Attached files
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8-K - FORM 8-K - Black Knight InfoServ, LLC | g25982e8vk.htm |
EX-99.2 - EX-99.2 - Black Knight InfoServ, LLC | g25982exv99w2.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 2010 Earnings
Year-over-year revenues increase 5.0%
Year-over-year adjusted EPS increases 12.2% to 92 cents per diluted share
Year-over-year revenues increase 5.0%
Year-over-year adjusted EPS increases 12.2% to 92 cents per diluted share
JACKSONVILLE, Fla. February 3, 2011 Lender Processing Services, Inc. (NYSE:LPS), a
leading provider of integrated technology and services to the mortgage and real estate industries,
today reported consolidated revenues of $638.8 million for the fourth quarter of 2010, an increase
of 5.0% compared to the fourth quarter of 2009, while net earnings of
$70.7 million or 78 cents per diluted share in the fourth quarter of 2010 compared to $74.9 million
or 77 cents per diluted share in the prior year quarter.
Adjusted net earnings for the fourth quarter of 2010 were $83.5 million, or 92 cents per
diluted share, compared to $79.6 million, or 82 cents per diluted share in the fourth quarter of
2009, and, were higher primarily due to reduced interest expense and a lower share count. Adjusted
net earnings in the current quarter include an adjustment for purchase price amortization of 4
cents per diluted share and exclude charges of 7 cents per diluted share for a non-recurring
accrual adjustment in our Loan Transaction Services segment (relating to 2007 and 2008) and 3 cents
per diluted share relating to costs associated with the departure of our former CFO, while the
prior year quarter included an adjustment for purchase price amortization of 5 cents per diluted
share.
LPS had a strong fourth quarter despite challenging conditions in the origination and default
markets and a difficult macro-economic environment. LPS, with its market leading presence and its
broad-based technology driven solutions for the mortgage and real estate
industries, remains well positioned to achieve its growth objectives in 2011 and beyond, said
Lee A. Kennedy, Executive Chairman of LPS.
Our Loan Facilitation business posted record growth in a difficult market while our Default
Services business continued to be impacted by a sluggish market environment. Our Other TD&A segment
continued to reflect strong growth due to additional market share gains. During 2010, we further
strengthened our balance sheet and expanded our financial flexibility by paying down $40.1 million
in debt. Also, we continued to be disciplined and aggressive in our capital deployment strategy by
repurchasing 7.4 million shares during 2010, added Jeff Carbiener, President and CEO of LPS.
Operating income of $128.6 million in the quarter compared to $140.9 million in the fourth
quarter of 2009. Adjusting for the charges noted earlier, operating income was $142.6 million in
the fourth quarter of 2010.
Full year 2010 revenues of $2.5 billion were 3.6% above 2009 while net earnings of $302.3
million in 2010 compared to $275.7 million in the prior year. Adjusted net earnings for full year
2010 of $326.4 million were a solid 8.7% higher than full year 2009.
Net cash provided by operating activities for full year 2010 was $448.7 million compared to
$443.7 million in 2009. 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 2010 was $342.0 million compared to $349.2 million for 2009 and was lower primarily due
to higher capital expenditures as well as from changes in working capital.
Technology, Data and Analytics (TD&A)
Revenues for the segment were $201.1 million compared to $189.4 million in the fourth quarter
of 2009, while operating income of $60.4 million compared to $63.5 million in the prior year
period. Mortgage Processing revenues of $100.3 million compared to $104.2 million in the same
period last year. Other TD&A revenues of $100.7 million were 18.1% above the fourth quarter of
2009 primarily due to higher Desktop revenues as well as strong growth in our Other Software and
Services offerings. Overall operating income for TD&A was lower compared to the prior year quarter
primarily due to lower contributions from Mortgage Processing, somewhat offset by higher
contributions from our Other Software and Services, and Desktop businesses.
Loan Transaction Services (LTS)
Revenues for the segment were $439.7 million compared to $421.6 million in the fourth quarter
of 2009, and operating income of $105.7 million, excluding the non-recurring accrual adjustment
noted earlier, compared to $97.2 million in the prior year quarter. Loan Facilitation Services
revenues of $188.3 million increased 31.8% compared to the fourth quarter of 2009. This result
compared very favorably to the Mortgage Bankers Associations (MBA) estimate of overall fourth
quarter originations being lower by 24% compared to the same period last year and, this positive
variance was primarily due to continued market share gains in our settlement services offerings.
Default Services revenues of $251.3 million declined 9.8% compared to the fourth quarter of 2009
driven by continued delays in the initiation of foreclosure proceedings in the industry. Overall
operating income for LTS grew 8.8% mainly due to higher income in Loan Facilitation Services partly
offset by lower contributions from Default Services.
Corporate and Other
Net corporate expenses in the fourth quarter of 2010, excluding the personnel related charge
noted earlier, were $23.5 million compared to $19.8 million in the prior year quarter and were
higher primarily due to higher personnel related expenses.
The company noted that it had repurchased 2.6 million shares for $78.6 million in the fourth
quarter. Following these purchases, $171.4 million remains available under the current
authorization.
Outlook
While the broader economy and the mortgage and real estate markets in particular were
challenging in 2010, overall, we had a good year. LPS continues to have a strong presence in each
of its businesses and is well positioned to grow earnings per share in 2011, said Jeff Carbiener.
Building on the strong 2010 results, we expect first quarter 2011 adjusted earnings to be in the
range of 81-84 cents per diluted share. For full year 2011, we expect adjusted earnings to be in
the $3.74 $3.81 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 EBIT, as adjusted (GAAP operating income adjusted
for the impact of certain non-recurring adjustments, if applicable), adjusted net earnings (GAAP
net earnings adjusted for the impact of certain non-recurring adjustments, if applicable, plus the
after-tax purchase price amortization of intangible assets added through acquisitions), adjusted
net earnings per diluted share (adjusted net earnings divided by diluted weighted average shares),
and adjusted free cash flow (net cash provided by operating activities less additions to
property, equipment and computer software, as well as non-recurring adjustments, if applicable).
LPS provides these measures because it believes that they are helpful to investors in comparing
year-over-year performance in light of certain non-recurring charges, and to better understand our
financial performance, competitive position and future prospects. Non-GAAP measures should be
considered in conjunction with the GAAP
financial presentation and should not be considered in isolation or as a substitute for GAAP
net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in
the attachments to this release.
Conference Call and Webcast
LPS will host a conference call to discuss these results on Friday, February 4, 2011, at 8:00
a.m. EST. 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 11, 2011 by dialing 888-203-1112 (access code: 4532202).
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 LPSs 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 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 (including among others, loan originations and
foreclosures) on demand for certain of our services; our ability to maintain and grow our
relationships with our customers; the effects of our substantial leverage on our ability to make
acquisitions and invest in our business; the level of scrutiny being placed on participants in the
foreclosure process; risks associated with federal and state inquiries and examinations currently
underway or that may be commenced in the future with respect to our default management operations,
and with civil litigation related to these matters; changes to the laws, rules and regulations that
regulate our businesses as a result of the current economic and financial environment; changes in
general economic, business and political conditions, including changes in the financial markets;
the impact of any potential defects, development delays, installation difficulties or system
failures on our business and reputation; risks associated with protecting information security and
privacy; and other risks and uncertainties detailed in the Statement Regarding Forward-Looking
Information, Risk Factors and other sections of the 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, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Processing and services revenues |
$ | 638,820 | $ | 608,133 | $ | 2,456,335 | $ | 2,370,548 | ||||||||
Cost of revenues |
437,963 | 403,174 | 1,642,075 | 1,571,003 | ||||||||||||
Gross profit |
200,857 | 204,959 | 814,260 | 799,545 | ||||||||||||
Selling, general and administrative expenses |
72,299 | 64,059 | 257,350 | 267,339 | ||||||||||||
Operating income |
128,558 | 140,900 | 556,910 | 532,206 | ||||||||||||
Other income (expense): |
||||||||||||||||
Interest income |
246 | 405 | 1,316 | 1,654 | ||||||||||||
Interest expense |
(16,317 | ) | (19,896 | ) | (70,850 | ) | (84,630 | ) | ||||||||
Other expense, net |
71 | (31 | ) | 273 | (248 | ) | ||||||||||
Total other income (expense) |
(16,000 | ) | (19,522 | ) | (69,261 | ) | (83,224 | ) | ||||||||
Earnings from continuing operations before
income taxes and equity in losses of
unconsolidated entity |
112,558 | 121,378 | 487,649 | 448,982 | ||||||||||||
Provision for income taxes |
41,834 | 46,427 | 185,305 | 171,735 | ||||||||||||
Earnings from continuing operations before
equity in losses of unconsolidated entity |
70,724 | 74,951 | 302,344 | 277,247 | ||||||||||||
Equity in losses of unconsolidated entity |
| | | (37 | ) | |||||||||||
Earnings from continuing operations |
70,724 | 74,951 | 302,344 | 277,210 | ||||||||||||
Discontinued operation, net of tax |
| | | (504 | ) | |||||||||||
Net earnings |
70,724 | 74,951 | 302,344 | 276,706 | ||||||||||||
Noncontrolling minority interest |
| (50 | ) | | (977 | ) | ||||||||||
Net earnings attributable to Lender
Processing Services, Inc. |
$ | 70,724 | $ | 74,901 | $ | 302,344 | $ | 275,729 | ||||||||
Net earnings per share diluted from
continuing operations |
$ | 0.78 | $ | 0.77 | $ | 3.23 | $ | 2.87 | ||||||||
Net earnings per share diluted from
discontinued operation |
| | | | ||||||||||||
Net earnings per share diluted |
$ | 0.78 | $ | 0.77 | $ | 3.23 | $ | 2.87 | ||||||||
Weighted average shares outstanding diluted |
90,296 | 96,781 | 93,559 | 96,152 | ||||||||||||
Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
Consolidated Balance Sheets
(Unaudited)
December 31, | ||||||||
2010 | 2009 | |||||||
(In thousands) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 52,287 | $ | 70,528 | ||||
Trade receivables, net of allowance for doubtful accounts |
419,647 | 401,333 | ||||||
Other receivables |
4,910 | 3,770 | ||||||
Prepaid expenses and other current assets |
38,328 | 26,985 | ||||||
Deferred income taxes |
44,102 | 47,528 | ||||||
Total current assets |
559,274 | 550,144 | ||||||
Property and equipment, net of accumulated depreciation |
123,897 | 113,108 | ||||||
Computer software, net of accumulated amortization |
217,573 | 185,376 | ||||||
Other intangible assets, net of accumulated amortization |
58,269 | 72,796 | ||||||
Goodwill |
1,159,539 | 1,166,142 | ||||||
Other non-current assets |
133,291 | 109,738 | ||||||
Total assets |
$ | 2,251,843 | $ | 2,197,304 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 145,154 | $ | 40,100 | ||||
Trade accounts payable |
51,610 | 38,166 | ||||||
Accrued salaries and benefits |
55,230 | 54,376 | ||||||
Recording and transfer tax liabilities |
10,879 | 15,208 | ||||||
Due to affiliates |
| 3,321 | ||||||
Other accrued liabilities |
145,203 | 151,601 | ||||||
Deferred revenues |
57,651 | 66,602 | ||||||
Total current liabilities |
465,727 | 369,374 | ||||||
Deferred revenues |
36,893 | 37,681 | ||||||
Deferred income taxes, net |
96,732 | 65,215 | ||||||
Long-term debt, net of current portion |
1,104,247 | 1,249,250 | ||||||
Other non-current liabilities |
22,030 | 19,926 | ||||||
Total liabilities |
1,725,629 | 1,741,446 | ||||||
Stockholders equity: |
||||||||
Preferred stock $0.0001 par value; 50 million shares authorized, none
issued at December 31, 2010 or 2009, respectively |
| | ||||||
Common stock $0.0001 par value; 500 million shares authorized, 97.4
million and
97.0 million shares issued at December 31, 2010 and 2009, respectively |
10 | 10 | ||||||
Additional paid-in capital |
216,896 | 173,424 | ||||||
Retained earnings |
596,168 | 330,963 | ||||||
Accumulated other comprehensive loss |
(283 | ) | (7,630 | ) | ||||
Treasury stock $0.0001 par value; 8.6 million and 1.2 million shares at
December 31, 2010 and 2009, respectively |
(286,577 | ) | (40,909 | ) | ||||
Total stockholders equity |
526,214 | 455,858 | ||||||
Total liabilities and stockholders equity |
$ | 2,251,843 | $ | 2,197,304 | ||||
Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
Consolidated Statements of Cash Flows
(Unaudited)
Year ended December 31, | ||||||||
2010 | 2009 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net earnings attributable to Lender Processing Services, Inc. |
$ | 302,344 | $ | 275,729 | ||||
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
||||||||
Depreciation and amortization |
98,761 | 97,922 | ||||||
Amortization of debt issuance costs |
4,716 | 5,404 | ||||||
Gain on sale of discontinued operation |
| (2,574 | ) | |||||
Deferred income taxes, net |
30,417 | 25,463 | ||||||
Stock-based compensation cost |
32,077 | 28,042 | ||||||
Income tax benefit from exercise of stock options |
(165 | ) | (2,921 | ) | ||||
Equity in losses of unconsolidated entity |
| 37 | ||||||
Noncontrolling minority interest |
| 977 | ||||||
Changes in assets and liabilities, net of effects of acquisitions: |
||||||||
Trade receivables |
(17,802 | ) | (49,602 | ) | ||||
Other receivables |
(1,126 | ) | 13,637 | |||||
Prepaid expenses and other assets |
(22,859 | ) | (11,578 | ) | ||||
Deferred revenues |
(11,687 | ) | 11,316 | |||||
Accounts payable, accrued liabilities and other liabilities |
34,018 | 51,836 | ||||||
Net cash provided by operating activities |
448,694 | 443,688 | ||||||
Cash flows from investing activities: |
||||||||
Additions to property and equipment |
(40,653 | ) | (40,890 | ) | ||||
Additions to capitalized software |
(67,603 | ) | (57,885 | ) | ||||
Purchases of investments, net of proceeds from sales |
(20,956 | ) | | |||||
Acquisition of title plants and property records data |
(4,401 | ) | (17,219 | ) | ||||
Acquisitions, net of cash acquired |
(18,823 | ) | (31,103 | ) | ||||
Proceeds from sale of discontinued operation, net of cash distributed |
| (32,638 | ) | |||||
Net cash used in investing activities |
(152,436 | ) | (179,735 | ) | ||||
Cash flows from financing activities: |
||||||||
Debt service payments |
(40,109 | ) | (254,497 | ) | ||||
Exercise of stock options and restricted stock activity |
12,111 | 8,098 | ||||||
Income tax benefit from exercise of stock options |
165 | 2,921 | ||||||
Cash dividends paid |
(37,139 | ) | (38,306 | ) | ||||
Acquisition of noncontrolling minority interest |
| (6,850 | ) | |||||
Treasury stock repurchases |
(246,549 | ) | (22,757 | ) | ||||
Bond repurchases |
| (8,000 | ) | |||||
Payments of contingent consideration related to acquisitions |
(2,978 | ) | | |||||
Net cash used in financing activities |
(314,499 | ) | (319,391 | ) | ||||
Net decrease in cash and cash equivalents |
(18,241 | ) | (55,438 | ) | ||||
Cash and cash equivalents, beginning of year |
70,528 | 125,966 | ||||||
Cash and cash equivalents, end of year |
$ | 52,287 | $ | 70,528 | ||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for interest |
$ | 69,005 | $ | 81,698 | ||||
Cash paid for taxes |
$ | 151,436 | $ | 154,595 | ||||
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)
SUPPLEMENTAL FINANCIAL INFORMATION UNAUDITED
(In thousands)
Year ended December 31, | Quarter ended | |||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 12/31/2010 | 9/30/2010 | 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 |
$ | 402,693 | $ | 387,874 | $ | 100,341 | $ | 102,362 | $ | 102,356 | $ | 97,634 | $ | 104,184 | $ | 102,973 | $ | 89,567 | $ | 91,150 | ||||||||||||||||||||||||
Other TD&A |
359,948 | 319,611 | 100,713 | 94,555 | 82,852 | 81,828 | 85,247 | 83,313 | 82,322 | 68,729 | ||||||||||||||||||||||||||||||||||
Total |
762,641 | 707,485 | 201,054 | 196,917 | 185,208 | 179,462 | 189,431 | 186,286 | 171,889 | 159,879 | ||||||||||||||||||||||||||||||||||
Loan Transaction Services: |
||||||||||||||||||||||||||||||||||||||||||||
Loan Facilitation Services |
640,907 | 547,300 | 188,332 | 165,490 | 140,471 | 146,614 | 142,919 | 136,657 | 148,510 | 119,214 | ||||||||||||||||||||||||||||||||||
Default Services |
1,060,616 | 1,137,313 | 251,327 | 265,572 | 275,046 | 268,671 | 278,647 | 303,823 | 299,534 | 255,309 | ||||||||||||||||||||||||||||||||||
Total |
1,701,523 | 1,684,613 | 439,659 | 431,062 | 415,517 | 415,285 | 421,566 | 440,480 | 448,044 | 374,523 | ||||||||||||||||||||||||||||||||||
Corporate and Other |
(7,829 | ) | (21,550 | ) | (1,893 | ) | (1,939 | ) | (1,644 | ) | (2,353 | ) | (2,864 | ) | (7,339 | ) | (6,762 | ) | (4,585 | ) | ||||||||||||||||||||||||
Total Revenue |
$ | 2,456,335 | $ | 2,370,548 | $ | 638,820 | $ | 626,040 | $ | 599,081 | $ | 592,394 | $ | 608,133 | $ | 619,427 | $ | 613,171 | $ | 529,817 | ||||||||||||||||||||||||
Revenue Growth from Prior Year
Period |
||||||||||||||||||||||||||||||||||||||||||||
Technology, Data and Analytics: |
||||||||||||||||||||||||||||||||||||||||||||
Mortgage Processing |
3.8 | % | 16.1 | % | -3.7 | % | -0.6 | % | 14.3 | % | 7.1 | % | 17.9 | % | 23.2 | % | 9.1 | % | 13.7 | % | ||||||||||||||||||||||||
Other TD&A |
12.6 | % | 38.1 | % | 18.1 | % | 13.5 | % | 0.6 | % | 19.1 | % | 40.3 | % | 50.5 | % | 37.9 | % | 23.5 | % | ||||||||||||||||||||||||
Total |
7.8 | % | 25.1 | % | 6.1 | % | 5.7 | % | 7.7 | % | 12.2 | % | 27.0 | % | 34.1 | % | 21.3 | % | 17.7 | % | ||||||||||||||||||||||||
Loan Transaction Services: |
||||||||||||||||||||||||||||||||||||||||||||
Loan Facilitation Services |
17.1 | % | 26.8 | % | 31.8 | % | 21.1 | % | -5.4 | % | 23.0 | % | 70.3 | % | 55.9 | % | 25.8 | % | -16.1 | % | ||||||||||||||||||||||||
Default Services |
-6.7 | % | 33.5 | % | -9.8 | % | -12.6 | % | -8.2 | % | 5.2 | % | 14.3 | % | 25.6 | % | 51.9 | % | 51.0 | % | ||||||||||||||||||||||||
Total |
1.0 | % | 31.3 | % | 4.3 | % | -2.1 | % | -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 | n/m | n/m | ||||||||||||||||||||||||||||||||||
Total Revenue |
3.6 | % | 29.0 | % | 5.0 | % | 1.1 | % | -2.3 | % | 11.8 | % | 28.3 | % | 32.7 | % | 35.3 | % | 19.4 | % | ||||||||||||||||||||||||
2. | Depreciation
and Amortization
Continuing Operations |
|||||||||||||||||||||||||||||||||||||||||||
Depreciation and Amortization |
$ | 66,703 | $ | 61,331 | $ | 18,788 | $ | 17,142 | $ | 15,780 | $ | 14,993 | $ | 15,932 | $ | 15,894 | $ | 15,431 | $ | 14,074 | ||||||||||||||||||||||||
Purchase Price Amortization |
24,781 | 30,749 | 6,469 | 5,710 | 5,884 | 6,718 | 7,654 | 7,608 | 7,404 | 8,083 | ||||||||||||||||||||||||||||||||||
Other Amortization |
7,277 | 5,837 | 1,690 | 1,668 | 1,976 | 1,943 | 1,713 | 1,542 | 753 | 1,829 | ||||||||||||||||||||||||||||||||||
Total Depreciation and Amortization |
$ | 98,761 | $ | 97,917 | $ | 26,947 | $ | 24,520 | $ | 23,640 | $ | 23,654 | $ | 25,299 | $ | 25,044 | $ | 23,588 | $ | 23,986 | ||||||||||||||||||||||||
3. | Stock Compensation Expense |
|||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Expense,
Excluding Acceleration Charges |
$ | 30,280 | $ | 27,243 | $ | 8,228 | $ | 8,215 | $ | 7,280 | $ | 6,557 | $ | 7,678 | $ | 7,062 | $ | 6,459 | $ | 6,044 | ||||||||||||||||||||||||
Stock Acceleration Expense |
1,797 | 799 | 1,797 | | | | | | | 799 | ||||||||||||||||||||||||||||||||||
Total Stock Compensation Expense |
$ | 32,077 | $ | 28,042 | $ | 10,025 | $ | 8,215 | $ | 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)
NON-GAAP FINANCIAL INFORMATION UNAUDITED
(In thousands, except per share data)
Year ended December 31, | Quarter ended | |||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | |||||||||||||||||||||||||||||||||||
1. | EBIT Continuing Operations |
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Consolidated |
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Revenue |
$ | 2,456,335 | $ | 2,370,548 | $ | 638,820 | $ | 626,040 | $ | 599,081 | $ | 592,394 | $ | 608,133 | $ | 619,427 | $ | 613,171 | $ | 529,817 | ||||||||||||||||||||||||
Cost of Sales |
1,642,075 | 1,571,003 | 437,963 | 417,243 | 390,847 | 396,022 | 403,174 | 409,113 | 404,014 | 354,702 | ||||||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
257,350 | 267,339 | 72,299 | 64,516 | 59,815 | 60,720 | 64,059 | 66,671 | 65,431 | 71,178 | ||||||||||||||||||||||||||||||||||
Operating Income |
556,910 | 532,206 | 128,558 | 144,281 | 148,419 | 135,652 | 140,900 | 143,643 | 143,726 | 103,937 | ||||||||||||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs |
2,472 | 8,186 | 2,472 | | | | | | | 8,186 | ||||||||||||||||||||||||||||||||||
Stock Related Restructuring Costs |
1,797 | 799 | 1,797 | | | | | | | 799 | ||||||||||||||||||||||||||||||||||
Non-recurring Accrual Adjustment |
9,800 | | 9,800 | | | | | | | | ||||||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | 570,979 | $ | 541,191 | $ | 142,627 | $ | 144,281 | $ | 148,419 | $ | 135,652 | $ | 140,900 | $ | 143,643 | $ | 143,726 | $ | 112,922 | ||||||||||||||||||||||||
EBIT Margin, as adjusted |
23.2 | % | 22.8 | % | 22.3 | % | 23.0 | % | 24.8 | % | 22.9 | % | 23.2 | % | 23.2 | % | 23.4 | % | 21.3 | % | ||||||||||||||||||||||||
Depreciation and Amortization |
$ | 98,761 | $ | 97,917 | $ | 26,947 | $ | 24,520 | $ | 23,640 | $ | 23,654 | $ | 25,299 | $ | 25,044 | $ | 23,588 | $ | 23,986 | ||||||||||||||||||||||||
Technology, Data and Analytics |
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Revenue |
$ | 762,641 | $ | 707,485 | $ | 201,054 | $ | 196,917 | $ | 185,208 | $ | 179,462 | $ | 189,431 | $ | 186,286 | $ | 171,889 | $ | 159,879 | ||||||||||||||||||||||||
Cost of Sales |
435,138 | 402,411 | 120,605 | 108,421 | 100,317 | 105,795 | 107,368 | 105,651 | 98,929 | 90,463 | ||||||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
81,035 | 70,717 | 20,050 | 21,108 | 20,066 | 19,811 | 18,571 | 18,256 | 17,824 | 16,066 | ||||||||||||||||||||||||||||||||||
Operating Income |
246,468 | 234,357 | 60,399 | 67,388 | 64,825 | 53,856 | 63,492 | 62,379 | 55,136 | 53,350 | ||||||||||||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs |
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Stock Related Restructuring Costs |
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Non-recurring Accrual Adjustment |
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EBIT, as adjusted |
$ | 246,468 | $ | 234,357 | $ | 60,399 | $ | 67,388 | $ | 64,825 | $ | 53,856 | $ | 63,492 | $ | 62,379 | $ | 55,136 | $ | 53,350 | ||||||||||||||||||||||||
EBIT Margin, as adjusted |
32.3 | % | 33.1 | % | 30.0 | % | 34.2 | % | 35.0 | % | 30.0 | % | 33.5 | % | 33.5 | % | 32.1 | % | 33.4 | % | ||||||||||||||||||||||||
Depreciation and Amortization |
$ | 68,022 | $ | 69,477 | $ | 18,905 | $ | 16,532 | $ | 16,047 | $ | 16,538 | $ | 18,066 | $ | 17,595 | $ | 16,441 | $ | 17,375 | ||||||||||||||||||||||||
Loan Transaction Services |
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Revenue |
$ | 1,701,523 | $ | 1,684,613 | $ | 439,659 | $ | 431,062 | $ | 415,517 | $ | 415,285 | $ | 421,566 | $ | 440,480 | $ | 448,044 | $ | 374,523 | ||||||||||||||||||||||||
Cost of Sales |
1,212,781 | 1,190,238 | 317,285 | 310,780 | 292,107 | 292,609 | 298,723 | 311,230 | 311,349 | 268,936 | ||||||||||||||||||||||||||||||||||
Selling, General and Administrative Expenses |
95,656 | 107,769 | 26,440 | 23,561 | 21,798 | 23,857 | 25,681 | 27,665 | 27,064 | 27,359 | ||||||||||||||||||||||||||||||||||
Operating Income |
393,086 | 386,606 | 95,934 | 96,721 | 101,612 | 98,819 | 97,162 | 101,585 | 109,631 | 78,228 | ||||||||||||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs |
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Stock Related Restructuring Costs |
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Non-recurring Accrual Adjustment |
9,800 | | 9,800 | | | | | | | | ||||||||||||||||||||||||||||||||||
EBIT, as adjusted |
$ | 402,886 | $ | 386,606 | $ | 105,734 | $ | 96,721 | $ | 101,612 | $ | 98,819 | $ | 97,162 | $ | 101,585 | $ | 109,631 | $ | 78,228 | ||||||||||||||||||||||||
EBIT Margin, as adjusted |
23.7 | % | 22.9 | % | 24.0 | % | 22.4 | % | 24.5 | % | 23.8 | % | 23.0 | % | 23.1 | % | 24.5 | % | 20.9 | % | ||||||||||||||||||||||||
Depreciation and Amortization |
$ | 23,313 | $ | 20,310 | $ | 6,226 | $ | 6,152 | $ | 5,749 | $ | 5,186 | $ | 5,281 | $ | 5,295 | $ | 5,126 | $ | 4,608 | ||||||||||||||||||||||||
Corporate and Other |
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Revenue |
$ | (7,829 | ) | $ | (21,550 | ) | $ | (1,893 | ) | $ | (1,939 | ) | $ | (1,644 | ) | $ | (2,353 | ) | $ | (2,864 | ) | $ | (7,339 | ) | $ | (6,762 | ) | $ | (4,585 | ) | ||||||||||||||
Cost of Sales |
(5,844 | ) | (21,646 | ) | 73 | (1,958 | ) | (1,577 | ) | (2,382 | ) | (2,917 | ) | (7,768 | ) | (6,264 | ) | (4,697 | ) | |||||||||||||||||||||||||
Selling, General and Administrative Expenses |
80,659 | 88,853 | 25,809 | 19,847 | 17,951 | 17,052 | 19,807 | 20,750 | 20,543 | 27,753 | ||||||||||||||||||||||||||||||||||
Operating Income |
(82,644 | ) | (88,757 | ) | (27,775 | ) | (19,828 | ) | (18,018 | ) | (17,023 | ) | (19,754 | ) | (20,321 | ) | (21,041 | ) | (27,641 | ) | ||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs |
2,472 | 8,186 | 2,472 | | | | | | | 8,186 | ||||||||||||||||||||||||||||||||||
Stock Related Restructuring Costs |
1,797 | 799 | 1,797 | | | | | | | 799 | ||||||||||||||||||||||||||||||||||
Non-recurring Accrual Adjustment |
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EBIT, as adjusted |
$ | (78,375 | ) | $ | (79,772 | ) | $ | (23,506 | ) | $ | (19,828 | ) | $ | (18,018 | ) | $ | (17,023 | ) | $ | (19,754 | ) | $ | (20,321 | ) | $ | (21,041 | ) | $ | (18,656 | ) | ||||||||||||||
Depreciation and Amortization |
$ | 7,426 | $ | 8,130 | $ | 1,816 | $ | 1,836 | $ | 1,844 | $ | 1,930 | $ | 1,952 | $ | 2,154 | $ | 2,021 | $ | 2,003 | ||||||||||||||||||||||||
2. | Net Earnings Reconciliation |
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Net Earnings |
$ | 302,344 | 275,729 | $ | 70,724 | $ | 78,691 | $ | 80,413 | $ | 72,516 | $ | 74,901 | $ | 75,542 | $ | 75,240 | $ | 50,046 | |||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs, net of tax |
1,533 | 5,055 | 1,533 | | | | | | | 5,055 | ||||||||||||||||||||||||||||||||||
Stock Related Restructuring Costs, net of tax |
1,114 | 493 | 1,114 | | | | | | | 493 | ||||||||||||||||||||||||||||||||||
Non-recurring Accrual Adjustment, net of tax |
6,076 | | 6,076 | |||||||||||||||||||||||||||||||||||||||||
Net Earnings, as adjusted |
311,067 | 281,277 | 79,447 | 78,691 | 80,413 | 72,516 | 74,901 | 75,542 | 75,240 | 55,594 | ||||||||||||||||||||||||||||||||||
Purchase Price Amortization, net of tax (1) |
15,366 | 18,987 | 4,059 | 3,526 | 3,633 | $ | 4,148 | 4,726 | 4,698 | 4,572 | 4,991 | |||||||||||||||||||||||||||||||||
Adjusted Net Earnings |
$ | 326,433 | $ | 300,264 | $ | 83,506 | $ | 82,217 | $ | 84,046 | $ | 76,664 | $ | 79,627 | $ | 80,240 | $ | 79,812 | $ | 60,585 | ||||||||||||||||||||||||
Adjusted Net Earnings Per Diluted Share (2) |
$ | 3.50 | $ | 3.12 | $ | 0.92 | $ | 0.89 | $ | 0.89 | $ | 0.80 | $ | 0.82 | $ | 0.83 | $ | 0.83 | $ | 0.64 | ||||||||||||||||||||||||
Diluted Weighted Average Shares |
93,559 | 96,152 | 90,296 | 92,682 | 94,910 | 96,416 | 96,781 | 96,399 | 96,133 | 95,284 | ||||||||||||||||||||||||||||||||||
3. | Cashflow Reconciliation |
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Cash Flows from Operating Activities: |
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Net Earnings |
$ | 302,344 | $ | 275,729 | $ | 70,724 | $ | 78,691 | $ | 80,413 | $ | 72,516 | $ | 74,901 | $ | 75,542 | $ | 75,240 | $ | 50,046 | ||||||||||||||||||||||||
Adjustments: |
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Cash Related Restructuring Costs, net of tax |
1,533 | 4,304 | 1,533 | | | | | | | 4,304 | ||||||||||||||||||||||||||||||||||
Net Earnings, as adjusted |
303,877 | 280,033 | 72,257 | 78,691 | 80,413 | 72,516 | 74,901 | 75,542 | 75,240 | 54,350 | ||||||||||||||||||||||||||||||||||
Adjustments to reconcile net earnings to
net cash provided by operating activities: |
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Non-cash adjustments |
165,806 | 152,350 | 51,625 | 41,548 | 34,591 | 38,042 | 60,281 | 32,279 | 31,700 | 28,090 | ||||||||||||||||||||||||||||||||||
Working capital adjustments |
(19,456 | ) | 15,609 | 34,628 | (35,191 | ) | (17,375 | ) | (1,518 | ) | 13,369 | (16,954 | ) | 21,957 | (2,763 | ) | ||||||||||||||||||||||||||||
Net cash provided by operating activities |
450,227 | 447,992 | 158,510 | 85,048 | 97,629 | 109,040 | 148,551 | 90,867 | 128,897 | 79,677 | ||||||||||||||||||||||||||||||||||
Capital expenditures included in investing
activities |
(108,256 | ) | (98,775 | ) | (24,150 | ) | (26,940 | ) | (29,122 | ) | (28,044 | ) | (30,913 | ) | (19,455 | ) | (25,836 | ) | (22,571 | ) | ||||||||||||||||||||||||
Adjusted Net Free Cash Flow |
$ | 341,971 | $ | 349,217 | $ | 134,360 | $ | 58,108 | $ | 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. | |
(2) | Adjusted net earnings per diluted share for the years ended December 31, 2010 and 2009 represents the summation of the adjusted net earnings per diluted share computed by quarter in each of the respective years. | |
(3) | During the three months ended December 31, 2010, we recorded a non-recurring accrual adjustment to cost of sales totaling $9.8 million relating to fiscal years 2007 and 2008. |