Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - OCWEN FINANCIAL CORP | ex99_1.htm |
| EX-99.3 - EXHIBIT 99.3 - OCWEN FINANCIAL CORP | ex99_3.htm |
| EX-99.2 - EXHIBIT 99.2 - OCWEN FINANCIAL CORP | ex99_2.htm |
| 8-K - FORM 8-K - OCWEN FINANCIAL CORP | ocn_8k3.htm |
EXHIBIT 99.4
OCWEN FINANCIAL CORPORATION
AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The unaudited pro forma combined statement of operations which combines the consolidated results of operations of Ocwen Financial Corporation (Ocwen), the combined results of operations of Litton Loan Servicing Business and related pro forma adjustments, and the combined consolidated results of operations of HomEq Servicing and related pro forma adjustments for the year ended December 31, 2010, and are presented as if the acquisitions of both Litton Loan Servicing Business and HomEq Servicing occurred on January 1, 2010.
The
historical consolidated financial information of Ocwen and historical combined financial information of Litton Loan Servicing
Business and HomEq Servicing have been adjusted in the unaudited pro forma combined statement of operations to give effect to
pro forma events that are (1) directly attributable to Litton Loan Servicing Business and HomEq Servicing, (2) factually
supportable, and (3) expected to have a continuing impact on the combined results. The unaudited pro forma combined statement
of operations should be read in conjunction with the:
|
●
|
Historical audited consolidated financial statements for the year ended December 31, 2010 and the related notes of Ocwen included in its Annual Report on Form 10-K; and
|
|
|
●
|
Historical
unaudited pro forma combined statement of operations of Ocwen related to the acquisition of Litton Loan Servicing Business
for the year ended December 31, 2010 attached as Exhibit 99.2.
|
|
|
●
|
Historical
unaudited pro forma combined consolidated statement of operations of Ocwen related to the acquisition of HomEq Servicing for
the year ended December 31, 2010 attached as Exhibit 99.3.
|
The unaudited pro forma combined statement of operations is provided for informational purposes only and is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had Litton Loan Servicing Business or HomEq Servicing been completed as of the date indicated because of differences in servicing practices and cost structure between Ocwen, Litton Loan Servicing Business and HomEq Servicing. In addition, the unaudited pro forma combined statement of operations does not purport to project the future operating results of Ocwen, Litton Loan Servicing Business and HomEq Servicing combined nor does it reflect expected realization of any cost savings associated with Litton Loan Servicing Business or HomEq Servicing.
The unaudited pro forma combined statement of operations has been prepared using the acquisition method of accounting which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We believe that the fair values assigned to the assets acquired and liabilities assumed, as reflected in the pro-forma financial statements, are based on reasonable assumptions. Ocwen’s judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the results of operations.
Page 1 of 2
OCWEN FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
(Dollars in thousands, except share data)
|
|
Ocwen Historical
|
Litton Loan Servicing Business Historical (1)
|
HomEq Servicing Pro Forma Historical (2)
|
Litton Loan Servicng Business Pro Forma Adjustments
|
HomEq Servicing Pro Forma Adjustments
|
Ocwen Pro Forma
|
||||||||||||||||||
|
Revenue
|
|
|
|
|
|
|
||||||||||||||||||
|
Servicing and subservicing fees
|
$ | 321,699 | $ | 235,379 | $ | 106,422 | $ | 36,961 | $ | (14,069 | ) | $ | 686,392 | |||||||||||
|
Change in fair value of interest-only securities
|
— | (8,338 | ) | — | 8,338 | — | — | |||||||||||||||||
|
Process management fees
|
33,704 | — | — | — | — | 33,704 | ||||||||||||||||||
|
Other revenues
|
4,978 | 6,396 | 5,814 | (6,396 | ) | — | 10,792 | |||||||||||||||||
|
Total revenue
|
360,381 | 233,437 | 112,236 | 38,903 | (14,069 | ) | 730,888 | |||||||||||||||||
|
|
||||||||||||||||||||||||
|
Operating expenses
|
||||||||||||||||||||||||
|
Compensation and benefits
|
87,644 | 132,211 | 58,211 | 1,456 | (20,727 | ) | 258,795 | |||||||||||||||||
|
Amortization of servicing rights
|
31,455 | — | 6,876 | 25,334 | 6,890 | 70,555 | ||||||||||||||||||
|
Servicing and origination
|
6,851 | 15,082 | 2,542 | 27,845 | — | 52,320 | ||||||||||||||||||
|
Technology and communications
|
25,644 | — | 2,793 | 21,044 | — | 49,481 | ||||||||||||||||||
|
Professional services
|
42,837 | — | 7,087 | 26,477 | (3,964 | ) | 72,437 | |||||||||||||||||
|
Occupancy and equipment
|
32,924 | — | 10,685 | 27,803 | (4,517 | ) | 66,895 | |||||||||||||||||
|
Provision for losses on servicing advances
|
— | 33,734 | — | (33,734 | ) | — | — | |||||||||||||||||
|
Goodwill impairment
|
— | 154,065 | — | — | — | 154,065 | ||||||||||||||||||
|
General and administrative expenses
|
— | 74,135 | — | (74,135 | ) | — | — | |||||||||||||||||
|
Other operating expenses
|
9,119 | — | 4,754 | 4,777 | — | 18,650 | ||||||||||||||||||
|
Total operating expense
|
236,474 | 409,227 | 92,948 | 26,867 | (22,318 | ) | 743,198 | |||||||||||||||||
|
|
||||||||||||||||||||||||
|
Income (loss) from operations
|
123,907 | (175,790 | ) | 19,288 | 12,036 | 8,249 | (12,310 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Other income (expense)
|
||||||||||||||||||||||||
|
Interest income
|
10,859 | 13,433 | 150 | — | — | 24,442 | ||||||||||||||||||
|
Interest expense
|
(85,923 | ) | (34,598 | ) | (5,839 | ) | (78,587 | ) | (43,766 | ) | (248,713 | ) | ||||||||||||
|
Loss on trading securities
|
(7,968 | ) | — | — | — | — | (7,968 | ) | ||||||||||||||||
|
Loss on loans held for resale, net
|
(5,865 | ) | — | — | — | — | (5,865 | ) | ||||||||||||||||
|
Equity in earnings of unconsolidated entities
|
1,371 | — | — | — | — | 1,371 | ||||||||||||||||||
|
Change in mortgage servicing rights at fair value
|
— | — | (1,779 | ) | — | 1,779 | ||||||||||||||||||
|
Other, net
|
2,773 | — | 1,060 | — | — | 3,833 | ||||||||||||||||||
|
Other income (expense), net
|
(84,753 | ) | (21,165 | ) | (6,408 | ) | (78,587 | ) | (41,987 | ) | (232,900 | ) | ||||||||||||
|
|
||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes
|
39,154 | (196,955 | ) | 12,880 | (66,551 | ) | (33,738 | ) | (245,210 | ) | ||||||||||||||
|
Income tax expense (benefit)
|
5,545 | (68,854 | ) | 6,788 | (24,038 | ) | (12,186 | ) | (92,745 | ) | ||||||||||||||
|
Income (loss) from continuing operations
|
33,609 | (128,101 | ) | 6,092 | (42,513 | ) | (21,552 | ) | (152,465 | ) | ||||||||||||||
|
Net income attributable to non-controlling interest in subsidiaries
|
(8 | ) | — | — | — | — | (8 | ) | ||||||||||||||||
|
Income (loss) from continuing operations attributable to Ocwen Financial Corporation
|
$ | 33,601 | $ | (128,101 | ) | $ | 6,092 | $ | (42,513 | ) | $ | (21,552 | ) | $ | (152,473 | ) | ||||||||
|
|
||||||||||||||||||||||||
|
Basic earnings (loss) per share
|
||||||||||||||||||||||||
|
Income (loss) from continuing operations attributable to Ocwen Financial Corporation
|
$ | 0.34 | $ | (1.52 | ) | |||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Diluted earnings (loss) per share
|
||||||||||||||||||||||||
|
Income (loss) from continuing operations attributable to Ocwen Financial Corporation
|
$ | 0.32 | $ | (1.52 | ) | |||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Weighted average common shares outstanding
|
||||||||||||||||||||||||
|
Basic
|
100,273,121 | 100,273,121 | ||||||||||||||||||||||
|
Diluted
|
107,483,015 | 100,273,121 | ||||||||||||||||||||||
|
(1)
|
Historical
combined results of operations are for the year ended December 31, 2010.
|
|
(2)
|
Historical
combined consolidated results of operations are for the eight months ended August 31, 2010.
|
Page 2 of 2