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Business Segment Reporting
 3 Months Ended
Mar. 31, 2016
Segment Reporting [Abstract]  
Business Segment Reporting
Note 16 – 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 conventional, government-insured and non-Agency loans. Non-Agency loans include 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 conventional and government-insured residential forward and reverse mortgage loans mainly through our correspondent lending arrangements, broker relationships and directly with mortgage customers. 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 revenues and expenses that are not directly related to other reportable segments, business activities that are individually insignificant, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. New business activities that are currently insignificant include providing secured floor plan lending to used car dealerships and providing financing to investors to purchase single-family homes and apartments for lease. Business activities not currently considered to be of continuing significance include residential subprime non-Agency loans held for sale (at lower of cost or fair value), investments in residential mortgage-backed securities and affordable housing investment activities.
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, 2016
Revenue (1)
$
307,427

 
$
23,285

 
$
45

 
$
—

 
$
330,757

 
 
 
 
 
 
 
 
 
 
Expenses (1) (2)
276,896

 
21,799

 
29,962

 
—

 
328,657

 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
(147
)
 
3,611

 
726

 
—

 
4,190

Interest expense
(96,474
)
 
(3,448
)
 
(6,167
)
 
—

 
(106,089
)
Gain on sale of mortgage servicing rights, net
1,175

 
—

 
—

 
—

 
1,175

Other (1)
(3,343
)
 
351

 
(509
)
 
—

 
(3,501
)
Other income (expense), net
(98,789
)
 
514

 
(5,950
)
 
—

 
(104,225
)
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
$
(68,258
)
 
$
2,000

 
$
(35,867
)
 
$
—

 
$
(102,125
)
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2015
Revenue (1)
$
471,125

 
$
37,746

 
$
1,608

 
$
(35
)
 
$
510,444

 
 
 
 
 
 
 
 
 
 
Expenses (1) (2)
337,911

 
23,785

 
16,697

 
(35
)
 
378,358

 


 


 


 


 


Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
1,371

 
3,596

 
608

 
—

 
5,575

Interest expense
(110,629
)
 
(2,639
)
 
(6,128
)
 
—

 
(119,396
)
Gain on sale of mortgage servicing rights, net
26,406

 
—

 
—

 
—

 
26,406

Other (1)
(3,640
)
 
1,065

 
733

 
—

 
(1,842
)
Other income (expense), net
(86,492
)
 
2,022

 
(4,787
)
 
—

 
(89,257
)
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
$
46,722

 
$
15,983

 
$
(19,876
)
 
$
—

 
$
42,829

 
Servicing
 
Lending
 
Corporate Items and Other
 
Corporate Eliminations
 
Business Segments Consolidated
Total Assets
 

 
 

 
 

 
 

 
 

March 31, 2016
$
3,807,685

 
$
3,116,531

 
$
482,894

 
$
—

 
$
7,407,110

 
 
 
 
 
 
 
 
 
 
December 31, 2015
$
4,089,064

 
$
2,811,154

 
$
480,090

 
$
—

 
$
7,380,308

 
 
 
 
 
 
 
 
 
 
March 31, 2015
$
5,706,301

 
$
2,165,742

 
$
481,919

 
$
—

 
$
8,353,962


(1)
Intersegment billings for services rendered to other segments are recorded as revenues, as contra-expense or as other income, depending on the type of service that is rendered.
(2)
Depreciation and amortization expense are as follows:
 
Servicing
 
Lending
 
Corporate Items and Other
 
Business Segments Consolidated
For the three months ended March 31, 2016
Depreciation expense
$
1,135

 
$
72

 
$
3,832

 
$
5,039

Amortization of mortgage servicing rights
12,725

 
81

 
—

 
12,806

Amortization of debt discount
206

 
—

 
—

 
206

Amortization of debt issuance costs
2,933

 
—

 
344

 
3,277

 
 
 
 
 
 
 
 
For the three months ended March 31, 2015
Depreciation expense
$
529

 
$
104

 
$
3,711

 
$
4,344

Amortization of mortgage servicing rights
38,405

 
89

 
—

 
38,494

Amortization of debt discount
356

 
—

 
—

 
356

Amortization of debt issuance costs
3,423

 
—

 
332

 
3,755