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8-K - FORM 8-K - Nationstar Mortgage Holdings Inc.d498381d8k.htm
EX-99.2 - EX-99.2 - Nationstar Mortgage Holdings Inc.d498381dex992.htm

Exhibit 99.1

 

LOGO   FOR IMMEDIATE RELEASE

Contact: Marshall Murphy

(469) 549-3005

NATIONSTAR MORTGAGE ANNOUNCES FOURTH QUARTER AND FULL YEAR 2012 FINANCIAL RESULTS

HIGHLIGHTS FOR FOURTH QUARTER 2012

 

   

Record net income of $64 million, or $0.71 per share

 

   

Ending servicing portfolio UPB of $208 billion; Feb’13 UPB over $300 billion

 

   

Increased servicing segment profitability

 

   

Third consecutive quarter of record originations volume and application pipeline

 

   

Solutionstar initiative to expand fee-based services offering

HIGHLIGHTS FOR FULL YEAR 2012

 

   

Record net income of $205 million, or $2.40 per share

 

   

Servicing portfolio growth of 94%, including Aurora acquisition

 

   

Originations of $7.9 billion, growth of 132%

 

   

Top 3 performing IPO with 121% increase in shareholder value

 

   

Return on equity of 40%

Lewisville, TX (March 7, 2013) – Nationstar Mortgage Holdings Inc. (NYSE:NSM) (“Nationstar”), a leading residential mortgage services company, today reported that quarterly net income grew 16% sequentially to $63.8 million, or $0.71 per share, for the fourth quarter 2012 compared to $55.1 million, or $0.61 per share, in the third quarter 2012 and 328% year-over-year versus $14.9 million in the fourth quarter 2011, or $0.21 per share. Net income for the full year 2012 increased 882% to $205.3 million, or $2.40 per share, from $20.9 million in 2011, or $0.30 per share.

On a Non-GAAP basis, adjusted EBITDA (“AEBITDA”) for operating segments grew 26% to $155.0 million, or $1.72 per share, for the current quarter versus $123.0 million, or $1.37 per share, in the third quarter 2012. Full year 2012 AEBITDA increased 236% to $456.4 million, or $5.34 per share, from $136.0 million, or $1.94 per share, in 2011. In the current quarter AEBITDA margin was 47%.

Nationstar’s revenue grew 17% to $332.6 million in the fourth quarter from $284.9 million in the prior quarter and was up 180% from $118.6 million in the fourth quarter of 2011. Full year 2012 revenue increased 161% to $984.3 million from $377.8 million in 2011. Pre-tax income from operating segments for the fourth quarter increased 17% to a $96.6 million, or $1.07 per share, up from $82.7 million, or $0.92 per share, in the third quarter of 2012 and was up 324% from $22.8 million, or $0.33 per share, in the fourth quarter of 2011. Full year 2012 pre-tax income from operating segments was a $297.1 million, up 549% from $45.8 million in 2011. In the current quarter, pre-tax income margin from operating segments was 30%.


Nationstar’s servicing portfolio, as measured by unpaid principal balance (“UPB”), increased 5% to end the fourth quarter at $208 billion compared to the prior quarter ending balance of $198 billion. 2012 ending UPB was up 94% over 2011 ending balance of $107 billion.

“2012 was a very successful and important year for Nationstar, and we have made great strides in building one of the leading residential mortgage services companies in the United States,” said Jay Bray, Chief Executive Officer of Nationstar. “Each quarter this year, we consistently achieved meaningful sequential growth in revenue and earnings while delivering high returns to our shareholders. We invested in infrastructure and built capacity in preparation for our landmark servicing portfolio acquisitions, Aurora and Bank of America. We continue to organically grow servicing with a continued focus on portfolio recapture and expansion of our builder and other origination channels. Our Solutionstar initiative is expanding our fee-based services offering across the entire mortgage lifecycle. We look forward to further growth in 2013 with a rigorous focus on delivering value to our shareholders. We remain focused on providing homeownership solutions to our customers and best-in-class servicing performance for investors.”

Chief Financial Officer David Hisey said, “Our strong financial results reflect our continued focus on increasing profitably as we capitalize on the many growth opportunities in front of us. Servicing profitability is a high priority for us, as reflected in the increase in servicing profit and margins in the fourth quarter. Origination margins remained near historical highs as we continued to grow volumes in multiple channels. We raised additional capital at lower costs to support our capital-light growth strategy and drive shareholder returns. In 2013 we will continue to focus on profitable growth across all of our business segments. Within servicing, we will look to drive down cost per loan, delinquencies, and advance financing costs as we scale the platform over time. We will also pursue fee-based services acquisitions that meet our return thresholds.”

Business Segments

Servicing

Servicing fee income before fair value adjustments increased 9% to $174.6 million in fourth quarter 2012 compared to $159.9 million in the prior quarter. Servicing fee income before fair value adjustments was $535.8 million in 2012, up 91% compared to 2011. Total servicing fee income of $145.4 million in the fourth quarter was up 2% quarter-over-quarter. Full year total servicing fee income was $462.0 million, up 94% compared to 2011.

Nationstar added over 550,000 new customers in 2012, resulting in over 1.1 million total customers at year-end. The average portfolio UPB for the fourth quarter was $203 billion, a 4% increase over the prior quarter average of $195 billion. The average portfolio for the full year 2012 was $157 billion, up 84% from 2011.

The fair value of mortgage servicing rights decreased in the current quarter by $25.4 million, or $0.28 per share pre-tax, versus a decrease in value of $22.4 million, or $0.25 per share, in the prior quarter. The current quarter decrease was comprised of $24.3 million in portfolio runoff and $1.2 million in fair-value mark to market adjustments.

Servicing pre-tax income increased 171% to $14.9 million from $5.5 million in the prior quarter and 10% compared to $13.6 million in the year-ago quarter. Servicing pre-tax margin was 9% in the current quarter, and servicing pre-tax income as a percentage of UPB was 3 basis points, an increase from the 1 basis point level in the prior quarter. Full year 2012 servicing pre-tax income was a $35.4 million, up 60% from 2011.

Servicing pre-tax income in the current quarter includes other income of $15.6 million from the Rescap contract termination, mostly offset by $13.2 million in other expense from the loss on an equity method investment (NREIS). Nationstar wrote off its minority investment in NREIS and has made the determination that Solutionstar will be the focus for the build out of settlement, processing, and asset management services.

Servicing AEBITDA increased 59% in the current quarter to $66.9 million compared to $42.1 million in the third quarter 2012 and was up 88% from $35.6 million in the fourth quarter of 2011. Servicing AEBITDA margin was 42% in the current quarter, and servicing AEBITDA as a percentage of UPB was 13 basis points, an increase from the 9 basis point level in the prior quarter. Full year 2012 servicing AEBITDA was $181.2 million, up 69% from 2011.

In December 2012, Nationstar closed on a $13 billion GNMA forward portfolio. Nationstar has executed on flow agreements that are expected to produce $15 billion in annual volume. Nationstar expects flow servicing of $25-50 billion in annual potential as the program grows with additional clients.

 

2


Nationstar’s 60 plus day delinquency rate increased to 15.3% of UPB, up from 15.1% in the third quarter. This slight increase is related to fourth-quarter boardings of higher delinquency portfolios.

The Solutionstar business’ REO unit managed the sale of over 2,600 homes in Q4 2012. Solutionstar plans to significantly expand the REO management business in 2013, as REO properties under management are expected to significantly increase with the closing of the private-label MSR portfolio acquisitions from Bank of America.

Origination

Origination revenue increased 28% to $173.1 million in fourth quarter 2012 on a 72% quarterly increase in origination volume to $3.1 billion in fundings. Full year origination revenue was $486.9 million, up 294% from 2011. This was primarily due to the significant increase in origination volume – up 132% year-over-year – to $7.9 billion in 2012 total fundings. Wide spreads between the primary and secondary markets also supported the increase in revenues over prior periods.

Excluding the newly launched correspondent channel, origination revenue as a percentage of funded volume was 682 basis points, with total origination revenue including correspondent at 562 basis points. Of the $3.1 billion in fundings, 82% were from the consumer direct/builder/wholesale channels, and 18% were from the new correspondent channel.

As a result of the favorable market environment, origination pre-tax income grew 6% to a $81.7 million, versus $77.1 million in the prior quarter and 788% compared to $9.2 million in the year-ago quarter. Origination pre-tax income margin was 47% in the current quarter. Full year 2012 origination pre-tax income was a $261.7 million, up 1,004% from 2011.

Origination AEBITDA was up 9% over the previous quarter and nearly 653% year-over-year to $88.1 million. Origination AEBITDA margin was 51% in the current quarter. Full year 2012 origination AEBITDA was $275.2 million, up 866% from 2011. Expenses were higher in the quarter due to increased staffing and volume-related costs. The total application pipeline grew 20% from the prior quarter to $6.6 billion, and locked applications grew 14% to $5.0 billion.

Subsequent Events

Servicing: In January 2013, Nationstar announced that it had signed a definitive agreement to acquire approximately $215 billion in servicing UPB and certain other assets from Bank of America, resulting in a pro-forma portfolio UPB of $423 billion with over 2.5 million customers when completed. In February 2013, Nationstar announced it had closed the purchase of approximately $97 billion in servicing UPB as a part of the Bank of America transaction, resulting in a servicing portfolio over $300 billion in UPB. Nationstar expects to close on the remaining Bank of America private label securitization UPB and other asset purchases as necessary third-party approvals are received in Q1-Q2 2013. Excluding the remaining Bank of America servicing, Nationstar’s current servicing pipeline is approximately $300 billion.

Solutionstar: In February 2013, Nationstar also announced the acquisition of Equifax Settlement Services (“ESS”), a leading provider of appraisal, title and closing services that serves a broad array of blue chip clients, including the largest financial institutions in the United States. Nationstar is rebranding the acquired entity as “Solutionstar Settlement Services.” ESS had over $65 million in revenue in 2012. In March 2013, Solutionstar is launching the HomeSearch.com platform, providing an online real estate marketplace for home buyers, sellers and investors to connect and conveniently complete sale transactions.

Financing: In January 2013, Nationstar announced the pricing of $300 million in asset-backed term notes with a weighted average fixed interest rate of 1.46% and a weighted average term of 3.0 years. The notes replaced $300 million in existing Agency servicing advance facilities that carried a weighted average floating rate of Libor plus 2.86%, or 3.10% in total, resulting in a reduction in rate of 1.65% as of January 24, 2013. Additionally, the effective advance rate of the new facility is approximately 94%, an increase over the effective advance rate on the facilities being replaced. Nationstar is developing a programmatic Term Asset-Backed Security issuance program which will allow it to efficiently finance current and future acquisitions of Agency and non-Agency servicing advance assets.

In February 2013 Nationstar announced the pricing of $400 million aggregate principal amount of 6.500% Senior Notes due 2021. The 6.500% note rate on the February 2013 issuance is lower than the financing cost of previous senior note pricings of 7.875% in September 2012 and 9.625% in April 2012.

 

3


Adjusted EBITDA (“AEBITDA”)

This disclaimer applies to every usage of “Adjusted EBITDA” or “AEBITDA” in this presentation. Adjusted EBITDA is a key performance metric used by management in evaluating the performance of our segments. Adjusted EBITDA represents our Operating Segments’ income (loss), and excludes income and expenses that relate to the financing of our senior notes, depreciable (or amortizable) asset base of the business, income taxes, and exit costs from our restructuring and certain non-cash items. Adjusted EBITDA also excludes results from our legacy asset portfolio and certain securitization trusts that were consolidated upon adoption of the accounting guidance eliminating the concept of a qualifying special purpose entity (“QSPE”).

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 fourth quarter and full year 2012 results and other general business matters at 10:00 a.m. (ET) on Thursday, March 7, 2013. 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 800-320-2978, or 617-614-4923 internationally. Please use the participant passcode 61330875 to access the live conference call. An investor presentation will also be available at http://investors.nationstarholdings.com.

 

4


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     Year ended December, 31  
     December 31,
2012
    September 30,
2012
    December 31,
2011
    2012     2011  

Revenues

          

Servicing fee income

   $ 145,496      $ 142,482      $ 67,775      $ 462,495      $ 233,411   

Other fee income

     12,070        3,129        15,205        34,656        35,294   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee income

     157,566        145,611        82,980        497,151        268,705   

Gain on mortgage loans held for sale

     175,048        139,259        35,576        487,164        109,136   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     332,614        284,870        118,556        984,315        377,841   

Total expenses and impairments

     200,268        154,828        86,466        582,045        306,183   

Other income (expense)

          

Interest income

     30,406        16,564        15,556        71,586        66,802   

Interest expense

     (71,400     (65,015     (28,446     (197,308     (105,375

Loss on interest rate swaps and caps

     708        (1,077     298        (994     298   

Fair value changes in ABS securitizations

     —          —          (5,470     —          (12,389

Contract termination

     15,600        —          —          15,600        —     

Loss on equity method investment

     (13,244     (733     864        (14,571     (107
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (37,930     (50,261     (17,198     (125,687     (50,771

Income before taxes

     94,416        79,781        14,892        276,583        20,887   

Income tax expense

     30,657        24,714        —          71,296        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     63,759        55,067        14,892        205,287        20,887   

Other comprehensive income, net of tax

          

Change in value of designated cash flow hedges

     —          —          —          —          —     

Reclassification adjustments for gain (loss)

     —          423        —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

   $ 63,759      $ 55,490      $ 14,892      $ 205,287      $ 20,887   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

          

Basic earnings per share

   $ 0.72      $ 0.62      $ 0.21      $ 2.41      $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.71      $ 0.61      $ 0.21      $ 2.40      $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares:

          

Basic

     89,173        89,168        70,000        85,328        70,000   

Dilutive effect of stock awards

     711        597        —          196        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     89,884        89,765        70,000        85,524        70,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per share

   $ —        $ —        $ —        $ —        $ —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

5


NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

 

     December 31,
2012
     September 30,
2012
     December 31,
2011
 
     (unaudited)      (unaudited)      (audited)  

Assets

        

Cash and cash equivalents

   $ 152,649       $ 430,815       $ 62,445   

Restricted cash

     393,190         258,858         71,499   

Accounts receivable

     3,043,606         2,852,985         562,300   

Mortgage loans held for sale

     1,480,537         703,214         458,626   

Mortgage loans held for investment, subject to nonrecourse debt — Legacy Assets

     238,907         238,178         243,480   

Reverse mortgage interests

     750,273         452,886         —     

Receivables from affiliates

     12,604         13,301         4,609   

Mortgage servicing rights —  fair value

     635,860         592,692         251,050   

Mortgage servicing rights —  amortized cost

     10,973         8,036         —     

Property and equipment, net

     75,026         48,714         24,073   

Real estate owned (REO), net

     10,467         3,193         3,668   

Other assets

     318,705         338,359         106,181   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 7,122,797       $ 5,941,231       $ 1,787,931   
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Notes payable

   $ 3,601,586       $ 2,532,316       $ 873,179   

Unsecured senior notes

     1,062,635         1,062,423         280,199   

Payables and accrued liabilities

     628,085         762,268         183,789   

Derivative financial instruments

     20,026         37,835         12,370   

Mortgage servicing liabilities

     83,238         82,313         —     

Nonrecourse debt — Legacy Assets

     100,620         101,898         112,490   

Excess spread financing (at fair value)

     288,089         255,484         44,595   

Participating interest financing

     580,836         415,448         —     
  

 

 

    

 

 

    

 

 

 

Total liabilities

     6,365,115         5,249,985         1,506,622   
  

 

 

    

 

 

    

 

 

 

Total equity

     757,682         691,246         281,309   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

   $ 7,122,797       $ 5,941,231       $ 1,787,931   
  

 

 

    

 

 

    

 

 

 

 

6


SERVICING SEGMENT — SERVICING FEE INCOME DETAIL

(dollars in thousands)

 

     Three months ended     Year ended December 31,  
     December 31,
2012
    September 30,
2012
    December 31,
2011
    2012     2011  
     (unaudited)     (unaudited)     (unaudited)              

Total servicing fee income before MSR fair value adjustments

   $ 174,645      $ 159,941      $ 80,707      $ 535,807        280,454   

Fair value adjustments on excess spread financing

     (5,633     2,213        (3,060     (10,684     (3,060

Reverse mortgage servicing amortization/accretion

     1,844        2,652        —          5,120        —     

Fair value adjustments on MSR

          

Due to changes in valuation

     (1,169     8,355        1,304        5,500        (14,207

Other changes in fair value

     (24,263     (30,785     (9,547     (73,742     (24,793
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Servicing fee income

     145,424        142,376        69,404        462,001        238,394   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other fee income

     14,078        7,190        9,967        35,133        17,189   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee income

   $ 159,502      $ 149,566      $ 79,371      $ 497,134      $ 255,583   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AEBITDA RECONCILIATION

(dollars in thousands)

 

     Three months ended     Year ended December 31,  
      December 31,
2012
    September 30,
2012
    December 31,
2011
    2012     2011  

Net Income/(Loss) from Operating Segments to Adjusted EBITDA Reconciliation

          

Net income

   $ 63,759      $ 55,067      $ 14,892      $ 205,287      $ 20,887   

Plus:

          

Net (income)/loss from Legacy Portfolio and Other

     2,189        2,874        7,912        20,483        24,892   

Income tax expense

     30,657        24,714        —          71,296        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) from Operating Segments

     96,605        82,655        22,804        297,066        45,779   

Adjust for:

          

Interest expense from unsecured senior notes

     24,165        17,656        7,842        63,879        30,464   

Depreciation and amortization

     3,107        2,772        1,208        8,880        3,395   

Change in fair value of mortgage servicing rights

     25,432        22,430        8,243        68,242        39,000   

Amortization/accretion of reverse mortgage servicing

     (1,844     (2,652     —          (5,120     —     

Restructuring charges

     —          —          1,836        —          1,836   

Share-based compensation

     2,675        2,623        2,612        14,045        14,764   

Fair value changes on excess spread financing

     5,633        (2,213     3,060        10,684        3,060   

Fair value changes in derivatives

     (813     (236     (298     (1,237     (298

Ineffective portion of cash flow hedge

     —          —          —          —          (2,032
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 154,960      $ 123,035      $ 47,307      $ 456,439      $ 135,968   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA per share

   $ 1.72      $ 1.37      $ 0.68      $ 5.34      $ 1.94   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

   $ 0.71      $ 0.61      $ 0.21      $ 2.40      $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

7


SEGMENT INCOME STATEMENT & AEBITDA RECONCILIATION

(dollars in thousands)

FOR QUARTER ENDED December 31, 2012

 

     Servicing     Origination     Operating     Legacy     Eliminations     Total  

Revenues

            

Servicing fee income

   $ 145,424      $ —         $ 145,424      $ 502      $ (430   $ 145,496   

Other fee income

     14,078        (1,956     12,122        (52     —           12,070   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fee income

     159,502        (1,956     157,546        450        (430     157,566   

Gain on mortgage loans held for sale

     —           175,048        175,048        —           —           175,048   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     159,502        173,092        332,594        450        (430     332,614   

Total expenses and impairments

     109,975        86,808        196,783        3,485        —           200,268   

Other income (expense)

            

Interest income

     19,983        5,707        25,690        4,286        430        30,406   

Interest expense

     (57,764     (10,301     (68,065     (3,335     —           (71,400

Loss on interest rate swaps and caps

     813        —           813        (105     —           708   

Contract termination

     15,600        —           15,600        —           —           15,600   

Loss on equity method investment

     (13,244     —           (13,244     —           —           (13,244
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (34,612     (4,594     (39,206     846        430        (37,930
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes

   $ 14,915      $ 81,690      $ 96,605      $ (2,189   $ —         $ 94,416   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense on corporate notes

     19,959        4,206        24,165        —          —          24,165   

MSR valuation adjustment

     25,432        —          25,432        —          —          25,432   

Excess spread adjustment

     5,633        —          5,633        —          —          5,633   

Amortization of mortgage servicing obligations

     (1,844     —          (1,844     —          —          (1,844

Depreciation & amortization

     2,020        1,087        3,107        155        —          3,262   

Stock-based compensation

     1,576        1,099        2,675        2        —          2,677   

Fair value adjustment for derivatives

     (813     —          (813     105        —          (708
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 66,878      $ 88,082      $ 154,960      $ (1,927   $ —         $ 153,033   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     89,884        89,884        89,884        89,884        89,884        89,884   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share — Diluted

             $ 0.71   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income per share

   $ 0.17      $ 0.91      $ 1.07      $ (0.02   $ —         $ 1.05   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AEBITDA per share

   $ 0.74      $ 0.98      $ 1.72      $ (0.02   $ —         $ 1.70   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

8


SEGMENT AEBITDA RECONCILIATION

(dollars in thousands)

FOR QUARTER ENDED September 30, 2012

 

      Servicing     Origination     Operating     Legacy     Total  

Adjusted EBITDA to Net Income/(Loss) Reconciliation

          

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—Diluted

           $ 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 December 31, 2011

 

      Servicing     Origination     Operating     Legacy     Total  

Adjusted EBITDA to Net Income/(Loss) Reconciliation

          

Adjusted EBITDA

   $ 35,594      $ 11,714      $ 47,307      $ (7,609   $ 39,698   

Interest expense on corporate notes

     (7,842     —          (7,842     —          (7,842

MSR valuation adjustment

     (8,243     —          (8,243     —          (8,243

Excess spread adjustment

     (3,060     —          (3,060     —          (3,060

Restructuring charges

     —          (1,836     (1,836     —          (1,836

Depreciation & amortization

     (796     (412     (1,208     (303     (1,511

Stock-based compensation

     (2,351     (261     (2,612     —          (2,612

Fair value adjustment for derivatives

     298        —          298        —          298   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income/Loss

     13,600        9,205        22,804        (7,912     14,892   

Income Tax

             —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income/Loss

           $ 14,892   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     70,000        70,000        70,000        70,000        70,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share—Diluted

           $ 0.21   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income per share

   $ 0.19      $ 0.13      $ 0.33      $ (0.11   $ 0.21   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AEBITDA per share

   $ 0.51      $ 0.17      $ 0.68      $ (0.11   $ 0.57   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

9


FOR YEAR ENDED December 31, 2012

 

      Servicing     Origination     Operating     Legacy     Total  

Adjusted EBITDA to Net Income/(Loss) Reconciliation

          

Adjusted EBITDA

     181,228        275,212        456,440        (18,215     438,225   

Interest expense on corporate notes

     (57,724     (6,155     (63,879     —           (63,879

MSR valuation adjustment

     (68,242     —           (68,242     —           (68,242

Excess spread adjustment

     (10,684     —           (10,684     —           (10,684

Amortization of mortgage servicing obligations

     5,120        —           5,120        —           5,120   

Depreciation & amortization

     (6,124     (2,756     (8,880     (740     (9,620

Stock-based compensation

     (9,449     (4,597     (14,045     703        (13,342

Fair value adjustment for derivatives

     1,237        —           1,237        (2,231     (994
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income/Loss

     35,362        261,704        297,066        (20,483     276,583   

Income Tax

             (71,296
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income/Loss

           $ 205,287   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     85,524        85,524        85,524        85,524        85,524   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share—Diluted

           $ 2.40   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income per share

   $ 0.41      $ 3.06      $ 3.47      $ (0.24   $ 3.23   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AEBITDA per share

   $ 2.12      $ 3.22      $ 5.34      $ (0.22   $ 5.12   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FOR YEAR ENDED December 31, 2011

 

      Servicing     Origination     Operating     Legacy     Total  

Adjusted EBITDA to Net Income/(Loss) Reconciliation

          

Adjusted EBITDA

   $ 107,491      $ 28,477      $ 135,968      $ (24,175   $ 111,793   

Interest expense on corporate notes

     (30,339     (125     (30,464     —           (30,464

MSR valuation adjustment

     (39,000     —           (39,000     —           (39,000

Excess spread adjustment

     (3,060     —           (3,060     —           (3,060

Restructuring Charges

     —           (1,836     (1,836     —           (1,836

Depreciation & amortization

     (2,089     (1,306     (3,395     (667     (4,062

Stock-based compensation

     (13,249     (1,515     (14,764     (50     (14,814

Hedge ineffectiveness

     2,032        —           2,032        —           2,032   

Fair value adjustment for derivatives

     298        —           298        —           298   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income/Loss

     22,084        23,695        45,779        (24,892     20,887   

Income Tax

             —      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

           $ 20,887   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     70,000        70,000        70,000        70,000        70,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share—Diluted

           $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-Tax Income per share

   $ 0.32      $ 0.34      $ 0.65      $ (0.35   $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AEBITDA per share

   $ 1.54      $ 0.41      $ 1.94      $ (0.35   $ 1.60   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


About Nationstar Mortgage Holdings Inc.

Based in Lewisville, Texas, Nationstar offers servicing, origination, and real estate services to financial institutions and consumers. Nationstar is one of the largest servicers in the United States, with a servicing portfolio of over 1.8 million residential mortgages in excess of $300 billion in unpaid principal balance as of February 1, 2013. Nationstar’s integrated loan origination business mitigates servicing portfolio run-off and improves credit performance for loan investors. Our Solutionstar business unit offers asset management, settlement, and processing services. In 2012, Nationstar was a top 3 performing IPO, as measured by share price appreciation, for global IPOs with a deal size of at least $100 million and excluding closed-end funds and SPACs, out of 203 deals total. Nationstar currently employs over 4,900 people. Additional corporate information is available at www.nationstarholdings.com.

Forward Looking Statements

Any statements in this release that are not historical or current facts are forward-looking statements. Forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. Forward-looking statements convey Nationstar’s current expectations or forecasts of future events. When used in this release, the words “anticipate,” “appears,” “believe,” “foresee,” “intend,” “should,” “expect,” “estimate,” “target,” “project,” “plan,” “may,” “could,” “will,” “are likely” and similar expressions are intended to identify forward-looking statements. These statements involve predictions of our future financial condition, performance, plans and strategies, and are thus dependent on a number of factors including, without limitation, assumptions and data that may be imprecise or incorrect. Specific factors that may impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Nationstar’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors” section of Nationstar Mortgage LLC’s Form 10-K for the year ended December 31, 2011, Nationstar’s Form 10-Q for the quarter ended September 30, 2012, and other reports filed with the SEC, which are available at the SEC’s website at http://www.sec.gov. We caution you not to place undue reliance on these forward-looking statements that speak only as of the date they were made. Unless required by law, Nationstar undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date of this release.

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