Attached files
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8-K - FORM 8-K - Black Knight InfoServ, LLC | g22037e8vk.htm |
EX-99.2 - EX-99.2 - Black Knight InfoServ, LLC | g22037exv99w2.htm |
Exhibit 99.1
Press Release
Investors:
|
Media: | |
Parag Bhansali
|
Michelle Kersch | |
(904) 854-8640
|
(904) 854-5043 |
Lender Processing Services, Inc. Reports Strong Fourth Quarter Earnings
Year-over-year revenues increase 28.3%
Adjusted EPS of 82 cents per diluted share
Year-over-year revenues increase 28.3%
Adjusted EPS of 82 cents per diluted share
JACKSONVILLE,
Fla. February 8, 2010 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 $608.1 million for the fourth quarter of 2009, an increase
of 28.3% compared to the fourth quarter of 2008, and net earnings of $74.9 million or 77 cents per
diluted share.
Adjusted net earnings for the fourth quarter of 2009 were $79.6 million, or 82 cents per
diluted share, compared to $60.9 million, or 64 cents per diluted share in the fourth quarter of
2008. Adjusted net earnings in the current quarter include an adjustment for purchase price
amortization of 5 cents per diluted share while the prior year quarter included a similar
adjustment of 7 cents per diluted share.
LPS had a strong fourth quarter despite challenging market conditions and a fragile
macro-economic environment. LPS with its market-leading presence and its unique technology-driven
solutions for the mortgage and real estate industries, remains well positioned to achieve its
growth objectives in 2010 and beyond, said Lee A. Kennedy, Executive Chairman of LPS. Our Loan
Facilitation business posted record growth as it benefitted from a better year-over-
year
origination market while our Default Services business continued to deliver very strong results.
Also, our Mortgage Processing and other technology businesses had another outstanding quarter.
During 2009, we continued to strengthen our balance sheet and increase our financial flexibility by
paying down $262 million in debt, added Jeff Carbiener, President and CEO of LPS.
Operating income of $140.9 million in the quarter compared to $121.6 million in the fourth
quarter of 2008. Operating margins were below fourth quarter 2008 primarily due to certain
one-time benefits in last years quarter. Operating margins were however consistent with third
quarter of 2009.
Full year 2009 revenues of $2.4 billion were a solid 29.0% above 2008 while net earnings of
$275.7 million in 2009 compared to $230.9 million in the prior year. Adjusted net earnings for
full year 2009 of $300.3 million were a record 30.2% higher than pro forma adjusted net earnings in
2008.
Adjusted free cash flow (net cash provided by operating activities minus certain non-recurring
expenses and additions to property, equipment and computer software) for full year 2009 of $349.2
million was well above the $276.5 million for 2008 (which also reflects the impact of pro forma
interest expense for the first six months of 2008) primarily due to strong operating results
combined with greater efficiency in working capital management.
Technology, Data and Analytics (TD&A)
Revenues for the segment were $189.4 million compared to $149.1 million in the fourth quarter
of 2008 while operating income of $63.5 million compared to $53.5 million in the prior year period.
Mortgage Processing revenues of $104.2 million were 17.9% above the fourth quarter of 2008,
primarily due to the addition of the JPMorgan Chase portfolio onto our mortgage servicing platform.
Other TD&A revenues increased by 40.3% to $85.2 million compared to the same period last year,
primarily due to strong growth in Data and Analytics services, our Desktop application, and the
impact of the FNRES acquisition completed in the
first quarter of 2009. Excluding the impact of
FNRES, Other TD&A revenues were up a strong 23.6%. Overall operating income for TD&A grew mainly
due to higher contributions from Mortgage Processing and Data & Analytics.
Loan Transaction Services (LTS)
Revenues for the segment increased by 28.7% to $421.6 million compared to the fourth quarter
of 2008 while operating income of $97.2 million compared to $84.1 million in the prior year
quarter. Loan Facilitation Services revenues of $142.9 million were up 70.3% compared to the prior
year quarter, primarily due to higher settlement services and increased appraisal volumes. Default
Services revenues of $278.6 million increased 14.3% over the fourth quarter of 2008, primarily due
to growth in the default market and our ability to continue to gain market share. Overall
operating income for LTS was higher mainly due to higher income in loan origination related
offerings, such as settlement services and appraisal.
Corporate and Other
Net corporate expenses were $19.8 million compared to $16.1 million in the fourth quarter of
2008 and were higher primarily due to higher incentive compensation expenses in the current quarter
driven by the strong operating results.
The company announced that its Board of Directors had authorized a share repurchase program of
$150 million that replaced the previous authorization of $75 million. The company noted that it
had repurchased 1.024 million shares for $39.2 million and $8.0 million of its public bonds under
the previous authorization.
Outlook
We had an exceptional year in 2009 and while the broader economy and the real estate market
in particular remain challenging, LPS has a strong presence in each of its businesses and is well
positioned to grow revenue and earnings in 2010, said Jeff Carbiener. Building on the
strong 2009
results, we expect first quarter 2010 adjusted earnings to be in the range of 78-80 cents per
diluted share. For full year 2010, we expect revenues to grow 8%-10% compared to 2009 and adjusted
earnings to be in the $3.49-$3.56 per diluted share range.
Use of Non-GAAP Financial Information
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 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), pro forma
adjusted net earnings (adjusted net earnings less pro forma interest expense on our debt
facilities for the first six months of 2008 as if such facilities had been outstanding as of
January 1, 2008), pro forma adjusted net earnings per diluted share (pro forma adjusted net
earnings divided by diluted weighted average shares), 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), and pro forma adjusted free cash flow (adjusted free
cash flow less pro forma interest expense on our debt facilities for the first six months of 2008
as if such facilities had been outstanding as of January 1, 2008). LPS provides these measures
because it believes that they are helpful to investors in comparing year-over-year performance in
light of our 2008 spin-off from Fidelity National Information Services, Inc. (FIS), 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 Tuesday, February 9, 2010, at 8:00
a.m. Eastern time. Interested parties are invited to listen to the live webcast by logging on to
the Investor Relations section 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 February 16,
2010 by dialing 888-203-1112 (access code: 6799466).
To access a printer friendly version of this release and accompanying exhibits, go to
http://www.lpsvcs.com/investor.
About Lender Processing Services
Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology and
services to the mortgage and real estate industries. LPS offers solutions that span the
mortgage continuum, including lead generation, origination, workflow automation (Desktop),
servicing, portfolio retention and default, augmented by the companys award-winning customer
support and professional services. Approximately 50 percent of all U.S. mortgages by dollar
volume are serviced using LPS Mortgage Servicing Package (MSP). In fact, many of the nations
top servicers rely on MSP, including eight of the top 10 and 14 of the top 20. LPS also offers
proprietary mortgage and real estate data and analytics for the mortgage and capital markets
industries. 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 managements 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 on demand for certain of our services; the
elimination of existing and potential customers as a result of failures and consolidations in the
banking and financial services industries; the effects of our substantial leverage on our ability
to make acquisitions and invest in our business; 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; risks associated with our spin-off from Fidelity National Information Services, Inc.,
including limitations on our strategic and operating flexibility as a result of the tax-free nature
of the spin-off; and other risks and uncertainties detailed in the Statement Regarding
Forward-Looking Information, Risk Factors and other sections of the Companys Form 10-K, the
Companys subsequent reports on Form 10-Q and other filings with the Securities and Exchange
Commission.
###
Exhibit A
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Unaudited)
Consolidated Statements of Earnings
(Unaudited)
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(In thousands) | ||||||||||||||||
Processing and services revenues |
$ | 608,133 | $ | 473,921 | $ | 2,370,548 | $ | 1,837,590 | ||||||||
Cost of revenues |
403,174 | 294,069 | 1,571,003 | 1,176,479 | ||||||||||||
Gross profit |
204,959 | 179,852 | 799,545 | 661,111 | ||||||||||||
Selling, general and administrative expenses |
64,059 | 58,298 | 267,339 | 229,875 | ||||||||||||
Operating income |
140,900 | 121,554 | 532,206 | 431,236 | ||||||||||||
Other income (expense): |
||||||||||||||||
Interest income |
405 | 566 | 1,654 | 1,605 | ||||||||||||
Interest expense |
(19,896 | ) | (25,306 | ) | (84,630 | ) | (49,927 | ) | ||||||||
Other expense, net |
(31 | ) | (4 | ) | (248 | ) | 273 | |||||||||
Total other income (expense) |
(19,522 | ) | (24,744 | ) | (83,224 | ) | (48,049 | ) | ||||||||
Earnings from continuing operations before income taxes and
equity in losses of unconsolidated entity |
121,378 | 96,810 | 448,982 | 383,187 | ||||||||||||
Provision for income taxes |
46,427 | 35,455 | 171,735 | 146,569 | ||||||||||||
Earnings from continuing operations before equity in losses
of unconsolidated entity |
74,951 | 61,355 | 277,247 | 236,618 | ||||||||||||
Equity in losses of unconsolidated entity |
| (833 | ) | (37 | ) | (4,687 | ) | |||||||||
Earnings from continuing operations |
74,951 | 60,522 | 277,210 | 231,931 | ||||||||||||
Discontinued operation, net of tax |
| (6,045 | ) | (504 | ) | 158 | ||||||||||
Net earnings |
74,951 | 54,477 | 276,706 | 232,089 | ||||||||||||
Noncontrolling minority interest |
(50 | ) | (148 | ) | (977 | ) | (1,201 | ) | ||||||||
Net earnings attributable to Lender Processing Services, Inc. |
$ | 74,901 | $ | 54,329 | $ | 275,729 | $ | 230,888 | ||||||||
Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
Consolidated Balance Sheets
(Unaudited)
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 70,528 | $ | 125,966 | ||||
Trade receivables, net of allowance for doubtful accounts |
401,333 | 344,848 | ||||||
Other receivables |
3,770 | 17,393 | ||||||
Due from afflilates |
| 2,713 | ||||||
Prepaid expenses and other current assets |
26,985 | 22,030 | ||||||
Deferred income taxes |
47,528 | 40,757 | ||||||
Total current assets |
550,144 | 553,707 | ||||||
Property and equipment, net of accumulated depreciation |
113,108 | 95,542 | ||||||
Computer software, net of accumulated amortization |
185,376 | 157,539 | ||||||
Other intangible assets, net of accumulated amortization |
72,796 | 83,489 | ||||||
Goodwill |
1,166,142 | 1,091,056 | ||||||
Other non-current assets |
109,738 | 122,300 | ||||||
Total assets |
$ | 2,197,304 | $ | 2,103,633 | ||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 40,100 | $ | 145,101 | ||||
Trade accounts payable |
38,166 | 31,720 | ||||||
Accrued salaries and benefits |
54,376 | 36,492 | ||||||
Recording and transfer tax liabilities |
15,208 | 14,639 | ||||||
Due to affiliates |
3,321 | 1,573 | ||||||
Other accrued liabilities |
151,601 | 101,612 | ||||||
Deferred revenues |
66,602 | 51,628 | ||||||
Total current liabilities |
369,374 | 382,765 | ||||||
Deferred revenues |
37,681 | 40,343 | ||||||
Deferred income taxes, net |
65,215 | 36,557 | ||||||
Long-term debt, net of current portion |
1,249,250 | 1,402,350 | ||||||
Other non-current liabilities |
19,926 | 39,217 | ||||||
Total liabilities |
1,741,446 | 1,901,232 | ||||||
Equity: |
||||||||
Lender Processing Services, Inc. stockholders equity: |
||||||||
Preferred stock $0.0001 par value; 50 million shares authorized, none
issued at December 31, 2009 or 2008, respectively |
| | ||||||
Common stock $0.0001 par value; 500 million shares authorized, 97.0 million
and 95.3 million shares issued at December 31, 2009 and 2008, respectively |
10 | 9 | ||||||
Additional paid-in capital |
173,424 | 111,849 | ||||||
Retained earnings |
330,963 | 93,540 | ||||||
Accumulated other comprehensive loss |
(7,630 | ) | (13,667 | ) | ||||
Treasury stock $0.0001 par value; 1,209,920 and 19,870 shares at
December 31, 2009 and 2008, respectively |
(40,909 | ) | (582 | ) | ||||
Total Lender Processing Services, Inc. stockholders equity |
455,858 | 191,149 | ||||||
Noncontrolling minority interest |
| 11,252 | ||||||
Total equity |
455,858 | 202,401 | ||||||
Total liabilities and equity |
$ | 2,197,304 | $ | 2,103,633 | ||||
Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
Consolidated Statements of Cash Flows
(Unaudited)
Year ended December 31, | ||||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net earnings attributable to Lender Processing Services, Inc. |
$ | 275,729 | $ | 230,888 | ||||
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
||||||||
Depreciation and amortization |
97,922 | 93,416 | ||||||
Amortization of debt issuance costs |
5,404 | 3,002 | ||||||
Gain on sale of discontinued operation |
(2,574 | ) | | |||||
Deferred income taxes, net |
25,463 | (28 | ) | |||||
Stock-based compensation cost |
28,042 | 21,513 | ||||||
Tax benefit associated with equity compensation |
(2,921 | ) | (533 | ) | ||||
Equity in losses of unconsolidated entity |
37 | 4,687 | ||||||
Noncontrolling minority interest |
977 | 1,201 | ||||||
Changes in assets and liabilities, net of effects of acquisitions: |
||||||||
Trade receivables |
(49,602 | ) | (57,918 | ) | ||||
Other receivables |
13,637 | (9,423 | ) | |||||
Prepaid expenses and other assets |
(11,578 | ) | 11,666 | |||||
Deferred revenues |
11,316 | 10,501 | ||||||
Accounts payable and other liabilities |
51,836 | 54,888 | ||||||
Net cash provided by operating activities |
443,688 | 363,860 | ||||||
Cash flows from investing activities: |
||||||||
Additions to property and equipment |
(40,890 | ) | (23,012 | ) | ||||
Additions to capitalized software |
(57,885 | ) | (39,276 | ) | ||||
Acquisition of title plants |
(17,219 | ) | | |||||
Acquisitions, net of cash acquired |
(31,103 | ) | (19,938 | ) | ||||
Proceeds from sale of discontinued operation, net of cash distributed |
(32,638 | ) | | |||||
Net cash used in investing activities |
(179,735 | ) | (82,226 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings |
| 25,700 | ||||||
Debt service payments |
(254,497 | ) | (63,272 | ) | ||||
Stock options exercised |
8,098 | 1,448 | ||||||
Tax benefit associated with equity compensation |
2,921 | 533 | ||||||
Cash dividends paid |
(38,306 | ) | (19,053 | ) | ||||
Capitalized debt issuance costs |
| (25,735 | ) | |||||
Repurchase of minority interests in subsidiary |
(6,850 | ) | | |||||
Net distributions to FIS |
| (114,855 | ) | |||||
Treasury stock purchases |
(22,757 | ) | | |||||
Bond repurchases |
(8,000 | ) | | |||||
Net cash used in financing activities |
(319,391 | ) | (195,234 | ) | ||||
Net (decrease) increase in cash and cash equivalents |
(55,438 | ) | 86,400 | |||||
Cash and cash equivalents, beginning of period |
125,966 | 39,566 | ||||||
Cash and cash equivalents, end of period |
$ | 70,528 | $ | 125,966 | ||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for interest |
$ | 81,698 | $ | 32,330 | ||||
Cash paid for taxes |
$ | 154,595 | $ | 62,229 | ||||
Non-cash contribution of stock compensation by FIS |
$ | | $ | 9,120 | ||||
Non-cash redistribution of assets to FIS |
$ | 434 | $ | (1,308 | ) | |||
Non-cash consideration received from sale of discontinued operation |
$ | 40,310 | $ | | ||||
Non-cash consideration issued in acquisition of business |
$ | (5,162 | ) | $ | | |||
Non-cash exchange of FIS note |
$ | | $ | (1,585,000 | ) | |||
Exhibit D
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION UNAUDITED
(In thousands)
SUPPLEMENTAL FINANCIAL INFORMATION UNAUDITED
(In thousands)
Year ended December 31, | Quarter ended | |||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | |||||||||||||||||||||||||||||||
1. Revenues Continuing Operations |
||||||||||||||||||||||||||||||||||||||||
Technology, Data and Analytics (TD&A): |
||||||||||||||||||||||||||||||||||||||||
Mortgage Processing |
$ | 387,874 | $ | 334,184 | $ | 104,184 | $ | 102,973 | $ | 89,567 | $ | 91,150 | $ | 88,364 | $ | 83,592 | $ | 82,062 | $ | 80,166 | ||||||||||||||||||||
Other TD&A |
319,611 | 231,466 | 85,247 | 83,313 | 82,322 | 68,729 | 60,754 | 55,372 | 59,682 | 55,658 | ||||||||||||||||||||||||||||||
Total |
707,485 | 565,650 | 189,431 | 186,286 | 171,889 | 159,879 | 149,118 | 138,964 | 141,744 | 135,824 | ||||||||||||||||||||||||||||||
Loan Transaction Services: |
||||||||||||||||||||||||||||||||||||||||
Loan Facilitation Services |
547,300 | 431,673 | 142,919 | 136,657 | 148,510 | 119,214 | 83,914 | 87,629 | 118,091 | 142,039 | ||||||||||||||||||||||||||||||
Default Services |
1,137,313 | 851,828 | 278,647 | 303,823 | 299,534 | 255,309 | 243,736 | 241,844 | 197,223 | 169,025 | ||||||||||||||||||||||||||||||
Total |
1,684,613 | 1,283,501 | 421,566 | 440,480 | 448,044 | 374,523 | 327,650 | 329,473 | 315,314 | 311,064 | ||||||||||||||||||||||||||||||
Corporate and Other |
(21,550 | ) | (11,561 | ) | (2,864 | ) | (7,339 | ) | (6,762 | ) | (4,585 | ) | (2,847 | ) | (1,675 | ) | (3,711 | ) | (3,328 | ) | ||||||||||||||||||||
Total Revenue |
$ | 2,370,548 | $ | 1,837,590 | $ | 608,133 | $ | 619,427 | $ | 613,171 | $ | 529,817 | $ | 473,921 | $ | 466,762 | $ | 453,347 | $ | 443,560 | ||||||||||||||||||||
Revenue Growth from Prior Year Period |
||||||||||||||||||||||||||||||||||||||||
Technology, Data and Analytics: |
||||||||||||||||||||||||||||||||||||||||
Mortgage Processing |
16.1 | % | -1.6 | % | 17.9 | % | 23.2 | % | 9.1 | % | 13.7 | % | -4.9 | % | 2.9 | % | -1.4 | % | -2.6 | % | ||||||||||||||||||||
Other TD&A |
38.1 | % | 0.4 | % | 40.3 | % | 50.5 | % | 37.9 | % | 23.5 | % | 14.6 | % | -5.5 | % | 1.5 | % | -7.4 | % | ||||||||||||||||||||
Total |
25.1 | % | -0.8 | % | 27.0 | % | 34.1 | % | 21.3 | % | 17.7 | % | 2.2 | % | -0.6 | % | -0.2 | % | -4.6 | % | ||||||||||||||||||||
Loan Transaction Services: |
||||||||||||||||||||||||||||||||||||||||
Loan Facilitation Services |
26.8 | % | -28.2 | % | 70.3 | % | 55.9 | % | 25.8 | % | -16.1 | % | -39.6 | % | -42.8 | % | -28.3 | % | -1.3 | % | ||||||||||||||||||||
Default Services |
33.5 | % | 80.1 | % | 14.3 | % | 25.6 | % | 51.9 | % | 51.0 | % | 68.3 | % | 97.1 | % | 89.7 | % | 66.5 | % | ||||||||||||||||||||
Total |
31.3 | % | 19.5 | % | 28.7 | % | 33.7 | % | 42.1 | % | 20.4 | % | 15.4 | % | 19.4 | % | 17.3 | % | 26.7 | % | ||||||||||||||||||||
Corporate and Other |
n/m | n/m | 0.6 | % | 338.1 | % | n/m | n/m | n/m | n/m | n/m | n/m | ||||||||||||||||||||||||||||
Total Revenue |
29.0 | % | 12.1 | % | 28.3 | % | 32.7 | % | 35.3 | % | 19.4 | % | 11.0 | % | 13.3 | % | 10.0 | % | 14.4 | % | ||||||||||||||||||||
2. Depreciation and Amortization Continuing Operations |
||||||||||||||||||||||||||||||||||||||||
Depreciation and Amortization |
$ | 61,331 | $ | 51,075 | $ | 15,932 | $ | 15,894 | $ | 15,431 | $ | 14,074 | $ | 13,697 | $ | 12,594 | $ | 11,286 | $ | 13,498 | ||||||||||||||||||||
Purchase Price Amortization |
30,749 | 40,018 | 7,654 | 7,608 | 7,404 | 8,083 | 10,711 | 10,627 | 8,980 | 9,700 | ||||||||||||||||||||||||||||||
Other Amortization |
5,837 | 2,244 | 1,713 | 1,542 | 753 | 1,829 | 596 | 579 | 594 | 475 | ||||||||||||||||||||||||||||||
Total Depreciation and Amortization |
$ | 97,917 | $ | 93,337 | $ | 25,299 | $ | 25,044 | $ | 23,588 | $ | 23,986 | $ | 25,004 | $ | 23,800 | $ | 20,860 | $ | 23,673 | ||||||||||||||||||||
3. Stock Compensation Expense (1) |
||||||||||||||||||||||||||||||||||||||||
Stock Compensation Expense, Excluding Acceleration Charges |
$ | 27,243 | $ | 21,375 | $ | 7,678 | $ | 7,062 | $ | 6,459 | $ | 6,044 | $ | 6,603 | $ | 5,790 | $ | 4,295 | $ | 4,687 | ||||||||||||||||||||
Stock Acceleration Expense |
799 | 138 | | | | 799 | | | 138 | | ||||||||||||||||||||||||||||||
Total Stock Compensation Expense |
$ | 28,042 | $ | 21,513 | $ | 7,678 | $ | 7,062 | $ | 6,459 | $ | 6,843 | $ | 6,603 | $ | 5,790 | $ | 4,433 | $ | 4,687 | ||||||||||||||||||||
4. EBIT Discontinued Operations (2) |
||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 296 | $ | 24,319 | $ | | $ | | $ | | $ | 296 | $ | 2,204 | $ | 5,916 | $ | 7,033 | $ | 9,166 | ||||||||||||||||||||
Cost of Sales |
503 | 6,379 | | | | 503 | 1,571 | 1,521 | 1,499 | 1,788 | ||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
499 | 8,982 | | | | 499 | 1,814 | 1,837 | 2,212 | 3,119 | ||||||||||||||||||||||||||||||
Operating Income |
(706 | ) | 8,958 | | | | (706 | ) | (1,181 | ) | 2,558 | 3,322 | 4,259 | |||||||||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs |
| | | | | | | | | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares |
| | | | | | | | | | ||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | (706 | ) | $ | 8,958 | $ | | $ | | $ | | $ | (706 | ) | $ | (1,181 | ) | $ | 2,558 | $ | 3,322 | $ | 4,259 | |||||||||||||||||
Depreciation and Amortization |
$ | 5 | $ | 79 | $ | | $ | | $ | | $ | 5 | $ | 17 | $ | 19 | $ | 20 | $ | 23 | ||||||||||||||||||||
(1) | As the Company does not allocate stock compensation expense to the individual business units, there is no related expense associated with the discontinued operation. | |
(2) | The business unit included in discontinued operations has historically been reported as a component of Loan Facilitation Services in the Loan Transaction Services reporting segment. |
Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION UNAUDITED
(In thousands, except per share data)
NON-GAAP FINANCIAL INFORMATION UNAUDITED
(In thousands, except per share data)
Year ended December 31, | Quarter ended | |||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | |||||||||||||||||||||||||||||||
1. EBIT Continuing Operations |
||||||||||||||||||||||||||||||||||||||||
Consolidated |
||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 2,370,548 | $ | 1,837,590 | $ | 608,133 | $ | 619,427 | $ | 613,171 | $ | 529,817 | $ | 473,921 | $ | 466,762 | $ | 453,347 | $ | 443,560 | ||||||||||||||||||||
Cost of Sales |
1,571,003 | 1,176,479 | 403,174 | 409,113 | 404,014 | 354,702 | 294,069 | 300,560 | 293,464 | 288,386 | ||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
267,339 | 229,875 | 64,059 | 66,671 | 65,431 | 71,178 | 58,298 | 57,909 | 58,570 | 55,098 | ||||||||||||||||||||||||||||||
Operating Income |
532,206 | 431,236 | 140,900 | 143,643 | 143,726 | 103,937 | 121,554 | 108,293 | 101,313 | 100,076 | ||||||||||||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs |
8,186 | 2,353 | | | | 8,186 | | | 2,353 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs |
| 2,963 | | | | | | | 1,960 | 1,003 | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares |
799 | 138 | | | | 799 | | | 138 | | ||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | 541,191 | $ | 436,690 | $ | 140,900 | $ | 143,643 | $ | 143,726 | $ | 112,922 | $ | 121,554 | $ | 108,293 | $ | 105,764 | $ | 101,079 | ||||||||||||||||||||
EBIT Margin, as adjusted |
22.8 | % | 23.8 | % | 23.2 | % | 23.2 | % | 23.4 | % | 21.3 | % | 25.6 | % | 23.2 | % | 23.3 | % | 22.8 | % | ||||||||||||||||||||
Depreciation and Amortization |
$ | 97,917 | $ | 93,337 | $ | 25,299 | $ | 25,044 | $ | 23,588 | $ | 23,986 | $ | 25,004 | $ | 23,800 | $ | 20,860 | $ | 23,673 | ||||||||||||||||||||
Technology, Data and Analytics |
||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 707,485 | $ | 565,650 | $ | 189,431 | $ | 186,286 | $ | 171,889 | $ | 159,879 | $ | 149,118 | $ | 138,964 | $ | 141,744 | $ | 135,824 | ||||||||||||||||||||
Cost of Sales |
402,411 | 309,969 | 107,368 | 105,651 | 98,929 | 90,463 | 80,482 | 73,980 | 81,397 | 74,110 | ||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
70,717 | 64,640 | 18,571 | 18,256 | 17,824 | 16,066 | 15,121 | 15,790 | 17,471 | 16,258 | ||||||||||||||||||||||||||||||
Operating Income |
234,357 | 191,041 | 63,492 | 62,379 | 55,136 | 53,350 | 53,515 | 49,194 | 42,876 | 45,456 | ||||||||||||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs |
| 2,178 | | | | | | | 2,178 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares |
| | | | | | | | | | ||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | 234,357 | $ | 193,219 | $ | 63,492 | $ | 62,379 | $ | 55,136 | $ | 53,350 | $ | 53,515 | $ | 49,194 | $ | 45,054 | $ | 45,456 | ||||||||||||||||||||
EBIT Margin, as adjusted |
33.1 | % | 34.2 | % | 33.5 | % | 33.5 | % | 32.1 | % | 33.4 | % | 35.9 | % | 35.4 | % | 31.8 | % | 33.5 | % | ||||||||||||||||||||
Depreciation and Amortization |
$ | 69,477 | $ | 61,205 | $ | 18,066 | $ | 17,595 | $ | 16,441 | $ | 17,375 | $ | 15,990 | $ | 15,229 | $ | 13,971 | $ | 16,015 | ||||||||||||||||||||
Loan Transaction Services |
||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 1,684,613 | $ | 1,283,501 | $ | 421,566 | $ | 440,480 | $ | 448,044 | $ | 374,523 | $ | 327,650 | $ | 329,473 | $ | 315,314 | $ | 311,064 | ||||||||||||||||||||
Cost of Sales |
1,190,238 | 879,031 | 298,723 | 311,230 | 311,349 | 268,936 | 217,242 | 228,283 | 215,838 | 217,668 | ||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
107,769 | 105,299 | 25,681 | 27,665 | 27,064 | 27,359 | 26,314 | 26,487 | 27,154 | 25,344 | ||||||||||||||||||||||||||||||
Operating Income |
386,606 | 299,171 | 97,162 | 101,585 | 109,631 | 78,228 | 84,094 | 74,703 | 72,322 | 68,052 | ||||||||||||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs |
| 163 | | | | | | | 163 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares |
| | | | | | | | | | ||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | 386,606 | $ | 299,334 | $ | 97,162 | $ | 101,585 | $ | 109,631 | $ | 78,228 | $ | 84,094 | $ | 74,703 | $ | 72,485 | $ | 68,052 | ||||||||||||||||||||
EBIT Margin, as adjusted |
22.9 | % | 23.3 | % | 23.0 | % | 23.1 | % | 24.5 | % | 20.9 | % | 25.7 | % | 22.7 | % | 23.0 | % | 21.9 | % | ||||||||||||||||||||
Depreciation and Amortization |
$ | 20,310 | $ | 25,132 | $ | 5,281 | $ | 5,295 | $ | 5,126 | $ | 4,608 | $ | 7,028 | $ | 6,651 | $ | 5,290 | $ | 6,163 | ||||||||||||||||||||
Corporate and Other |
||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | (21,550 | ) | $ | (11,561 | ) | $ | (2,864 | ) | $ | (7,339 | ) | $ | (6,762 | ) | $ | (4,585 | ) | $ | (2,847 | ) | $ | (1,675 | ) | $ | (3,711 | ) | $ | (3,328 | ) | ||||||||||
Cost of Sales |
(21,646 | ) | (12,521 | ) | (2,917 | ) | (7,768 | ) | (6,264 | ) | (4,697 | ) | (3,655 | ) | (1,703 | ) | (3,771 | ) | (3,392 | ) | ||||||||||||||||||||
Selling, General and Administrative Expenses |
88,853 | 59,936 | 19,807 | 20,750 | 20,543 | 27,753 | 16,863 | 15,632 | 13,945 | 13,496 | ||||||||||||||||||||||||||||||
Operating Income |
(88,757 | ) | (58,976 | ) | (19,754 | ) | (20,321 | ) | (21,041 | ) | (27,641 | ) | (16,055 | ) | (15,604 | ) | (13,885 | ) | (13,432 | ) | ||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs |
8,186 | 12 | | | | 8,186 | | | 12 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs |
| 2,963 | | | | | | | 1,960 | 1,003 | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares |
799 | 138 | | | | 799 | | | 138 | | ||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | (79,772 | ) | $ | (55,863 | ) | $ | (19,754 | ) | $ | (20,321 | ) | $ | (21,041 | ) | $ | (18,656 | ) | $ | (16,055 | ) | $ | (15,604 | ) | $ | (11,775 | ) | $ | (12,429 | ) | ||||||||||
Depreciation and Amortization |
$ | 8,130 | $ | 7,000 | $ | 1,952 | $ | 2,154 | $ | 2,021 | $ | 2,003 | $ | 1,986 | $ | 1,920 | $ | 1,599 | $ | 1,495 | ||||||||||||||||||||
Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION UNAUDITED
(In thousands, except per share data)
NON-GAAP FINANCIAL INFORMATION UNAUDITED
(In thousands, except per share data)
Year ended December 31, | Quarter ended | |||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | |||||||||||||||||||||||||||||||
2. Net Earnings Reconciliation |
||||||||||||||||||||||||||||||||||||||||
Net Earnings |
$ | 275,729 | 230,888 | $ | 74,901 | $ | 75,542 | $ | 75,240 | $ | 50,046 | $ | 54,329 | $ | 51,281 | $ | 63,546 | $ | 61,732 | |||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs, net of tax |
5,055 | 1,440 | | | | 5,055 | | | 1,440 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs, net of tax |
| 1,814 | | | | | | | 1,200 | 614 | ||||||||||||||||||||||||||||||
Acceleration of Performance-Based Shares, net of tax |
493 | 84 | | | | 493 | | | 84 | | ||||||||||||||||||||||||||||||
Impact of change in tax rate on non-recurring items |
| (223 | ) | | | | | (223 | ) | | | | ||||||||||||||||||||||||||||
Net Earnings, excluding non-recurring items |
281,277 | 234,003 | 74,901 | 75,542 | 75,240 | 55,594 | 54,106 | 51,281 | 66,270 | 62,346 | ||||||||||||||||||||||||||||||
Pro Forma Interest Expense, net of tax (1) |
| 28,131 | | | | | | | 13,951 | 14,180 | ||||||||||||||||||||||||||||||
Pro Forma Net Earnings |
281,277 | 205,872 | 74,901 | 75,542 | 75,240 | 55,594 | 54,106 | 51,281 | 52,319 | 48,166 | ||||||||||||||||||||||||||||||
Purchase Price Amortization, net of tax (2) |
18,987 | 24,751 | 4,726 | 4,698 | 4,572 | 4,991 | 6,815 | 6,504 | 5,496 | 5,936 | ||||||||||||||||||||||||||||||
Pro Forma Adjusted Net Earnings |
$ | 300,264 | $ | 230,623 | $ | 79,627 | $ | 80,240 | $ | 79,812 | $ | 60,585 | $ | 60,921 | $ | 57,785 | $ | 57,815 | $ | 54,102 | ||||||||||||||||||||
Pro Forma Net Earnings Per Share |
$ | 2.93 | $ | 2.15 | $ | 0.77 | $ | 0.78 | $ | 0.78 | $ | 0.58 | $ | 0.57 | $ | 0.54 | $ | 0.55 | $ | 0.49 | ||||||||||||||||||||
Pro Forma Adjusted Net Earnings Per Share (3) |
$ | 3.12 | $ | 2.41 | $ | 0.82 | $ | 0.83 | $ | 0.83 | $ | 0.64 | $ | 0.64 | $ | 0.61 | $ | 0.61 | $ | 0.55 | ||||||||||||||||||||
Pro Forma Diluted Weighted Average Shares (3) |
96,152 | 95,754 | 96,781 | 96,399 | 96,133 | 95,284 | 95,126 | 95,223 | 95,070 | 97,597 | ||||||||||||||||||||||||||||||
3. Cashflow Reconciliation |
||||||||||||||||||||||||||||||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||||||||||||||||||||||||||
Net Earnings |
$ | 275,729 | $ | 230,888 | $ | 74,901 | $ | 75,542 | $ | 75,240 | $ | 50,046 | $ | 54,329 | $ | 51,281 | $ | 63,546 | $ | 61,732 | ||||||||||||||||||||
Less Non-recurring Charges: |
||||||||||||||||||||||||||||||||||||||||
Restructuring Costs, net of tax |
4,304 | 1,440 | | | | 4,304 | | | 1,440 | | ||||||||||||||||||||||||||||||
LPS Spin Related Costs, net of tax |
| 1,814 | | | | | | | 1,200 | 614 | ||||||||||||||||||||||||||||||
Impact of change in tax rate on non-recurring items |
| (223 | ) | | | | | (223 | ) | | | | ||||||||||||||||||||||||||||
Net Earnings, excluding non-recurring items |
280,033 | 233,919 | 74,901 | 75,542 | 75,240 | 54,350 | 54,106 | 51,281 | 66,186 | 62,346 | ||||||||||||||||||||||||||||||
Pro Forma Interest Expense, net of tax |
| 28,131 | | | | | | | 13,951 | 14,180 | ||||||||||||||||||||||||||||||
Pro Forma Adjusted Net Earnings |
280,033 | 205,788 | 74,901 | 75,542 | 75,240 | 54,350 | 54,106 | 51,281 | 52,235 | 48,166 | ||||||||||||||||||||||||||||||
Adjustments to reconcile net earnings to
net cash provided by operating activities: |
||||||||||||||||||||||||||||||||||||||||
Non-cash adjustments |
152,350 | 123,258 | 60,281 | 32,279 | 31,700 | 28,090 | 30,081 | 32,420 | 18,262 | 42,495 | ||||||||||||||||||||||||||||||
Working capital adjustments |
15,609 | 9,714 | 13,369 | (16,954 | ) | 21,957 | (2,763 | ) | 32,158 | 26,908 | (91,474 | ) | 42,122 | |||||||||||||||||||||||||||
Net cash provided by operating activities |
447,992 | 338,760 | 148,551 | 90,867 | 128,897 | 79,677 | 116,345 | 110,609 | (20,977 | ) | 132,783 | |||||||||||||||||||||||||||||
Capital expenditures included in investing
activities |
(98,775 | ) | (62,288 | ) | (30,913 | ) | (19,455 | ) | (25,836 | ) | (22,571 | ) | (23,946 | ) | (13,205 | ) | (14,344 | ) | (10,793 | ) | ||||||||||||||||||||
Pro Forma Adjusted Net Free Cash Flow |
$ | 349,217 | $ | 276,472 | $ | 117,638 | $ | 71,412 | $ | 103,061 | $ | 57,106 | $ | 92,399 | $ | 97,404 | $ | (35,321 | ) | $ | 121,990 | |||||||||||||||||||
Notes: | ||
(1) | Pro forma interest expense for each of the two
quarters in the period ended June 30, 2008 represents the interest expense associated with the $1,610.7 million in debt incurred by us in connection with the spin-off assuming the spin-off occurred on January 1, 2007. Our new bank debt bears interest at a floating rate which we estimate would have been 4.96% on the revolving credit agreement, Term Loan A and Term Loan B based on the one month LIBOR rate on June 30, 2008 (2.46%) plus
a spread of 2.5%. Our new senior notes bear interest at a fixed rate of 8.125%. Amortization of capitalized debt issuance costs in connection with the borrowings included in pro forma interest expense total approximately $2.7 million for the six months ended June 30, 2008. These projections also reflect principal paydowns of approximately $36.3 million ($35 million of Term Loan A, $1.3 million of Term Loan B) per quarter under the credit agreement (other than in the
first quarter after closing, in which only $1.3 million is
payable) and the paydown of the revolver of $25.7 million during
the first quarter of 2007. |
|
(2) | 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. |
|
(3) | Pro forma earnings per share and pro forma diluted weighted average shares for the quarter ended June 30, 2008 are provided based on the 94,611 shares of Lender Processing Services, Inc. common stock issued to FIS shareholders on the July 2, 2008 spin date along with dilutive common stock equivalents calculated under the treasury stock method using the $33 per share closing price of LPS on July 2, 2008 as the average market price and the number of LPS options and awards issued to our
employees per the terms of the spin-off. Pro forma earnings per share
and pro forma diluted weighted average shares for all other periods
presented above are based on the pro forma diluted shares as included
in the Companys Form 10 filed on June 20, 2008. |