Nationstar Mortgage Announces Fourth Quarter and Full Year 2013 Financial Results

  Nationstar Mortgage Announces Fourth Quarterand Full Year 2013 Financial
  Results

Business Wire

LEWISVILLE, Texas -- February 27, 2014

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      September     December        December 31,    December
                  31, 2013        30, 2013        31, 2012        2013              31, 2012
Revenues
Servicing         $ 281,624       $ 341,679       $ 145,496       $ 1,084,208       $ 462,495
fee income
Other fee         113,137        84,203         12,070         300,014         34,656    
income
Total fee         394,761         425,882         157,566         1,384,222         497,151
income
Gain on
mortgage          25,659         205,956        175,048        702,763          487,164   
loans held
for sale
Total             420,420         631,838         332,614         2,086,985         984,315
revenues
                                                                                    
Total
expenses          398,002         395,854         200,268         1,402,278         582,045
and
impairments
                                                                                    
Other
income
(expense)
Interest          51,273          63,903          30,406          197,220           71,586
income
Interest          (160,306  )     (168,215  )     (71,400   )     (538,805    )     (197,308  )
expense
Contract
termination       —               —               15,600          —                 15,600
fees, net
Loss on
equity            —               —               (13,244   )     —                 (14,571   )
investment
Gain (loss)
on interest       675            400            708            3,132            (994      )
rate swaps
and caps
Total other
income            (108,358  )     (103,912  )     (37,930   )     (338,453    )     (125,687  )
(expense)
                                                                                    
Income
(loss)            (85,940   )     132,072         94,416          346,254           276,583
before
taxes
Income tax
expense           (35,033   )     50,187         30,657         129,200          71,296    
(benefit)
Net income        (50,907   )     81,885          63,759          217,054           205,287
                                                                                    
Earnings
per share:
Basic
earnings          $ (0.57   )     $ 0.92         $ 0.72         $ 2.43           $ 2.41    
per share
Diluted
earnings          $ (0.56   )     $ 0.91         $ 0.71         $ 2.40           $ 2.40    
per share
Weighted
average
shares:
Basic             89,475          89,477          89,173          89,415            85,328
Dilutive
effect of         1,166          921            683            853              196       
stock
awards
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,       December 31,
                                            2013                  2012
Assets                                      (unaudited)
Cash and cash         $  441,902            $  275,251            $  152,649
equivalents
Restricted cash       592,747               741,689               393,190
Accounts              5,636,482             7,575,612             3,043,606
receivable
Mortgage loans        2,603,380             3,868,460             1,480,537
held for sale
Mortgage loans
held for
investment,
subject to            211,050               213,381               238,907
nonrecourse
debt - Legacy
Assets, net
Reverse
mortgage              1,434,506             1,225,866             750,273
interests
Mortgage
servicing             2,503,162             2,221,451             646,833
rights
Property and          119,185               110,199               75,026
equipment, net
Derivative
financial             123,878               292,320               152,189
instruments
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             2,444,062             2,444,112             1,062,635
senior notes
Payables and
accrued               1,308,450             1,260,499             631,431
liabilities
Derivative
financial             8,526                 205,849               20,026
instruments
Mortgage
servicing             82,521                82,521                83,238
liabilities
Nonrecourse
debt - Legacy         89,107                92,099                100,620
Assets
Excess spread
financing (at         986,410               946,614               288,089
fair value)
Participating
interest              1,103,490             996,255               580,836
financing
Mortgage
servicing
rights                29,874               —                    —
financing
liabilities
Total                 $  13,036,791        $  16,031,781        $  6,368,461
liabilities
                                                                  
Total equity          989,898             1,036,291           757,682
Total
liabilities and       $  14,026,689        $  17,068,072        $  7,126,143
equity
                                                                     


SERVICING SEGMENT - SERVICING FEE INCOME DETAIL
(dollars in thousands)
                                                               
                                                                     
                     Three months ended                              Twelve months ended
                     December        September       December        December 31,      December
                     31,           30,           31,             2013            31,
                     2013            2013            2012                              2012
                                                                                       
Total
servicing fee
income before        $ 311,531       $ 328,576       $ 176,489       $ 1,155,577       $ 540,926
MSR fair value
adjustments
Fair value
adjustments
due to
valuation
inputs or
assumptions
Mortgage
servicing            93,660          100,203         (1,169    )     355,586           5,500
rights
Excess spread        (44,455   )     (3,964    )     6,024          (148,852    )     (16,418   )
financing
Net change in
FV due to
valuation            49,205          96,239          4,855           206,734           (10,918   )
inputs or
assumptions
Fair value
adjustments
due to other
changes in
fair value
(amortization)
Mortgage
servicing            (72,676   )     (85,946   )     (24,263   )     (297,128    )     (73,742   )
rights
Excess spread        4,351          18,407         (11,657   )     75,519           5,735     
financing
Net change in
FV due to
other changes        (68,325   )     (67,539   )     (35,920   )     (221,609    )     (68,007   )
in fair value
(amortization)
Servicing fee        292,411         357,276         145,424         1,140,702         462,001
income
Other fee            87,655         61,036         14,078         238,144          35,133    
income
Total fee            $ 380,066      $ 418,312      $ 159,502      $ 1,378,846      $ 497,134 
income
                                                                                                 


PRO FORMA EARNINGS PER SHARE RECONCILIATION
(dollars and shares in thousands, except per share data)
                                                         
                                                               
                 Three months ended                            Twelve months ended
                 December        September      December       December       December
                 31,           30,          31,            31,          31,
                 2013            2013           2012           2013           2012

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


AEBITDA RECONCILIATION
(dollars in thousands, except per share data)
                                                                       
                                                                             
                             Three months ended                              Twelve months ended
                             December        September       December        December        December
                             31,           30,           31,             31,           31,
                             2013            2013            2012            2013            2012
                                                                                             
Net income                   $ (50,907 )     $ 81,885        $ 63,759        $ 217,054       $ 205,287
Plus:
Net loss from Legacy         18,409          11,683          2,189           45,248          20,483
Portfolio and Other
Income tax expense           (35,033   )     50,187         30,657         129,200        71,296    
Net income from              $ (67,531 )     $ 143,755       $ 96,605        391,502         297,066
Operating Segments
Adjust for:
Interest expense from        50,502          46,136          24,165          166,402         63,879
unsecured senior notes
Depreciation and             8,814           6,338           3,107           23,869          8,880
amortization
Change in fair value
of mortgage servicing        (20,984   )     (14,257   )     25,432          (58,458   )     68,242
rights
Amortization/accretion
of reverse mortgage          —               (92       )     (1,844    )     (642      )     (5,120    )
servicing
Restructuring Costs          12,078          —               —               12,078          —
Share-based                  2,434           2,416           2,675           10,547          14,045
compensation
Fair value changes on
excess spread                40,104          (14,443   )     5,633           73,333          10,684
financing
Fair value changes in        —               (187      )     (813      )     (1,466    )     (1,237    )
derivatives
Ineffective portion of       (390      )     —              —              (544      )     —         
cash flow hedge
Adjusted EBITDA              $ 25,027       $ 169,666      $ 154,960      $ 616,620      $ 456,439 
Adjusted EBITDA per          $ 0.28         $ 1.88         $ 1.72         $ 6.83         $ 5.34    
share
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         292,411         —                292,411        474             (11,261   )      281,624
income
Other fee             87,655         25,437          113,092       45             —               113,137  
income
Total fee             380,066         25,437           405,503        519             (11,261   )      394,761
income
Gain on
mortgage loans        4,860          19,145          24,005        (9,218    )     10,872          25,659   
held for sale
Total revenues        384,926         44,582           429,508        (8,699    )     (389      )      420,420
Total expenses        216,709         172,595          389,304        8,698           —                398,002
and impairments
Other income
(expense)
Interest income       23,952          21,777           45,729         5,155           389              51,272
Interest              (117,569  )     (36,285    )     (153,854 )     (6,452    )     —                (160,305 )
expense
Loss on
interest rate         390            —               390           285            —               675      
swaps and caps
Total other
income                (93,227   )     (14,508    )     (107,735 )     (1,012    )     389              (108,358 )
(expense)
Income before         74,990          (142,521   )     (67,531  )     (18,409   )     —                (85,940  )
taxes
Interest
expense on            35,717          14,786           50,503         —               —                50,503
corporate notes
MSR valuation         (20,984   )     —                (20,984  )     —               —                (20,984  )
adjustment
Excess spread         40,104          —                40,104         —               —                40,104
adjustment
Depreciation &        6,008           2,806            8,814          1,115           —                9,929
amortization
Stock-based           1,738           696              2,434          —               —                2,434
compensation
Fair value
adjustment for        —               —                —              (285      )     —               (285     )
derivatives
Restructuring         8,594           3,484            12,078         795             —                12,873
charge
Hedge                 (390      )     —               (390     )     —              —               (390     )
ineffectiveness
ADJUSTED EBITDA       $ 145,777      $ (120,750 )     $ 25,027      $ (16,784 )     $     —         $  8,243 
                                                                                                       
Pretax income         74,990          (142,521   )     (67,531  )     (18,409   )     —                (85,940  )
(loss)
Ramp expenses         36,740         14,588          51,328        —              —               51,328   
Pro forma
pretax income         111,730         (127,933   )     (16,203  )     (18,409   )     —                (34,612  )
(loss)
                                                                                                       
Earnings per                                                                                     $  (0.56 )
share - Diluted
Pretax income         $ 0.83         $ (1.57    )     $ (0.75  )     $ (0.20   )     $     —         $  (0.95 )
per share
AEBITDA per           $ 1.61         $ (1.33    )     $ 0.28        $ (0.19   )     $     —         $  0.09  
share
                                                                                                                


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            (33,520 )     (12,616   )     (46,136 )     (3      )     (46,138 )
corporate notes
MSR valuation         14,257        —               14,257        —             14,257
adjustment
Excess spread         14,443        —               14,443        —             14,443
adjustment
Amortization of
mortgage              92            —               92            —             92
servicing
obligations
Depreciation &        (4,106  )     (2,232    )     (6,338  )     (657    )     (6,995  )
amortization
Stock-based           (1,542  )     (874      )     (2,416  )     (6      )     (2,422  )
compensation
Fair value
adjustment for        93            —               93            307           400
derivatives
Hedge                 94           —              94           —            94      
ineffectiveness
Pretax income         130,867       12,888          143,755       (11,683 )     132,072
(loss)
Income tax                                                                      50,187  
Net income                                                                      81,885  
(loss)
                                                                                
Pretax income         130,867       12,888          143,755       (11,683 )     132,072
(loss)
Ramp expenses         17,124       7,945          25,069       —            25,069  
Pro forma
pretax income         147,991       20,833          168,824       (11,683 )     157,141
(loss)
                                                                                
Earnings per                                                                $  0.91 
share
Pretax income         $  1.45      $   0.14       $  1.59      $ (0.13 )     $  1.46 
per share
AEBITDA per           $  1.56      $   0.32       $  1.88      $ (0.13 )     $  1.75 
share
                                                                                        

                   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            (19,959 )     (4,206   )      (24,165 )     —             (24,165 )
corporate notes
MSR valuation         (25,432 )     —               (25,432 )     —             (25,432 )
adjustment
Excess spread         (5,633  )     —               (5,633  )     —             (5,633  )
adjustment
Amortization of
mortgage              1,844         —               1,844         —             1,844
servicing
obligations
Depreciation &        (2,020  )     (1,087   )      (3,107  )     (155    )     (3,262  )
amortization
Stock-based           (1,576  )     (1,099   )      (2,675  )     (2      )     (2,677  )
compensation
Fair value
adjustment for        813           —               813           (105    )     708
derivatives
Hedge                 —            —              —            —            —       
ineffectiveness
Pretax income         14,915        81,690          96,605        (2,189  )     94,416
(loss)
Income tax                                                                      30,657  
Net income                                                                      63,759  
(loss)
                                                                                
Pretax income         14,915        81,690          96,605        (2,189  )     94,416
(loss)
Ramp expenses         —            —              —            —            —       
Pro forma
pretax income         14,915        81,690          96,605        (2,189  )     94,416
(loss)
                                                                                
Earnings per                                                                $  0.71 
share
Pretax income         $  0.17      $  0.91        $  1.08      $ (0.02 )     $  1.05 
per share
AEBITDA per           $  0.74      $  0.98        $  1.72      $ (0.02 )     $  1.70 
share
                                                                                        


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            (120,849 )     (45,552     )     (166,401 )     (3      )     (166,404 )
corporate notes
MSR valuation         58,458         —                 58,458         —             58,458
adjustment
Excess spread         (73,333  )     —                 (73,333  )     —             (73,333  )
adjustment
Amortization of
mortgage              642            —                 642            —             642
servicing
obligations
Depreciation &        (16,085  )     (7,784      )     (23,869  )     (2,745  )     (26,614  )
amortization
Stock-based           (6,710   )     (3,837      )     (10,547  )     (27     )     (10,574  )
compensation
Fair value
adjustment for        1,465          —                 1,465          1,277         2,742
derivatives
Restructuring         (8,594   )     (3,484      )     (12,078  )     (795    )     (12,873  )
Charges
Hedge                 545           —                545           —            545      
ineffectiveness
Pretax income         331,854        59,649            391,503        (45,248 )     346,254
(loss)
Income tax                                                                          129,200  
Net income                                                                          217,054  
(loss)
                                                                                    
Pretax income         331,854        59,649            391,503        (45,248 )     346,254
(loss)
Ramp expenses         81,431        36,917           118,348       —            118,348  
Pro forma
pretax income         413,285        96,566            509,851        (45,248 )     464,602
(loss)
                                                                                    
Earnings per                                                                   $   2.43 
share
Pretax income         $   3.68      $    0.66        $   4.34      $ (0.50 )     $   3.84 
per share
AEBITDA per           $   5.50      $    1.33        $   6.83      $ (0.48 )     $   6.36 
share
                                                                                             

               
                   For year ended December 31, 2012
                   Servicing   Origination   Operating   Legacy      Total
                                                                             
Adjusted           181,228       275,212         456,440       (18,215 )     438,225
EBITDA
                                                                             
Interest
expense on         (57,724 )     (6,155    )     (63,879 )     —             (63,879 )
corporate
notes
MSR
valuation          (68,242 )     —               (68,242 )     —             (68,242 )
adjustment
Excess
spread             (10,684 )     —               (10,684 )     —             (10,684 )
adjustment
Amortization
of mortgage        5,120         —               5,120         —             5,120
servicing
obligations
Depreciation
&                  (6,124  )     (2,756    )     (8,880  )     (740    )     (9,620  )
amortization
Stock-based        (9,449  )     (4,597    )     (14,046 )     703           (13,343 )
compensation
Fair value
adjustment         1,237        —              1,237        (2,231  )     (994    )
for
derivatives
Pretax
income             35,362        261,704         297,066       (20,483 )     276,583
(loss)
Income tax                                                                   71,296  
Net income                                                                   205,287 
(loss)
                                                                             
Pretax
income             35,362        261,704         297,066       (20,483 )     276,583
(loss)
Ramp               —            —              —            —             —       
expenses
Pro forma
pretax             35,362        261,704         297,066       (20,483 )     276,583
income
(loss)
                                                                             
Earnings per                                                             $  2.40 
share
Pretax
income per         $  0.41      $   3.06       $  3.47      $ (0.24 )     $  3.23 
share
AEBITDA per        $  2.12      $   3.22       $  5.34      $ (0.21 )     $  5.12 
share
                                                                                     

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.

Contact:

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