONCILIATION (dollars in thousands) | |||||||||
| Three months ended | |||||||||
| September 30, 2012 | June 30, 2012 | ||||||||
| (unaudited) | (unaudited) | ||||||||
| AEBITDA | $ | 123,035 | $ | 101,201 | |||||
| ResCap and other transaction related expenses | 3,888 | 4,136 | |||||||
| Pro-forma AEBITDA | $ | 126,923 | $ | 105,377 | |||||
| Average shares outstanding | 89,765 | 89,528 | |||||||
| Pro-forma AEBITDA per share | $ | 1.41 | $ | 1.18 | |||||
| AEBITDA RECONCILIATION (dollars in thousands) | ||||||||||||||||
| Three months ended | ||||||||||||||||
| Net Income/(Loss) from Operating Segments to Adjusted EBITDA Reconciliation | September 30, 2012 | June 30, 2012 | September 30, 2011 | |||||||||||||
| Net income | $ | 55,067 | $ | 36,275 | $ | (3,100 | ) | |||||||||
| Plus: | ||||||||||||||||
| Net (income)/loss from Legacy Portfolio and Other | 2,874 | 7,373 | 7,607 | |||||||||||||
| Income tax expense | 24,714 | 12,780 | – | |||||||||||||
| Net income/(loss) from Operating Segments | 82,655 | 56,428 | 4,507 | |||||||||||||
| Adjust for: | ||||||||||||||||
| Interest expense from unsecured senior notes | 17,656 | 13,516 | 7,543 | |||||||||||||
| Depreciation and amortization | 2,772 | 1,758 | 852 | |||||||||||||
| Change in fair value of mortgage servicing rights | 22,430 | 20,875 | 19,035 | |||||||||||||
| Amortization/accretion of reverse mortgage servicing | (2,652 | ) | 9 | – | ||||||||||||
| Restructuring charges | – | – | – | |||||||||||||
| Share-based compensation | 2,623 | 6,353 | 1,676 | |||||||||||||
| Fair value changes on excess spread financing | (2,213 | ) | 2,412 | – | ||||||||||||
| Fair value changes in derivatives | (236 | ) | (150 | ) | – | |||||||||||
| Ineffective portion of cash flow hedge | – | – | (617 | ) | ||||||||||||
| Adjusted EBITDA | $ | 123,035 | $ | 101,201 | $ | 32,996 | ||||||||||
| Adjusted EBITDA per share | $ | 1.37 | $ | 1.13 | $ | 0.47 | ||||||||||
| Earnings per share | $ | 0.61 | $ | 0.41 | $ | (0.04 | ) | |||||||||
| SEGMENT AEBITDA RECONCILIATION (dollars in thousands) | ||||||||||||||||||||||||||
| FOR QUARTER ENDED SEPTEMBER 30, 2012 | ||||||||||||||||||||||||||
| Adjusted EBITDA to Net Income/(Loss) Reconciliation | Servicing | Origination | Operating | Legacy | Total | |||||||||||||||||||||
| Adjusted EBITDA | $ 42,121 | $ 80,914 | $ 123,035 | $ (1,347 | ) | $ | 121,688 | |||||||||||||||||||
| Interest expense on corporate notes | (15,707 | ) | (1,949 | ) | (17,656 | ) | – | (17,656 | ) | |||||||||||||||||
| MSR valuation adjustment | (22,430 | ) | – | (22,430 | ) | – | (22,430 | ) | ||||||||||||||||||
| Excess spread adjustment | 2,213 | – | 2,213 | – | 2,213 | |||||||||||||||||||||
| Amortization of mortgage servicing obligations | 2,652 | – | 2,652 | – | 2,652 | |||||||||||||||||||||
| Depreciation & amortization | (2,006 | ) | (766 | ) | (2,772 | ) | (201 | ) | (2,973 | ) | ||||||||||||||||
| Stock-based compensation | (1,570 | ) | (1,053 | ) | (2,623 | ) | (13 | ) | (2,636 | ) | ||||||||||||||||
| Fair value adjustment for derivatives | 236 | – | 236 | (1,313 | ) | (1,077 | ) | |||||||||||||||||||
| Pre-Tax Income/Loss | 5,509 | 77,146 | 82,655 | (2,874 | ) | 79,781 | ||||||||||||||||||||
| Income Tax | (24,714 | ) | ||||||||||||||||||||||||
| Net Income/Loss | $ | 55,067 | ||||||||||||||||||||||||
| Average shares outstanding | 89,765 | 89,765 | 89,765 | 89,765 | 89,765 | |||||||||||||||||||||
| Earnings per share | $ | 0.61 | ||||||||||||||||||||||||
| Pre-Tax Income per share | $ 0.06 | $ 0.86 | $ 0.92 | $ (0.03 | ) | $ | 0.89 | |||||||||||||||||||
| AEBITDA per share | $ 0.47 | $ 0.90 | $ 1.37 | $ (0.02 | ) | $ | 1.36 | |||||||||||||||||||
| FOR QUARTER ENDED June 30, 2012 | ||||||||||||||||||||||||||
| Adjusted EBITDA to Net Income/(Loss) Reconciliation | Servicing | Origination | Operating | Legacy | Total | |||||||||||||||||||||
| Adjusted EBITDA | $ | 37,378 | $ | 63,823 | $ | 101,201 | $ | (7,488 | ) | $ | 93,713 | |||||||||||||||
| Interest expense on corporate notes | (13,516 | ) | – | (13,516 | ) | – | (13,516 | ) | ||||||||||||||||||
| MSR valuation adjustment | (20,875 | ) | – | (20,875 | ) | – | (20,875 | ) | ||||||||||||||||||
| Excess spread adjustment | (2,412 | ) | – | (2,412 | ) | – | (2,412 | ) | ||||||||||||||||||
| Amortization of mortgage servicing obligations | (9 | ) | – | (9 | ) | – | (9 | ) | ||||||||||||||||||
| Depreciation & amortization | (1,238 | ) | (520 | ) | (1,758 | ) | (96 | ) | (1,854 | ) | ||||||||||||||||
| Stock-based compensation | (4,147 | ) | (2,206 | ) | (6,353 | ) | 718 | (5,635 | ) | |||||||||||||||||
| Fair value adjustment for derivatives | 150 | – | 150 | (507 | ) | (357 | ) | |||||||||||||||||||
| Pre-Tax Income/Loss | (4,669 | ) | 61,097 | 56,428 | (7,373 | ) | 49,055 | |||||||||||||||||||
| Income Tax | (12,780 | ) | ||||||||||||||||||||||||
| Net Income | $ | 36,275 | ||||||||||||||||||||||||
| Average shares outstanding | 89,528 | 89,528 | 89,528 | 89,528 | 89,528 | |||||||||||||||||||||
| Earnings per share | $ | 0.41 | ||||||||||||||||||||||||
| Pre-Tax Income per share | $ | (0.05 | ) | $ | 0.68 | $ | 0.63 | $ | (0.08 | ) | $ | 0.55 | ||||||||||||||
| AEBITDA per share | $ | 0.42 | $ | 0.71 | $ | 1.13 | $ | (0.08 | ) | $ | 1.05 | |||||||||||||||
| FOR QUARTER ENDED SEPTEMBER 30, 2011 | ||||||||||||||||||||||||||
| Adjusted EBITDA to Net Income/(Loss) Reconciliation | Servicing | Origination | Operating | Legacy | Total | |||||||||||||||||||||
| Adjusted EBITDA | $ | 24,858 | $ | 8,138 | $ | 32,996 | $ | (7,468 | ) | $ | 25,528 | |||||||||||||||
| Interest expense on corporate notes | (7,543 | ) | – | (7,543 | ) | – | (7,543 | ) | ||||||||||||||||||
| MSR valuation adjustment | (19,035 | ) | – | (19,035 | ) | – | (19,035 | ) | ||||||||||||||||||
| Excess spread adjustment | – | – | – | – | – | |||||||||||||||||||||
| Amortization of mortgage servicing obligations | – | – | – | – | – | |||||||||||||||||||||
| Depreciation & amortization | (525 | ) | (327 | ) | (852 | ) | (139 | ) | (991 | ) | ||||||||||||||||
| Stock-based compensation | (1,508 | ) | (168 | ) | (1,676 | ) | – | (1,676 | ) | |||||||||||||||||
| Fair value adjustment for derivatives | 617 | – | 617 | – | 617 | |||||||||||||||||||||
| Pre-Tax Income/Loss | (3,136 | ) | 7,643 | 4,507 | (7,607 | ) | (3,100 | ) | ||||||||||||||||||
| Income Tax | – | |||||||||||||||||||||||||
| Net Income/Loss | $ | (3,100 | ) | |||||||||||||||||||||||
| Average shares outstanding | 70,000 | 70,000 | 70,000 | 70,000 | 70,000 | |||||||||||||||||||||
| Earnings per share | $ | (0.04 | ) | |||||||||||||||||||||||
| Pre-Tax Income per share | $ | (0.04 | ) | $ | 0.11 | $ | 0.06 | $ | (0.11 | ) | $ | (0.04 | ) | |||||||||||||
| AEBITDA per share | $ | 0.36 | $ | 0.12 | $ | 0.47 | $ | (0.11 | ) | $ | 0.36 | |||||||||||||||
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