Rocket Companies, Inc

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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: 001-39432 Rocket Companies, Inc. (Exact name of registrant as specified in its charter) Delaware 84-4946470 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1050 Woodward Avenue, Detroit, MI 48226 (Address of principal executive offices) (Zip Code) (313) 373-7990 (Registrant’s telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, par value $0.00001 per share RKT New York Stock Exchange 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 ☒ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No □ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of August 27, 2020, 100,372,565 shares of the registrant's Class A common stock, $0.00001 par value, and 1,884,079,483 shares of the registrant's Class D common stock, $0.00001 par value, were outstanding. 1 PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Condensed Combined Balance Sheets.................................................................................................. 3 Condensed Combined Statements of Income and Comprehensive Income......................................... 4 Condensed Combined Statements of Changes in Equity..................................................................... 5 Condensed Combined Statements of Cash Flows................................................................................ 6 Notes to Condensed Combined Financial Statements.......................................................................... 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.................... 34 Item 3. Quantitative and Qualitative Disclosures About Market Risk................................................................... 55 Item 4. Controls and Procedures............................................................................................................................ 58 PART II. OTHER INFORMATION Item 1. Legal Proceedings...................................................................................................................................... 59 Item 1A. Risk Factors............................................................................................................................................... 59 Item 2. Unregistered Sales Of Equity Securities and Use of Proceeds.................................................................. 59 Item 6. Exhibits...................................................................................................................................................... 61 SIGNATURES............................................................................................................................................................ 62 2 PART I — FINANCIAL INFORMATION Item 1. Financial Statements Rocket Companies Condensed Combined Balance Sheets (Dollars in Thousands) June 30, December 31, 2020 2019 (unaudited) Assets Cash and cash equivalents............................................................................................. $ 1,724,035 $ 1,350,972 Restricted cash............................................................................................................... 78,367 61,154 Mortgage loans held for sale, at fair value.................................................................... 17,628,535 13,275,735 Interest rate lock commitments (“IRLCs”), at fair value.............................................. 2,393,764 508,135 Mortgage servicing rights (“MSRs”), at fair value....................................................... 2,289,209 2,874,972 MSRs collateral for financing liability, at fair value..................................................... 59,926 205,108 Notes receivable and due from affiliates....................................................................... 17,028 89,946 Property and equipment, net of accumulated depreciation and amortization of $459,474 and $428,540, respectively..................................................................... 192,173 176,446 Lease right of use assets................................................................................................ 256,183 278,921 Forward commitments, at fair value............................................................................. 6,328 3,838 Loans subject to repurchase right from Ginnie Mae..................................................... 3,496,120 752,442 Other assets................................................................................................................... 714,789 499,658 Total assets.................................................................................................................... $ 28,856,457 $ 20,077,327 Liabilities and equity Liabilities: Funding facilities........................................................................................................... $ 15,685,860 $ 12,041,878 Other financing facilities and debt:............................................................................... Lines of credit............................................................................................................ 160,000 165,000 Senior Notes, net........................................................................................................ 2,235,721 2,233,791 Early buy out facility................................................................................................. 241,752 196,247 MSRs financing liability, at fair value.......................................................................... 58,926 189,987 Accounts payable.......................................................................................................... 219,650 157,295 Lease liabilities.............................................................................................................. 288,866 314,353 Forward commitments, at fair value............................................................................. 351,261 43,794 Investor reserves............................................................................................................ 63,012 54,387 Notes payable and due to affiliates............................................................................... 61,192 35,082 Loans subject to repurchase right from Ginnie Mae..................................................... 3,496,120 752,442 Other liabilities.............................................................................................................. 457,920 390,149 Total liabilities............................................................................................................... 23,320,280 16,574,405 Equity: Net parent investment.................................................................................................... 5,527,173 3,498,065 Accumulated other comprehensive income (loss)........................................................ 5,929 (151) Non-controlling interest................................................................................................ 3,075 5,008 Total equity................................................................................................................... 5,536,177 3,502,922 Total liabilities and equity............................................................................................. $ 28,856,457 $ 20,077,327 See accompanying Notes to the Unaudited Condensed Combined Financial Statements. 3 Rocket Companies Condensed Combined Statements of Income and Comprehensive Income (Dollars in Thousands) (Unaudited) Three Months Ended June 30, Six Months

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