Nationstar Mortgage Announces Fourth Quarter and Full Year 2013 Financial Results

LEWISVILLE, Texas--()--Nationstar Mortgage Holdings Inc. (NYSE:NSM):

  • 2013 GAAP EPS of $2.40 on net income of $217 million
  • 2013 pro forma EPS of $3.20 on pro forma net income of $289 million
  • Ending servicing portfolio UPB of $391 billion
  • 2013 servicing portfolio growth of 88% with successful completion of BofA boarding
  • Q4 2013 servicing operating profitability exceeded 6 basis points
  • Originations: Funded volume of $24 billion in 2013; Year-over-year growth of 204%
  • Solutionstar: $185 million and $67 million in revenue and pretax income, respectively in its first full year
  • 2013 return on equity of 25%

Nationstar Mortgage Holdings Inc. (NYSE:NSM) (“Nationstar”), a leading residential mortgage loan servicer, today reported that net income for the year ended December 31, 2013 increased 6% to $217 million, or $2.40 per share, from $205 million in 2012, or $2.40 per share. The net loss in the fourth quarter 2013 was $51 million, or $(0.56) per share compared to net income of $64 million, or $0.71 per share, in the fourth quarter 2012.

Pro forma 2013 EPS was $3.20, after adjusting for $67 million in platform ramp related to the previously announced servicing acquisition from Bank of America (“BofA”) and $51 million in other one-time expenses. Pro forma 2013 EPS was up 44% in comparison to 2012 pro forma EPS of $2.23. Pro forma Q4’13 EPS was $(0.23), after adjusting for one-time expenses. Pro forma Q4’13 EPS was down in comparison to Q4’12 pro forma EPS of $0.65. Nationstar's return on equity for 2013 was 25%.

On a Non-GAAP basis, adjusted EBITDA (“AEBITDA”) for operating segments grew 35% to $617 million, or $6.83 per share, in 2013 versus $456 million, or $5.34 per share, in 2012. Fourth quarter 2013 AEBITDA was $25 million, or $0.28 per share, down from $155 million, or $1.72 per share, in fourth quarter 2012.

“I am very proud of what Nationstar was able to accomplish in 2013,” said Jay Bray, Chief Executive Officer of Nationstar. “We achieved strong growth in our servicing portfolio and originations volume. We realized this growth while helping consumers with over 108,000 workouts and approximately 62,000 HARP refinancings. Nationstar delivered increased profitability and a healthy return on equity for our shareholders. In 2014, we continue to focus on delivering earnings growth and attractive returns to our shareholders as we expand our fee-based real estate services platform. We are confident that we have the right culture, processes and infrastructure in place to serve our various stakeholders in 2014 and beyond.”

Chief Financial Officer David Hisey said, “Nationstar delivered both impressive volume and top-line growth in 2013. We expect in 2014 to enjoy the benefits of our substantial internal investments in infrastructure and efficiency improvements over the last year. Within servicing, we will look to increase profitability as we drive down our cost per loan, delinquencies, and vendor spend. We will continue to grow our Solutionstar business with organic volume growth at Nationstar and third-party business along with fee-based services acquisitions that meet our return thresholds. Although origination margins came under pressure in the fourth quarter, our current originations are profitable and we are confident this business will continue to be profitable in 2014 with its more focused footprint.”

 

2014 GUIDANCE CONFIRMED: AEBITDA and EARNINGS PER SHARE

 
      2014
AEBITDA per Share $ 13.50 - 15.00
Earnings per Share $ 4.50 - 6.00
 

Fourth Quarter and Full Year 2013 Business Highlights

Servicing

Servicing fee income, before fair value adjustments, increased 77% to $312 million in fourth quarter 2013 compared to $176 million in the quarter a year ago. Servicing fee income before fair value adjustments was $1.2 billion in 2013, up 114% compared to $541 million in 2012. Servicing fee income of $292 million in the fourth quarter was up 101% year-over-year. Full year servicing fee income was $1.1 billion, up 147% compared to 2012.

Nationstar’s portfolio UPB grew 88% year-over-year to end 2013 at $391 billion. The average portfolio UPB for the fourth quarter and full year 2013 were $383 billion and $299 billion, respectively.

The pipeline of bulk and flow MSR acquisition opportunities remains strong at over $350 billion in aggregate UPB. Nationstar's existing flow agreements are expected to produce approximately $20 billion of UPB in annual volume.

The fair value of mortgage servicing rights, net of changes in excess spread financing, decreased in the current quarter by $19.1 million and $14.9 million in the current year. The fourth quarter 2013 net decrease is comprised of $68.3 million in portfolio runoff and $49.2 million in fair-value mark to market adjustments, net of changes in the excess spread financing. The full year 2013 net decrease is comprised of $221.6 million in portfolio runoff net of an increase of $206.7 million in fair-value mark to market adjustments, net of changes in the excess spread financing.

Servicing pretax income increased to $75 million compared to $15 million in the year-ago quarter. Servicing pretax margin was 19% in the current quarter. Full year 2013 servicing pretax income was $332 million, up from $35 million in 2012.

Servicing pretax income in the current quarter includes $37 million in one-time expenses from previously announced restructuring initiatives and transaction related expenses. Servicing pretax income before one-time expenses and fair value adjustments as a percentage of UPB was 6 basis points, an increase from 1 basis point in the third quarter 2012.

Servicing AEBITDA increased 118% in the current quarter to $146 million compared to $67 million in the fourth quarter 2012. Servicing AEBITDA margin was 38% in the current quarter. Full year 2013 servicing AEBITDA was $496 million, up 174% from 2012.

Nationstar’s 60 plus day delinquency rate decreased to 11.9% of UPB at the end of 2013, down from 14.1% the same time a year ago. Nationstar's servicing portfolio CPR decreased to 14.8% at the end of 2013, down from 15.7% the same time a year ago. Nationstar replaced over 200% of run-off in the quarter with originations as well as flow and bulk acquisitions.

Solutionstar Update: The Solutionstar business’ property sale unit managed the sale over 2,500 homes in Q4 2013, and expects to expand the property sale management business to over 20,000 sales in 2014. The number of properties under management is expected to increase over the course of 2014 as a result of the successful closing of the private-label MSR portfolio acquisitions from Bank of America.

Solutionstar generated over $64 million in revenue in the fourth quarter 2013, up from $51 million in the prior quarter. Solutionstar generated $29 million in pretax income in the fourth quarter 2013, representing a 45% margin. In Solutionstar's first year of operation, it generated $185 million and $67 million in revenue and pretax income respectively.

Origination

The interest rate volatility in the third quarter 2013 continued into the fourth quarter 2013, placing downward pressure on refinance activity, the application pipeline and gain-on-sale margins.

In 2014, Nationstar is focusing on its core consumer-direct origination channel, reducing turn-times and increasing profitability. In preparation, Nationstar reduced its application and lock volumes the fourth quarter 2013 as we retooled the platform to improve efficiencies and the customer experience. At quarter end, the total application pipeline was $5.0 billion and the locked pipeline was $4.0 billion. The recapture rate was 49% in fourth quarter 2013, with a year-to-date average of 47%.

Nationstar funded $5.5 billion in fourth quarter 2013 providing a source of quality, long-term servicing assets. Volume from the consumer-direct channel, including recapture and Greenlight, was $4.4 billion, and correspondent volume was $0.6 billion. Volume from our divested wholesale channel was $0.4 billion. Nationstar funded $24.0 billion in volume in 2013, up 204% from 2012.

Full year 2013 origination revenue was $712 million, up from $487 million in 2012 as Nationstar significantly increased its origination volume. Origination pretax income was $60 million in 2013, down from $262 million in 2012 as Nationstar managed through interest rate volatility and capacity reductions in the second half of 2013. Origination revenue was $45 million in the fourth quarter 2013, with a pretax loss of $143 million as Nationstar reconfigured its operations.

Origination expenses decreased during the quarter due to our capacity reductions in our originations business. Nationstar incurred $15 million in one-time expenses in the quarter related to these reductions.

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 2013 results and other general business matters at 9:00 a.m. ET on Thursday, February 27, 2014. 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 877-415-3186, or 857-244-7329 internationally. Please use the participant passcode 78785950 to access the live conference call. An investor presentation will also be available at http://investors.nationstarholdings.com.

Non-GAAP Financial Measures

This disclaimer applies to every usage of “Adjusted EBITDA” or “AEBITDA”, “Pro forma Earnings per Share” or “Pro Forma EPS”, "Pro Forma Pretax Income" and “Servicing Fee Income before fair value adjustments” in this release. 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. Pro-forma EPS is a metric that is used by management to exclude certain non-recurring items in an attempt to provide a better earnings per share comparison to prior periods. Pro forma Q4’13 EPS excludes certain expenses related to the acquisition of the $200 billion servicing portfolio from Bank of America and other transaction related expenses. These expenses include the advance hiring of servicing and originations staff, recruiting expenses, travel, licensing and legal expenses. Pro forma pretax income is a metric that is used by management to exclude certain non-recurring items in an attempt to provide a better earnings per share comparison to prior periods. Servicing fee income before fair value adjustments is a metric that is used by management in an attempt to provide a better sense of the servicing fee income prior to any changes in the fair value of servicing assets. Servicing fee income before fair value adjustments excludes fair value adjustment due to valuation inputs or assumptions for mortgage servicing rights and excess spread financing, and the fair value adjustment due to other changes in fair value for mortgage servicing rights and excess spread financing.

 
NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars and shares in thousands, except per share data)

         
 
Three months ended Twelve months ended
December 31, 2013     September 30, 2013     December 31, 2012 December 31, 2013    

December 31, 2012

Revenues
Servicing fee income $ 281,624 $ 341,679 $ 145,496 $ 1,084,208 $ 462,495
Other fee income 113,137   84,203   12,070   300,014     34,656  
Total fee income 394,761 425,882 157,566 1,384,222 497,151

Gain on mortgage loans held for sale

25,659   205,956   175,048   702,763   487,164  
Total revenues 420,420 631,838 332,614 2,086,985 984,315
 
Total expenses and impairments 398,002 395,854 200,268 1,402,278 582,045
 
Other income (expense)
Interest income 51,273 63,903 30,406 197,220 71,586
Interest expense (160,306 ) (168,215 ) (71,400 ) (538,805 ) (197,308 )
Contract termination fees, net 15,600 15,600
Loss on equity investment (13,244 ) (14,571 )
Gain (loss) on interest rate swaps and caps 675   400   708   3,132   (994 )
Total other income (expense) (108,358 ) (103,912 ) (37,930 ) (338,453 ) (125,687 )
 
Income (loss) before taxes (85,940 ) 132,072 94,416 346,254 276,583
Income tax expense (benefit) (35,033 ) 50,187   30,657   129,200   71,296  
Net income (50,907 ) 81,885 63,759 217,054 205,287
 
Earnings per share:
Basic earnings per share $ (0.57 ) $ 0.92   $ 0.72   $ 2.43   $ 2.41  
Diluted earnings per share $ (0.56 ) $ 0.91   $ 0.71   $ 2.40   $ 2.40  
Weighted average shares:
Basic 89,475 89,477 89,173 89,415 85,328
Dilutive effect of stock awards 1,166   921   683   853   196  
Diluted 90,641   90,398   89,856   90,268   85,524  
Dividends declared per share $   $   $   $   $  
 
 
NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

 
 
      December 31, 2013     September 30, 2013     December 31, 2012
Assets (unaudited)
Cash and cash equivalents $ 441,902 $ 275,251 $ 152,649
Restricted cash 592,747 741,689 393,190
Accounts receivable 5,636,482 7,575,612 3,043,606
Mortgage loans held for sale 2,603,380 3,868,460 1,480,537
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets, net 211,050 213,381 238,907
Reverse mortgage interests 1,434,506 1,225,866 750,273
Mortgage servicing rights 2,503,162 2,221,451 646,833
Property and equipment, net 119,185 110,199 75,026
Derivative financial instruments 123,878 292,320 152,189
Other assets 360,397   543,843   192,933
Total assets $ 14,026,689   $ 17,068,072   $ 7,126,143
 
Liabilities and equity
Notes payable $ 6,984,351 $ 10,003,832 $ 3,601,586
Unsecured senior notes 2,444,062 2,444,112 1,062,635
Payables and accrued liabilities 1,308,450 1,260,499 631,431
Derivative financial instruments 8,526 205,849 20,026
Mortgage servicing liabilities 82,521 82,521 83,238
Nonrecourse debt - Legacy Assets 89,107 92,099 100,620
Excess spread financing (at fair value) 986,410 946,614 288,089
Participating interest financing 1,103,490 996,255 580,836
Mortgage servicing rights financing liabilities 29,874    
Total liabilities $ 13,036,791   $ 16,031,781   $ 6,368,461
 
Total equity 989,898     1,036,291     757,682
Total liabilities and equity $ 14,026,689   $ 17,068,072   $ 7,126,143
 
 
SERVICING SEGMENT - SERVICING FEE INCOME DETAIL

(dollars in thousands)

         
 
Three months ended Twelve months ended

December 31,
2013

   

September 30,
2013

   

December 31,
2012

December 31,
2013

   

December 31,
2012

 
Total servicing fee income before MSR fair value adjustments $ 311,531 $ 328,576 $ 176,489 $ 1,155,577 $ 540,926
Fair value adjustments due to valuation inputs or assumptions
Mortgage servicing rights 93,660 100,203 (1,169 ) 355,586 5,500
Excess spread financing (44,455 ) (3,964 ) 6,024   (148,852 ) (16,418 )
Net change in FV due to valuation inputs or assumptions 49,205 96,239 4,855 206,734 (10,918 )
Fair value adjustments due to other changes in fair value (amortization)
Mortgage servicing rights (72,676 ) (85,946 ) (24,263 ) (297,128 ) (73,742 )
Excess spread financing 4,351   18,407   (11,657 ) 75,519   5,735  
Net change in FV due to other changes in fair value (amortization) (68,325 ) (67,539 ) (35,920 ) (221,609 ) (68,007 )
Servicing fee income 292,411 357,276 145,424 1,140,702 462,001
Other fee income 87,655   61,036   14,078   238,144   35,133  
Total fee income $ 380,066   $ 418,312   $ 159,502   $ 1,378,846   $ 497,134  
 
 
PRO FORMA EARNINGS PER SHARE RECONCILIATION

(dollars and shares in thousands, except per share data)

         
 
Three months ended Twelve months ended

December 31,
2013

   

September 30,
2013

   

December 31,
2012

December 31,
2013

   

December 31,
2012

 
Net income $ (50,907 ) $ 81,885 $ 63,759 217,054 205,287
Income taxes (35,033 ) 50,187   30,657   129,200   71,296  
Income before taxes (85,940 ) 132,072 94,416 346,254 276,583
Ramp expenses 25,069 67,020
Other one-time expenses 51,328       51,328   8,024  
Pro forma pretax income (34,612 ) 157,141 94,416 464,602 284,607
 
Income taxes (using respective quarter's tax rate) 14,087   (59,713 ) (35,878 ) (175,487 ) (85,346 )
Pro forma income (20,525 ) 97,428   58,538   289,115   199,261  
 
Average share count (pro forma 2012 full year) 90,641 90,398 89,856 90,268 89,355
 
Pro forma EPS $ (0.23 ) $ 1.08 $ 0.65 $ 3.20 $ 2.23
 
 
AEBITDA RECONCILIATION

(dollars in thousands, except per share data)

         
 
Three months ended Twelve months ended

December 31,
2013

   

September 30,
2013

   

December 31,
2012

December 31,
2013

   

December 31,
2012

 
Net income $ (50,907 ) $ 81,885 $ 63,759 $ 217,054 $ 205,287
Plus:
Net loss from Legacy Portfolio and Other 18,409 11,683 2,189 45,248 20,483
Income tax expense (35,033 ) 50,187   30,657   129,200   71,296  
Net income from Operating Segments $ (67,531 ) $ 143,755 $ 96,605 391,502 297,066
Adjust for:
Interest expense from unsecured senior notes 50,502 46,136 24,165 166,402 63,879
Depreciation and amortization 8,814 6,338 3,107 23,869 8,880
Change in fair value of mortgage servicing rights (20,984 ) (14,257 ) 25,432 (58,458 ) 68,242
Amortization/accretion of reverse mortgage servicing (92 ) (1,844 ) (642 ) (5,120 )
Restructuring Costs 12,078 12,078
Share-based compensation 2,434 2,416 2,675 10,547 14,045
Fair value changes on excess spread financing 40,104 (14,443 ) 5,633 73,333 10,684
Fair value changes in derivatives (187 ) (813 ) (1,466 ) (1,237 )
Ineffective portion of cash flow hedge (390 )     (544 )  
Adjusted EBITDA $ 25,027   $ 169,666   $ 154,960   $ 616,620   $ 456,439  
Adjusted EBITDA per share $ 0.28   $ 1.88   $ 1.72   $ 6.83   $ 5.34  
Earnings per share $ (0.56 ) $ 0.91   $ 0.71   $ 2.40   $ 2.40  
 
 
SEGMENT INCOME STATEMENT & AEBITDA RECONCILIATION

(dollars in thousands)

     
 
For quarter ended December 31, 2013  
Servicing     Origination     Operating     Legacy       Eliminations     Total
 
Revenues
Servicing fee income 292,411 292,411 474 (11,261 ) 281,624
Other fee income 87,655   25,437   113,092   45     113,137  
Total fee income 380,066 25,437 405,503 519 (11,261 ) 394,761
Gain on mortgage loans held for sale 4,860   19,145   24,005   (9,218 ) 10,872   25,659  
Total revenues 384,926 44,582 429,508 (8,699 ) (389 ) 420,420
Total expenses and impairments 216,709 172,595 389,304 8,698 398,002
Other income (expense)
Interest income 23,952 21,777 45,729 5,155 389 51,272
Interest expense (117,569 ) (36,285 ) (153,854 ) (6,452 ) (160,305 )
Loss on interest rate swaps and caps 390     390   285     675  
Total other income (expense) (93,227 ) (14,508 ) (107,735 ) (1,012 ) 389 (108,358 )
Income before taxes 74,990 (142,521 ) (67,531 ) (18,409 ) (85,940 )
Interest expense on corporate notes 35,717 14,786 50,503 50,503
MSR valuation adjustment (20,984 ) (20,984 ) (20,984 )
Excess spread adjustment 40,104 40,104 40,104
Depreciation & amortization 6,008 2,806 8,814 1,115 9,929
Stock-based compensation 1,738 696 2,434

2,434
Fair value adjustment for derivatives (285 )

 

(285 )
Restructuring charge 8,594 3,484 12,078 795 12,873
Hedge ineffectiveness (390 )   (390 )     (390 )
ADJUSTED EBITDA $ 145,777   $ (120,750 ) $ 25,027   $ (16,784 ) $   $ 8,243  
 
Pretax income (loss) 74,990 (142,521 ) (67,531 ) (18,409 ) (85,940 )
Ramp expenses 36,740   14,588   51,328       51,328  
Pro forma pretax income (loss) 111,730 (127,933 ) (16,203 ) (18,409 ) (34,612 )
 
Earnings per share - Diluted             $ (0.56 )
Pretax income per share $ 0.83   $ (1.57 ) $ (0.75 ) $ (0.20 ) $   $ (0.95 )
AEBITDA per share $ 1.61   $ (1.33 ) $ 0.28   $ (0.19 ) $   $ 0.09  
 
 
SEGMENT AEBITDA AND PRO FORMA PRETAX INCOME RECONCILIATION

(dollars in thousands)

     
For quarter ended September 30, 2013
Servicing     Origination     Operating     Legacy     Total
 
Adjusted EBITDA 141,056 28,610 169,666 (11,324 ) 158,342
 
Interest expense on corporate notes (33,520 ) (12,616 ) (46,136 ) (3 ) (46,138 )
MSR valuation adjustment 14,257 14,257 14,257
Excess spread adjustment 14,443 14,443 14,443
Amortization of mortgage servicing obligations 92 92 92
Depreciation & amortization (4,106 ) (2,232 ) (6,338 ) (657 ) (6,995 )
Stock-based compensation (1,542 ) (874 ) (2,416 ) (6 ) (2,422 )
Fair value adjustment for derivatives 93 93 307 400
Hedge ineffectiveness 94     94     94  
Pretax income (loss) 130,867 12,888 143,755 (11,683 ) 132,072
Income tax 50,187  
Net income (loss) 81,885  
 
Pretax income (loss) 130,867 12,888 143,755 (11,683 ) 132,072
Ramp expenses 17,124   7,945   25,069     25,069  
Pro forma pretax income (loss) 147,991 20,833 168,824 (11,683 ) 157,141
 
Earnings per share         $ 0.91  
Pretax income per share $ 1.45   $ 0.14   $ 1.59   $ (0.13 ) $ 1.46  
AEBITDA per share $ 1.56   $ 0.32   $ 1.88   $ (0.13 ) $ 1.75  
 
      For quarter ended December 31, 2012
Servicing     Origination     Operating     Legacy     Total
 
Adjusted EBITDA 66,878 88,082 154,960 (1,927 ) 153,033
 
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
Hedge ineffectiveness          
Pretax income (loss) 14,915 81,690 96,605 (2,189 ) 94,416
Income tax 30,657  
Net income (loss) 63,759  
 
Pretax income (loss) 14,915 81,690 96,605 (2,189 ) 94,416
Ramp expenses          
Pro forma pretax income (loss) 14,915 81,690 96,605 (2,189 ) 94,416
 
Earnings per share         $ 0.71  
Pretax income per share $ 0.17   $ 0.91   $ 1.08   $ (0.02 ) $ 1.05  
AEBITDA per share $ 0.74   $ 0.98   $ 1.72   $ (0.02 ) $ 1.70  
 
 
SEGMENT AEBITDA AND PRO FORMA PRETAX INCOME RECONCILIATION

(dollars in thousands)

     
 
For year ended December 31, 2013  
Servicing     Origination       Operating     Legacy     Total
 
Adjusted EBITDA 496,315 120,306 616,621 (42,954 ) 573,667
 
Interest expense on corporate notes (120,849 ) (45,552 ) (166,401 ) (3 ) (166,404 )
MSR valuation adjustment 58,458 58,458 58,458
Excess spread adjustment (73,333 ) (73,333 ) (73,333 )
Amortization of mortgage servicing obligations 642 642 642
Depreciation & amortization (16,085 ) (7,784 ) (23,869 ) (2,745 ) (26,614 )
Stock-based compensation (6,710 ) (3,837 ) (10,547 ) (27 ) (10,574 )
Fair value adjustment for derivatives 1,465

1,465 1,277 2,742
Restructuring Charges (8,594 ) (3,484 ) (12,078 ) (795 ) (12,873 )
Hedge ineffectiveness 545     545     545  
Pretax income (loss) 331,854 59,649 391,503 (45,248 ) 346,254
Income tax 129,200  
Net income (loss) 217,054  
 
Pretax income (loss) 331,854 59,649 391,503 (45,248 ) 346,254
Ramp expenses 81,431   36,917   118,348     118,348  
Pro forma pretax income (loss) 413,285 96,566 509,851 (45,248 ) 464,602
 
Earnings per share           $ 2.43  
Pretax income per share $ 3.68   $ 0.66   $ 4.34   $ (0.50 ) $ 3.84  
AEBITDA per share $ 5.50   $ 1.33   $ 6.83   $ (0.48 ) $ 6.36  
 
     
For year ended December 31, 2012
Servicing     Origination     Operating     Legacy     Total
 
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 ) (14,046 ) 703 (13,343 )
Fair value adjustment for derivatives 1,237     1,237   (2,231 ) (994 )
Pretax income (loss) 35,362 261,704 297,066 (20,483 ) 276,583
Income tax 71,296  
Net income (loss) 205,287  
 
Pretax income (loss) 35,362 261,704 297,066 (20,483 ) 276,583
Ramp expenses      

 
Pro forma pretax income (loss) 35,362 261,704 297,066 (20,483 ) 276,583
 
Earnings per share         $ 2.40  
Pretax income per share $ 0.41   $ 3.06   $ 3.47   $ (0.24 ) $ 3.23  
AEBITDA per share $ 2.12   $ 3.22   $ 5.34   $ (0.21 ) $ 5.12  
 

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 and operates an integrated loan origination business that mitigates servicing portfolio run-off and improves credit performance for loan investors. Our Solutionstar business unit offers asset management, settlement, valuation and processing services. Additional corporate information is available at www.nationstarholdings.com.

Forward Looking Statements

Any statements in this presentation that are not historical or current facts are forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding: estimates of our servicing segment’s growth and profitability; estimates of our origination’s segment’s profitability; property management sales in 2014; estimates of fiscal year 2014 revenue; profitability through our fee-services business. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-statements. Certain of these risks and uncertainties are described in the “Risk Factors” section of our most recent annual and quarterly reports and other required reports as filed with the SEC, which are available at the SEC’s website at http://www.sec.gov. Certain amounts included in this presentation are presented strictly for illustrative purposes, and such amounts should not be viewed as a representation regarding management’s expectations or actual results. Management’s expectations and actual results could differ materially from statements made for illustrative purposes.

No Reliance, No Update and Use of Information

The information in the presentation is provided to you as of February 27, 2014, and Nationstar does not intend to update the information after its distribution, even in the event that the information becomes materially inaccurate. Certain information contained in this presentation includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results and such differences may be material.

Contacts

Nationstar Mortgage Holdings Inc.
Marshall Murphy, 469-549-3005

Sharing

Contacts

Nationstar Mortgage Holdings Inc.
Marshall Murphy, 469-549-3005