Mr Cooper Group Inc fka COOP

[Split T]

What Embedded Derivative?


From the 10K....Page 30

https://www.sec.gov/Archives/edgar/data/933136/000156459018004269/wmih-10k_20171231.htm#Properties

"The net impact on the financial results from the change in fair value of the embedded derivative over the three years ended December 31, 2017 it has existed was net other income of $175.1 million which also increased equity through retained earnings. The fair market value of the embedded derivative was determined to be $108.9 million at December 31, 2017, however, as a result of the amendment of the Original Series B Preferred Stock, the embedded derivative was determined, due to modification, to no longer exist and the December 31, 2017 fair market value of $108.9 million was reclassified as a reduction of equity. The net impact to equity between 2015 and 2017 from the embedded derivative is therefore an increase of $66.2 million which was the original fair market value recorded in 2015 at the time of issuance of the Original Series B Preferred Stock. The embedded derivative impact was solely attributable to changes in fair value of the derivative embedded conversion feature and were non-cash items. Fluctuations in the price of WMIH’s common stock directly impacted the fair value of the derivative instrument. The fair value of this derivative instrument was analyzed in each reporting period. Any change in fair value of the embedded conversion feature impacted other income or expense, as the case may be, in the applicable reporting period. In the future, as a result of the Series B Amendment, there will be no change to the fair value of this derivative instrument as, due to modification, it was determined to no longer exist and was reclassified to equity".