Investments in Unconsolidated Subsidiaries

3 Months Ended

Mar. 31, 2012

Investments in Unconsolidated Subsidiaries

Investments in Unconsolidated Subsidiaries

(6)  Investments in Unconsolidated Subsidiaries

The Company has investments in Acquisition Partnerships and various servicing and operating entities that are accounted for under the equity method of accounting (refer to Note 1). 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

	March 31,		December 31,
	2012		2011
	(Dollars in thousands)
Acquisition Partnerships:
Assets	$	513,456	$	450,189
Liabilities	$	35,817	$	39,401
Net equity	477,639		410,788
	$	513,456	$	450,189
Servicing and operating entities:
Assets	$	168,834	$	163,647
Liabilities	$	85,838	$	86,269
Net equity	82,996		77,378
	$	168,834	$	163,647
Total:
Assets	$	682,290	$	613,836
Liabilities	$	121,655	$	125,670
Net equity	560,635		488,166
	$	682,290	$	613,836
Equity investment in Acquisition Partnerships	$	63,109	$	59,952
Equity investment in servicing and operating entities	52,899		49,441
	$	116,008	$	109,393

Condensed Combined Summary of Operations

	Three Months Ended
	March 31,
	2012		2011
	(Dollars in thousands)
Acquisition Partnerships:
Revenues	$	26,954	$	12,885
Costs and expenses	5,703		5,427
Net loss	$	21,251	$	7,458
Servicing and operating entities:
Revenues	$	26,059	$	22,013
Costs and expenses	21,313		19,908
Net earnings	$	4,746	$	2,105
Equity income from Acquisition Partnerships	$	2,328	$	584
Equity income from servicing and operating entities	2,139		1,287
	$	4,467	$	1,871

At March 31, 2012 and December 31, 2011, 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 $418.2 million and $377.7 million, respectively.

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

	March 31,		December 31,
	2012		2011
	(Dollars in thousands)
Combined assets of the Equity Investees:
Domestic:
Acquisition Partnerships	$	407,996	$	349,529
Operating entities	50,905		53,256
Latin America:
Acquisition Partnerships	105,460		100,660
Servicing entities	2,258		1,857
Europe - servicing entities	115,671		108,534
	$	682,290	$	613,836

	March 31,		December 31,
	2012		2011
	(Dollars in thousands)
Combined equity of the Equity Investees:
Domestic:
Acquisition Partnerships	$	383,577	$	325,557
Operating entities	19,444		20,515
Latin America:
Acquisition Partnerships	94,062		85,231
Servicing entities	810		763
Europe - servicing entities	62,742		56,100
	$	560,635	$	488,166
Company’s carrying value of its investments in the Equity Investees:
Domestic:
Acquisition Partnerships	$	58,537	$	55,612
Operating entities	12,442		12,508
Latin America:
Acquisition Partnerships	4,572		4,340
Servicing entities	3,013		2,758
Europe - servicing entities	37,444		34,175
	$	116,008	$	109,393

Revenues and net earnings (losses) of the Equity Investees, and the Company’s share of equity income (loss) 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 March 31, 2012.

	Three Months Ended
	March 31,
	2012			2011
	(Dollars in thousands)
Revenues of the Equity Investees:
Domestic:
Combined Varde Acquisition Partnerships	$	22,597		$	7,872
Other Acquisition Partnerships	29			84
Other operating entities	7,429			8,395
Latin America:
Acquisition Partnerships	4,328			4,796
Servicing entity	2,273			2,610
Europe:
Acquisition Partnerships	—			133
MCS et Associes (servicing entity)	15,117			10,014
Other servicing entities	1,240			994
	$	53,013		$	34,898
Net earnings (loss) of the Equity Investees:
Domestic:
Combined Varde Acquisition Partnerships	$	13,628		$	5,929
Other Acquisition Partnerships	(827		)	(127		)
Other operating entities	5			310
Latin America:
Acquisition Partnerships	8,450			1,663
Servicing entity	175			320
Europe:
Acquisition Partnerships	—			(7		)
MCS et Associes (servicing entity)	4,370			1,413
Other servicing entities	196			62
	$	25,997		$	9,563
Company’s equity income (loss) from the Equity Investees:
Domestic:
Combined Varde Acquisition Partnerships	$	2,524		$	982
Other Acquisition Partnerships	(405		)	(50		)
Other operating entities	(65		)	152
Latin America:
Acquisition Partnerships	209			(356		)
Servicing entity	87			160
Europe:
Acquisition Partnerships	—			8
MCS et Associes (servicing entity)	2,069			960
Other servicing entities	48			15
	$	4,467		$	1,871

At March 31, 2012, the Company had $12.4 million in Euro-denominated debt for the purpose of hedging a portion of the Company’s net equity investments in Europe. Refer to Note 10 for additional information.