Current report filing

Business Segment Reporting

v3.23.2
Business Segment Reporting
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Business Segment Reporting
30. Business Segment Reporting
The following tables are a presentation of financial information by segment for the periods indicated (in thousands), and have been restated to reflect the new segment structure, as described in Note 1 - Organization and Description of Business:
For the year ended December 31, 2022
Successor
Retirement Solutions Portfolio Management Total Operating Segments Corporate and Other Eliminations Total
REVENUES
Gain (loss) on sale and other income from loans held for sale, net $ 367  $ (6,298) $ (5,931) $ —  $ —  $ (5,931)
Net fair value gains (losses) on loans and related obligations 283,808  (195,231) 88,577  —  912  89,489 
Fee income 15,526  66,761  82,287  27,578  (28,050) 81,815 
Net interest expense
Interest income 43  5,319  5,362  676  —  6,038 
Interest expense (54) (90,926) (90,980) (27,669) —  (118,649)
Net interest expense (11) (85,607) (85,618) (26,993) —  (112,611)
Total revenues 299,690  (220,375) 79,315  585  (27,138) 52,762 
Total expenses 182,287  124,060  306,347  139,014  (27,135) 418,226 
Impairment of intangibles and other assets (3,500) (3,800) (7,300) (2,228) (9,528)
Other, net 3,290  860  4,150  27,839  3  31,992 
Net income (loss) before taxes $ 117,193  $ (347,375) $ (230,182) $ (112,818) $ —  $ (343,000)
Depreciation and amortization $ 38,654  $ 319  $ 38,973  $ 3,055  $ —  $ 42,028 
Total assets $ 297,361  $ 20,185,979  $ 20,483,340  $ 1,610,355  $ (1,534,400) $ 20,559,295 
For the nine months ended December 31, 2021
Successor
Retirement Solutions Portfolio Management Total Operating Segments Corporate and Other Eliminations Total
REVENUES
Gain (loss) on sale and other income from loans held for sale, net $ (4,150) $ 39,950  $ 35,800  $ —  $ —  $ 35,800 
Net fair value gains (losses) on loans and related obligations 317,138  (30,738) 286,400  —  4,621  291,021 
Fee income 11,220  30,455  41,675  25,243  (25,232) 41,686 
Net interest income (expense)
Interest income 1,031  1,027  2,058  276  —  2,334 
Interest expense (364) (52,625) (52,989) (20,243) —  (73,232)
Net interest income (expense) 667  (51,598) (50,931) (19,967) —  (70,898)
Total revenues 324,875  (11,931) 312,944  5,276  (20,611) 297,609 
Total expenses 137,872  92,197  230,069  101,005  (26,543) 304,531 
Impairment of goodwill and intangible assets (413,868) (11,909) (425,777) —  (425,777)
Other, net 248  1,170  1,418  15,198  (5,932) 10,684 
Net loss before taxes $ (226,617) $ (114,867) $ (341,484) $ (80,531) $ —  $ (422,015)
Depreciation and amortization $ 29,019  $ 132  $ 29,151  $ 1,425  $ —  $ 30,576 
Total assets $ 368,927  $ 18,974,389  $ 19,343,316  $ 1,083,412  $ (957,353) $ 19,469,375 

For the three months ended March 31, 2021
Predecessor
Retirement Solutions Portfolio Management Total Operating Segments Corporate and Other Eliminations Total
REVENUES
Gain on sale and other income from loans held for sale, net $ —  $ 5,065  $ 5,065  $ —  $ —  $ 5,065 
Net fair value gains on loans and related obligations 68,449  2,750  71,199  —  (1) 71,198 
Fee income 524  36,191  36,715  7,936  (8,104) 36,547 
Net interest expense
Interest income —  138  138  12  —  150 
Interest expense —  (14,954) (14,954) (7,756) —  (22,710)
Net interest expense —  (14,816) (14,816) (7,744) —  (22,560)
Total revenues 68,973  29,190  98,163  192  (8,105) 90,250 
Total expenses 23,693  24,406  48,099  27,746  (8,613) 67,232 
Other, net 34  895  929  (9,464) (508) (9,043)
Net income (loss) before taxes $ 45,314  $ 5,679  $ 50,993  $ (37,018) $ —  $ 13,975 
Depreciation and amortization $ 151  $ 146  $ 297  $ 474  $ —  $ 771 
Total assets $ 35,861  $ 17,378,088  $ 17,413,949  $ 385,370  $ (326,313) $ 17,473,006 
For the year ended December 31, 2020
Predecessor
Retirement Solutions Portfolio Management Total Operating Segments Corporate and Other Eliminations Total
REVENUES
Gain on sale and other income from loans held for sale, net $ —  $ 10,192  $ 10,192  $ —  $ —  $ 10,192 
Net fair value gains on loans and related obligations 192,257  103,872  296,129  —  (2) 296,127 
Fee income 1,837  28,002  29,839  25,392  (22,701) 32,530 
Net interest expense
Interest income —  714  714  15  —  729 
Interest expense —  (73,877) (73,877) (8,946) (132) (82,955)
Net interest expense —  (73,163) (73,163) (8,931) (132) (82,226)
Total revenues 194,094  68,903  262,997  16,461  (22,835) 256,623 
Total expenses 87,219  90,854  178,073  80,106  (22,835) 235,344 
Other, net —  —  —  (6,131) —  (6,131)
Net income (loss) before taxes $ 106,875  $ (21,951) $ 84,924  $ (69,776) $ —  $ 15,148 
Depreciation and amortization $ 897  $ 130  $ 1,027  $ 1,985  $ —  $ 3,012 
Total assets $ 25,841  $ 16,895,820  $ 16,921,661  $ 88,638  $ —  $ 17,010,299 

The Company has identified three reportable segments: Retirement Solutions, Portfolio Management, and Corporate and Other.
Retirement Solutions
Our Retirement Solutions segment is where we fulfill our goal to help older homeowners achieve their financial goals in retirement. This segment includes all loan origination activity for the Company, including reverse mortgage and home improvement loans. We originate or acquire reverse mortgage loans through our FAR operating subsidiary. This segment originates HECM and non-agency reverse mortgages. We securitize HECM into HMBS, which Ginnie Mae guarantees, and sell them in the secondary market while retaining the rights to service. Non-agency reverse mortgages, which complement the FHA HECM for higher value homes, may be sold as whole loans to investors or held for investment and pledged as collateral to securitized nonrecourse debt obligations. Non-agency reverse mortgage loans are not insured by the FHA. We originate reverse mortgage loans through a retail channel (consisting primarily of field offices and a centralized retail platform) and a third-party originator channel (consisting primarily of a network of mortgage brokers).
Additionally, this segment originates home improvement loans through our FAM subsidiary. Through these operations, the Company assists homeowners in the financing of short-term home improvement projects such as windows, HVAC, or remodeling, and relies on a network of partner contractors across the country to acquire, interact with, and serve these customers. These home improvement loans are then sold in the secondary market through our capital markets platform.
Portfolio Management
Our Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the enterprise. As part of the vertical integration of our business, our Portfolio Management team acts as the connector between borrowers and investors. The direct connections to investors, provided by our Financial Industry Regulatory Authority registered broker-dealer, allows us to innovate and manage risk through better price and product discovery. Given our scale, we are able to work directly with investors and where appropriate, retain assets on balance sheet for attractive return opportunities. These retained investments are a source of growing and recurring earnings. The Portfolio Management segment generates
revenue and earnings in the form of gains on sale of loans, fair value gains on portfolio assets, interest income, and fee income related to mortgage servicing rights, underwriting, advisory, valuation, and other ancillary services.
Corporate and Other
Our Corporate and Other segment consists of our corporate services groups.
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 actual cost of services performed based on a direct resource utilization, estimate of percentage use for shared services or headcount percentage for certain functions. Non-allocated corporate expenses include administrative costs of executive management and other corporate functions that are not directly attributable to the Company's operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. To reconcile the Company's consolidated results, certain inter-segment revenues and expenses are eliminated in the "Eliminations" column in the previous tables.