2015 was a challenging year for both the sector and Walter, as we and our industry navigated an evolving marketplace and changing regulatory environment as well as continued interest rate volatility. We are not satisfied with 2015’s financial and operational results and are working diligently to improve our performance and realize value for shareholders. I expect the sector to continue its evolution and firmly believe that Walter possesses many key attributes necessary to achieve long-term success in the market, given the important role I expect will be filled by non-bank participants as banks and other institutions look to outsource servicing and the originations needs of all borrowers are met. Our team has significant experience in the sector and is highly motivated to achieve results. We continue to add talent to ensure we are bringing fresh perspectives and ideas to the Company. Additionally, I believe we have the scale, relationships and track record that will enable us to grow the business as opportunities arise.
To position the Company for improved performance in 2016 and beyond, we are focused on the execution of several key initiatives designed to address the operating environment and marketplace. These key initiatives include a company-wide project to transform processes and identify and deploy technology solutions intended to drive substantial improvement in costs, revenues and overall business efficiency. We believe there is a significant opportunity for improvement embedded within the business and are optimistic that if we successfully execute our key initiatives the improvement should drive operational results, financial results and shareholder value in a meaningful way.
As important as successfully executing our key initiatives is to our operational success, equally important is achieving our objective of improving Walter’s financial strength. We believe our best opportunities to achieve this objective lie in enhancing the strength of our balance sheet. During 2016 we plan to focus on efficiently allocating capital, maximizing our cash flows and increasing our mix of sub-servicing business. We plan to repurchase or pay down a portion of our debt during 2016 by utilizing a combination of excess operating cash flow and the proceeds from the potential sale of our insurance business and flow and/or opportunistic sales of MSRs, principally with servicing retained.
Looking ahead, it is our goal to rapidly transform our businesses to create a best-in-class experience for homeowners. We want to become a Lifelong Partner in Homeownership for our customers, as well as the partner of choice for our clients, regulators and other stakeholders. To support the achievement of this goal, we have undertaken a companywide initiative to elevate awareness around the shared goals of our high-performance culture. We believe building and nurturing a culture of excellence is paramount on all levels: customer interactions; operational efficiencies; compliance; and improvement of our financial strength.
We are committed to taking the actions necessary to position the business to drive value for all of our stakeholders. We understand that our execution of the outlined initiatives will be the most impactful measure of our success.
The Walter team — from the Board of Directors to each employee —
is actively engaged in driving a high-performance, compliance-focused culture designed to deliver a best-in-class experience to our customers and improve value for our shareholders. I greatly appreciate all of the support we have received from our stakeholders and look forward to reporting on our progress over the coming year.
DENMAR J. DIXON
Vice Chairman of the Board, Chief Executive Officer and President
