EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

  NEWS   

FOR
IMMEDIATE
RELEASE

CORELOGIC REPORTS SECOND QUARTER 2010 NET INCOME OF

$24.4 MILLION, OR $0.22 PER SHARE, ON REVENUE OF $468 MILLION

PRE-TAX INCOME OF $9.3 MILLION; ADJUSTED PRE-TAX INCOME1 OF $69.2 MILLION;

ADJUSTED EBITDA1 OF $102.8 MILLION

 

•  

Second quarter revenues totaled $468.3 million, compared to $448.2 million in the first quarter of 2010 and $499.9 million in the second quarter of 2009.

 

•  

Second quarter adjusted revenues1 totaled $480.9 million, compared to $461.8 million in the first quarter of 2010 and $527.0 million in the second quarter of 2009.

 

•  

Growth in analytical and advisory services revenues led improved Data and Analytics segment financial results.

 

•  

Growth in default and technology services revenues and stronger product margins contributed to improved profitability in the Business and Information Services segment.

 

•  

Following a strategic review of the company’s businesses, management has determined to pursue monetization of the employer, investigative and litigation consulting business.

Santa Ana, Calif., August 5, 2010 – CoreLogic (NYSE:CLGX) today announced net income of $24.4 million for the quarter ended June 30, 2010 compared with $29.4 million in the first quarter of 2010 and $70.3 million in the second quarter of 2009. Earnings per share were $0.22, compared with $0.28 in the first quarter of 2010 and $0.75 in the second quarter of 2009.

GAAP financial reporting standards require the company’s financial results to include amounts associated with three items that do not reflect the company’s results of operations on a stand-alone basis: corporate expenses associated with the historical First American corporation, which totaled pre-tax $38.6 million in the quarter; and one-time costs which totaled pre-tax $7.3 million. In addition, the company recorded tax expense of $9.8 million in the quarter, which was affected by the items mentioned above as well as the spin-off transaction.

Anand Nallathambi, President and Chief Executive Officer, commented on the quarter: “As we expected, revenues and adjusted EBITDA across all of our business segments improved from the first quarter with the majority primarily coming from growth in analytical and advisory revenues in the risk and fraud businesses, and improved product mix in the default and technology services business. We expect that a successful sale of the employer, investigative and litigation consulting business will improve our business mix and provide sharpened focus on CoreLogic’s growth areas.”

1 This is a non-GAAP measure. For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 7 and following.

Page 2

 

Continuing on, Nallathambi added: “While we are cautious in our outlook for growth tied to mortgage originations, we expect that a shift towards generating revenues tied to more differentiated data, analytics and consultative business solutions will strengthen our results as we work through this period in the mortgage market.”

FINANCIAL SUMMARY

 

($ millions)

 

   

2Q10  

 

   

1Q10  

 

   

2Q09

 

Total revenue (excludes equity in earnings of affiliates)

    $468.3      $448.2      $499.9

Business and Information Services

 

    228.1  

 

    216.1  

 

    254.7

 

Data and Analytics

 

    178.3  

 

    170.7  

 

    179.1

 

Employer, Legal and Marketing

 

    66.1  

 

    61.0  

 

    70.4

 

Corporate and eliminations

 

    (4.2)  

 

    0.4  

 

    (4.3)

 

Total operating expenses

 

    $444.3  

 

    $429.8  

 

    $439.3

 

Business and Information Services

 

    189.3  

 

    184.4  

 

    205.5

 

Data and Analytics

 

    144.2  

 

    140.5  

 

    134.5

 

Employer, Legal and Marketing

 

    69.6  

 

    63.2  

 

    69.2

 

Corporate and eliminations

 

    41.2  

 

    41.8  

 

    30.2

 

Total pretax income / margin (%)

 

    $9.3     /    2%   

 

    $15.1     /    4%   

 

    $53.4    /    11% 

 

Business and Information Services

 

    51.8     /    23%  

 

    42.7     /    20%  

 

    69.9    /    27% 

 

Data and Analytics

 

    35.2     /    20%  

 

    30.8     /    18%  

 

    46.4    /    26% 

 

Employer, Legal and Marketing

 

    (3.6)   /    (5)%  

 

    (2.6)    /    (4)%  

 

    1.1       /    2%   

 

Corporate and eliminations

 

    (74.1)    /    NM  

 

    (55.8)    /    NM  

 

    (64.1)    /    NM 

 

Adjusted pretax income / margin (%)2

 

    $69.2     /    14%  

 

    $55.3   /    12% 

 

    $97.1     /    18% 

 

Business and Information Services

 

    53.3    /    22%  

 

    43.0  /    19%  

 

    70.3     /    26% 

 

Data and Analytics

 

    35.3    /    20%  

 

    30.6  /    18%  

 

    44.5   /    25% 

 

Employer, Legal and Marketing

 

    1.2     /    2%    

 

    (2.4)    /    (4)%  

 

    1.1   /    2% 

 

Corporate and eliminations

 

    (20.6)    /    NM  

 

    (14.1)     /    NM  

 

    (18.8) /    NM 

 

Cash on balance sheet

    $395      Intentionally left
blank		    Intentionally left
blank

Total debt outstanding

    $617      Intentionally left
blank		    Intentionally left
blank

2 This is a non-GAAP measure. For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 7 and following.

Page 3

 

BUSINESS SEGMENT RESULTS 3

 

($ millions)

 

   

2Q10  

 

   

1Q10  

 

   

2Q09

 

Total adjusted revenue4

    $480.9      $461.8      $527.0

 

Business and Information Services

    242.4      227.1      273.6

 

Data and Analytics

    179.8      171.0      179.4

 

Employer, Legal and Marketing

    66.0      60.9      70.4

 

Corporate

 

   

(7.5)  

 

   

3.1  

 

   

3.6

 

Total adjusted EBITDA / margin (%)4

    $102.8    /    21%      $90.0    /    19%      $132.5    /    25%

 

Business and Information Services

    58.6    /    24%      48.3    /    21%      75.0    /    27%

 

Data and Analytics

    49.5    /    28%      44.9    /    26%      58.5    /    33%

 

Employer, Legal and Marketing

    7.0    /    11%      3.8    /    6%      7.4    /    10%

 

Corporate

 

   

(12.0)    /    NM  

 

   

(6.9)    /    NM  

 

   

(8.4)    /    NM

 

3 The discussion of segment financial results reflects the comparison of second quarter 2010 to the prior quarter’s results. The company believes that the year-over-year change in the mortgage origination market which resulted from the expiration of the homebuyer tax credit and other government programs had a greater impact on the underlying business and financial trends than typical seasonal fluctuations exhibited in certain of our businesses.

4 This is a non-GAAP measure. For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 7 and following.

Buddy Piszel, Chief Financial Officer, commented on the quarter: “During the second quarter of 2010, CoreLogic benefited from improved business mix in our default businesses, a rebound in mortgage origination volumes and significant growth in higher-touch analytical and advisory services revenues within our Data and Analytics segment. In addition to rationalizing our business mix, we believe the monetization of the employer, investigative and litigation consulting business will strengthen our ability to pursue complementary acquisitions in growth segments and industry verticals.”

BUSINESS AND INFORMATION SERVICES

Adjusted EBITDA was $58.6 million, up 21% compared with the prior quarter, driven by higher adjusted revenues and margins in the default and technology services group and net volume-related adjusted revenue gains in the mortgage origination services group.

Adjusted revenue was $242.4 million, compared with $227.1 million in the prior quarter. Default and technology services adjusted revenues increased by 7% to $111.9 million. Mortgage origination services adjusted revenues increased by 6% to $130.4 million, as higher U.S. residential mortgage loan origination volumes led to increased adjusted revenues and equity in earnings contribution from our appraisal, flood

Page 4

 

zone certification and national joint ventures businesses. Adjusted revenue from our tax services business declined modestly in the second quarter, due mainly to a decline in the number of loans under tax service and a slower rate of deferred revenue recognition on loans under life-of-loan customer contracts.

Adjusted EBITDA margin was 24%, up from 21% in the prior quarter. Significantly all of this improvement was based in the default and technology services group, which increased to 24% from 19% as the growth in default services adjusted revenues improved our business mix and continued use of off-shoring and other cost containment efforts yielded improved results.

DATA AND ANALYTICS

Adjusted EBITDA was $49.5 million, up 10% compared with the prior quarter, driven by higher adjusted revenues and margins in the risk and fraud analytics group.

Adjusted revenue was $179.8 million, compared with $171 million in the prior quarter. Risk and fraud analytics adjusted revenues increased by 8% to $102.2 million, including a $2.7 million increase in analytical and advisory adjusted revenues connected to customized risk management solutions, client portfolio reviews and other recently introduced mortgage-related analytics products. Specialty finance adjusted revenues increased slightly, led by higher credit report volumes in our mortgage and automotive-related businesses and improved identity and privacy-related results.

Adjusted EBITDA margin was 28%, up from 26% in the prior quarter. Adjusted EBITDA margin in the risk and fraud analytics group increased to 33% from 30% reflecting growth in relatively high margin analytical and advisory adjusted revenues. Adjusted EBITDA margin in the specialty finance group declined slightly to 21% from 22% in the prior quarter.

EMPLOYER, LEGAL AND MARKETING SERVICES

Adjusted EBITDA was $7 million, up 84% compared with the prior quarter. Improvements were driven by higher adjusted revenues in the employer services business that more than offset declines in the marketing services business.

Adjusted revenue was $66.0 million, compared with $60.9 million in the prior quarter. Employer services revenues increased by 20% to $49.6 million, driven by a significant increase in the amount of international employment screening activity. Litigation and investigation support adjusted revenues were largely flat compared to the prior quarter, reflecting an improvement in adjusted revenues tied to

Page 5

 

background screening activities focused on hedge fund managers which was offset by declines in the litigation consulting adjusted revenues. Marketing services revenues declined by 30% to $8.4 million, primarily reflecting the impact of new regulations for on-line commerce.

Adjusted EBITDA margin was 11%, up from 6% in the prior quarter. Significantly all of this improvement resulted from improved adjusted revenues in the employer services business.

CORPORATE

Adjusted Corporate EBITDA was ($12.0) million, up from ($6.9) million compared with the prior quarter. Increased expenses were primarily associated with higher costs associated with being a standalone public company and the impact of foreign exchange rate movements on non-U.S. dollar expenses associated with our off-shore operations.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2010, CoreLogic had cash on balance sheet of $395 million, and total debt outstanding of $617 million, with $415 million available under the company’s credit facility.

Teleconference/Webcast

The CoreLogic management team will host a live webcast and conference call on Thursday, August 5, 2010, at 8:00 a.m. Pacific time (11:00 a.m. Eastern time) to discuss second quarter 2010 financial results. All interested parties are invited to listen to the live event via webcast on the CoreLogic website at http://investor.corelogic.com. The discussion is also available through dial-in number 1-866-383-8003 for U.S./Canada participants or 617-597-5330 for international participants using Conference ID 49824790.

A replay of the webcast will be available on the CoreLogic investor website for 30 days and also through the conference call number 1-888-286-8010 for U.S./Canada participants or 617-801-6888 for international participants using Conference ID 20280095.

- more -

Page 6

 

About CoreLogic

CoreLogic (NYSE:CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive and decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest U.S. real estate, mortgage application, fraud, and loan performance databases and is a leading provider of mortgage and automotive credit reporting, property tax information, valuation, flood determination and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. Formerly the information solutions group of The First American Corporation, CoreLogic began trading under the ticker CLGX on the NYSE on June 2, 2010. The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2009 revenues of $2 billion. For more information visit www.corelogic.com.

Web Site Disclosure

CoreLogic posts information of interest to investors at www.corelogic.com/investor.

Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those related to the company’s outlook and strategy for 2010, the potential monetization of the employer, investigative and litigation consulting businesses and the impact thereof, including the ability to pursue acquisitions. These forward-looking statements may contain the words “believe,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in our Current Report on Form 8-K filed on June 1, 2010 and Part I, Item 1A of our most recent Annual Report on Form 10-K, including but not limited to:

 

  •  

limitations on access to data from external sources, including government and public record sources;

 

  •  

changes in applicable government legislation and regulations affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data;

 

  •  

compromises in the security of our data transmissions, including the transmission of confidential information or systems interruptions;

 

  •  

difficult conditions in the mortgage and consumer credit industry, the state of the securitization market, increased unemployment and the economy generally;

 

  •  

our ability to bring new products to market and to protect proprietary technology rights;

 

  •  

our ability to identify purchasers and complete the sale of certain businesses on satisfactory terms or identify suitable acquisition targets, obtain necessary capital and complete such transactions on satisfactory terms;

 

  •  

our ability to realize the benefits of our off-shore strategy;

 

  •  

consolidation among our significant customers and competitors;

Page 7

 

  •  

impairments in our goodwill or other intangible assets; and

 

  •  

the inability to realize the benefits of the spin-off transaction as a result of the factors described immediately above, as well as, among other factors, increased borrowing costs, competition between the resulting companies, increased operating or other expenses or the triggering of rights and obligations by the transaction or any litigation arising out of or related to the separation.

The forward-looking statements speak only as of the date they are made. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Use of Non-GAAP Financial Measures

This press release contains certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including adjusted revenue which includes equity in earnings of affiliates; adjusted EBITDA and adjusted EBITDA margin which is adjusted to exclude historical corporate expense and other adjustments,adjusted pretax margin, which is adjusted to exclude net realized investment losses, employee separation costs and lease termination costs. Although these exclusions represent actual losses or expenses to the company, they may mask the periodic income and financial and operating trends associated with the company’s business. To compensate for the inherent limitations of these non-GAAP measures, the company uses them in conjunction with the corresponding GAAP measures.

The company is presenting these non-GAAP financial measures because the company believes that they provide the company’s management and investors with additional insight into the operational performance of the company relative to earlier periods. The company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this press release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.

 

Media Contact:    Investor Contact:

Bob Visini

Corporate Communications

CoreLogic

415-536-3526

  

Dan Smith

Investor Relations

CoreLogic

703-610-5410

(Additional Financial Data Follows)

Page 8

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

 

 ($ thousands)   

2Q10

as adjusted    

  

1Q10

as adjusted    

   

2Q09

as adjusted    

 Net Income

    $24,410   $29,417    $70,273

 Less:  Discontinued Operations

    (25,496)   (18,811)    (33,342)

 Plus:  Noncontrolling Interests

    9,035   9,222    18,863

 Income Tax Provision*

    15,458   7,709    23,820

 Interest Expense

    9,261   7,259    9,403

 Depreciation & Amortization

    31,864   30,500    32,322

 Other Legacy FAC Corporate Costs

    31,306   27,112    12,819

 Other Adjustments

   

7,004

  

(3,085)

   

(1,676)

 Adjusted EBITDA

    $102,841   $89,323    $132,482

    *Includes income tax provision associated with equity in earnings of affiliates.

Page 9

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

 

($ thousands)   

    2Q10 as    

 

    reported    

 

   

  2Q10 historical corporate  

 

  exp. and other adjustments  

 

   

    2Q10 reclass. of equity in    

 

    earnings of affiliates    

 

   

    2Q10 as    

 

    adjusted    

 

 

Revenue

   

 

$468,279  

   

 

($1,520)  

   

 

$14,097  

   

 

$480,856

 

Salaries and benefits

   

 

167,034  

   

 

(4,671)  

   

 

0  

   

 

162,363

 

Other operating

   

 

245,433  

   

 

(29,056)  

   

 

0  

   

 

216,377

 

Depr. and amort.

   

 

31,864  

   

 

(2,228)  

   

 

0  

   

 

29,636

 

Total operating exp.

   

 

$444,331  

   

 

($35,955)  

   

 

$0  

   

 

$408,376

 

Interest expense

   

 

9,120  

   

 

(5,188)  

   

 

0  

   

 

3,932

 

Other income

   

 

(5,520)  

   

 

6,245  

   

 

0  

   

 

725

 

Pre-tax income

   

 

$9,308  

   

 

$45,868  

   

 

$14,097  

   

 

$69,273

 

Provision for Income Taxes

   

 

(9,819)  

      

 

(5,639)  

   

 

(15,458)

 

Equity in earnings of affiliates,

 

net of tax

   

 

8,458  

      

 

(8,458)  

   

 

0

 

Income from Continuing

 

Operations

   

 

$7,947  

         

 

$7,947

 

Pre-tax margin

   

 

2%  

   

 

$45,868*  

 

        

 

14%

 

  + Adj. interest exp.

            

 

3,932

 

  + Adj. depr. and amort.

            

 

29,636

 

  = Adj. EBITDA

            

 

$102,841

 

  Adj. EBITDA margin

 

                  

 

21%

 

 

* Includes loss related to closure of a national joint venture of $1,400, an adjustment related to sales tax exposure of $4,750, severance of $1,105 and legacy First American Corp. costs of $38,612.

 

Page 10

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

 

($ thousands)   

    2Q09 as    

 

    reported    

   

  2Q09 historical corporate  

 

  exp. and other adjustments  

 

   

    2Q09 reclass. of equity in    

 

  earnings of affiliates  

 

   

    2Q09 as    

 

    adjusted    

 

Revenue

   

 

$499,929  

   

 

$7,835  

   

 

$19,187  

   

 

$526,951

 

Salaries and benefits

   

 

173,006  

   

 

(6,342)  

   

 

0  

   

 

166,664

 

Other operating

   

 

233,977  

   

 

(3,703)  

   

 

0  

   

 

230,274

 

Depr. and amort.

   

 

32,322  

   

 

(723)  

   

 

0  

   

 

31,599

 

Total operating exp.

   

 

$439,305  

   

 

($10,768)  

   

 

$0  

   

 

$428,537

 

Interest expense

   

 

7,677  

   

 

(5,413)  

   

 

0  

   

 

2,264

 

Other income

   

 

440  

   

 

(6,416)  

   

 

6,940  

   

964

 

Pre-tax income

   

 

$53,687  

   

 

$17,600*  

   

 

$26,127  

   

 

$97,114

Provision for Income Taxes

    (13,370)         (10,451)      (23,821)

 

Equity in earnings of affiliates,

 

net of tax

   

 

15,676  

      

 

(15,676)  

   

 

0

 

Income from Continuing

 

Operations

   

 

$55,693  

   

 

$17,600  

      

 

$73,293

 

Pre-tax margin

 

   

 

11%  

 

             

 

18%

 

 

  + Adj. interest exp.

            

 

2,264

 

  + Adj. depr. and amort.

            

 

31,599

 

  = Adj. EBITDA

            

 

$132,482

 

  Adj. EBITDA margin

 

                  

 

25%

 

 

*  Includes $1,568 of net realized gains, severance of $6 and legacy First American Corp costs of $19,176.

 

Page 11

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

 

($ thousands)   

    1Q10 as    

 

    reported    

 

   

1Q10 historical corporate    

 

exp. and other adjustments  

 

   

    1Q10 reclass. of equity in    

 

earnings of affiliates    

 

   

    1Q10 as    

 

    adjusted    

 

 

Revenue

   

 

$448,245  

   

 

$2,678  

   

 

$10,850  

   

 

$461,773

 

Salaries and benefits

   

 

177,865  

   

 

(16,228)  

   

 

0  

   

 

161,637

 

Other operating

   

 

221,478  

   

 

(14,076)  

   

 

0  

   

207,402

 

Depr. and amort.

   

 

30,500  

   

 

(535)  

   

 

0  

   

 

29,965

 

Total operating exp.

   

 

$429,843  

   

 

($30,839)  

   

 

$0  

   

 

$399,004

 

Interest expense

   

 

5,692  

   

 

(3,440)  

   

 

0  

   

 

2,252

 

Other income

   

 

2,449  

   

 

(7,388)  

   

 

1,255  

   

 

(3,411)

 

Pre-tax income

   

 

$15,159  

   

 

$29,569  

   

 

$12,378  

   

 

$57,106

Provision for Income Taxes

    2,757         4,951      7,708

 

Equity in earnings of affiliates,

 

net of tax

   

 

7,427  

      

 

(7,427)  

   

 

0

 

Income from Continuing

 

Operations

   

 

$19,829  

   

 

$29,569*  

        

 

$49,398

 

Pre-tax margin

 

   

 

3%  

 

             

 

12%

 

 

  + Adj. interest exp.

                

 

2,252

 

  + Adj. depr. and amort.

                

 

29,965

 

  = Adj. EBITDA

                

 

$89,323

 

  Adj. EBITDA margin

 

                  

 

19%

 

 

*INCLUDES SEVERANCE OF $1,485, NET OF REALIZED GAINS OF $3,824 AND FIRST AMERICAN CORP.

COSTS OF $31,907.

 

Page 12

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR BUSINESS AND INFORMATION SERVICES

 

($ thousands)   

2Q10 as    

 

reported    

 

    2Q10 adjustments       

2Q10 reclassification of    

 

equity in earnings of    

 

affiliates    

 

   

2Q10 as    

 

adjusted    

 

Revenue

    $228,064      $0      $14,305      $242,369  

 

Salaries and benefits

   

 

52,647  

   

 

(29)  

   

 

0  

   

 

52,617  

 

Other operating

   

 

131,346  

   

 

0  

   

 

0  

   

 

131,346  

 

Depr. and amort.

   

 

5,303  

   

 

0  

   

 

0  

   

 

5,303  

 

Total operating exp.

   

 

$189,296  

   

 

($29)  

   

 

$0  

   

 

$189,266  

 

Interest expense

   

 

0  

   

 

0  

   

 

0  

   

 

0  

 

Other income

   

 

13,068  

   

 

1,400  

   

 

(14,305)  

   

 

163  

 

Pre-tax income

   

 

$51,836  

   

 

$1,429*  

   

 

$0  

   

 

$53,265  

 

Pre-tax margin

 

   

 

23%  

 

             

 

22%  

 

 

  + Adj. interest exp.

                

 

0  

 

  + Adj. depr. and amort.

                

 

5,303  

 

  = Adj. EBITDA

                

 

$58,568  

 

  Adj. EBITDA margin

 

                   24%  

 

*Includes $1,400 loss closure of a national joint venture and severance of $29.

 

 

($ thousands)   

2Q09 as    

 

reported    

 

    2Q09 adjustments       

2Q09 reclassification of    

 

equity in earnings of    

 

affiliates    

 

   

2Q09 as    

 

adjusted    

 

Revenue

    $254,718      $0      $18,885      $273,603  

 

Salaries and benefits

    53,433      0      0      53,433  

 

Other operating

    145,884      0      0      145,884  

 

Depr. and amort.

    6,205      0      0      6,205  

 

Total operating exp.

    $205,522      $0      $0      $205,522  

 

Interest expense

    (1,546)      0      0      (1,546)  

 

Other income

    19,222      377      (18,885)      715  

 

Pre-tax income

    $69,965      $377*      $0      $70,342  

 

Pre-tax margin

 

    27%  

 

              26%  

 

 

  + Adj. interest exp.

                 (1,546)  

 

  + Adj. depr. and amort.

                 6,205  

 

  = Adj. EBITDA

                 $75,001  

 

  Adj. EBITDA margin

                   27%  
* Includes net realized losses of $377.          

Page 13

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR BUSINESS AND INFORMATION SERVICES

 

($ thousands)   

1Q10 as    

 

reported    

 

    1Q10 adjustments       

1Q10 reclassification of    

 

equity in earnings of    

 

affiliates    

   

1Q10 as    

 

adjusted    

Revenue

    $216,092      $0      $10,959      $227,052  

 

Salaries and benefits

    52,491      (317)      0      52,173  

 

Other operating

    126,600      0      0      126,600  

 

Depr. and amort.

    5,321      0      0      5,321  

 

Total operating exp.

    $184,411      ($317)      $0      $184,094  

 

Interest expense

    0      0      0      0  

 

Other income

    11,024      (4)      (10,959)      60  

 

Pre-tax income

    $42,704      $313*      $0      $43,017  

 

Pre-tax margin

    20%                19%  

  + Adj. interest exp.

                 0  

  + Adj. depr. and amort.

                 5,321  

  = Adj. EBITDA

                 $48,339  

  Adj. EBITDA margin

                  21%  
* Includes severance of $317 and net realized gains of $4.     

Page 14

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DATA AND ANALYTICS

 

($ thousands)   

2Q10 as    

 

reported    

 

    2Q10 adjustments       

2Q10 reclassification of    

 

equity in earnings of    

 

affiliates    

 

   

2Q10 as    

 

adjusted    

 

Revenue

    $178,331      $0      $1,496      $179,827  

 

Salaries and benefits

    53,239      (134)      0      53,105  

 

Other operating

    77,753      0      0      77,753  

 

Depr. and amort.

    13,249      0      0      13,249  

 

Total operating exp.

    $144,242      ($134)      $0      $144,108  

 

Interest expense

    975      0      0      975  

 

Other income

    2,067      0      (1,496)      571  

 

Pre-tax income

    $35,181      $134*      $0      $35,316  

 

Pre-tax margin

 

    20%  

 

            20%  

 

  + Adj. interest exp.

                  975  

  + Adj. depr. and amort.

                 13,249  

  = Adj. EBITDA

                 $49,540  

  Adj. EBITDA margin

 

                   28%  

 

* Includes severance of $134.

 

 

($ thousands)   

2Q09 as    

 

reported    

 

    2Q09 adjustments       

2Q09 reclassification of    

 

equity in earnings of    

 

affiliates    

 

   

2Q09 as    

 

adjusted    

 

Revenue

    $179,091      $0      $302      $179,394  

 

Salaries and benefits

    52,245      0      0      52,245  

 

Other operating

    69,170      0      0      69,170  

 

Depr. and amort.

    12,951      0      0      12,951  

 

Total operating exp.

    $134,366      $0      $0      $134,366  

 

Interest expense

    1,090      0      0      1,090  

 

Other income

    2,806      (1,951)      (302)      553  

 

Pre-tax income

    $46,441      ($1,951)*      $0      $44,490  

 

Pre-tax margin

 

    26%  

 

            25%  

 

 

  + Adj. interest exp.

                   1,090  

 

  + Adj. depr. and amort.

                 12,951  

 

  = Adj. EBITDA

                 $58,531  

 

  Adj. EBITDA margin

 

                   33%  

 

*Includes gain on acquisition of remaining interest in affiliate of $3,200, less net realized investment losses of $1,250.

 

Page 15

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DATA AND ANALYTICS

 

($ thousands)   

1Q10 as    

 

reported    

 

    1Q10 adjustments       

1Q10 reclassification of    

 

equity in earnings of    

 

affiliates    

   

1Q10 as    

 

adjusted    

Revenue

    $170,746      $0      $260      $171,006  

 

Salaries and benefits

    52,817      (462)      0      52,355  

 

Other operating

    74,190      0      0      74,190  

 

Depr. and amort.

    13,445      0      0      13,445  

 

Total operating exp.

    $140,453      ($462)      $0      $139,991  

 

Interest expense

    852      0      0      852  

 

Other income

    1,405      (752)      (260)      393  

 

Pre-tax income

    $30,846      ($290)*      $0      $30,556  

 

Pre-tax margin

 

    18%  

 

              18%  

 

+ Adj. interest exp.

                 852  

+ Adj. depr. and amort.

                 13,445  

= Adj. EBITDA

                 $44,853  

Adj. EBITDA margin

 

                   26%  

 

* Includes severance of $462 and net realized gains of $752.

 

          

Page 16

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR EMPLOYER, LEGAL AND MARKETING SERVICES

 

 

 

($ thousands)

   

2Q10 as   

 

reported   

 

     2Q10 adjustments         

2Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

2Q10 as  

 

adjusted  

 

Revenue

    $66,113       $0       ($104)       $66,009
         

Salaries and benefits

    24,524      (76)      0      24,448
         

Other operating

    39,385      (4,750)      0      34,635
         

Depr. and amort.

    5,689      0      0      5,689
         

Total operating exp.

    $69,597      ($4,826)      $0      $64,772
         

Interest expense

    83      0      0      83
         

Other income

    (7)      0      104      97
         

Pre-tax income

    ($3,574)      $4,826 *    $0      $1,252
         

Pre-tax margin

 

    (5%)

 

   

 

               2%

 

  + Adj. interest exp.

               83

  + Adj. depr. and amort.

                5,689

  = Adj. EBITDA

                $7,024

  Adj. EBITDA margin

                      11%

*Adjustment primarily related to historical sales tax exposure $4,750.

 

 

 

($ thousands)

   

2Q09 as   

 

reported   

 

     2Q09 adjustments         

2Q09 reclassification

 

of equity in earnings

 

of affiliates

 

    

2Q09 as  

 

adjusted  

 

Revenue

    $70,378       $0       $0       $70,378
         

Salaries and benefits

    23,341      0      0      23,341
         

Other operating

    39,782      0      0      39,782
         

Depr. and amort.

    6,046      0      0      6,046
         

Total operating exp.

    $69,169      $0      $0      $69,169
         

Interest expense

    210      0      0      210
         

Other income

    132      (3)      0      129
         

Pre-tax income

    $1,130      ($3) *    $0      $1,127
         

Pre-tax margin

 

    2%

 

   

 

               2%

 

  + Adj. interest exp.

               210

  + Adj. depr. and amort.

                6,046

  = Adj. EBITDA

                $7,383

  Adj. EBITDA margin

                      10%

* Includes net realized gains of $3.

 

Page 17

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR EMPLOYER, LEGAL AND MARKETING SERVICES

 

 

($ thousands)

   

1Q10 as   

 

reported   

 

     1Q10 adjustments         

1Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

1Q10 as  

 

adjusted

 

Revenue

    $60,997       $0       ($96)       $60,901
         

Salaries and benefits

    23,922      (265)      0      23,657
         

Other operating

    33,230      0      0      33,230
         

Depr. and amort.

    6,054      0      0      6,054
         

Total operating exp.

    $63,206      ($265)      $0      $62,941
         

Interest expense

    68      0      0      68
         

Other income

    (339)      0      96      (243)
         

Pre-tax income

    ($2,617)      $265      $0      ($2,352)
         

Pre-tax margin

    (4%)                  (4%)

  + Adj. interest exp.

               68

  + Adj. depr. and amort.

                6,054

  = Adj. EBITDA

                $3,770

  Adj. EBITDA margin

                      6%
 

Page 18

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE

 

 

($ thousands)

   

2Q10 as   

 

reported   

 

    

2Q10 historical corp.     

 

expense

 

    

2Q10 adjustments

 

    

2Q10 as  

 

adjusted  

 

Revenue

    ($4,229)       ($3,315)       $0       ($7,543)
         

Salaries and benefits

    36,624      ($3,566)      (865)      32,192
         

Other operating

    (3,052)      (26,100)      0      (29,152)
         

Depr. and amort.

    7,623      (2,228)      0      5,395
         

Total operating exp.

    $41,196      ($31,894)      ($865)      $8,436
         

Interest expense, net

    8,708      (5,188)      0      3,521
         

Other income

    (20,001)      4,845      (14,097)      (1,059)
         

Pre-tax income

    ($74,134)      $38,612*      $14,963**      ($20,559)
         

Pre-tax margin

 

    NM

 

   

 

               NM

 

 

    + Adj. interest exp.

                3,124
         

    + Adj. depr. and amort.

                5,395
         

    = Adj. EBITDA

                ($12,040)
         

    Adj. EBITDA margin

 

                      NM

 

* $38,612 Adjustment due to net corporate expense at historical First American Corp.

 

**Includes severance expense of $865 and reclassification of equity in earnings.

 

 

 

($ thousands)

   

2Q09 as   

 

reported   

 

    

2Q09 historical corp.     

 

expense

 

    

2Q09 adjustments

 

    

2Q09 as  

 

adjusted  

 

Revenue

    ($4,258)       $7,835       $0       $3,577
         

Salaries and benefits

    43,988      (6,348)      6      37,646
         

Other operating

    (20,859)      (3,703)      0      (24,562)
         

Depr. and amort.

    7,119      (723)      0      6,396
         

Total operating exp.

    $30,248      ($10,775)      $6      $19,480
         

Interest expense, net

    9,210      (5,413)      0      3,797
         

Other income

    (20,433)      (4,848)      (26,137)      856
         

Pre-tax income

    ($64,149)      $19,176*      ($26,131)      ($18,843)
         

Pre-tax margin

 

    NM

 

   

 

               NM

 

    + Adj. interest exp.

                4,015
         

    + Adj. depr. and amort.

                6,396
         

    = Adj. EBITDA

                ($8,432)
         

    Adj. EBITDA margin

 

                      NM

 

* $19,176 adjustment due to net corporate expense at historical First American Corp. and reclassification of equity in

 

earnings.

 

 

Page 19

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE

 

($ thousands)   

1Q10 as   

 

reported

 

    

1Q10 historical corp.     

 

expense

 

    

1Q10 adjustments

 

    

1Q10 as  

 

adjusted  

 

Revenue

    $409       $2,678       $0       $3,087
         

Salaries and benefits

    48,635      ($14,743)      (441)      33,451
         

Other operating

    (12,542)      (14,076)      0      (26,617)
         

Depr. and amort.

    5,679      (535)      0      5,144
         

Total operating exp.

    $41,773      ($29,354)      ($441)      $11,978
         

Interest expense, net

    5,326      (3,440)      0      1,886
         

Other income

    (9,085)      (3,565)      (9,311)      (3,339)
         

Pre-tax income

    ($55,775)      $31,907*      ($9,722)**      ($14,146)
         

Pre-tax margin

    NM                  NM

  + Adj. interest exp.

               2,079

  + Adj. depr. and amort.

                5,144

  = Adj. EBITDA

                ($6,893)

  Adj. EBITDA margin

                      NM

 

*$31,904 Adjustment due to net corporate expense at historical First American Corp.

 

**Includes severance expense of $441; gain on investment of $3,067

 

Page 20

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR MORTGAGE ORIGINATION SERVICES GROUP

 

 

 

($ thousands)

   

2Q10 as   

 

reported   

 

     2Q10 adjustments         

2Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

2Q10 as  

 

adjusted  

 

Revenue

    $116,473       $0       $13,971       $130,444
         

Salaries and benefits

    39,626      (11)      0      39,615
         

Other operating

    58,772      0      0      58,772
         

Depr. and amort.

    3,692      0      0      3,692
         

Total operating exp.

    $102,090      ($11)      $0      $102,079
         

Interest expense

    0      0      0      0
         

Other income

    12,733      1,400      (13,971)      162
         

Pre-tax income

    27,116      $1,411 *    $0      $28,527
         

Pre-tax margin

 

    23%

 

   

 

               22%

 

 

  + Adj. interest exp.

                0
         

  + Adj. depr. and amort.

                3,692
         

  = Adj. EBITDA

                $32,219
         

  Adj. EBITDA margin

 

                      25%

 

*Includes $1,400 loss closure of a national joint venture

 

 

 

 

($ thousands)

   

2Q09 as   

 

reported   

 

     2Q09 adjustments         

2Q09 reclassification of

 

equity in earnings of

 

affiliates

 

    

2Q09 as  

 

adjusted  

 

Revenue

    $144,032       $0       $18,795       $162,827
         

Salaries and benefits

    38,448      0      0      $38,448
         

Other operating

    70,668      0      0      70,668
         

Depr. and amort.

    4,267      0      0      4,267
         

Total operating exp.

    $113,383      $0      $0      $113,383
         

Interest expense

    (1,569)      0      0      (1,569)
         

Other income

    19,131      377      ($18,795)      713
         

Pre-tax income

    $51,349      $377      0      $51,726
         

Pre-tax margin

 

    36%

 

   

 

               32%

 

         

  + Adj. interest exp.

               (1,569)
         

  + Adj. depr. and amort.

                4,267
         

  = Adj. EBITDA

                $54,424
         

  Adj. EBITDA margin

                      33%
                        

Page 21

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR MORTGAGE ORIGINATION SERVICES GROUP

 

 

 

($ thousands)

   

1Q10 as   

 

reported   

 

     1Q10 adjustments         

1Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

1Q10 as  

 

adjusted  

 

  

Revenue

    $112,222       $0       $10,730       $122,953    
         

Salaries and benefits

    39,006      (192)      0      38,814   
         

Other operating

    56,032      0      0      56,032   
         

Depr. and amort.

    3,658      0      0      3,658   
         

Total operating exp.

    $98,696      ($192)      $0      $98,504   
         

Interest expense

    0      0      0      0   
         

Other income

    10,795      (4)      (10,730)      60   
         

Pre-tax income

    $24,321      $188      $0      $24,509   
         

Pre-tax margin

    22%              20%   

  + Adj. interest exp.

                      0   

  + Adj. depr. and amort.

                3,658   

  = Adj. EBITDA

                $28,167   

  Adj. EBITDA margin

                      23%   
                          

Page 22

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DEFAULT AND TECHNOLOGY SERVICES GROUP

 

 

 

($ thousands)

   

2Q10 as  

 

reported  

 

     2Q10 adjustments         

2Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

2Q10 as  

 

adjusted  

 

  

Revenue

    $111,590       $0       $334       $111,924    
         

Salaries and benefits

    13,021      (18)      0      13,002   
         

Other operating

    72,574      0      0      72,574   
         

Depr. and amort.

    1,610      0      0      1,610   
         

Total operating exp.

    $87,205      ($18)      $0      $87,187   
         

Interest expense

    0      0      0      0   
         

Other income

    335      0      (334)      0   
         

Pre-tax income

    $24,719      $18      $0      $24,738   
         

Pre-tax margin

 

    22%

 

   

 

           22%

 

   

 

 

  + Adj. interest exp.

                     

 

0

 

  

         

  + Adj. depr. and amort.

                1,610   
         

  = Adj. EBITDA

                $26,348   
         

  Adj. EBITDA margin

 

                      24%

 

   

 

                          

 

 

 

($ thousands)

   

2Q09 as  

 

reported  

 

     2Q09 adjustments         

2Q09 reclassification

 

of equity in earnings

 

of affiliates

 

    

2Q09 as  

 

adjusted  

 

  

Revenue

    $110,686       $0       $90       $110,776    
         

Salaries and benefits

    14,985      0      0      14,985   
         

Other operating

    75,215      0      0      75,215   
         

Depr. and amort.

    1,939      0      0      1,939   
         

Total operating exp.

    $92,139      $0      $0      $92,139   
         

Interest expense

    22      0      0      22   
         

Other income

    91      0      (90)      1   
         

Pre-tax income

    $18,616      $0      $0      $18,616   
         

Pre-tax margin

    17%                  17%   

 

  + Adj. interest exp.

               

 

22

 

  

         

  + Adj. depr. and amort.

                1,939   
         

  = Adj. EBITDA

                $20,577   
         

  Adj. EBITDA margin

                      19%   
                          

Page 23

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DEFAULT AND TECHNOLOGY SERVICES GROUP

 

 

 

($ thousands)

   

1Q10 as   

 

reported   

 

     1Q10 adjustments         

1Q10 reclassification of

 

equity in earnings of

 

affiliates

 

    

1Q10 as  

 

adjusted  

 

  

Revenue

    $103,870       $0       $229       $104,099    
         

Salaries and benefits

    13,484      (125)      0      13,359   
         

Other operating

    70,568      0      0      70,568   
         

Depr. and amort.

    1,663      0      0      1,663   
         

Total operating exp.

    $85,715      ($125)      $0      $85,590   
         

Interest expense

    0      0      0      0   
         

Other income

    229      0      (229)      0   
         

Pre-tax income

    $18,384      $125      $0      $18,509   
         

Pre-tax margin

    18%                  18%   

  + Adj. interest exp.

               0   

  + Adj. depr. and amort.

                1,663   

  = Adj. EBITDA

                $20,172   

  Adj. EBITDA margin

                      19%   
                          

Page 24

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR RISK AND FRAUD ANALYTICS GROUP

 

($ thousands)   

2Q10 as

 

reported

 

    2Q10 adjustments   

2Q10 reclassification of

 

equity in earnings of

 

affiliates

 

   

2Q10 as

 

adjusted

 

Revenue

 

   

$101,292  

 

   

$0  

 

   

$869  

 

   

$102,161  

 

Salaries and benefits

 

   

35,216  

 

   

(7)  

 

   

0  

 

   

35,209  

 

Other operating

 

   

34,141  

 

   

0  

 

   

0  

 

   

34,141  

 

Depr. and amort.

 

   

10,253  

 

   

0  

 

   

0  

 

   

10,253  

 

Total operating exp.

 

   

$79,610  

 

   

($7)  

 

   

$0  

 

   

$79,604  

 

Interest expense, net

 

   

953  

 

   

0  

 

   

0  

 

   

953  

 

Other income

 

   

1,440  

 

   

0  

 

   

(869)  

 

   

571  

 

Pre-tax income

 

   

$22,169  

 

   

$7  

 

   

$0  

 

   

$22,175  

 

Pre-tax margin

 

   

22%  

 

             

22%  

 

 

  + Adj. interest exp.

 

                  

953  

 

  + Adj. depr. and amort.

 

                  

10,253  

 

  = Adj. EBITDA

 

                  

$33,381  

 

  Adj. EBITDA margin

 

                  

33%  

 

 

 

($ thousands)   

2Q09 as

 

reported

 

    2Q09 adjustments   

2Q09 reclassification of

 

equity in earnings of

 

affiliates

 

   

2Q09 as

 

adjusted

 

Revenue

 

   

$96,890  

 

   

$0  

 

   

$252  

 

   

$97,142  

 

Salaries and benefits

 

   

33,471  

 

   

0  

 

   

0  

 

   

33,471  

 

Other operating

 

   

29,398  

 

   

0  

 

   

0  

 

   

29,398  

 

Depr. and amort.

 

   

9,658  

 

   

0  

 

   

0  

 

   

9,658  

 

Total operating exp.

 

   

$72,527  

 

   

$0  

 

   

$0  

 

   

$72,527  

 

Interest expense

 

   

1,041  

 

   

0  

 

   

0  

 

   

1,041  

 

Other income

 

   

2,752  

 

   

(1,954)  

 

   

(252)  

 

   

546  

 

Pre-tax income

 

   

$26,074  

 

   

($1,954)*  

 

   

$0  

 

   

$24,120  

 

Pre-tax margin

 

   

27%  

 

             

25%  

 

 

  + Adj. interest exp.

 

                  

1,041  

 

  + Adj. depr. and amort.

 

                  

9,658  

 

  = Adj. EBITDA

 

                  

$34,819  

 

  Adj. EBITDA margin

 

                   36%  

* Gain on acquisition remaining interest in investment in affiliate: $3,200

 

* Net realized investment losses: $1,246.

 

Page 25

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR RISK AND FRAUD ANALYTICS GROUP

 

($ thousands)   

1Q10 as

 

reported

 

    1Q10 adjustments   

1Q10 reclassification of

 

equity in earnings of

 

affiliates

 

   

1Q10 as

 

adjusted

 

Revenue

 

   

$94,151  

 

   

$0  

 

   

$109  

 

   

$94,260  

 

Salaries and benefits

 

   

34,881  

 

   

(133)  

 

   

0  

 

   

34,749  

 

Other operating

 

   

31,660  

 

   

0  

 

   

0  

 

   

  31,660  

 

Depr. and amort.

 

   

10,375  

 

   

0  

 

   

0  

 

   

10,375  

 

Total operating exp.

 

   

$76,915  

 

   

($133)  

 

   

$0  

 

   

$76,783  

 

Interest expense

 

   

845  

 

   

0  

 

   

0  

 

   

845  

 

Other income

 

   

1,254  

 

   

(752)  

 

   

(109)  

 

   

393  

 

Pre-tax income

 

   

$17,644  

 

   

($619)  

 

   

$0  

 

   

$17,025  

 

Pre-tax margin

 

   

19%  

 

             

18%  

 

 

  + Adj. interest exp.

 

                  

845  

 

  + Adj. depr. and amort.

 

                  

10,375  

 

  = Adj. EBITDA

 

                  

$28,245  

 

  Adj. EBITDA margin

 

                  

30%  

 

 

Page 26

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR SPECIALTY FINANCE SOUTIONS GROUP

 

($ thousands)

   

2Q10 as

 

reported

 

    2Q10 adjustments   

2Q10 reclassification of

 

equity in earnings of

 

affiliates

 

   

2Q10 as

 

adjusted

 

Revenue

 

   

$77,039  

 

   

$0  

 

   

$627  

 

   

$77,666  

 

Salaries and benefits

 

   

18,024  

 

   

(128)  

 

   

0  

 

   

17,896  

 

Other operating

 

   

43,612  

 

   

0  

 

   

0  

 

   

43,612  

 

Depr. and amort.

 

   

2,996  

 

   

0  

 

   

0  

 

   

2,996  

 

Total operating exp.

 

   

$64,632  

 

   

($128)  

 

   

$0  

 

   

$64,504  

 

Interest expense

 

   

22  

 

   

0  

 

   

0  

 

   

22  

 

Other income

 

   

627  

 

   

0  

 

   

(627)  

 

   

0  

 

Pre-tax income

 

   

$13,012  

 

   

$128  

 

   

$0  

 

   

$13,140  

 

Pre-tax margin

 

   

17%  

 

             

17%  

 

 

  + Adj. interest exp.

 

                  

22  

 

  + Adj. depr. and amort.

 

                  

2,996  

 

  = Adj. EBITDA

 

                  

$16,158  

 

  Adj. EBITDA margin

 

                  

21%  

 

                     

 

($ thousands)

   

2Q09 as

 

reported

 

    2Q09 adjustments   

2Q09 reclassification of

 

equity in earnings of

 

affiliates

 

   

2Q09 as

 

adjusted

 

Revenue

 

   

$82,202  

 

   

$0  

 

   

$50  

 

   

$82,252  

 

Salaries and benefits

 

   

18,774  

 

   

0  

 

   

0  

 

   

18,774  

 

Other operating

 

   

39,772  

 

   

0  

 

   

0  

 

   

39,772  

 

Depr. and amort.

 

   

3,293  

 

   

0  

 

   

0  

 

   

3,293  

 

Total operating exp.

 

   

$61,839  

 

   

$0  

 

   

$0  

 

   

$61,839  

 

Interest expense

 

   

50  

 

   

0  

 

   

0  

 

   

50  

 

Other income

 

   

54  

 

   

3  

 

   

(50)  

 

   

7  

 

Pre-tax income

 

   

$20,367  

 

   

$3  

 

   

$0  

 

   

$20,370  

 

Pre-tax margin

 

   

25%  

 

             

25%  

 

 

  + Adj. interest exp.

 

                  

50  

 

  + Adj. depr. and amort.

 

                  

3,293  

 

  = Adj. EBITDA

 

                  

$23,713  

 

  Adj. EBITDA margin

                   29%  
 

Page 27

 

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR SPECIALTY FINANCE SOUTIONS GROUP

 

($ thousands)   

1Q10 as

 

reported

 

    1Q10 adjustments   

1Q10 reclassification of

 

equity in earnings of

 

affiliates

 

   

1Q10 as

 

adjusted

 

Revenue

 

   

$76,595  

 

   

$0  

 

   

$151  

 

   

$76,746  

 

Salaries and benefits

 

   

17,936  

 

   

(329)  

 

   

0  

 

   

17,607  

 

Other operating

 

   

42,531  

 

   

0  

 

   

0  

 

   

42,531  

 

Depr. and amort.

 

   

3,071  

 

   

0  

 

   

0  

 

   

3,071  

 

Total operating exp.

 

   

$63,537  

 

   

($329)  

 

   

$0  

 

   

$63,208  

 

Interest expense

 

   

7  

 

   

0  

 

   

0  

 

   

7  

 

Other income

 

   

151  

 

   

0  

 

   

(151)  

 

   

0  

 

Pre-tax income

 

   

$13,201  

 

   

$329  

 

   

$0  

 

   

$13,530  

 

Pre-tax margin

 

   

17%  

 

             

18%  

 

 

  + Adj. interest exp.

 

                  

7  

 

  + Adj. depr. and amort.

 

                  

3,071  

 

  = Adj. EBITDA

 

                  

$16,622  

 

  Adj. EBITDA margin

 

                  

22%