Equity Investments

6 Months Ended

Jun. 30, 2011

Equity Investments

Equity Investments

(7)  Equity Investments

The Company has non-marketable equity investments in Acquisition Partnerships and various servicing and operating entities that are accounted for under the equity-method of accounting. The condensed combined financial position and results of operations of the Acquisition Partnerships (which include our U.S. and foreign Acquisition Partnerships) and the servicing and operating entities (collectively, the “Equity Investees”) are summarized as follows:

Condensed Combined Balance Sheets

	June 30,		December 31,
	2011		2010
	(Dollars in thousands)
Acquisition Partnerships:
Assets	$	361,624	$	329,690
Liabilities	$	21,011	$	28,319
Net equity	340,613		301,371
	$	361,624	$	329,690
Servicing and operating entities:
Assets	$	161,967	$	161,631
Liabilities	$	84,305	$	80,687
Net equity	77,662		80,944
	$	161,967	$	161,631
Total:
Assets	$	523,591	$	491,321
Liabilities	$	105,316	$	109,006
Net equity	418,275		382,315
	$	523,591	$	491,321
Equity investment in Acquisition Partnerships	$	66,879	$	54,477
Equity investment in servicing and operating entities	51,068		52,732
	$	117,947	$	107,209

Condensed Combined Summary of Operations

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011		2010
	(Dollars in thousands)
Acquisition Partnerships:
Revenues	$	12,092		$	8,292		$	25,360	$	15,410
Costs and expenses	7,336			10,103			13,146		20,278
Net earnings (loss)	$	4,756		$	(1,811	)	$	12,214	$	(4,868	)
Servicing and operating entities:
Revenues	$	27,410		$	19,328		$	49,423	$	45,540
Costs and expenses	20,568			16,005			40,476		33,974
Net earnings	$	6,842		$	3,323		$	8,947	$	11,566
Equity in earnings (loss) of Acquisition Partnerships	$	(7	)	$	(275	)	$	577	$	(883	)
Equity in earnings of servicing and operating entities	3,290			2,091			4,577		4,928
	$	3,283		$	1,816		$	5,154	$	4,045

At June 30, 2011 and December 31, 2010, the Acquisition Partnerships’ total carrying value of loans accounted for under non-accrual methods of accounting (i.e. cost-recovery or cash basis method) approximated $290.4 million and $274.6 million, respectively.

The combined assets and equity (deficit) of the Equity Investees, and the Company’s carrying value of its equity investments in the Equity Investees, are summarized by geographic region below.

	June 30,		December 31,
	2011		2010
	(Dollars in thousands)
Combined assets of the Equity Investees:
Domestic:
Acquisition Partnerships	$	234,269	$	195,434
Operating entities	52,945		55,587
Latin America:
Acquisition Partnerships	127,355		127,707
Servicing entities	2,252		1,961
Europe:
Acquisition Partnerships	—		6,549
Servicing entities	106,770		104,083
	$	523,591	$	491,321

	June 30,		December 31,
	2011		2010
	(Dollars in thousands)
Combined equity of the Equity Investees:
Domestic:
Acquisition Partnerships	$	228,591	$	191,859
Operating entities	20,065		23,494
Latin America:
Acquisition Partnerships	112,022		110,854
Servicing entities	1,085		598
Europe:
Acquisition Partnerships	—		(1,342		)
Servicing entities	56,512		56,852
	$	418,275	$	382,315
Company’s carrying value of its equity investments in the Equity Investees:
Domestic:
Acquisition Partnerships	$	52,465	$	39,804
Operating entities	12,604		15,427
Latin America:
Acquisition Partnerships	14,414		14,943
Servicing entities	3,212		2,840
Europe:
Acquisition Partnerships	—		(270		)
Servicing entities	35,252		34,465
	$	117,947	$	107,209

Revenues and net earnings (losses) of the Equity Investees, and the Company’s share of equity in earnings (losses) of those entities, are summarized by geographic region below. The tables below include individual entities and combined entities under common management that are considered to be significant Equity Investees of FirstCity at June 30, 2011.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(Dollars in thousands)
Revenues of the Equity Investees:
Domestic:
Acquisition Partnerships	$	8,024	$	782	$	16,363	$	2,610
FC Crestone Oak LLC (operating entity) (1)	3,802		2,388		6,019		4,450
Other operating entities	7,238		4,898		13,416		12,899
Latin America:
Acquisition Partnerships	3,910		6,927		8,706		10,324
Servicing entity	2,863		2,346		5,473		4,510
Europe:
Acquisition Partnerships	158		584		291		2,476
MCS et Associes (servicing entity)	12,356		8,903		22,370		21,906
Other servicing entities	1,151		792		2,145		1,775
	$	39,502	$	27,620	$	74,783	$	60,950

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011			2010
	(Dollars in thousands)
Net earnings (loss) of the Equity Investees:
Domestic:
Acquisition Partnerships	$	132	$	(222	)	$	5,934		$	543
FC Crestone Oak LLC (operating entity) (1)	3,141		1,570			4,390			2,828
Other operating entities	186		947			(753		)	2,441
Latin America:
Acquisition Partnerships	4,581		(299		)	6,244			(2,132		)
Servicing entity	539		(185		)	859			(1,450		)
Europe:
Acquisition Partnerships	43		(1,291		)	36			(3,280		)
MCS et Associes (servicing entity)	2,932		1,223			4,345			8,130
Other servicing entities	44		(231		)	106			(382		)
	$	11,598	$	1,512		$	21,161		$	6,698

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(Dollars in thousands)
Company’s equity in earnings (loss) of the Equity Investees:
Domestic:
Acquisition Partnerships	$	(112	)	$	(95	)	$	820		$	37
FC Crestone Oak LLC (operating entity) (1)	1,539			1,256			2,151			1,853
Other operating entities	83			550			(377		)	999
Latin America:
Acquisition Partnerships	84			165			(272		)	45
Servicing entity	270			(93		)	430			(725		)
Europe:
Acquisition Partnerships	21			(346		)	29			(966		)
MCS et Associes (servicing entity)	1,387			416			2,347			2,864
Other servicing entities	11			(37		)	26			(62		)
	$	3,283		$	1,816		$	5,154		$	4,045

(1) FC Crestone Oak LLC operates in the prefabricated building manufacturing industry.

At June 30, 2011, the Company had $20.1 million in Euro-denominated debt for the purpose of hedging a portion of the Company’s net equity investments in Europe. Refer to Note 11 for additional information.