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NOTE 21 BUSINESS SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
BUSINESS SEGMENT REPORTING
Note 21 Business Segment Reporting

Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows:

Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes both agency and non-agency loans. Non-agency loans include prime and subprime loans which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent.

Lending. The Lending segment is focused on originating and purchasing agency-conforming residential mortgage loans mainly through our correspondent lending business. We also commenced a direct lending business to pursue refinancing opportunities from our existing portfolio, where permitted. The loans are typically sold shortly after origination into a liquid market on a servicing retained basis.

Corporate Items and Other. Corporate Items and Other includes items of revenue and expense that are not directly related to a business, business activities that are individually insignificant, interest income on short-term investments of cash, corporate debt and certain corporate expenses. Business activities that are not considered to be of continuing significance include subprime loans held for sale (at lower of cost or fair value), investments in unconsolidated entities and affordable housing investment activities. Corporate Items and Other also included the diversified fee-based businesses that we acquired as part of the Homeward Acquisition and the ResCap Acquisition and subsequently sold.

We allocate interest income and expense to each business segment for funds raised or for funding of investments made, including interest earned on cash balances and short-term investments and interest incurred on corporate debt. We also allocate expenses generated by corporate support services to each business segment.

Financial information for our segments is as follows:

Servicing Lending Corporate Items and Other Corporate Eliminations Business Segments Consolidated
Results of Operations
Three Months Ended March 31, 2013:
Revenue $ 376,084 $ 13,908 $ 16,712 $ (45 ) $ 406,659
Operating expenses (1) 211,505 11,098 20,968 (45 ) 243,526
Income (loss) from operations 164,579 2,810 (4,256 ) — 163,133
Other income (expense), net:
Interest income (614 ) 4,780 1,019 — 5,185
Interest expense (1) (90,460 ) (2,829 ) (127 ) — (93,416 )
Other (26,085 ) 267 2,251 — (23,567 )
Other income (expense), net (117,159 ) 2,218 3,143 — (111,798 )
Income (loss) before income taxes $ 47,420 $ 5,028 $ (1,113 ) $ — $ 51,335
Three Months Ended March 31, 2012:
Revenue $ 164,192 $ — $ 658 $ (304 ) $ 164,546
Operating expenses (1) 82,879 — 3,395 (147 ) 86,127
Income (loss) from operations 81,313 — (2,737 ) (157 ) 78,419
Other income (expense), net:
Interest income — — 2,312 — 2,312
Interest expense (1) (46,526 ) — (398 ) — (46,924 )
Other (310 ) — (3,535 ) 157 (3,688 )
Other income (expense), net (46,836 ) — (1,621 ) 157 (48,300 )
Income (loss) before income taxes $ 34,477 $ — $ (4,358 ) $ — $ 30,119
Total Assets
March 31, 2013 $ 5,713,500 $ 430,915 $ 1,103,600 $ — $ 7,248,015
December 31, 2012 $ 4,461,755 $ 551,733 $ 658,394 $ — $ 5,671,882
March 31, 2012 $ 3,530,184 $ — $ 964,327 $ — $ 4,494,511
(1) Depreciation and amortization expense are as follows:
Servicing Lending Corporate Items and Other Business Segments Consolidated
Three Months Ended March 31, 2013:
Depreciation expense $ 2,699 $ 234 $ 1,580 $ 4,513
Amortization of MSRs 47,883 — — 47,883
Amortization of debt discount 424 — — 424
Amortization of debt issuance costs – SSTL 894 — — 894
Three Months Ended March 31, 2012:
Depreciation expense $ 255 $ — $ 578 $ 833
Amortization of MSRs 14,314 — — 14,314
Amortization of debt discount 745 — — 745
Amortization of debt issuance costs – SSTL 920 — — 920