NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands unless otherwise stated, except share data)
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Organization
Home Loan Servicing Solutions, Ltd. and all of its wholly owned subsidiaries, HLSS Holdings, LLC and HLSS Management, LLC (collectively referred to throughout as HLSS, us,
our, we, the Company) focus on acquiring mortgage servicing assets.
Basis of Presentation and Use of
Estimates
We prepared the accompanying unaudited Condensed Consolidated Financial Statements in conformity with the
instructions of the Securities and Exchange Commission (SEC) to Form 10-Q for interim financial statements. In our opinion, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires that we make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
materially differ from those estimates. Material estimates that are particularly significant relate to our fair value measurements of Notes receivable Rights to MSRs. Prior to our Initial Public Offering (IPO) on March 5,
2012 we were a developmental stage company. Therefore, our results for the three months ended March 31, 2012 do not reflect a full quarter of operations and are not fully comparable to the results for the three months ended March 31, 2013.
Principles of Consolidation
Our financial statements include the accounts of Home Loan Servicing Solutions, Ltd. and its wholly owned subsidiaries, as well as a variable interest entity (VIE) of which we are the primary
beneficiary. We eliminate intercompany accounts and transactions in consolidation.
We evaluate each special purpose entity
(SPE) for classification as a VIE. When an SPE meets the definition of a VIE and we determine that HLSS is the primary beneficiary, we include the SPE in our Interim Condensed Consolidated Financial Statements.
Our servicing advances are in an SPE along with related Match funded liabilities. We determined that this SPE is a VIE of which we are
the primary beneficiary. The accounts of this SPE are included in our Interim Condensed Consolidated Financial Statements.
Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to an SPE in exchange
for cash. This SPE issues debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers do not qualify for sale accounting because we retain control over the
transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities.
We use collections on the advances pledged to the SPE to repay principal and to pay interest and the expenses of the entity. Holders of the debt issued by this entity can look only to the assets of the entity itself for satisfaction of the debt and
have no recourse against HLSS.
The following table summarizes the assets and liabilities of the SPE formed in connection with
our current match funded advance facility, at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
Match funded advances
|
|
$
|
3,524,262
|
|
|
$
|
3,098,198
|
|
Related party receivables(1)
|
|
|
|
|
|
|
21,265
|
|
Other assets (2)
|
|
|
73,830
|
|
|
|
77,110
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,598,092
|
|
|
$
|
3,196,573
|
|
|
|
|
|
|
|
|
|
|
Match funded liabilities
|
|
$
|
3,120,861
|
|
|
$
|
2,690,821
|
|
Other liabilities
|
|
|
2,797
|
|
|
|
2,203
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
3,123,658
|
|
|
$
|
2,693,024
|
|
|
|
|
|
|
|
|
|
|
7
(1)
|
Relates to collections made by Ocwen Financial Corporation and its subsidiaries (collectively Ocwen) on outstanding Match funded advances. This receivable
represents the portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of each presented period. See Note 13 for more information about our Related party receivables.
|
(2)
|
Other assets principally include debt service accounts and debt issuance costs. See Note 5 for more information about our Other assets.
|
Certain disclosures included in the companys annual report are not required to be included on an interim basis in the
companys quarterly reports on Forms 10-Q. The company has condensed or omitted these disclosures. Therefore, this Form 10-Q should be read in conjunction with the companys annual report on Form 10-K for the year
ended December 31, 2012 which was filed with the U.S. Securities and Exchange Commission on February 7, 2013.
Recent
Accounting Pronouncements
Accounting Standards Update (ASU) ASU 2012-04.
This ASU makes technical
corrections and improvements to a variety of topics in the Codification. The changes include source literature amendments, guidance clarification, reference corrections and relocated guidance. The ASU also includes conforming amendments to the
Codification to reflect ASC 820s fair value measurement and disclosure requirements. Our adoption of this standard effective January 1, 2013 did not have a material impact on our Interim Condensed Consolidated Financial Statements.
Accounting Standards Update (ASU) ASU 2013-01.
This ASU limits the scope of the new balance sheet
offsetting disclosure requirements to derivatives (including bifurcated embedded derivatives), repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. Our adoption of this standard effective
January 1, 2013 did not have a material impact on our Interim Condensed Consolidated Financial Statements.
Accounting
Standards Update (ASU) 2013-02.
The ASU enhances the reporting of reclassifications out of accumulated other comprehensive income (AOCI). The ASU sets requirements for presentation for significant items reclassified to
net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. It requires companies to present information about reclassifications out of AOCI in one place. It also requires
companies to present reclassifications by component when reporting changes in AOCI balances. Our adoption of this standard effective January 1, 2013 did not have a material impact on our Interim Condensed Consolidated Financial Statements.
2.
|
ASSETS ACQUIRED AND LIABILITIES ASSUMED
|
On March 13, 2013, we executed our third flow purchase Flow 3 wherein we used cash flows from
operations to purchase the following:
|
|
|
the contractual right to receive the servicing fees related to mortgage servicing rights with respect to 93 pooling and servicing agreements with UPB
of approximately $15.9 billion and the right to automatically obtain legal ownership, without any additional payment to Ocwen, of each mortgage servicing right upon the receipt of the necessary approvals and consents (Required Third Party
Consents) (these rights constitute the Rights to MSRs with respect to the mortgage servicing rights); and
|
|
|
|
the outstanding servicing advances associated with the related pooling and servicing agreements.
|
The following table summarizes the purchase price of the assets we acquired from Ocwen during the period ended March 31, 2013 and
reconciles the cash used to acquire such assets:
|
|
|
|
|
|
|
Total
|
|
Notes receivable Rights to MSRs
|
|
$
|
100,707
|
|
Match funded advances (1)
|
|
|
703,206
|
|
Purchase price, as adjusted
|
|
|
803,913
|
|
Amount due from Ocwen for post-closing adjustments
|
|
|
10,406
|
|
|
|
|
|
|
Cash used
|
|
$
|
814,319
|
|
|
|
|
|
|
8
|
|
|
|
|
Sources:
|
|
|
|
|
Cash on-hand
|
|
$
|
153,142
|
|
Match funded liabilities
|
|
|
661,177
|
|
|
|
|
|
|
Cash used
|
|
$
|
814,319
|
|
|
|
|
|
|
(1)
|
The cash used to purchase these assets are shown net within the Acquisition of advances and other assets (net of liabilities assumed) in connection with the
purchase of notes receivable Rights to MSRs of the interim condensed consolidated statement of cash flows.
|
On March 5, 2012, we used a portion of the net proceeds from our IPO to purchase the following:
|
|
|
the contractual right to receive the servicing fees related to mortgage servicing rights with respect to 116 pooling and servicing agreements with UPB
of approximately $15.2 billion and the right to automatically obtain legal ownership, without any additional payment to Ocwen, of each mortgage servicing right upon the receipt of the Required Third Party Consents (these rights constitute the Rights
to MSRs with respect to the mortgage servicing rights);
|
|
|
|
the outstanding servicing advances associated with the related pooling and servicing agreements; and
|
|
|
|
other assets related to the foregoing.
|
The following table summarizes the purchase price of the assets and liabilities we acquired from Ocwen during the period ended March 31, 2012 and reconciles the cash used to acquire such assets and
liabilities:
|
|
|
|
|
|
|
Total
|
|
Notes receivable Rights to MSRs
|
|
$
|
62,458
|
|
Purchase of Advance SPE:
|
|
|
|
|
Match funded advances (1)
|
|
|
413,374
|
|
Other assets (1)
|
|
|
22,136
|
|
Match funded liabilities (1)
|
|
|
(358,335
|
)
|
Other liabilities (1)
|
|
|
(841
|
)
|
Net assets of Advance SPE
|
|
|
76,334
|
|
Purchase price, as adjusted
|
|
|
138,792
|
|
Amount due from Ocwen for post-closing adjustments
|
|
|
11,006
|
|
Cash used
|
|
$
|
149,798
|
|
|
|
|
|
|
Sources:
|
|
|
|
|
Cash on-hand
|
|
$
|
149,798
|
|
|
|
|
|
|
Match funded liabilities
|
|
|
|
|
Cash used
|
|
$
|
149,798
|
|
|
|
|
|
|
(1)
|
The cash used to purchase these assets are shown net within the Acquisition of advances and other assets (net of liabilities assumed) in connection with the
purchase of notes receivable Rights to MSRs of the interim condensed consolidated statement of cash flows.
|
9
3.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
We estimate fair value based on a hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable
inputs are inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value
hierarchy prioritizes the inputs to valuation techniques into three broad levels and gives the highest priority to Level 1 inputs and the lowest to Level 3 inputs.
The three broad categories are:
|
|
|
Level 1: Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term
of the financial instrument.
|
|
|
|
Level 3: Unobservable inputs for the asset or liability.
|
Where available, we utilize quoted market prices or observable inputs rather than unobservable inputs to determine fair value. We classify assets in their entirety based on the lowest level of input that
is significant to the fair value measurement.
We describe the methodologies that we use and key assumptions that we make to
assess the fair value of instruments in more detail below:
Notes Receivable Rights to MSRs
We established the value of the Notes Receivable Rights to MSRs based on an appraisal prepared with the assistance of an
independent valuation firm. This appraisal is prepared on a quarterly basis. Significant inputs into the valuation include the following:
|
|
|
Discount rates reflecting the risk of earning the future income streams from the Notes receivable Rights to MSRs ranging from 16% to 22%.
|
|
|
|
Interest rate used for calculating the cost of servicing advances of 1-Month LIBOR + 4%.
|
|
|
|
Mortgage loan prepayment projections ranging from 12% to 26% of the related mortgage lifetime projected prepayment rate.
|
|
|
|
Delinquency rate projections ranging from 15% to 35% of the aggregate unpaid balance of the underlying mortgage loans.
|
The independent valuation firm reviewed the collateral attributes and the historical payment performance of the underlying mortgage
servicing portfolio and compared them with similar mortgage servicing portfolios and with standard industry mortgage performance benchmarks to arrive at the assumptions set forth above. The selected collateral attributes and performance comparisons
utilized were the voluntary prepayment performance, delinquency and foreclosure performance, operational cost comparison, average loan balance, weighted average coupon and note rate distribution, loan product type classification, geographic
distribution and servicing advance behavior.
The unobservable inputs that have the most significant effect on the fair value
of Notes receivable Rights to MSRs are the mortgage loan prepayment rate projections and delinquency rate projections; however, any significant increase (decrease) in discount rates, interest rates, mortgage loan prepayment projections or
delinquency rate projections, each in isolation, would result in a substantially lower (higher) valuation.
Derivative Financial
Instruments
Our derivatives are not exchange-traded, and therefore quoted market prices or other observable inputs are
not available. The fair value of our interest rate swap agreements are based on certain information provided by third-party pricing sources. Third-party valuations are derived from proprietary models based on inputs that include yield curves and
contractual terms such as fixed interest rates and payment dates. We have not adjusted the information obtained from the third-party pricing sources; however, we review this information to ensure that it provides a reasonable basis for estimating
fair value. Our review is designed to identify information that appears stale, information that has changed significantly from the prior period, and other indicators that the information may not be accurate. We determined that potential credit and
counterparty risks had an immaterial impact on the valuation of our derivatives. See Note 8 for additional information on our derivative financial instruments.
10
The following tables present assets and liabilities measured at fair value on a recurring
basis categorized by input level within the fair value hierarchy as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
At March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable Rights to MSRs
|
|
$
|
393,776
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
393,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
393,776
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
393,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
1,063
|
|
|
|
|
|
|
|
|
|
|
$
|
1,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
1,063
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
At December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable Rights to MSRs
|
|
$
|
303,705
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
303,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
303,705
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
303,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
1,076
|
|
|
|
|
|
|
|
|
|
|
$
|
1,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
1,076
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present reconciliations of the changes in fair value of our Level 3 assets which we
measure at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
For the three months ended March 31,
|
|
Note
receivable
Rights to
MSRs
|
|
|
Derivative
Financial
Instruments
|
|
|
Note
receivable
Rights to
MSRs
|
|
|
Derivative
Financial
Instruments
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
303,705
|
|
|
$
|
(1,076
|
)
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
Purchases and reductions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
100,707
|
|
|
|
|
|
|
|
62,458
|
|
|
|
|
|
Reductions
|
|
|
(10,636
|
)
|
|
|
|
|
|
|
(784
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
393,776
|
|
|
|
(1,076
|
)
|
|
|
61,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in other comprehensive income (1)
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfers in or out of Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
393,776
|
|
|
$
|
(1,063
|
)
|
|
$
|
61,674
|
|
|
$
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These gains are attributable to derivatives still held at March 31, 2013 and March 31, 2012, respectively.
|
11
The following table shows the effect on the fair value of the Note receivable Rights
to MSRs assuming adverse changes to certain key assumptions used in valuing these assets at March 31, 2013 and December 31, 2012 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
|
Prepayment Speeds
|
|
|
Delinquency Rates
|
|
|
|
100 bps adverse change
|
|
|
1000 bps adverse change
|
|
|
1000 bps adverse change
|
|
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Receivable Rights to MSRs
|
|
$
|
(11,850
|
)
|
|
$
|
(17,587
|
)
|
|
$
|
(50,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
|
Prepayment Speeds
|
|
|
Delinquency Rates
|
|
|
|
100 bps adverse change
|
|
|
1000 bps adverse change
|
|
|
1000 bps adverse change
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Receivable Rights to MSRs
|
|
$
|
(11,786
|
)
|
|
$
|
(15,470
|
)
|
|
$
|
(45,540
|
)
|
This sensitivity analysis above assumes a change is made to one key input, while holding all other inputs
constant. As many of these inputs are correlated, a change in one input will likely impact other inputs which would ultimately impact the overall valuation.
The following table provides additional quantitative information on our significant inputs used for valuing our Note Receivable Rights to MSRs as of March 31, 2013 and December 31, 2012,
respectively:
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
Unobservable Input
|
|
Low
|
|
|
High
|
|
|
Weighted Average
|
|
Note receivable Rights to MSRs
|
|
Discount Rate
|
|
|
16
|
%
|
|
|
22
|
%
|
|
|
20
|
%
|
|
|
Prepayment Speeds
|
|
|
12
|
%
|
|
|
26
|
%
|
|
|
20
|
%
|
|
|
Delinquency Rates
|
|
|
15
|
%
|
|
|
35
|
%
|
|
|
28
|
%
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
Unobservable Input
|
|
Low
|
|
|
High
|
|
|
Weighted Average
|
|
Note receivable Rights to MSRs
|
|
Discount Rate
|
|
|
15
|
%
|
|
|
22
|
%
|
|
|
20
|
%
|
|
|
Prepayment Speeds
|
|
|
12
|
%
|
|
|
27
|
%
|
|
|
19
|
%
|
|
|
Delinquency Rates
|
|
|
15
|
%
|
|
|
35
|
%
|
|
|
29
|
%
|
Presented below are the carrying values and fair value estimates of financial instruments not carried at
fair value at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
|
December 31,
2012
|
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Match funded advances
|
|
$
|
3,524,262
|
|
|
$
|
3,524,262
|
|
|
$
|
3,098,198
|
|
|
$
|
3,098,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets
|
|
$
|
3,524,262
|
|
|
$
|
3,524,262
|
|
|
$
|
3,098,198
|
|
|
$
|
3,098,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Match funded liabilities
|
|
$
|
3,120,861
|
|
|
$
|
3,136,120
|
|
|
$
|
2,690,821
|
|
|
$
|
2,697,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities
|
|
$
|
3,120,861
|
|
|
$
|
3,136,120
|
|
|
$
|
2,690,821
|
|
|
$
|
2,697,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Match Funded Advances
The carrying value of our Match funded advances approximates fair value. This is because our Match funded advances have no stated maturity, generally are realized within a relatively short period of time
and do not bear interest. The fair value measurements for Match funded advances are categorized as Level 3.
12
Match Funded Liabilities
Match funded liabilities include term notes that are publically traded. The fair value estimate of the companys fixed rate debt was determined by using broker quotes. We concluded that no
adjustments are required to the quoted prices. The level of trading, both in number of trades and amount of term notes traded, is at a level that the company believes market quotes to be a reasonable representation of the current fair market value
of the term notes. All other Match funded liabilities are short term in nature and the carrying value generally approximates the fair value. The fair value measurements for Match funded liabilities are categorized as Level 3.
Match funded advances on residential loans we service for others are comprised of the following at the dates
indicated:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
Principal and interest advances
|
|
$
|
1,331,129
|
|
|
$
|
1,231,471
|
|
Escrow advances
|
|
|
1,598,496
|
|
|
|
1,399,813
|
|
Corporate advances
|
|
|
594,637
|
|
|
|
466,914
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,524,262
|
|
|
$
|
3,098,198
|
|
|
|
|
|
|
|
|
|
|
Other assets consisted of the following at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
Debt service accounts (1)
|
|
$
|
62,277
|
|
|
$
|
67,776
|
|
Debt issuance costs (2)
|
|
|
11,516
|
|
|
|
9,278
|
|
Interest-earning collateral deposits (3)
|
|
|
2,014
|
|
|
|
1,904
|
|
Other
|
|
|
405
|
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,212
|
|
|
$
|
79,091
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Under our advance funding facility, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. We do not use the
collected funds to reduce the related match funded debt until the payment dates specified in the indenture. The balance also includes amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and
interest.
|
(2)
|
Costs relate to Match funded liabilities. We amortize these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the
debt.
|
(3)
|
Represents cash collateral held by the counterparty to our interest rate swap agreements.
|
6.
|
MATCH FUNDED LIABILITIES
|
Match funded liabilities are comprised of the following at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unused
Borrowing
Capacity (4)
|
|
|
Balance Outstanding
|
|
Borrowing Type(1)
|
|
Interest Rate (2)
|
|
Maturity
(3)
|
|
|
Amortization
Date (3)
|
|
|
|
March 31,
2013(5)
|
|
|
December 31,
2012
|
|
Series 2012 T1 Term Notes
|
|
134 396 bps
|
|
|
Oct. 2043
|
|
|
|
Oct. 2013
|
|
|
$
|
|
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Series 2012 T2 Term Notes
|
|
199 494 bps
|
|
|
Oct. 2045
|
|
|
|
Oct. 2015
|
|
|
|
|
|
|
|
450,000
|
|
|
|
450,000
|
|
Series 2013 T1 Term Notes
|
|
90 249 bps
|
|
|
Jan. 2044
|
|
|
|
Jan. 2014
|
|
|
|
|
|
|
|
650,000
|
|
|
|
|
|
Series 2013 T2 Term Notes
|
|
150 323 bps
|
|
|
Jan. 2046
|
|
|
|
Jan. 2016
|
|
|
|
|
|
|
|
350,000
|
|
|
|
|
|
Series 2013 T3 Term Notes
|
|
229 446 bps
|
|
|
Jan. 2048
|
|
|
|
Jan. 2018
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unused
Borrowing
Capacity (4)
|
|
|
Balance Outstanding
|
|
Borrowing Type(1)
|
|
Interest Rate (2)
|
|
Maturity
(3)
|
|
|
Amortization
Date (3)
|
|
|
|
March 31,
2013(5)
|
|
|
December 31,
2012
|
|
Series 1 Variable Funding Notes
|
|
1-Month LIBOR + 200 700 bps
|
|
|
Aug. 2043
|
|
|
|
Aug. 2013
|
|
|
$
|
99,273
|
|
|
$
|
300,727
|
|
|
$
|
339,465
|
|
Series 2 Variable Funding Notes
|
|
1-Month LIBOR + 120 475 bps
|
|
|
Aug. 2043
|
|
|
|
Aug. 2013
|
|
|
|
111,683
|
|
|
|
338,317
|
|
|
|
678,928
|
|
Series 3 Variable Funding Notes
|
|
1-Month LIBOR + 120 475 bps
|
|
|
Aug. 2043
|
|
|
|
Aug. 2013
|
|
|
|
111,683
|
|
|
|
338,317
|
|
|
|
678,928
|
|
Class A Term Money Market Fund Note(6)
|
|
65 bps
|
|
|
Sep. 2013
|
|
|
|
Sep. 2012
|
|
|
|
|
|
|
|
122,308
|
|
|
|
183,462
|
|
Class B Term Money Market Fund Note
|
|
275 bps
|
|
|
Sep. 2044
|
|
|
|
Sep. 2014
|
|
|
|
|
|
|
|
28,500
|
|
|
|
28,500
|
|
Class A Draw Money Market Fund Note(6)
|
|
1-Month LIBOR + 200 bps
|
|
|
Sep. 2044
|
|
|
|
Sep. 2014
|
|
|
|
|
|
|
|
142,692
|
|
|
|
81,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
322,639
|
|
|
$
|
3,120,861
|
|
|
$
|
2,690,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Each Match funded liability series has four classes, an A, B, C and D class.
|
(2)
|
The weighted average interest rate at March 31, 2013 was 1.81%. We pay interest monthly.
|
(3)
|
The amortization date is the date on which the revolving period ends under each Advance Facility note and repayment of the outstanding balance must begin if the note is
not renewed or extended. The maturity date is the due date for all outstanding balances. After the amortization date, all collections that represent the repayment of advances pledged to the facility must be applied to reduce the balance of the note
outstanding, and any new advances are ineligible to be financed.
|
(4)
|
Our unused borrowing capacity is available to us if we have additional eligible collateral to pledge and meet other borrowing conditions. We pay a 0.75% fee on the
unused borrowing capacity. Concurrent with Flow 3, the aggregate commitment on our variable funding notes was increased from $1.0 billion to $1.3 billion.
|
(5)
|
On January 22, 2013, we completed the issuance of $650,000 of one-year, $350,000 of three-year and $150,000 of five-year term notes (2013 Term Notes).
Issuance of the 2013 Term Notes allowed us to reduce the outstanding borrowings on all classes of the Variable Funding Note Series 2 and 3 Notes.
|
(6)
|
The Class A Term Money Market Fund Note and Class A Draw Money Market Fund Note have a combined maximum borrowing capacity of $265,000. By design, the
Class A Term Money Market Fund Note balance is reduced periodically as this note approaches its maturity on September 12, 2013. The reductions on the Class A Term Money Market Fund Note were offset by additional borrowings on the
Class A Draw Money Market Fund Note so that the combined balance of these notes was equal to $265,000 at March 31, 2013 and December 31, 2012.
|
Analysis of Borrowing by Expected Maturity(1):
|
|
|
|
|
Year of Expected Maturity Date
|
|
As of March 31, 2013
|
|
2013
|
|
$
|
1,349,669
|
|
2014
|
|
|
821,192
|
|
2015
|
|
|
450,000
|
|
2016
|
|
|
350,000
|
|
2017 and thereafter
|
|
|
150,000
|
|
|
|
|
|
|
Total debt
|
|
$
|
3,120,861
|
|
|
|
|
|
|
(1)
|
The expected maturity date is the date on which the revolving period ends under each Advance Facility note and repayment of the outstanding balance must begin if the
note is not renewed or extended.
|
14
Movements in the number of ordinary shares issued during the three months ended March 31, 2013 and March 31,
2012 are represented in the table below:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Ordinary shares issued - beginning balance
|
|
|
55,884,718
|
|
|
|
20,000
|
|
Issuance of new ordinary shares
|
|
|
970,578
|
|
|
|
14,047,618
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares issued ending balance
|
|
|
56,855,296
|
|
|
|
14,067,618
|
|
|
|
|
|
|
|
|
|
|
8.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
We are party to interest rate swap agreements that we recognize on our Interim Condensed Consolidated Balance Sheet at
fair value within other liabilities. On the date we entered into the interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for floating rate interest expense on our borrowings (cash flow
hedge). To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must include the risk management objective and strategy. We assess and document
quarterly the derivatives effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we use statistical methods, such as regression analysis, as well as
nonstatistical methods including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we record changes in the estimated fair value of the derivative in other comprehensive income. We subsequently reclassify these
changes in estimated fair value to net income in the same period or periods that the hedged transaction affects earnings and in the same financial statement category as the hedged item.
If a derivative instrument in a cash flow hedge is terminated or the hedge designation is removed, we reclassify related amounts in
accumulated other comprehensive income (loss) into earnings in the same period or periods during which the cash flows that were hedged affect earnings. In a period where we determine that it is probable that a hedged forecasted transaction will not
occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in accumulated other comprehensive income are reclassified into earnings in that period.
Because our current derivative agreements are not exchange-traded, we are exposed to credit loss in the event of nonperformance by the
counterparty to the agreement. We control this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amounts of our contracts do not represent our exposure to credit loss.
See note 3 for additional information regarding our use of derivatives.
Interest Rate Management
We executed a hedging strategy aimed to mitigate the impact of changes in variable interest rates on the excess of interest rate
sensitive liabilities over interest rate sensitive assets. We entered into interest rate swaps to hedge against the effects of a change in 1-Month LIBOR.
The following table provides information about our interest rate swaps at March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purpose
|
|
Date
Opened
|
|
Effective
Date (1)
|
|
Maturity
|
|
We Pay
|
|
We
Receive
|
|
Notional
Amount
|
|
|
Fair
Value
|
|
Designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge the effects of changes in 1-Month LIBOR (2)
|
|
March
2012
|
|
March
2012
|
|
March
2016
|
|
0.6325%
|
|
1-Month
LIBOR
|
|
$
|
125,313
|
|
|
$
|
(619
|
)
|
Hedge the effects of changes in 1-Month LIBOR (2)
|
|
May
2012
|
|
May
2012
|
|
May
2016
|
|
0.6070%
|
|
1-Month
LIBOR
|
|
|
38,025
|
|
|
|
(133
|
)
|
Hedge the effects of changes in 1-Month LIBOR (2)
|
|
September
2012
|
|
September
2012
|
|
August
2017
|
|
0.5188%
|
|
1-Month
LIBOR
|
|
|
217,662
|
|
|
|
93
|
|
Hedge the effects of changes in 1-Month LIBOR (2)
|
|
January
2013
|
|
January
2014
|
|
July
2014
|
|
0.3375%
|
|
1-Month
LIBOR
|
|
|
307,043
|
|
|
|
(33
|
)
|
Hedge the effects of changes in 1-Month LIBOR (2)
|
|
January
2013
|
|
January
2016
|
|
December
2017
|
|
1.3975%
|
|
1-Month
LIBOR
|
|
|
338,009
|
|
|
|
(371
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total designated as hedges
|
|
|
1,026,052
|
|
|
|
(1,063
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,026,052
|
|
|
$
|
(1,063
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
The following table provides information about our interest rate swaps at December 31,
2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purpose
|
|
Date
Opened
|
|
Effective
Date (1)
|
|
Maturity
|
|
We Pay
|
|
We
Receive
|
|
Notional
Amount
|
|
|
Fair
Value
|
|
Designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge the effects of changes in 1-Month
LIBOR
|
|
March
2012
|
|
March
2012
|
|
March
2016
|
|
0.6325%
|
|
1-Month
LIBOR
|
|
$
|
147,351
|
|
|
$
|
(759
|
)
|
Hedge the effects of changes in 1-Month
LIBOR
|
|
May
2012
|
|
May
2012
|
|
May
2016
|
|
0.6070%
|
|
1-Month
LIBOR
|
|
|
44,221
|
|
|
|
(174
|
)
|
Hedge the effects of changes in 1-Month
LIBOR
|
|
September
2012
|
|
September
2012
|
|
August
2017
|
|
0.5188%
|
|
1-Month
LIBOR
|
|
|
223,059
|
|
|
|
(143
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total designated as hedges
|
|
|
414,631
|
|
|
|
(1,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
414,631
|
|
|
$
|
(1,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The effective date of the swap is the date from which monthly settlements begin to be computed.
|
(2)
|
Projected net settlements for the next twelve months total approximately $1,280 of payments to the counterparty. Unrealized losses of $1,063 related to our interest
rate swaps are included in accumulated other comprehensive loss for the three months ended March 31, 2013. There were $284 of unrealized gains attributable to derivatives for the three months ended March 31, 2012. Given the current and
expected effectiveness of our hedging arrangements, we do not expect any reclassifications from other comprehensive income into earnings associated with these hedging arrangements during the next twelve months.
|
The following table summarizes the use of derivatives during the three months ended March 31:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Notional balance at beginning of period
|
|
$
|
414,631
|
|
|
$
|
|
|
Additions
|
|
|
645,052
|
|
|
|
235,058
|
|
Maturities
|
|
|
|
|
|
|
|
|
Terminations
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
33,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional balance at end of period
|
|
$
|
1,026,052
|
|
|
$
|
235,058
|
|
|
|
|
|
|
|
|
|
|
9.
|
INTEREST INCOME NOTES RECEIVABLE RIGHTS TO MSRs
|
Our primary source of revenue is the fees we are entitled to receive in connection with the servicing of mortgage
loans. We account for these fees as interest income.
The following table shows how we calculated Interest incomenotes
receivable Rights to MSRs for the three months ended March 31:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Servicing fees collected
|
|
$
|
102,258
|
|
|
$
|
6,461
|
|
Subservicing fee payable to Ocwen
|
|
|
47,052
|
|
|
|
2,732
|
|
|
|
|
|
|
|
|
|
|
Net servicing fees retained by HLSS
|
|
|
55,206
|
|
|
|
3,729
|
|
Reduction in notes receivable Rights to MSRs
|
|
|
10,636
|
|
|
|
784
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
44,570
|
|
|
$
|
2,945
|
|
|
|
|
|
|
|
|
|
|
The following table presents the components of interest expense for the three months ended March 31:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Match funded liabilities
|
|
$
|
14,781
|
|
|
$
|
791
|
|
Amortization of debt issuance costs
|
|
|
3,106
|
|
|
|
457
|
|
Interest rate swaps
|
|
|
355
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,242
|
|
|
$
|
1,291
|
|
|
|
|
|
|
|
|
|
|
16
Income taxes have been provided for based upon the tax laws and rates in countries in which we conduct operations and
earn related income. Our effective tax rate was 0.1% for the three months ended March 31, 2013 (1.3%, for the three months ended March 31, 2012). As of March 31, 2013 we have net operating loss carryforwards of $2,359 and $3,512, for
U.S. federal and state and local tax, respectively. These carryforwards are available to offset future taxable income until they begin to expire in 2032 and 2022, respectively. We are a Cayman Islands exempted company, and the Cayman Islands
currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. Our subsidiaries are expected to be subject to U.S federal income taxation as corporations.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities. As of March 31, 2013, the Company did not have any unrecognized tax benefits related to the current period or any previous period. Our policy is that we will recognize interest and penalties
accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the period.
12.
|
BUSINESS SEGMENT REPORTING
|
Our business strategy focuses on acquiring mortgage servicing assets consisting of mortgage servicing rights, rights
to fees and other income from servicing mortgage loans, and associated servicing advances. As of March 31, 2013, we operate a single reportable business segment that holds Rights to MSRs.
13.
|
RELATED PARTY TRANSACTIONS
|
We entered into various agreements with Ocwen and Altisource Portfolio Solutions, S.A. (Altisource) in
connection with our IPO on March 5, 2012. William C. Erbey, our founder and the Chairman of our Board of Directors, is also the Chairman of the Board of Directors and largest shareholder of Ocwen and the Chairman of the Board of Directors and
largest shareholder of Altisource.
So long as the Required Third Party Consents have not been obtained with respect to the
transfer of legal ownership of any mortgage servicing right, Ocwen remains obligated to perform as servicer under the related pooling and servicing agreements, and we are required to pay Ocwen a monthly fee for the servicing activities it performs.
We are also required to purchase any servicing advances that Ocwen is required to make pursuant to such pooling and servicing agreements.
The following table summarizes our transactions with Ocwen for the three months ended March 31:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Servicing fees collected
|
|
$
|
102,258
|
|
|
$
|
6,461
|
|
Subservicing fee payable to Ocwen
|
|
|
47,052
|
|
|
|
2,732
|
|
|
|
|
|
|
|
|
|
|
Net servicing fees retained by HLSS
|
|
|
55,206
|
|
|
|
3,729
|
|
Reduction in Notes receivable Rights to MSRs
|
|
|
10,636
|
|
|
|
784
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
44,570
|
|
|
$
|
2,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Servicing advances purchased from Ocwen in the ordinary course of business
|
|
$
|
695,105
|
|
|
$
|
95,889
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2013 Ocwen owed us $3,064 for servicing fees collected but not remitted to us, and we
owed Ocwen $17,056 for the subservicing fee earned by Ocwen in March 2013. The Notes receivable Rights to MSRs are due from Ocwen as of March 31, 2013.
Ocwen Professional Services Agreement
We have a professional services
agreement with Ocwen that requires us to provide certain services to Ocwen and for Ocwen to provide certain services with pricing terms intended to reflect market rates. Services provided by us under this agreement include valuation and analysis of
mortgage servicing rights, advance financing management, treasury management, legal services and other similar services. Services provided by Ocwen under this agreement include legal, licensing and regulatory compliance support services, risk
management services and other similar services. The services provided by the parties under this agreement are on an as-needed basis, and the fees represent actual costs incurred plus an additional markup of 15%.
17
At March 31, 2013, Ocwen owed us $407 for professional services provided pursuant to
the Ocwen Professional Services Agreement. During the three months ended March 31, 2013 and March 31, 2012, we earned fees of $407 and $251, respectively, for services provided to Ocwen pursuant to the Professional Services Agreement.
Additionally, during the three months ended March 31, 2013 and March 31, 2012, we incurred fees of $30 and $10, respectively, for services received from Ocwen pursuant to the Ocwen Professional Services Agreement.
Altisource Administrative Services Agreement
This agreement requires Altisource to provide certain administrative services to us with pricing terms intended to reflect market rates. Services provided to us under this agreement include human
resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel
services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The services Altisource provides to us under this agreement are on
an as-needed basis, and the fees we pay Altisource are based on the actual costs incurred by them plus an additional markup of 15%. During the three months ended March 31, 2013 and March 31, 2012, we paid Altisource $196 and $61,
respectively, for services provided to us pursuant to the Altisource Administrative Services Agreement.
Subleases
During the three months ended March 31, 2013 and March 31, 2012 we paid Altisource $20 and $7, respectively, for the rental of
office space under two sublease agreements.
Receivables from and Payables to Related Parties
The following table summarizes amounts receivable from and payable to related parties at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
Servicing fees collected (1)
|
|
$
|
3,064
|
|
|
$
|
4,966
|
|
Professional services (2)
|
|
|
407
|
|
|
|
1,322
|
|
Advance collections (3)
|
|
|
|
|
|
|
21,265
|
|
Other(4)
|
|
|
10,914
|
|
|
|
718
|
|
|
|
|
|
|
|
|
|
|
Receivables from Ocwen
|
|
$
|
14,385
|
|
|
$
|
28,271
|
|
|
|
|
|
|
|
|
|
|
Subservicing fees payable (5)
|
|
$
|
17,056
|
|
|
$
|
890
|
|
Advances made (6)
|
|
|
17,758
|
|
|
|
|
|
Professional services (2)
|
|
|
|
|
|
|
40
|
|
Other
|
|
|
|
|
|
|
1,815
|
|
|
|
|
|
|
|
|
|
|
Payables to Ocwen
|
|
$
|
34,814
|
|
|
$
|
2,745
|
|
|
|
|
|
|
|
|
|
|
Payables to Altisource
|
|
$
|
136
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Ocwen is required to remit to us servicing fees it collects on our behalf within two business days. The amount due from Ocwen at March 31, 2013 represents
servicing fees collected but not remitted at the end of the month. We record servicing fees we collect less the subservicing fee we pay to Ocwen as Interest income as shown in Note 9.
|
(2)
|
The respective amounts are for professional services provided during the periods indicated.
|
(3)
|
Upon collection, Ocwen is contractually obligated to remit Match funded advance collections to pay down our Match funded liabilities. This receivable represents the
portion of Match funded advance collections that were in-transit to pay down our Match funded liabilities as of the period indicated.
|
(4)
|
At March 31, 2013 Ocwen owed us $10,406 for certain purchase price adjustments pertaining to the Flow 3 purchase.
|
(5)
|
The base fee and performance fee, if any, that comprise the servicing fee expense are calculated and paid to Ocwen within three business days following the end of the
month.
|
(6)
|
At March 31, 2013 we owed Ocwen for advances made on our behalf. Ocwen is still the named servicer for the securitizations where we currently own Rights to MSRs.
Thus, any advances Ocwen makes to these securitizations are an obligation for us, and we reimburse Ocwen at agreed upon settlement dates.
|
18
14.
|
COMMITMENTS AND CONTINGENCIES
|
We may be party to various claims, legal actions, and complaints arising in the ordinary course of business. We
monitor our legal matters, including advice from external legal counsel, and periodically perform assessments of these matters for potential loss accrual and disclosure. There are currently no probable matters outstanding that, in the opinion of
management, will have a material effect on our Interim Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows. There are also currently no reasonably possible matters outstanding that, in the opinion of
management, will have a material effect on our Interim Condensed Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows.
Subsequent to our balance sheet date of March 31, 2013 we:
|
|
|
Paid cash dividends of $7,391 or $0.13 per ordinary share (April 10, 2013);
|
|
|
|
Declared a monthly dividend of $0.14 per ordinary share with respect to April, May and June 2013 (April 18, 2013).
|