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8-K - FORM 8-K - Black Knight InfoServ, LLCg24114e8vk.htm
EX-99.2 - EX-99.2 - Black Knight InfoServ, LLCg24114exv99w2.htm
Exhibit 99.1
     
(LPS LOGO)
  Press Release
     
Investors:
  Media:
 
   
Parag Bhansali
  Michelle Kersch
(904) 854-8640
  (904) 854-5043
Lender Processing Services, Inc. Reports Strong Second Quarter Earnings
Year-over-year operating income increases 3.3%
Year-over-year adjusted EPS increases 7.2% to 89 cents per diluted share
     JACKSONVILLE, Fla. – July 22, 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 $599.1 million for the second quarter of 2010, a decrease of 2.3% compared to the second quarter of 2009; however, net earnings of $80.4 million or 85 cents per diluted share in the second quarter of 2010 increased from $75.2 million or 78 cents per diluted share in the prior year quarter.
     Adjusted net earnings for the second quarter of 2010 were $84.0 million, or 89 cents per diluted share, compared to $79.8 million, or 83 cents per diluted share in the second quarter of 2009. Adjusted net earnings in the current quarter include an adjustment for purchase price amortization of 4 cents per diluted share while the prior year quarter included a similar adjustment of 5 cents per diluted share.
     “LPS had a strong quarter despite very difficult conditions in both the origination and default markets and a sustained challenging macro-economic environment. LPS, with its comprehensive end-to-end solutions for the mortgage and real estate industries, remains well positioned for a solid 2010 and to continue to grow profitably in 2011 and beyond,” said Lee A.

 


 

Kennedy, Executive Chairman of LPS. “Our Mortgage Processing business delivered another strong quarter and while our Loan Facilitation and Default Services businesses were both impacted by sluggish industry trends, we continued to expand market share in both areas,” added Jeff Carbiener, President and CEO of LPS.
     Operating income of $148.4 million in the quarter increased from $143.7 million in the second quarter of 2009 and operating margins improved by 140 basis points to 24.8%.
     Adjusted free cash flow (net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software) for the first half of 2010 was $149.5 million compared to $160.2 million in the first half of 2009 primarily due to higher capital expenditures as well as from timing differences in our working capital components.
Technology, Data and Analytics (TD&A)
     Revenues for the segment were $185.2 million compared to $171.9 million in the second quarter of 2009 while operating income of $64.8 million compared to $55.1 million in the prior year period. Mortgage Processing revenues of $102.4 million were 14.3% above the second quarter of 2009 primarily due to higher activity-based fees as well as professional services and license revenues. Other TD&A revenues of $82.9 million compared to $82.3 million in the same period last year. Overall operating income for TD&A grew 17.6% primarily due to higher contributions from Mortgage Processing somewhat offset by lower contributions from our Desktop business due to investments in key implementations for top-tier financial institutions and also from our Data & Analytics businesses.
Loan Transaction Services (LTS)
     Revenues for the segment were $415.5 million compared to $448.0 million in the second quarter of 2009 and operating income of $101.6 million compared to $109.6 million in the prior year quarter. While Loan Facilitation Services revenues of $140.5 million declined 5.4% year-over-year,

 


 

they compared favorably to the Mortgage Bankers Association’s (MBA) estimate of overall originations being lower by 20% year-over-year. This positive variance was primarily due to market share gains in our settlement services and appraisal offerings. Default Services revenues of $275.0 million declined 8.2% compared to the second quarter of 2009, due to a decline in industry foreclosure starts of 16.0% for the same period, per LPS’s Mortgage Monitor report, which were driven by a broader industry slowdown. Overall operating income for LTS was lower mainly due to lower contributions from Default Services partly offset by higher income in Loan Facilitation services.
Corporate and Other
     Net corporate expenses in the second quarter of 2010 were $18.0 million compared to $21.0 million in the prior year quarter primarily due to lower incentive compensation costs.
     The company noted that it had repurchased 1.6 million shares for $57.4 million in the second quarter. Following these purchases, $68.8 million remained available under the previous authorization. Also, the company announced that its Board of Directors had authorized a new share repurchase program of $150 million for a one year period that replaced the previous authorization.
Outlook
     “Second quarter and first half 2010 results were solid given the challenges in our specific markets and the broader economic environment. LPS with its market-leading presence remains well positioned to grow revenue and earnings in the second half of 2010 as well as in 2011,” said Jeff Carbiener. “Based on trends in the first half of 2010 and the outlook for the remainder of the year for the origination and default markets, we now expect full year 2010 revenues to grow 3%-6% compared to 2009. Also, we continue to expect full year 2010 adjusted earnings to be in the $3.49-$3.56 per diluted share range with third quarter adjusted earnings in the 88-90 cents 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), and “adjusted free cash flow” (net cash provided by operating activities less additions to property, equipment and computer software, as well as non-recurring adjustments, if applicable). LPS provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring charges, and to better understand our financial performance, competitive position and future prospects. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.
Conference Call and Webcast
     LPS will host a conference call to discuss these results on Friday, July 23, 2010, at 8:00 a.m. EDT. 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 July 30, 2010 by dialing 888-203-1112 (access code: 7113478).

 


 

     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 company’s award-winning customer support and professional services. Approximately 50 percent of all U.S. mortgages by dollar volume are serviced using LPS’s Mortgage Servicing Package (MSP). 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 management’s beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to adapt our services to changes in technology or the marketplace; the impact of adverse changes in the level of real estate activity on demand for certain of our services; our ability to maintain and grow our relationships with our customers; the effects of our substantial

 


 

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

 


 

Exhibit A
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Unaudited)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2010     2009     2010     2009  
    (In thousands, except per share amounts)  
Processing and services revenues
  $ 599,081     $ 613,171     $ 1,191,475     $ 1,142,988  
Cost of revenues
    390,847       404,014       786,869       758,716  
 
                       
Gross profit
    208,234       209,157       404,606       384,272  
Selling, general and administrative expenses
    59,815       65,431       120,535       136,609  
 
                       
Operating income
    148,419       143,726       284,071       247,663  
 
                               
Other income (expense):
                               
Interest income
    300       442       923       966  
Interest expense
    (18,615 )     (21,625 )     (37,460 )     (43,539 )
Other expense, net
    119       (13 )     123       (14 )
 
                       
Total other income (expense)
    (18,196 )     (21,196 )     (36,414 )     (42,587 )
 
                       
 
                               
Earnings from continuing operations before income taxes and equity in losses of unconsolidated entity
    130,223       122,530       247,657       205,076  
Provision for income taxes
    49,810       46,866       94,728       78,441  
 
                       
Earnings from continuing operations before equity in losses of unconsolidated entity
    80,413       75,664       152,929       126,635  
Equity in losses of unconsolidated entity
                      (37 )
 
                       
Earnings from continuing operations
    80,413       75,664       152,929       126,598  
Discontinued operation, net of tax
                      (504 )
 
                       
Net earnings
    80,413       75,664       152,929       126,094  
Noncontrolling minority interest
          (424 )           (808 )
 
                       
Net earnings attributable to Lender Processing Services, Inc.
  $ 80,413     $ 75,240     $ 152,929     $ 125,286  
 
                       
 
                               
Net earnings per share — diluted from continuing operations
  $ 0.85     $ 0.78     $ 1.60     $ 1.31  
Net earnings per share — diluted from discontinued operation
                       
 
                       
Net earnings per share — diluted
  $ 0.85     $ 0.78     $ 1.60     $ 1.31  
 
                       
Weighted average shares outstanding — diluted
    94,910       96,133       95,660       95,709  
 
                       

 


 

     Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
                 
    June 30, 2010     December 31, 2009  
    (In thousands)  
Assets              
Current assets:
               
Cash and cash equivalents
  $ 108,593     $ 70,528  
Trade receivables, net of allowance for doubtful accounts
    383,821       401,333  
Other receivables
    3,932       3,770  
Prepaid expenses and other current assets
    35,146       26,985  
Deferred income taxes
    44,377       47,528  
 
           
Total current assets
    575,869       550,144  
 
           
 
               
Property and equipment, net of accumulated depreciation
    122,230       113,108  
Computer software, net of accumulated amortization
    202,646       185,376  
Other intangible assets, net of accumulated amortization
    60,841       72,796  
Goodwill
    1,166,142       1,166,142  
Other non-current assets
    107,448       109,738  
 
           
Total assets
  $ 2,235,176     $ 2,197,304  
 
           
 
               
Liabilities and Equity                
Current liabilities:
               
Current portion of long-term debt
  $ 110,100     $ 40,100  
Trade accounts payable
    46,194       38,166  
Accrued salaries and benefits
    34,854       54,376  
Recording and transfer tax liabilities
    14,038       15,208  
Due to affiliates
          3,321  
Other accrued liabilities
    149,108       151,601  
Deferred revenues
    52,849       66,602  
 
           
Total current liabilities
    407,143       369,374  
 
           
 
               
Deferred revenues
    36,404       37,681  
Deferred income taxes, net
    73,695       65,215  
Long-term debt, net of current portion
    1,176,700       1,249,250  
Other non-current liabilities
    19,818       19,926  
 
           
Total liabilities
    1,713,760       1,741,446  
 
           
 
Equity:
               
Preferred stock $0.0001 par value; 50 million shares authorized, none issued at June 30, 2010 or December 31, 2009, respectively
           
Common stock $0.0001 par value; 500 million shares authorized, 97.8 million and 97.0 million shares issued at June 30, 2010 and December 31, 2009, respectively
    10       10  
Additional paid-in capital
    199,769       173,424  
Retained earnings
    464,936       330,963  
Accumulated other comprehensive loss
    (2,928 )     (7,630 )
Treasury stock $0.0001 par value; 3.9 million and 1.2 million shares at June 30, 2010 and December 31, 2009, respectively
    (140,371 )     (40,909 )
 
           
Total equity
    521,416       455,858  
 
           
Total liabilities and equity
  $ 2,235,176     $ 2,197,304  
 
           

 


 

Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
                 
    Six months ended June 30,  
    2010     2009  
    (In thousands)  
Cash flows from operating activities:
               
Net earnings attributable to Lender Processing Services, Inc.
  $ 152,929     $ 125,286  
 
               
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
Depreciation and amortization
    47,294       47,579  
Amortization of debt issuance costs
    2,317       2,645  
Gain on sale of discontinued operation
          (2,574 )
Deferred income taxes, net
    9,023       (651 )
Stock-based compensation cost
    13,837       13,302  
Tax benefit associated with equity compensation
    162       (1,356 )
Equity in losses of unconsolidated entity
          37  
Noncontrolling minority interest
          808  
 
Changes in assets and liabilities, net of effects of acquisitions:
               
Trade receivables
    17,512       (76,919 )
Other receivables
    (162 )     10,264  
Prepaid expenses and other assets
    (13,699 )     (11,599 )
Deferred revenues
    (15,031 )     (158 )
Accounts payable and other liabilities
    (7,513 )     97,606  
 
           
Net cash provided by operating activities
    206,669       204,270  
 
           
 
               
Cash flows from investing activities:
               
Additions to property and equipment
    (23,371 )     (23,201 )
Additions to capitalized software
    (33,795 )     (25,206 )
Acquisition of title plants
          (9,395 )
Acquisitions, net of cash acquired
          (16,403 )
Proceeds from sale of discontinued operation, net of cash distributed
          (32,638 )
 
           
Net cash used in investing activities
    (57,166 )     (106,843 )
 
           
 
               
Cash flows from financing activities:
               
Debt service payments
    (2,550 )     (143,481 )
Stock options exercised
    10,906       109  
Tax benefit associated with equity compensation
    (162 )     1,356  
Cash dividends paid
    (18,956 )     (19,134 )
Treasury stock purchases
    (97,698 )      
Contingent payments related to acquisitions
    (2,978 )      
 
           
Net cash used in financing activities
    (111,438 )     (161,150 )
Net increase (decrease) in cash and cash equivalents
    38,065       (63,723 )
Cash and cash equivalents, beginning of period
    70,528       125,966  
 
           
Cash and cash equivalents, end of period
  $ 108,593     $ 62,243  
 
           
 
               
Supplemental disclosures of cash flow information:
               
Cash paid for interest
  $ 36,558     $ 41,828  
 
           
Cash paid for taxes
  $ 71,332     $ 47,862  
 
           
Non-cash redistribution of assets to FIS
  $     $ 434  
 
           
Non-cash consideration received from sale of discontinued operation
  $     $ 40,310  
 
           
Non-cash consideration issued in acquisition of business
  $     $ (5,162 )
 
           

 


 

Exhibit D
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION – UNAUDITED
(In thousands)
                                                                 
    Six months ended June 30,                                      
    2010     2009     6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009     3/31/2009  
1. Revenues — Continuing Operations
                                                               
 
                                                               
Technology, Data and Analytics (TD&A):
                                                               
Mortgage Processing
  $ 199,990     $ 180,717     $ 102,356     $ 97,634     $ 104,184     $ 102,973     $ 89,567     $ 91,150  
Other TD&A
    164,680       151,051       82,852       81,828       85,247       83,313       82,322       68,729  
 
                                               
Total
    364,670       331,768       185,208       179,462       189,431       186,286       171,889       159,879  
 
                                               
 
                                                               
Loan Transaction Services:
                                                               
Loan Facilitation Services
    287,085       267,724       140,471       146,614       142,919       136,657       148,510       119,214  
Default Services
    543,717       554,843       275,046       268,671       278,647       303,823       299,534       255,309  
 
                                               
Total
    830,802       822,567       415,517       415,285       421,566       440,480       448,044       374,523  
 
                                               
 
                                                               
Corporate and Other
    (3,997 )     (11,347 )     (1,644 )     (2,353 )     (2,864 )     (7,339 )     (6,762 )     (4,585 )
 
                                               
Total Revenue
  $ 1,191,475     $ 1,142,988     $ 599,081     $ 592,394     $ 608,133     $ 619,427     $ 613,171     $ 529,817  
 
                                               
 
Revenue Growth from Prior Year Period
                                                               
 
                                                               
Technology, Data and Analytics:
                                                               
Mortgage Processing
    10.7 %     11.4 %     14.3 %     7.1 %     17.9 %     23.2 %     9.1 %     13.7 %
Other TD&A
    9.0 %     31.0 %     0.6 %     19.1 %     40.3 %     50.5 %     37.9 %     23.5 %
 
                                               
Total
    9.9 %     19.5 %     7.7 %     12.2 %     27.0 %     34.1 %     21.3 %     17.7 %
 
                                               
 
Loan Transaction Services:
                                                               
Loan Facilitation Services
    7.2 %     2.9 %     -5.4 %     23.0 %     70.3 %     55.9 %     25.8 %     -16.1 %
Default Services
    -2.0 %     51.5 %     -8.2 %     5.2 %     14.3 %     25.6 %     51.9 %     51.0 %
 
                                               
Total
    1.0 %     31.3 %     -7.3 %     10.9 %     28.7 %     33.7 %     42.1 %     20.4 %
 
                                               
 
                                                               
Corporate and Other
    n/m       n/m       n/m       n/m       n/m       n/m       n/m       n/m  
 
                                               
Total Revenue
    4.2 %     27.4 %     -2.3 %     11.8 %     28.3 %     32.7 %     35.3 %     19.4 %
 
                                               
 
                                                               
2. Depreciation and Amortization — Continuing Operations
                                                               
 
                                                               
Depreciation and Amortization
  $ 30,773     $ 29,505     $ 15,780     $ 14,993     $ 15,932     $ 15,894     $ 15,431     $ 14,074  
Purchase Price Amortization
    12,602       15,487       5,884       6,718       7,654       7,608       7,404       8,083  
Other Amortization
    3,919       2,582       1,976       1,943       1,713       1,542       753       1,829  
 
                                               
Total Depreciation and Amortization
  $ 47,294     $ 47,574     $ 23,640     $ 23,654     $ 25,299     $ 25,044     $ 23,588     $ 23,986  
 
                                               
 
                                                               
3. Stock Compensation Expense
                                                               
 
                                                               
Stock Compensation Expense, Excluding Acceleration Charges
  $ 13,837     $ 12,503     $ 7,280     $ 6,557     $ 7,678     $ 7,062     $ 6,459     $ 6,044  
Stock Acceleration Expense
          799                                     799  
 
                                               
Total Stock Compensation Expense
  $ 13,837     $ 13,302     $ 7,280     $ 6,557     $ 7,678     $ 7,062     $ 6,459     $ 6,843  
 
                                               

 


 

Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION – UNAUDITED
(In thousands, except per share data)
                                                                 
    Six months ended June 30,                                      
    2010     2009     6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009     3/31/2009  
1. EBIT — Continuing Operations
                                                               
 
                                                               
Consolidated
                                                               
Revenue
  $ 1,191,475     $ 1,142,988     $ 599,081     $ 592,394     $ 608,133     $ 619,427     $ 613,171     $ 529,817  
Cost of Sales
    786,869       758,716       390,847       396,022       403,174       409,113       404,014       354,702  
Selling, General and Administrative Expenses
    120,535       136,609       59,815       60,720       64,059       66,671       65,431       71,178  
 
                                               
Operating Income
    284,071       247,663       148,419       135,652       140,900       143,643       143,726       103,937  
 
                                                               
Less Non-recurring Charges:
                                                               
Restructuring Costs
          8,186                                     8,186  
Acceleration of Performance-Based Shares
          799                                     799  
 
                                               
EBIT, as adjusted
  $ 284,071     $ 256,648     $ 148,419     $ 135,652     $ 140,900     $ 143,643     $ 143,726     $ 112,922  
 
                                               
EBIT Margin, as adjusted
    23.8 %     22.5 %     24.8 %     22.9 %     23.2 %     23.2 %     23.4 %     21.3 %
 
                                               
Depreciation and Amortization
  $ 47,294     $ 47,574     $ 23,640     $ 23,654     $ 25,299     $ 25,044     $ 23,588     $ 23,986  
 
                                               
 
                                                               
Technology, Data and Analytics
                                                               
Revenue
  $ 364,670     $ 331,768     $ 185,208     $ 179,462     $ 189,431     $ 186,286     $ 171,889     $ 159,879  
Cost of Sales
    206,112       189,392       100,317       105,795       107,368       105,651       98,929       90,463  
Selling, General and Administrative Expenses
    39,877       33,890       20,066       19,811       18,571       18,256       17,824       16,066  
 
                                               
Operating Income
    118,681       108,486       64,825       53,856       63,492       62,379       55,136       53,350  
 
                                                               
Less Non-recurring Charges:
                                                               
Restructuring Costs
                                               
Acceleration of Performance-Based Shares
                                               
 
                                                               
 
                                               
EBIT, as adjusted
  $ 118,681     $ 108,486     $ 64,825     $ 53,856     $ 63,492     $ 62,379     $ 55,136     $ 53,350  
 
                                               
EBIT Margin, as adjusted
    32.5 %     32.7 %     35.0 %     30.0 %     33.5 %     33.5 %     32.1 %     33.4 %
 
                                               
Depreciation and Amortization
  $ 32,585     $ 33,816     $ 16,047     $ 16,538     $ 18,066     $ 17,595     $ 16,441     $ 17,375  
 
                                               
 
                                                               
Loan Transaction Services
                                                               
Revenue
  $ 830,802     $ 822,567     $ 415,517     $ 415,285     $ 421,566     $ 440,480     $ 448,044     $ 374,523  
Cost of Sales
    584,716       580,285       292,107       292,609       298,723       311,230       311,349       268,936  
Selling, General and Administrative Expenses
    45,655       54,423       21,798       23,857       25,681       27,665       27,064       27,359  
 
                                               
Operating Income
    200,431       187,859       101,612       98,819       97,162       101,585       109,631       78,228  
 
                                                               
Less Non-recurring Charges:
                                                               
Restructuring Costs
                                               
Acceleration of Performance-Based Shares
                                               
 
                                                               
 
                                               
EBIT, as adjusted
  $ 200,431     $ 187,859     $ 101,612     $ 98,819     $ 97,162     $ 101,585     $ 109,631     $ 78,228  
 
                                               
EBIT Margin, as adjusted
    24.1 %     22.8 %     24.5 %     23.8 %     23.0 %     23.1 %     24.5 %     20.9 %
 
                                               
Depreciation and Amortization
  $ 10,935     $ 9,734     $ 5,749     $ 5,186     $ 5,281     $ 5,295     $ 5,126     $ 4,608  
 
                                               
 
                                                               
Corporate and Other
                                                               
Revenue
  $ (3,997 )   $ (11,347 )   $ (1,644 )   $ (2,353 )   $ (2,864 )   $ (7,339 )   $ (6,762 )   $ (4,585 )
Cost of Sales
    (3,959 )     (10,961 )     (1,577 )     (2,382 )     (2,917 )     (7,768 )     (6,264 )     (4,697 )
Selling, General and Administrative Expenses
    35,003       48,296       17,951       17,052       19,807       20,750       20,543       27,753  
 
                                               
Operating Income
    (35,041 )     (48,682 )     (18,018 )     (17,023 )     (19,754 )     (20,321 )     (21,041 )     (27,641 )
 
                                                               
Less Non-recurring Charges:
                                                               
Restructuring Costs
          8,186                                     8,186  
Acceleration of Performance-Based Shares
          799                                     799  
 
                                               
EBIT, as adjusted
  $ (35,041 )   $ (39,697 )   $ (18,018 )   $ (17,023 )   $ (19,754 )   $ (20,321 )   $ (21,041 )   $ (18,656 )
 
                                               
Depreciation and Amortization
  $ 3,774     $ 4,024     $ 1,844     $ 1,930     $ 1,952     $ 2,154     $ 2,021     $ 2,003  
 
                                               
 
                                                               
2. Net Earnings — Reconciliation
                                                               
Net Earnings
  $ 152,929       125,286     $ 80,413     $ 72,516     $ 74,901     $ 75,542     $ 75,240     $ 50,046  
 
                                                               
Less Non-recurring Charges:
                                                               
Restructuring Costs, net of tax
          5,055                                     5,055  
Acceleration of Performance-Based Shares, net of tax
          493                                     493  
 
                                               
Net Earnings, as adjusted
    152,929       130,834       80,413       72,516       74,901       75,542       75,240       55,594  
 
                                                               
Purchase Price Amortization, net of tax (1)
    7,781       9,563       3,633       4,148       4,726       4,698       4,572       4,991  
 
                                               
Adjusted Net Earnings
  $ 160,710     $ 140,397     $ 84,046     $ 76,664     $ 79,627     $ 80,240     $ 79,812     $ 60,585  
 
                                               
Adjusted Net Earnings Per Diluted Share
  $ 1.69     $ 1.47     $ 0.89     $ 0.80     $ 0.82     $ 0.83     $ 0.83     $ 0.64  
 
                                               
Diluted Weighted Average Shares
    95,660       95,709       94,910       96,416       96,781       96,399       96,133       95,284  
 
                                               
 
                                                               
3. Cashflow — Reconciliation
                                                               
Cash Flows from Operating Activities:
                                                               
 
                                                               
Net Earnings
  $ 152,929     $ 125,286     $ 80,413     $ 72,516     $ 74,901     $ 75,542     $ 75,240     $ 50,046  
Less Non-recurring Charges:
                                                               
Restructuring Costs, net of tax
          4,304                                     4,304  
 
                                               
Net Earnings, as adjusted
    152,929       129,590       80,413       72,516       74,901       75,542       75,240       54,350  
 
                                                               
Adjustments to reconcile net earnings to net cash provided by operating activities:
                                                               
Non-cash adjustments
    72,633       59,790       34,591       38,042       60,281       32,279       31,700       28,090  
Working capital adjustments
    (18,893 )     19,194       (17,375 )     (1,518 )     13,369       (16,954 )     21,957       (2,763 )
 
                                               
Net cash provided by operating activities
    206,669       208,574       97,629       109,040       148,551       90,867       128,897       79,677  
 
                                               
 
                                                               
Capital expenditures included in investing activities
    (57,166 )     (48,407 )     (29,122 )     (28,044 )     (30,913 )     (19,455 )     (25,836 )     (22,571 )
 
                                               
Adjusted Net Free Cash Flow
  $ 149,503     $ 160,167     $ 68,507     $ 80,996     $ 117,638     $ 71,412     $ 103,061     $ 57,106  
 
                                               
 
    Notes:
 
(1)   Purchase price amortization, net of tax represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.