EX-99.1 2 d247125dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

Investors:    Media:
LPS Investor Relations    Michelle Kersch
(904) 854-5086    (904) 854-5043
investor@lpsvcs.com    michelle.kersch@lpsvcs.com

Lender Processing Services, Inc. Reports Third Quarter 2011 Earnings

Adjusted EPS of 59 cents per diluted share in 3Q11

JACKSONVILLE, Fla. – October 25, 2011 – Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today reported consolidated revenues of $532.1 million for the third quarter of 2011, a decrease of 13.8% compared to the prior year quarter, and net earnings of $40.5 million, or 48 cents per diluted share, as compared to $78.7 million, or 85 cents per diluted share in the prior year quarter.

Adjusted net earnings for the third quarter of 2011 totaled $49.4 million, or 59 cents per diluted share, as compared to $82.2 million, or 89 cents per diluted share in the third quarter of 2010. Adjusted net earnings reflect the add-back for purchase price amortization, which totaled 3 cents per diluted share in the current year quarter and 4 cents per diluted share in the prior year quarter. Additionally, the current year quarter excludes a charge totaling 6 cents per diluted share relating to the write-off of certain debt issuance costs in connection with the Company’s recently completed debt refinancing, and a charge of 2 cents per diluted share relating to the loss on disposition of a non-core operation.

“Despite difficult market conditions and sustained challenges in the broader macro-economic environment, LPS, with its strong market presence and broad-based, technology-


driven solutions for the mortgage and real estate industries, remains well-positioned for the years ahead,” said Hugh Harris, president and chief executive officer of LPS.

“Sequentially, our Loan Facilitation business benefited from historically low interest rates, while our Mortgage Processing business had another positive quarter. Other TD&A continued to perform well as a result of market share gains, however, Default Services continued to be impacted by broader industry foreclosure delays,” added Tom Schilling, executive vice president and chief financial officer of LPS.

Operating income of $89.8 million in the current year quarter decreased from $145.1 million in the prior year period primarily due to lower year-over-year origination and default volumes as well as from higher corporate legal and compliance-related expenses.

On a year-to-date basis, cash provided by operating activities increased to $329.6 million from $291.7 million in the prior year period. Adjusted free cash flow (net cash provided by operating activities less certain non-recurring charges and additions to property, equipment and computer software) for the first nine months of 2011 was $259.6 million as compared to $207.6 million for the prior year period and was higher primarily due to contributions from changes in working capital.

Technology, Data and Analytics (TD&A)

Revenues for the TD&A segment increased to $193.7 million during the current year quarter from $187.9 million in the prior year period primarily due to higher professional service revenues in our Mortgage Processing division. Operating income of $62.6 million decreased from $68.2 million in the prior year period primarily due to lower income in our Desktop and Other Software and Services offerings, partially offset by higher contributions from Data & Analytics.


Loan Transaction Services (LTS)

Revenues for the LTS segment declined to $340.2 million during the current year quarter from $431.1 million in the prior year period. In spite of a 23.0% decline in total market originations as reported by the Mortgage Bankers Association, revenues in our Loan Facilitation Services group decreased on a year-over-year basis by just 14.7% to $141.1 million primarily due to lower industry volumes. Additionally, the continued slowdown in the initiation of foreclosure proceedings impacted our Default Services group where revenues decreased by 25.0% to $199.1 million in current year quarter. The decrease in revenue in our Default Services group was consistent with RealtyTrac’s report of a 27.4% decline in default notices as compared to the prior year quarter. Operating income for the LTS segment declined mainly due to lower contributions from Default Services, and to a lesser extent, from Loan Facilitation Services.

Corporate and Other

Net corporate expenses in the third quarter of 2011 increased to $34.0 million from $19.8 million in the prior year quarter primarily due to higher legal and compliance-related expenses.

The Company noted that it had completed the refinancing of its senior secured credit facilities during the third quarter. The available authorization under the Company’s share repurchase program remained unchanged at $95.1 million.

Outlook

“While the origination market did improve during the quarter, we remain concerned about broader macro-economic conditions and ongoing industry-specific pressures. However, LPS’ leading technology, strong customer relationships and deep industry knowledge ensure the Company is well-positioned for the future,” said Schilling. “Given the current environment, we expect fourth quarter 2011 revenue to be in the range of $510 million to $520 million, adjusted earnings to be in the range of 57-59 cents per diluted share and adjusted free cash flow to be in the range of $60 million to $70 million.”


Use of Non-GAAP Financial Information

U.S. Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, LPS reports several non-GAAP measures, including “EBIT, as adjusted” (GAAP operating income adjusted for the impact of certain non-recurring adjustments, if applicable), “adjusted net earnings” (GAAP net earnings adjusted for the impact of certain non-recurring adjustments, if applicable, plus the after-tax purchase price amortization of intangible assets added through acquisitions), “adjusted net earnings per diluted share” (adjusted net earnings divided by diluted weighted average shares), and “adjusted free cash flow” (net cash provided by operating activities less additions to property, equipment and computer software, as well as non-recurring adjustments, if applicable). LPS provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring charges, and to better understand our financial performance, competitive position and future prospects. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.

Conference Call and Webcast

LPS will host a conference call to discuss these results on Wednesday, October 26, 2011, at 8:00 a.m. ET. Interested parties are invited to listen to the live webcast by logging on to the Investor Relations section of the Company’s website at www.lpsvcs.com. Supplemental materials will be available on the website. Those wishing to participate via the conference call may do so by calling 866-823-5035. A replay of the webcast will be available on the website shortly after the call where it will be archived for one month. A replay of the conference call will be available through November 2, 2011, by dialing 888-203-1112 (access code: 9248950).


To access a printer-friendly version of this release and accompanying exhibits, go to LPS Investor Relations.

About Lender Processing Services

Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology, services and loan performance data and analytics to the mortgage, consumer lending, capital markets and real estate industries. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, workflow automation, portfolio retention and default, augmented by the company’s award-winning customer support and professional services. Almost half of all U.S. mortgages are serviced using LPS’ Mortgage Servicing Package (MSP). For more information about LPS, visit www.lpsvcs.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements are based on management’s beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to adapt our services to changes in technology or the marketplace; the impact of adverse changes in the level of real estate activity (including among others, loan originations and foreclosures) on demand for certain of our services; our ability to maintain and grow our relationships with our customers; the effects of our substantial leverage on our ability to make acquisitions and invest in our business; the level of scrutiny being placed on participants in the foreclosure process; risks associated with federal and state inquiries and examinations currently underway or that may be commenced in the future with respect to our default management


operations, and with civil litigation related to these matters; changes to the laws, rules and regulations that regulate our businesses as a result of the current economic and financial environment; changes in general economic, business and political conditions, including changes in the financial markets; the impact of any potential defects, development delays, installation difficulties or system failures on our business and reputation; risks associated with protecting information security and privacy; and other risks and uncertainties detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K, the Company’s subsequent reports on Form 10-Q and other filings with the Securities and Exchange Commission.

###


Exhibit A

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)

 

     Three months ended September 30,     Nine months ended September 30,  
     2011     2010     2011     2010  
     (In thousands, except per share data)  

Processing and services revenues

   $ 532,114      $ 617,002      $ 1,595,652      $ 1,789,029   

Cost of revenues

     370,288        408,955        1,098,364        1,177,953   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     161,826        208,047        497,288        611,076   

Selling, general and administrative expenses

     72,008        62,914        225,852        179,671   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     89,818        145,133        271,436        431,405   

Other income (expense):

        

Interest income

     355        143        1,072        1,066   

Interest expense

     (22,959     (17,186     (50,888     (54,793

Other expense, net

     (128     101        (173     275   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (22,732     (16,942     (49,989     (53,452
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     67,086        128,191        221,447        377,953   

Provision for income taxes

     25,157        49,032        83,043        144,564   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations

     41,929        79,159        138,404        233,389   

Discontinued operations, net of tax

     (1,479     (468     (20,660     (1,769
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

   $ 40,450      $ 78,691      $ 117,744      $ 231,620   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings per share - diluted from continuing operations

   $ 0.50      $ 0.86      $ 1.61      $ 2.48   

Net loss per share - diluted from discontinued operations

     (0.02     (0.01     (0.24     (0.03
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings per share - diluted

   $ 0.48      $ 0.85      $ 1.37      $ 2.45   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding - diluted

     84,415        92,682        86,108        94,658   
  

 

 

   

 

 

   

 

 

   

 

 

 


Exhibit B

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

 

     September 30,     December 31,  
     2011     2010  
     (In thousands)  
Assets     

Current assets:

    

Cash and cash equivalents

   $ 83,960      $ 52,287   

Trade receivables, net of allowance for doubtful accounts

     353,972        419,647   

Other receivables

     2,203        4,910   

Prepaid expenses and other current assets

     36,722        38,328   

Deferred income taxes

     45,926        44,102   
  

 

 

   

 

 

 

Total current assets

     522,783        559,274   
  

 

 

   

 

 

 

Property and equipment, net of accumulated depreciation

     122,619        123,897   

Computer software, net of accumulated amortization

     231,022        217,573   

Other intangible assets, net of accumulated amortization

     45,447        58,269   

Goodwill

     1,150,631        1,159,539   

Other non-current assets

     176,797        133,291   
  

 

 

   

 

 

 

Total assets

   $ 2,249,299      $ 2,251,843   
  

 

 

   

 

 

 
Liabilities and Stockholders’ Equity     

Current liabilities:

    

Current portion of long-term debt

   $ 29,308      $ 145,154   

Trade accounts payable

     39,307        51,610   

Accrued salaries and benefits

     54,167        55,230   

Recording and transfer tax liabilities

     12,520        10,879   

Other accrued liabilities

     149,142        145,203   

Deferred revenues

     57,326        57,651   
  

 

 

   

 

 

 

Total current liabilities

     341,770        465,727   
  

 

 

   

 

 

 

Deferred revenues

     34,132        36,893   

Deferred income taxes, net

     111,681        96,732   

Long-term debt, net of current portion

     1,232,178        1,104,247   

Other non-current liabilities

     24,636        22,030   
  

 

 

   

 

 

 

Total liabilities

     1,744,397        1,725,629   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Preferred stock $0.0001 par value; 50 million shares authorized, none issued at September 30, 2011 or December 31, 2010

     —          —     

Common stock $0.0001 par value; 500 million shares authorized, 97.4 million shares issued at September 30, 2011 and December 31, 2010

     10        10   

Additional paid-in capital

     238,691        216,896   

Retained earnings

     687,906        596,168   

Accumulated other comprehensive loss

     (1,366     (283

Treasury stock $0.0001 par value; 13.1 million and 8.6 million shares at September 30, 2011 and December 31, 2010, respectively

     (420,339     (286,577
  

 

 

   

 

 

 

Total stockholders’ equity

     504,902        526,214   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,249,299      $ 2,251,843   
  

 

 

   

 

 

 


Exhibit C

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

     Nine months ended September 30,  
     2011     2010  
     (In thousands)  

Cash flows from operating activities:

    

Net earnings

   $ 117,744      $ 231,620   

Adjustments to reconcile net earnings to net cash provided by operating activities:

    

Depreciation and amortization

     73,753        71,814   

Amortization of debt issuance costs

     8,901        3,506   

Asset impairment charges

     31,855        —     

Loss on sale of discontinued operation

     1,486        —     

Deferred income taxes, net

     11,985        16,604   

Stock-based compensation cost

     28,179        22,052   

Income tax effect of equity compensation

     588        205   

Changes in assets and liabilities, net of effects of acquisitions:

    

Trade receivables

     64,291        (17,224

Other receivables

     2,708        1,023   

Prepaid expenses and other assets

     (6,258     (17,272

Deferred revenues

     (3,382     (15,471

Accounts payable, accrued liabilities and other liabilities

     (2,249     (5,140
  

 

 

   

 

 

 

Net cash provided by operating activities

     329,601        291,717   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Additions to property and equipment

     (25,970     (32,601

Additions to capitalized software

     (55,501     (51,505

Purchases of investments, net of proceeds from sales

     (14,918     (10,856

Acquisition of title plants and property records data

     (15,686     (1,840

Acquisitions, net of cash acquired

     (9,802     (271
  

 

 

   

 

 

 

Net cash used in investing activities

     (121,877     (97,073
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings

     960,000        —     

Debt service payments

     (942,915     (3,825

Exercise of stock options and restricted stock vesting

     (2,680     10,505   

Income tax effect of equity compensation

     (588     (205

Dividends paid

     (26,006     (28,160

Debt issuance costs paid

     (22,059     —     

Treasury stock repurchases

     (136,878     (167,991

Bond repurchases

     (4,925     —     

Payment of contingent consideration related to acquisitions

     —          (2,978
  

 

 

   

 

 

 

Net cash used in financing activities

     (176,051     (192,654

Net increase in cash and cash equivalents

     31,673        1,990   

Cash and cash equivalents, beginning of period

     52,287        70,528   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 83,960      $ 72,518   
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information:

    

Cash paid for interest

   $ 48,672      $ 60,631   
  

 

 

   

 

 

 

Cash paid for taxes

   $ 49,181      $ 116,955   
  

 

 

   

 

 

 


Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)

 

        Nine months  ended
September 30,
    Quarter ended     Year ended  
        2011     2010     9/30/2011     6/30/2011     3/31/2011     12/31/2010     9/30/2010     6/30/2010     3/31/2010     12/31/2010  

1.

 

Revenues - Continuing Operations

                   
 

Technology, Data and Analytics (TD&A):

                   
 

Mortgage Processing

  $ 311,465      $ 302,352      $ 106,365      $ 102,766      $ 102,334      $ 100,341      $ 102,362      $ 102,356      $ 97,634      $ 402,693   
 

Other TD&A

    266,690        230,749        87,383        88,108        91,199        93,701        85,517        73,572        71,660        324,450   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

    578,155        533,101        193,748        190,874        193,533        194,042        187,879        175,928        169,294        727,143   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Loan Transaction Services:

                   
 

Loan Facilitation Services

    391,745        452,575        141,090        113,352        137,303        188,332        165,490        140,471        146,614        640,907   
 

Default Services

    630,531        809,289        199,072        210,338        221,121        251,327        265,572        275,046        268,671        1,060,616   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

    1,022,276        1,261,864        340,162        323,690        358,424        439,659        431,062        415,517        415,285        1,701,523   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Corporate and Other

    (4,779     (5,936     (1,796     (1,513     (1,470     (1,893     (1,939     (1,644     (2,353     (7,829
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Revenue

  $ 1,595,652      $ 1,789,029      $ 532,114      $ 513,051      $ 550,487      $ 631,808      $ 617,002      $ 589,801      $ 582,226      $ 2,420,837   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Revenue Growth from Prior Year Period

                   
 

Technology, Data and Analytics:

                   
 

Mortgage Processing

    3.0     6.6     3.9     0.4     4.8     -3.7     -0.6     14.3     7.1     3.8
 

Other TD&A

    15.6     8.7     2.2     19.8     27.3     24.1     16.9     -2.1     12.0     12.8
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

    8.5     7.5     3.1     8.5     14.3     8.0     6.7     6.8     9.1     7.6
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Loan Transaction Services:

                   
 

Loan Facilitation Services

    -13.4     11.9     -14.7     -19.3     -6.4     31.8     21.1     -5.4     23.0     17.1
 

Default Services

    -22.1     -5.8     -25.0     -23.5     -17.7     -9.8     -12.6     -8.2     5.2     -6.7
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

    -19.0     -0.1     -21.1     -22.1     -13.7     4.3     -2.1     -7.3     10.9     1.0
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Corporate and Other

    n/m        n/m        n/m        n/m        n/m        n/m        n/m        n/m        n/m        n/m   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Revenue

    -10.8     2.8     -13.8     -13.0     -5.5     5.6     1.3     -2.7     10.9     3.5
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

2.

 

Depreciation and Amortization

                   
 

Depreciation and Amortization

  $ 54,201      $ 46,285      $ 18,435      $ 18,134      $ 17,632      $ 18,108      $ 16,703      $ 15,209      $ 14,373      $ 64,393   
 

Purchase Price Amortization

    12,865        17,463        4,015        4,022        4,828        5,483        5,427        5,601        6,435        22,946   
 

Other Amortization

    5,098        5,545        1,749        1,686        1,663        1,680        1,658        1,962        1,925        7,225   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total continuing operations

    72,164        69,293        24,199        23,842        24,123        25,271        23,788        22,772        22,733        94,564   
 

Depreciation and Amortization - Discontinued Operations

    1,589        2,521        119        725        745        1,676        732        868        921        4,197   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Depreciation and Amortization

  $ 73,753      $ 71,814      $ 24,318      $ 24,567      $ 24,868      $ 26,947      $ 24,520      $ 23,640      $ 23,654      $ 98,761   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

3.

 

Stock Compensation Expense (1)

                   
 

Stock Compensation Expense, Excluding Acceleration Charges

  $ 24,310      $ 22,052      $ 9,313      $ 8,238      $ 6,759      $ 8,228      $ 8,215      $ 7,280      $ 6,557      $ 30,280   
 

Stock Acceleration Expense

    3,869        —          —          —          3,869        1,797        —          —          —          1,797   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Stock Compensation Expense

  $ 28,179      $ 22,052      $ 9,313      $ 8,238      $ 10,628      $ 10,025      $ 8,215      $ 7,280      $ 6,557      $ 32,077   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

4.

 

Discontinued Operations (2)

                   
 

Revenue

  $ 17,458      $ 28,486      $ 5,702      $ 6,045      $ 5,711      $ 7,012      $ 9,038      $ 9,280      $ 10,168      $ 35,498   
 

Cost of Sales

    17,228        26,159        5,684        5,439        6,105        9,261        8,288        8,294        9,577        35,420   
 

Selling, General and Administrative Expenses

    2,885        5,380        189        1,580        1,116        1,647        1,602        1,888        1,890        7,027   
 

Asset Impairment Charge (3)

    29,923        —          —          29,923        —          —          —          —          —          —     
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Operating Loss

    (32,578     (3,053     (171     (30,897     (1,510     (3,896     (852     (902     (1,299     (6,949
 

Total Other Income (Expense)

    (2,087     191        (2,195     43        65        110        95        34        62        301   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Loss Before Income Taxes

    (34,665     (2,862     (2,366     (30,854     (1,445     (3,786     (757     (868     (1,237     (6,648
 

Benefit for Income Taxes

    (14,005     (1,093     (887     (12,569     (549     (1,431     (289     (331     (473     (2,524
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Net Loss

  $ (20,660   $ (1,769   $ (1,479   $ (18,285   $ (896   $ (2,355   $ (468   $ (537   $ (764   $ (4,124
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Discontinued Operations - Reconciliation

                   
 

Net Loss, as reported

  $ (20,660   $ (1,769   $ (1,479   $ (18,285   $ (896   $ (2,355   $ (468   $ (537   $ (764   $ (4,124
 

Adjustments:

                   
 

Loss on Disposition, net of tax (4)

    1,486        —          1,486        —          —          —          —          —          —          —     
 

Asset Impairment Charge, net of tax (3)

    17,763        —          —          17,763        —          —          —          —          —          —     
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Net (Loss) Earnings, as adjusted

    (1,411     (1,769     7        (522     (896     (2,355     (468     (537     (764     (4,124
 

Purchase Price Amortization, net of tax

    253        524        (15     133        135        619        175        175        175        1,143   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Adjusted Net Loss

  $ (1,158   $ (1,245   $ (8   $ (389   $ (761   $ (1,736   $ (293   $ (362   $ (589   $ (2,981
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Adjusted Net Loss Per Diluted Share

  $ (0.01   $ (0.01   $ —        $ —        $ (0.01   $ (0.02   $ —        $ —        $ (0.01   $ (0.03
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Diluted Weighted Average Shares

    86,108        94,658        84,415        85,812        88,134        90,296        92,682        94,910        96,416        93,559   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1) As the Company does not allocate stock compensation expense to the individual business units, there is no related expense associated with the discontinued operations.
(2) The business units included in discontinued operations have historically been reported as a component of Other TD&A in the Technology, Data and Analytics reporting segment.
(3) Reflects asset impairment charges totaling $29.9 million ($17.8 million net of tax) relating to the write-down of net assets in certain businesses that have been reclassified as discontinued operations.
(4) We recognized a $2.5 million charge ($1.5 million net of tax) related to the loss on disposal of certain operations previously included in our Real Estate Group within the Technology, Data and Analytics segment.


Exhibit E

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)

 

         Nine months ended
September 30,
    Quarter ended     Year ended  
         2011     2010     9/30/2011     6/30/2011     3/31/2011     12/31/2010     9/30/2010     6/30/2010     3/31/2010     12/31/2010  

1.

  

EBIT - Continuing Operations

                   
  

Consolidated

                   
  

Revenue

  $ 1,595,652      $ 1,789,029      $ 532,114      $ 513,051      $ 550,487      $ 631,808      $ 617,002      $ 589,801      $ 582,226      $ 2,420,837   
  

Cost of Sales

    1,098,364        1,177,953        370,288        363,571        364,505        428,702        408,955        382,553        386,445        1,606,655   
  

Selling, General and Administrative Expenses

    225,852        179,671        72,008        73,333        80,511        70,652        62,914        57,927        58,830        250,323   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Operating Income

    271,436        431,405        89,818        76,147        105,471        132,454        145,133        149,321        136,951        563,859   
  

Adjustments:

                   
  

Cash Related Restructuring Costs

    23,446        —          —          7,943        15,503        2,472        —          —          —          2,472   
  

Stock Related Restructuring Costs

    3,869        —          —          —          3,869        1,797        —          —          —          1,797   
  

Asset Impairment Charges

    1,930        —          —          1,930        —          —          —          —          —          —     
  

Out-of-period Adjustment

    —          —          —          —          —          9,800        —          —          —          9,800   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT, as adjusted

  $ 300,681      $ 431,405      $ 89,818      $ 86,020      $ 124,843      $ 146,523      $ 145,133      $ 149,321      $ 136,951      $ 577,928   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT Margin, as adjusted

    18.8     24.1     16.9     16.8     22.7     23.2     23.5     25.3     23.5     23.9
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Depreciation and Amortization

  $ 72,164      $ 69,293      $ 24,199      $ 23,842      $ 24,123      $ 25,271      $ 23,788      $ 22,772      $ 22,733      $ 94,564   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Technology, Data and Analytics

                   
  

Revenue

  $ 578,155      $ 533,101      $ 193,748      $ 190,874      $ 193,533      $ 194,042      $ 187,879      $ 175,928      $ 169,294      $ 727,143   
  

Cost of Sales

    346,137        288,374        111,718        118,864        115,555        111,344        100,133        92,023        96,218        399,718   
  

Selling, General and Administrative Expenses

    59,416        55,605        19,426        19,207        20,783        18,403        19,506        18,178        17,921        74,008   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Operating Income

    172,602        189,122        62,604        52,803        57,195        64,295        68,240        65,727        55,155        253,417   
  

Adjustments:

                   
  

Cash Related Restructuring Costs (3)(4)

    6,925        —          —          4,641        2,284        —          —          —          —          —     
  

Asset Impairment Charges (4)

    1,368        —          —          1,368        —          —          —          —          —          —     
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT, as adjusted

  $ 180,895      $ 189,122      $ 62,604      $ 58,812      $ 59,479      $ 64,295      $ 68,240      $ 65,727      $ 55,155      $ 253,417   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT Margin, as adjusted

    31.3     35.5     32.3     30.8     30.7     33.1     36.3     37.4     32.6     34.9
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Depreciation and Amortization

  $ 52,711      $ 46,596      $ 17,902      $ 17,204      $ 17,605      $ 17,229      $ 15,800      $ 15,179      $ 15,617      $ 63,825   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Loan Transaction Services

                   
  

Revenue

  $ 1,022,276      $ 1,261,864      $ 340,162      $ 323,690      $ 358,424      $ 439,659      $ 431,062      $ 415,517      $ 415,285      $ 1,701,523   
  

Cost of Sales

    756,856        895,496        260,298        246,193        250,365        317,285        310,780        292,107        292,609        1,212,781   
  

Selling, General and Administrative Expenses

    61,395        69,216        18,646        20,208        22,541        26,440        23,561        21,798        23,857        95,656   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Operating Income

    204,025        297,152        61,218        57,289        85,518        95,934        96,721        101,612        98,819        393,086   
  

Adjustments:

                   
  

Cash Related Restructuring Costs (3)(4)

    4,027        —          —          1,074        2,953        —          —          —          —          —     
  

Asset Impairment Charges (4)

    562        —          —          562        —          —          —          —          —          —     
  

Out-of-period Adjustment (2)

    —          —          —          —          —          9,800        —          —          —          9,800   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT, as adjusted

  $ 208,614      $ 297,152      $ 61,218      $ 58,925      $ 88,471      $ 105,734      $ 96,721      $ 101,612      $ 98,819      $ 402,886   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT Margin, as adjusted

    20.4     23.5     18.0     18.2     24.7     24.0     22.4     24.5     23.8     23.7
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Depreciation and Amortization

  $ 14,158      $ 17,087      $ 4,633      $ 4,822      $ 4,703      $ 6,226      $ 6,152      $ 5,749      $ 5,186      $ 23,313   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Corporate and Other

                   
  

Revenue

  $ (4,779   $ (5,936   $ (1,796   $ (1,513   $ (1,470   $ (1,893   $ (1,939   $ (1,644   $ (2,353   $ (7,829
  

Cost of Sales

    (4,629     (5,917     (1,728     (1,486     (1,415     73        (1,958     (1,577     (2,382     (5,844
  

Selling, General and Administrative Expenses

    105,041        54,850        33,936        33,918        37,187        25,809        19,847        17,951        17,052        80,659   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Operating Income

    (105,191     (54,869     (34,004     (33,945     (37,242     (27,775     (19,828     (18,018     (17,023     (82,644
  

Adjustments:

                   
  

Cash Related Restructuring Costs (2)(3)(4)

    12,494        —          —          2,228        10,266        2,472        —          —          —          2,472   
  

Stock Related Restructuring Costs (2)(3)

    3,869        —          —          —          3,869        1,797        —          —          —          1,797   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

EBIT, as adjusted

  $ (88,828   $ (54,869   $ (34,004   $ (31,717   $ (23,107   $ (23,506   $ (19,828   $ (18,018   $ (17,023   $ (78,375
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Depreciation and Amortization

  $ 5,295      $ 5,610      $ 1,664      $ 1,816      $ 1,815      $ 1,816      $ 1,836      $ 1,844      $ 1,930      $ 7,426   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

2.

  

Net Earnings - Reconciliation

                   
  

Net Earnings

  $ 117,744      $ 231,620      $ 40,450      $ 21,365      $ 55,929      $ 70,724      $ 78,691      $ 80,413      $ 72,516      $ 302,344   
  

Adjustments:

                   
  

Cash Related Restructuring Costs, net of tax

    14,601        —          —          4,989        9,612        1,533        —          —          —          1,533   
  

Stock Related Restructuring Costs, net of tax

    2,399        —          —          —          2,399        1,114        —          —          —          1,114   
  

Asset Impairment Charges - continuing operations, net of tax

    1,211        —          —          1,211        —          —          —          —          —          —     
  

Asset Impairment Charges - discontinued operations, net of tax

    17,763        —          —          17,763        —          —          —          —          —          —     
  

Write-off of Debt Issuance Costs, net of tax (5)

    4,978        —          4,978        —          —          —          —          —          —          —     
  

Loss on Disposal of Operation, net of tax (5)

    1,486        —          1,486        —          —          —          —          —          —          —     
  

Out-of-period Adjustment, net of tax

    —          —          —          —          —          6,076        —          —          —          6,076   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Net Earnings, as adjusted

    160,182        231,620        46,914        45,328        67,940        79,447        78,691        80,413        72,516        311,067   
  

Purchase Price Amortization, net of tax (1)

    8,297        11,307        2,495        2,674        3,128        4,059        3,526        3,633        4,148        15,366   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Adjusted Net Earnings

  $ 168,479      $ 242,927      $ 49,409      $ 48,002      $ 71,068      $ 83,506      $ 82,217      $ 84,046      $ 76,664      $ 326,433   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Adjusted Net Earnings Per Diluted Share

  $ 1.96      $ 2.58      $ 0.59      $ 0.56      $ 0.81      $ 0.92      $ 0.89      $ 0.89      $ 0.80      $ 3.50   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Diluted Weighted Average Shares

    86,108        94,658        84,415        85,812        88,134        90,296        92,682        94,910        96,416        93,559   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

3.

  

Cash Flow - Reconciliation

                   
  

Cash Flows from Operating Activities:

                   
  

Net Earnings

  $ 117,744      $ 231,620      $ 40,450      $ 21,365      $ 55,929      $ 70,724      $ 78,691      $ 80,413      $ 72,516      $ 302,344   
  

Adjustments:

                   
  

Cash Related Restructuring Costs, net of tax

    11,479        —          2,107        5,220        4,152        1,533        —          —          —          1,533   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Net Earnings, as adjusted

    129,223        231,620        42,557        26,585        60,081        72,257        78,691        80,413        72,516        303,877   
  

Adjustments to reconcile net earnings to net cash provided by operating activities:

                   
  

Non-cash adjustments

    156,747        114,181        50,508        61,260        44,979        51,625        41,548        34,591        38,042        165,806   
  

Working capital adjustments

    55,110        (54,084     11,756        23,822        19,532        34,628        (35,191     (17,375     (1,518     (19,456
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Net cash provided by operating activities

    341,080        291,717        104,821        111,667        124,592        158,510        85,048        97,629        109,040        450,227   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Capital expenditures included in investing

                   
  

activities

    (81,471     (84,106     (28,243     (29,907     (23,321     (24,150     (26,940     (29,122     (28,044     (108,256
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  

Adjusted Net Free Cash Flow

  $ 259,609      $ 207,611      $ 76,578      $ 81,760      $ 101,271      $ 134,360      $ 58,108      $ 68,507      $ 80,996      $ 341,971   
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1) Purchase price amortization, net of tax represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.
(2) During the three months ended December 31, 2010, we recorded an immaterial error correction within cost of revenues totaling $9.8 million related to fiscal years 2007 and 2008. Additionally, we recorded a $4.3 million charge ($2.5 million of compensation and $1.8 million of stock acceleration) related to the departure of our former chief financial officer.
(3) During the three months ended March 31, 2011, we recorded a restructuring charge totaling $19.4 million related to the departure of our former co-chief operating officer ($6.1 million of compensation and $3.6 million of stock acceleration), and other cost reduction initiatives ($9.7 million).
(4) During the three months ended June 30, 2011, we recorded an asset impairment charge totaling $31.9 million ($1.9 million in continuing operations and $29.9 million in discontinued operations) relating to the write-down of net assets in certain underperforming operations that management has decided to dispose of or wind-down. Additionally, we recorded a restructuring charge totaling $7.9 million related to various cost reduction initiatives.
(5) During the three months ended September 30, 2011, we recorded a charge totaling $8.0 million ($5.0 million net of tax) related to the write-off of certain debt issuance costs in connection with the refinancing of our senior credit facilities. We also recognized a $2.5 million charge ($1.5 million net of tax) related to the loss on disposal of certain operations previously included in our Real Estate Group within the Technology, Data and Analytics segment.