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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

(Mark One)

 

þ                                     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended

September 30, 2013

 

OR

 

¨                                     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from

to

 

Commission file number 001-36129

 

SPRINGLEAF HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		27-3379612
(State of Incorporation)		(I.R.S. Employer Identification No.)
601 N.W. Second Street, Evansville, IN		47708
(Address of principal executive offices)		(Zip Code)
(812) 424-8031
(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ¨      No þ

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨      No þ

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer þ	Smaller reporting company ¨
		(Do not check if a smaller
		reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨      No þ

 

At November 12, 2013, there were 114,823,734 shares of the registrant’s common stock, $.01 par value, outstanding.

 

Table of Contents

 

TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Shareholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	60
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	96
Item 4.	Controls and Procedures	96
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	96
Item 1A.	Risk Factors	96
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	97
Item 3.	Defaults Upon Senior Securities	97
Item 4.	Mine Safety Disclosures	97
Item 5.	Other Information	97
Item 6.	Exhibits	97

 

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

 

SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

 

			September 30,			December 31,
(dollars in thousands)			2013			2012
Assets
Cash and cash equivalents			$	1,249,636		$	1,554,348
Investment securities			594,471			888,577
Net finance receivables:
Personal loans (includes loans of consolidated VIEs of $1.7 billion in 2013 and $0 in 2012)			3,027,255			2,649,732
SpringCastle Portfolio (includes loans of consolidated VIEs of $2.7 billion in 2013 and $0 in 2012)			2,653,632			-
Real estate loans (includes loans of consolidated VIEs of $5.5 billion in 2013 and $4.1 billion in 2012)			8,212,855			8,955,365
Retail sales finance			117,888			208,357
Net finance receivables			14,011,630			11,813,454
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $89.6 million in 2013 and $14.5 million in 2012)			(281,347		)	(180,088		)
Net finance receivables, less allowance for finance receivable losses			13,730,283			11,633,366
Restricted cash (includes restricted cash of consolidated VIEs of $415.8 million in 2013 and $109.0 million in 2012)			430,806			157,844
Other assets			422,167			439,380
Total assets			$	16,427,363		$	14,673,515
Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $7.6 billion in 2013 and $3.1 billion in 2012)			$	13,998,961		$	12,596,577
Insurance claims and policyholder liabilities			380,155			365,238
Deferred and accrued taxes			178,442			283,762
Other liabilities			275,969			227,811
Total liabilities			14,833,527			13,473,388
Shareholders’ equity:
Common stock			1,000			1,000
Additional paid-in capital			278,704			147,454
Accumulated other comprehensive income			21,145			30,188
Retained earnings			975,623			1,021,485
Springleaf Holdings, Inc. shareholders’ equity			1,276,472			1,200,127
Non-controlling interests			317,364			-
Total shareholders’ equity			1,593,836			1,200,127
Total liabilities and shareholders’ equity			$	16,427,363		$	14,673,515

 

See Notes to Condensed Consolidated Financial Statements.

 

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

 

		Three Months			Three Months			Nine Months			Nine Months
(dollars in thousands		Ended			Ended			Ended			Ended
except earnings (loss)		September 30,			September 30,			September 30,			September 30,
per share)		2013			2012			2013			2012
Interest income:
Finance charges		$	585,300		$	423,622		$	1,578,934		$	1,285,541
Finance receivables held for sale originated as held for investment		-			346			-			2,740
Total interest income		585,300			423,968			1,578,934			1,288,281
Interest expense		228,439			268,847			697,365			829,120
Net interest income		356,861			155,121			881,569			459,161
Provision for finance receivable losses		158,785			90,855			341,723			227,794
Net interest income after provision for finance receivable losses		198,076			64,266			539,846			231,367
Other revenues:
Insurance		38,277			31,719			107,144			93,042
Investment		6,756			7,377			27,687			25,544
Net loss on repurchases and repayments of debt		(34,503		)	(10,670		)	(34,558		)	(12,163		)
Other		1,603			(2,709		)	6,986			(32,814		)
Total other revenues		12,133			25,717			107,259			73,609
Other expenses:
Operating expenses:
Salaries and benefits		214,552			78,122			371,842			241,114
Other operating expenses		69,595			65,491			191,574			208,326
Restructuring expenses		-			-			-			23,503
Insurance losses and loss adjustment expenses		16,550			15,152			47,650			42,302
Total other expenses		300,697			158,765			611,066			515,245
Income (loss) before provision for (benefit from) income taxes		(90,488		)	(68,782		)	36,039			(210,269		)
Benefit from income taxes		(29,606		)	(23,938		)	(1,898		)	(72,419		)
Net income (loss)		(60,882		)	(44,844		)	37,937			(137,850		)
Less: Net income attributable to non-controlling interests		29,851			-			83,799			-
Net loss attributable to Springleaf Holdings, Inc.		$	(90,733	)	$	(44,844	)	$	(45,862	)	$	(137,850	)
Share Data:
Weighted average number of shares outstanding:
Basic and diluted		100,000,000			100,000,000			100,000,000			100,000,000
Earnings (loss) per share:
Basic and diluted		$	(0.91	)	$	(0.45	)	$	(0.46	)	$	(1.38	)

 

See Notes to Condensed Consolidated Financial Statements.

 

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

 

		Three Months			Three Months			Nine Months			Nine Months
		Ended			Ended			Ended			Ended
		September 30,			September 30,			September 30,			September 30,
(dollars in thousands)		2013			2012			2013			2012
Net income (loss)		$	(60,882	)	$	(44,844	)	$	37,937		$	(137,850	)
Other comprehensive income (loss):
Net unrealized gains (losses) on:
Investment securities on which other-than-temporary impairments were taken		(17		)	84			(135		)	316
All other investment securities		(331		)	4,618			(10,989		)	17,005
Cash flow hedges		-			-			-			(16,987		)
Retirement plan liabilities adjustments		-			-			-			20,937
Foreign currency translation adjustments		(2,056		)	3,067			38			4,280
Income tax effect:
Net unrealized (gains) losses on:
Investment securities on which other-than-temporary impairments were taken		6			(29		)	47			(110		)
All other investment securities		116			(1,617		)	3,846			(5,952		)
Cash flow hedges		-			-			-			5,945
Retirement plan liabilities adjustments		-			-			-			(7,544		)
Other comprehensive income (loss), net of tax, before reclassification adjustments		(2,282		)	6,123			(7,193		)	17,890
Reclassification adjustments included in net loss:
Net realized (gains) losses on investment securities		33			(13		)	(2,686		)	52
Cash flow hedges		-			(1,192		)	(160		)	11,478
Income tax effect:
Net realized gains (losses) on investment securities		(12		)	5			940			(18		)
Cash flow hedges		-			418			56			(4,017		)
Reclassification adjustments included in net loss, net of tax		21			(782		)	(1,850		)	7,495
Other comprehensive income (loss), net of tax		(2,261		)	5,341			(9,043		)	25,385
Comprehensive income (loss)		$	(63,143	)	$	(39,503	)	$	28,894		$	(112,465	)

 

See Notes to Condensed Consolidated Financial Statements.

 

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

 

		Springleaf Holdings, Inc.  Shareholders’  Equity
								Accumulated						Springleaf
					Additional			Other						Holdings, Inc.						Total
		Common			Paid-in			Comprehensive			Retained			Shareholders’			Non-controlling			Shareholders’
(dollars in thousands)		Stock			Capital			Income (Loss)			Earnings			Equity			Interests			Equity
Balance, January 1, 2013		$	1,000		$	147,454		$	30,188		$	1,021,485		$	1,200,127		$	-		$	1,200,127
Grant of restricted stock units		-			131,250			-			-			131,250			-			131,250
Capital contributions from parent and other		-			-			-			-			-			-			-
Changes in non-controlling interests:
Contributions from joint venture partners		-			-			-			-			-			438,081			438,081
Distributions declared to joint venture partners		-			-			-			-			-			(204,516		)	(204,516		)
Change in net unrealized gains (losses):
Investment securities		-			-			(8,977		)	-			(8,977		)	-			(8,977		)
Cash flow hedges		-			-			(104		)	-			(104		)	-			(104		)
Foreign currency translation adjustments		-			-			38			-			38			-			38
Net income (loss)		-			-			-			(45,862		)	(45,862		)	83,799			37,937
Balance, September 30, 2013		$	1,000		$	278,704		$	21,145		$	975,623		$	1,276,472		$	317,364		$	1,593,836
Balance, January 1, 2012		$	1,000		$	147,456		$	(25,671	)	$	1,240,119		$	1,362,904		$	-		$	1,362,904
Capital contributions from parent and other		-			6			-			-			6			-			6
Change in net unrealized gains (losses):
Investment securities		-			-			11,293			-			11,293			-			11,293
Cash flow hedges		-			-			(3,581		)	-			(3,581		)	-			(3,581		)
Retirement plan liabilities adjustments		-			-			13,393			-			13,393			-			13,393
Foreign currency translation adjustments		-			-			4,280			-			4,280			-			4,280
Net loss		-			-			-			(137,850		)	(137,850		)	-			(137,850		)
Balance, September 30, 2012		$	1,000		$	147,462		$	(286	)	$	1,102,269		$	1,250,445		$	-		$	1,250,445

 

 

See Notes to Condensed Consolidated Financial Statements.

 

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

 

(dollars in thousands)
Nine Months Ended September 30,		2013			2012
Cash flows from operating activities
Net income (loss)		$	37,937		$	(137,850	)
Reconciling adjustments:
Provision for finance receivable losses		341,723			227,794
Depreciation and amortization		(40,181		)	141,435
Deferral of finance receivable origination costs		(42,317		)	(32,729		)
Deferred income tax benefit		(88,668		)	(128,592		)
Writedowns and net loss on sales of real estate owned		1,546			36,667
Writedowns on assets resulting from restructuring		-			5,046
Impairments of Ocean Finance and Mortgages Limited
assets		-			8,342
Mark to market provision and net gain on sales of finance receivables held for sale originated as held for investment		-			(4,536		)
Net loss on repurchases and repayments of debt		17,075			12,163
Net realized losses (gains) on investment securities		(2,686		)	52
Grant of restricted stock units		131,250			-
Change in other assets and other liabilities		50,431			104,898
Change in insurance claims and policyholder liabilities		14,917			2,179
Change in taxes receivable and payable		(29,177		)	64,077
Change in accrued finance charges		1,941			7,381
Change in restricted cash		33,885			(66,494		)
Other, net		(823		)	285
Net cash provided by operating activities		426,853			240,118
Cash flows from investing activities
Finance receivables originated or purchased		(1,596,394		)	(1,234,866		)
Principal collections on finance receivables		2,299,827			2,010,539
Purchase of SpringCastle Portfolio		(2,963,547		)	-
Sales and principal collections on finance receivables held for sale originated as held for investment		-			181,561
Investment securities purchased		(448,981		)	(802,835		)
Investment securities called, sold, and matured		728,534			992,376
Change in restricted cash		(306,847		)	(25,241		)
Proceeds from sale of real estate owned		88,346			148,134
Other, net		(4,748		)	(4,889		)
Net cash provided by (used for) investing activities		(2,203,810		)	1,264,779
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of commissions		6,008,369			1,481,800
Repayment of long-term debt		(4,768,854		)	(1,938,060		)
Contributions from joint venture partners		438,081			-
Distributions to joint venture partners		(204,516		)	-
Net cash provided by (used for) financing activities		1,473,080			(456,260		)

 

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)

 

 

 

(dollars in thousands)
Nine Months Ended September 30,			2013			2012
Effect of exchange rate changes			(835		)	2,888
Increase (decrease) in cash and cash equivalents			(304,712		)	1,051,525
Cash and cash equivalents at beginning of period			1,554,348			689,586
Cash and cash equivalents at end of period			$	1,249,636		$	1,741,111
Supplemental non-cash activities
Transfer of finance receivables to real estate owned			$	70,004		$	142,966
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses)			-			182,208
Transfer of finance receivables held for sale to finance receivables held for investment			-			1,353

 

 

 

See Notes to Condensed Consolidated Financial Statements.

 

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2013

 

1.  Business and Summary of Significant Accounting Policies

 

Springleaf Holdings, Inc. (“SHI” or, collectively with its subsidiaries, whether directly or indirectly owned, “the Company,” “we,” “us,” or “our”) is a Delaware corporation, primarily owned by Springleaf Financial Holdings, LLC (the “Initial Stockholder”). At September 30, 2013, and prior to the reorganization described below, FCFI Acquisition LLC (“FCFI”), an affiliate of Fortress Investment Group LLC (“Fortress”), indirectly owned an 80% economic interest in SHI and American International Group, Inc. (“AIG”) indirectly owned a 20% economic interest in SHI.

 

SHI is a financial services holding company whose principal subsidiary is Springleaf Finance, Inc. (“SFI”). SFI’s principal subsidiary is Springleaf Finance Corporation (“SFC”). SFC is also a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses.

 

In connection with the initial public offering of common stock of SHI, we executed a reorganization of Springleaf Holdings, LLC, the predecessor entity of SHI, into SHI, a newly formed Delaware corporation. The reorganization was completed on October 9, 2013. In connection with the reorganization, Springleaf Financial Holdings, LLC’s predecessor, AGF Holding Inc., contributed all of the common stock of SFI to Springleaf Holdings, LLC and SFI became a wholly owned subsidiary of Springleaf Holdings, LLC. Following the contribution, Springleaf Holdings, LLC converted from a Delaware limited liability company into a Delaware corporation, named Springleaf Holdings, Inc. on October 9, 2013. Upon the conversion from a limited liability company to a corporation, the 100 common interests, previously held by Springleaf Financial Holdings, LLC (or its predecessor), converted into 100 shares of common stock. Additionally, SHI executed a 1,000,000-for-1 common stock split, resulting in 100,000,000 shares of common stock being issued and outstanding at October 9, 2013. The financial statements of SFI were adjusted on a retrospective basis, as appropriate, as financial statements of SHI to account for the reorganization.

 

On October 21, 2013, SHI completed the initial public offering of its common stock. As of November 12, 2013, the Initial Stockholder owns approximately 75% of SHI’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress and AIG Capital Corporation, a subsidiary of AIG.

 

ACQUISITION OF LOAN PORTFOLIO BY SPRINGCASTLE

 

On March 5, 2013, SpringCastle Acquisition LLC (“SCA”), a newly formed joint venture in which one of our indirect wholly owned subsidiaries, Springleaf Acquisition Corporation (“SAC”), and NRZ Consumer LLC (“NRZ”), previously an indirect subsidiary of Newcastle Investment Corp., each held a 50% equity interest (the “Joint Venture”), entered into a definitive agreement to purchase a portfolio of loans from HSBC Finance Corporation and certain of its affiliates (collectively, “HSBC”). On April 1, 2013, BTO WillowHoldings, L.P. (“Blackstone”), an affiliate of Blackstone Tactical Opportunities Advisors L.L.C., acquired a 23% equity interest in SCA, which reduced our equity interests and the equity interests of NRZ to 47% and 30%, respectively.

 

The loan portfolio acquisition was completed on April 1, 2013 for a purchase price of $3.0 billion, at which time the portfolio consisted of over 415,000 finance receivable accounts with $3.9 billion unpaid principal balance (“UPB”). The portfolio included both unsecured loans and loans secured with subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests). The $3.0 billion purchase was funded with $2.2 billion of debt and the remainder was funded with equity contributed from each of the joint venture

 

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members, including $388.5 million of equity from SFI. Upon final validation by the parties, SCA received a refund of $15.4 million from HSBC in August 2013 for the true up of the April 1, 2013 purchase price.

 

Immediately prior to the completion of the loan portfolio acquisition, SCA assigned its right to purchase the portfolio to SpringCastle America, LLC (“SC America”), SpringCastle Credit, LLC (“SC Credit”), and SpringCastle Finance, LLC (“SC Finance”) (each, a “Seller LLC” and collectively, the “Seller LLCs”), which, in turn, immediately sold their respective portion of the portfolio to SpringCastle America Funding, LLC (“SC America Funding”), SpringCastle Credit Funding, LLC (“SC Credit Funding”), and SpringCastle Finance Funding, LLC (“SC Finance Funding”) (each, a “Co-issuer LLC” and collectively, the “Co-issuer LLCs”) and a loan trustee in connection with the securitization of the loan portfolio (the “SpringCastle securitization”) on April 1, 2013.

 

As of April 1, 2013, SpringCastle Holdings, LLC, a wholly owned subsidiary of SAC, NRZ, and Blackstone held a 47%, 30% and 23% equity interest in each Seller LLC, respectively. On May 15, 2013, Newcastle Investment Corp. completed the spinoff of New Residential Investment Corp. and its subsidiaries, including NRZ , which still retains its equity interest in the Seller LLCs. SC America holds a 100% equity interest in SC America Funding, SC Credit holds a 100% equity interest in SC Credit Funding and SC Finance holds a 100% equity interest in SC Finance Funding.

 

On April 1, 2013, SFI entered into a servicing agreement with the Co-issuer LLCs and the loan trustee whereby SFI agreed to service the loans in the loan portfolio effective on the servicing transfer date. In accordance with this agreement, we assumed the direct servicing obligations for the loans in September, 2013.

 

We have determined that our servicing agreement provides us with the power to direct the activities of Seller LLCs and Co-issuer LLCs that most significantly impact their economic performance. As such, we consider the Seller LLCs and Co-issuer LLCs to be variable interest entities (“VIEs”) because the equity investment in each lacks the characteristics of a controlling financial interest. Our decision-making rights as servicer, coupled with our significant indirect equity interest in the Seller LLCs and Co-issuer LLCs, provide us with a controlling financial interest in each, and thus the Seller LLCs and Co-issuer LLCs are included in our condensed consolidated financial statements. The equity (membership) interests in the Seller LLCs held by NRZ and Blackstone, which represent an indirect residual interest in the loans owned by the Co- issuers, are reported as non-controlling interests in our financial statements.

 

PURCHASE OF SERVICING FACILITY

 

On March 5, 2013, one of our subsidiaries signed an agreement to acquire a servicing facility located in London, Kentucky from Renaissance Bankcard Services of Kentucky, Inc. (“Renaissance”), a subsidiary of HSBC. The servicing facility was purchased on September 1, 2013 for consideration of $1.4 million. The acquisition of the servicing facility included the transfer of over 200 employees of Renaissance to the Company.

 

BASIS OF PRESENTATION

 

We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SHI, its subsidiaries (all of which are wholly owned, except for the Seller LLCs and Co-issuer LLCs), and VIEs in which we hold a controlling financial interest as of the financial statement date.

 

We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated

 

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financial statements include the normal, recurring adjustments necessary for a fair statement of results, and the out-of-period adjustments recorded in the nine months ended September 30, 2013 discussed below. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. These statements should be read in conjunction with our audited consolidated financial statements and related notes for the years ended December 31, 2012 and 2011.

 

In the second quarter of 2013, we recorded an out-of-period adjustment, which increased provision for finance receivable losses by $2.7 million and decreased basic and diluted earnings per share by $0.02 for the nine months ended September 30, 2013. The adjustment related to the correction of the identification of certain bankrupt real estate loan accounts for consideration as troubled debt restructured (“TDR”) finance receivables.

 

In the third quarter of 2013, we recorded an out-of-period adjustment, which decreased provision for finance receivable losses by $3.8 million and increased basic and diluted earnings per share by $0.02 for the three months ended September 30, 2013. The adjustment related to the correction of certain inputs in our model supporting the TDR allowance for finance receivable losses. There was no impact for the nine months ended September 30, 2013 as the error was isolated to intra-period reporting in 2013.

 

In the third quarter of 2013, we identified two errors in the classification of certain line items within our condensed consolidated statement of cash flows for the six months ended June 30, 2013. The errors related to the misclassifications of the original issue discount and rebate on the SpringCastle securitization.

 

See reconciliation below of amounts previously presented in our condensed consolidated statement of cash flows for the six months ended June 30, 2013 in our final prospectus (the “Prospectus”), which forms part of our Registration Statement on Form S-1 filed with the SEC on October 16, 2013, to the corrected amounts:

 

		Six Months
		Ended
		June 30,
(dollars in thousands)		2013
Cash flows from operating activities:
Depreciation and amortization
As previously stated		$	(4,090	)
Adjustment		(8,498		)
As corrected		$	(12,588	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt
As previously stated		$	4,133,788
Adjustment		(24,502		)
As corrected		$	4,109,286
Debt commissions on issuance of long-term debt
As previously stated		$	(47,054	)
Adjustment		33,000
As corrected		$	(14,054	)

 

In addition, we combined “Debt commissions on issuance of long-term debt” with “Proceeds from issuance of long-term debt” within our condensed consolidated statement of cash flows for the nine months ended September 30, 2013, as “Proceeds from issuance of long-term debt, net of commissions.”

 

After evaluating the quantitative and qualitative aspects of these corrections (individually and in aggregate), management has determined that our previous quarterly and annual consolidated financial statements were not materially misstated.

 

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