Black Knight InfoServ, LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
8-K - 8-K - Black Knight InfoServ, LLC	q420128k.htm
EX-99.2 - EXHIBIT 99.2 - Black Knight InfoServ, LLC	lps4q12financialresultsf.htm

Exhibit 99.1

Press Release



Investors:		Media:
Nancy Murphy		Michelle Kersch
(904) 854-8640; nancy.murphy@lpsvcs.com		(904) 854-5043; michelle.kersch@lpsvcs.com

Lender Processing Services Reports Fourth Quarter and Full Year 2012 Earnings

Fourth quarter adjusted earnings per share of $0.74 and free cash flow of $92 million

Full year adjusted earnings per share of $2.80 and free cash flow of $345 million

Leading technology-driven solutions enable mortgage industry to meet new requirements

JACKSONVILLE, Fla. - February 7, 2013 - Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced fourth quarter 2012 GAAP net earnings of $2.8 million, or $0.03 per diluted share, compared to a net loss of $21.2 million, or $0.25 per diluted share in fourth quarter 2011, and full year 2012 GAAP net earnings of $70.4 million, or $0.83 per diluted share, compared to net earnings of $96.5 million, or $1.13 per diluted share in 2011.

“LPS enters 2013 a stronger company that is increasingly well positioned to enhance the mortgage value chain and deliver innovative technology, data and expertise to our clients,” said Hugh Harris, president and chief executive officer of LPS. “The rapidly evolving mortgage landscape continues to create new requirements for our clients that result in significant long-term growth opportunities for LPS.”

“We are extremely pleased with the recent conclusion of many of the company's legacy legal and regulatory matters which allows us to focus more of our time and energy on growth and innovation,” added Harris. “LPS' technology leadership, scale and commitment to compliance excellence provide significant strategic advantages. We are confident these unique capabilities, together with our company's strong cash flow and disciplined capital allocation, will create significant long-term value for our stakeholders.”

Fourth Quarter 2012


•	Technology, Data & Analytics (TD&A) revenue increased 8% over the prior year fueled by growth in all sub-segments


•	Origination Services revenue increased 15% from the prior year driven by strong refinance volume and market share gains


•	Adjusted EBITDA margin increased more than one percentage point over the prior year to 27%


•	Adjusted earnings were $63 million, or $0.74 per diluted share, excluding a charge totaling $0.69 per diluted share, and reflecting the add-back for purchase accounting amortization


•	Adjusted free cash flow of $92 million or $1.08 per diluted share


•	Completed debt refinancing to lower cost of capital and further strengthen the balance sheet

Full Year 2012


•	Record TD&A revenue increased 8% to $737 million, compared to the prior year


•	Record Origination Services revenue of $625 million, up 20% from the prior year


•	Adjusted EBITDA margin increased more than one percentage point to 27%, driven by growth in high return businesses


•	Adjusted earnings of $237 million, or $2.80 per diluted share, excluding a charge totaling $1.88 per diluted share, and reflecting the add-back for purchase accounting amortization


•	Adjusted free cash flow of $345 million or $4.07 per diluted share

Delivering Innovative Technology, Data and Expertise


•	Increased Servicing Technology leadership - mortgage loans on the system climbed 3% from the prior year including 5 new client implementations


•	Invested more than $200 million in technology and data solutions in the past two years to enable customers to meet evolving industry requirements


•	Implementing 20 new clients during 2013 on to expanded Origination Technology platforms

“Our strong financial performance in 2012 clearly demonstrates the strength of LPS' business model and our company's ability to thrive in a rapidly changing market,” Tom Schilling, chief financial officer, said. “Since our spin-off in 2008, LPS has consistently delivered annual adjusted free cash flow exceeding $340 million. This success enables ongoing investment in growth initiatives to further strengthen our leadership in TD&A. We continue to enhance Transaction Services, which delivers high value, regulatory compliant solutions to the nation's largest mortgage lenders. In 2012, we significantly strengthened LPS' financial position, which is a key competitive advantage, while continuing to improve the risk/return profile of Default Services.”

Fourth quarter 2012 results are adjusted for charges totaling $0.69 per diluted share, including $0.33 per share for estimated legal and regulatory contingencies, $0.18 per share related to the refinancing of credit facilities, $0.07 per share related to income tax adjustments, $0.03 per share related to the disposition of non-core businesses, and $0.08 per share for other non-recurring charges.

Consolidated Fourth Quarter and Full Year Performance

Fourth quarter 2012 revenue was $501.0 million, a decrease of 2.1% compared to the prior year quarter, due to lower Default Services revenue that resulted from a drop in industry-wide foreclosure starts, partially offset by higher revenue in TD&A and Origination Services. Fourth quarter 2012 operating income on a GAAP basis was $51.9 million and on an adjusted basis was $110.3 million, an increase of 0.7% from the comparable period in 2011 primarily driven by higher contributions from Origination Services.

Full year 2012 revenue was $2.0 billion, a 0.7% increase from the prior year, due to increased revenue from Origination Services and TD&A, partially offset by lower revenue in Default Services. Full year 2012 operating income on a GAAP basis was $232.9 million and on an adjusted basis was $435.8 million, an increase of 5.2% from 2011 primarily driven by higher contributions from Origination Services and TD&A, partially offset by lower contributions from Default Services.

Net cash provided by operating activities for the full year 2012 was $434.5 million compared to $477.9 million in 2011, and adjusted free cash flow was $345.1 million compared to $381.2 million in the prior year. The decrease in adjusted free cash flow resulted primarily from higher capital expenditures and changes in working capital. Fourth quarter adjusted free cash flow was $92.3 million, compared to $121.5 million in the prior year period. Adjusted free cash flow is defined as net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software.

Technology, Data and Analytics (TD&A)

Revenue for the fourth quarter increased 7.8% from the prior year to $189.3 million driven by growth in all lines of business. Revenue from Servicing Technology increased 7.2% primarily due to growth in loans and revenue per loan; Origination Technology increased 20.3% due to higher industry refinance volumes; Default Technology increased 3.0% as a result of annualized market share gains achieved in 2011 that were partially offset by lower industry-wide foreclosure volumes; and Data and Analytics increased 6.3%. Adjusted operating income was $54.8 million compared to $57.6 million in the prior year period due to higher expenses related to growth initiatives and an increase in depreciation. Adjusted operating margin was 28.9%, down from 32.8% in the prior year quarter due to investment in growth initiatives including origination technology and data and analytics.

Transaction Services

Revenue for the fourth quarter decreased 7.7% from the prior year period to $311.7 million as a result of a 26.0% decrease in Default Services revenue, which was partially offset by a 14.8% increase in Origination Services revenue. Default Services revenue and operating income decreased as a result of lower industry-wide foreclosure activity and strategic actions to reduce risk and enhance returns. Origination Services revenue and operating income increased as a result of higher industry refinance volume. Adjusted operating income was $67.4 million down from $70.7 million in the prior year period due to lower Default Services revenue which was partially offset by higher Origination Services title, escrow and flood revenue. Adjusted operating margin increased to 21.6% from 20.9% in the prior year period.

Corporate and Other

Net corporate expenses in the fourth quarter of 2012 were $66.0 million compared to $117.2 million in the prior year period, which reflects increases to the legal and regulatory reserve of $47.9 million and $78.5 million, respectively. Adjusting for these and other non-recurring items, corporate expenses decreased to $11.9 million from $18.7 million in the prior year period as a result of 2011 legal expenses being charged to expense prior to establishing a contingency reserve for the company's legal and regulatory matters.

Outlook

Based on the current environment, the company expects first quarter 2013 revenue to be in the range of $460 million to $480 million and adjusted net earnings per diluted share from continuing operations to be in the range of $0.63 to $0.67.

Earnings Conference Call and Webcast

LPS will host a conference call tomorrow at 10:00 a.m. ET with a live webcast on the Investor Relations section of its website at www.lpsvcs.com. Earnings information, including this press release and our financial results presentation, is available on the website. 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 call will be available until February 15, 2013, by dialing 888-203-1112 (access code: 3830545).

About Lender Processing Services

LPS (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS

offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.

These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries. Lender Processing Services is a Fortune 1000 company headquartered in Jacksonville, Fla., employing approximately 8,000 professionals. For more information, please visit www.lpsvcs.com.

Use of Non-GAAP Financial Information

U.S. Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, LPS reports several non-GAAP measures, including “EBITDA” (GAAP operating income plus depreciation and amortization); “EBITDA, as adjusted” (EBITDA adjusted for the impact of certain non-recurring adjustments, if applicable); “EBIT, as adjusted” or “adjusted operating income” (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” or “adjusted EPS 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 and other 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 measures. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.

Forward-Looking Statements

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

###

Exhibit A

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)



	Three months ended December 31,						Year ended December 31,
	2012			2011			2012			2011
	(In thousands, except per share data)
Revenue	$	501,029		$	512,033		$	1,997,651		$	1,983,433
Expenses:
Operating expenses	365,557			378,840			1,465,095			1,480,371
Depreciation and amortization	25,136			23,600			96,744			88,942
Legal and regulatory charges	47,941			78,484			192,417			78,484
Exit costs, impairments and other charges	10,460			27,714			10,460			56,912
Total expenses	449,094			508,638			1,764,716			1,704,709
Operating income	51,935			3,395			232,935			278,724
Other income (expense):
Interest income	497			387			1,862			1,451
Interest expense	(39,039		)	(16,622		)	(88,008		)	(67,583		)
Other income, net	21			(8		)	194			(181		)
Total other income (expense)	(38,521		)	(16,243		)	(85,952		)	(66,313		)
Earnings (loss) from continuing operations before income taxes	13,414			(12,848		)	146,983			212,411
Provision (benefit) for income taxes	7,686			(7,307		)	67,546			77,167
Net earnings (loss) from continuing operations	5,728			(5,541		)	79,437			135,244
Loss from discontinued operations, net of tax	(2,914		)	(15,660		)	(9,078		)	(38,701		)
Net earnings (loss)	$	2,814		$	(21,201	)	$	70,359		$	96,543

Net earnings (loss) per share - diluted from continuing operations	$	0.06		$	(0.06	)	$	0.93		$	1.58
Net loss per share - diluted from discontinued operations	(0.03		)	(0.19		)	(0.10		)	(0.45		)
Net earnings (loss) per share - diluted	$	0.03		$	(0.25	)	$	0.83		$	1.13
Weighted average shares outstanding - diluted	85,106			84,430			84,857			85,685

Exhibit B

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)



	December 31,
	2012			2011
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	236,241		$	77,355
Trade receivables, net of allowance for doubtful accounts	274,783			345,048
Other receivables	3,800			1,423
Prepaid expenses and other current assets	38,194			33,004
Deferred income taxes	127,742			74,006
Total current assets	680,760			530,836

Property and equipment, net	126,633			121,245
Computer software, net	245,271			228,882
Other intangible assets, net	23,670			39,140
Goodwill	1,109,304			1,132,828
Other non-current assets	260,196			192,484
Total assets	$	2,445,834		$	2,245,415

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	39,310
Trade accounts payable	38,901			43,105
Accrued salaries and benefits	107,984			64,383
Legal and regulatory accrual	223,149			78,483
Other accrued liabilities	169,458			168,627
Deferred revenues	58,868			64,078
Total current liabilities	598,360			457,986

Deferred revenues	24,987			34,737
Deferred income taxes, net	174,303			122,755
Long-term debt, net of current portion	1,068,125			1,109,850
Other non-current liabilities	37,163			32,099
Total liabilities	1,902,938			1,757,427

Stockholders' equity:
Preferred stock $0.0001 par value; 50 million shares authorized, none issued at December 31, 2012 and December 31, 2011	—			—
Common stock $0.0001 par value; 500 million shares authorized, 97.4 million shares issued at December 31, 2012 and December 31, 2011	10			10
Additional paid-in capital	250,016			250,533
Retained earnings	694,148			658,146
Accumulated other comprehensive loss	(3,079		)	(1,783		)
Treasury stock at cost; 12.5 million and 13.0 million shares at December 31, 2012 and December 31, 2011, respectively	(398,199		)	(418,918		)
Total stockholders' equity	542,896			487,988
Total liabilities and stockholders' equity	$	2,445,834		$	2,245,415

Exhibit C

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Year ended December 31,
	2012			2011
	(In thousands)
Cash flows from operating activities:
Net earnings	$	70,359		$	96,543
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	98,778			98,828
Amortization of debt issuance costs	12,250			10,017
Asset impairment charges	6,603			71,995
(Gain) loss on sale of discontinued operations	(20,207		)	849
Deferred income taxes, net	(3,654		)	(4,761		)
Stock-based compensation cost	25,749			41,709
Income tax effect of equity compensation	(891		)	873
Changes in assets and liabilities, net of effects of acquisitions:
Trade receivables	62,571			72,446
Other receivables	(896		)	3,303
Prepaid expenses and other assets	(27,168		)	(6,274		)
Deferred revenues	18,054			3,975
Accounts payable, accrued liabilities and other liabilities	192,914			88,356
Net cash provided by operating activities	434,462			477,859

Cash flows from investing activities:
Additions to property and equipment	(38,905		)	(32,768		)
Additions to capitalized software	(74,423		)	(72,111		)
Purchases of investments	(24,533		)	(25,211		)
Proceeds from sale of investments	5,917			3,702
Acquisition of title plants and property records data	(44,766		)	(23,967		)
Acquisitions, net of cash acquired	(12,250		)	(9,802		)
Proceeds from sale of discontinued operations, net of cash distributed	42,628			4,451
Net cash used in investing activities	(146,332		)	(155,706		)

Cash flows from financing activities:
Borrowings	600,000			1,005,000
Debt service payments	(318,957		)	(1,100,242		)
Exercise of stock options and restricted stock vesting	(2,681		)	(2,662		)
Income tax effect of equity compensation	891			(873		)
Dividends paid	(33,875		)	(34,446		)
Debt issuance costs paid	(10,622		)	(22,059		)
Treasury stock repurchases	—			(136,878		)
Bond repurchases	(362,000		)	(4,925		)
Payment of contingent consideration related to acquisitions	(2,000		)	—
Net cash used in financing activities	(129,244		)	(297,085		)

Net increase in cash and cash equivalents	158,886			25,068
Cash and cash equivalents, beginning of period	77,355			52,287
Cash and cash equivalents, end of period	$	236,241		$	77,355

Supplemental disclosures of cash flow information:
Cash paid for interest	$	68,827		$	56,975
Cash paid for taxes	$	74,704		$	56,538

Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)



		CALENDAR YEAR						QUARTER (1)
		2012			2011			Q4-2012			Q3-2012			Q2-2012			Q1-2012			Q4-2011			Q3-2011			Q2-2011			Q1-2011
1.	Revenue - Continuing Operations
	Technology, Data and Analytics:
	Technology	$	677,900		$	621,585		$	174,110		$	173,985		$	168,515		$	161,290		$	161,252		$	156,414		$	152,676		$	151,243
	Servicing Technology	446,025			421,352			114,818			111,572			111,284			108,351			107,103			107,273			103,676			103,300
	Default Technology	136,552			120,288			34,762			36,163			34,051			31,576			33,752			28,185			29,201			29,150
	Origination Technology	95,323			79,945			24,530			26,250			23,180			21,363			20,397			20,956			19,799			18,793
	Data and Analytics	59,005			58,014			15,202			15,009			14,767			14,027			14,297			13,920			15,161			14,636
	Total	736,905			679,599			189,312			188,994			183,282			175,317			175,549			170,334			167,837			165,879
	Transaction Services:
	Origination Services	625,482			519,438			173,934			154,057			150,741			146,750			151,527			133,099			105,856			128,956
	Default Services	637,256			790,467			137,783			154,394			179,618			165,461			186,249			192,675			198,273			213,270
	Total	1,262,738			1,309,905			311,717			308,451			330,359			312,211			337,776			325,774			304,129			342,226
	Corporate	(1,992		)	(6,071		)	—			6			(264		)	(1,734		)	(1,292		)	(1,796		)	(1,513		)	(1,470		)
	Total Revenue	$	1,997,651		$	1,983,433		$	501,029		$	497,451		$	513,377		$	485,794		$	512,033		$	494,312		$	470,453		$	506,635

	Revenue Growth from Prior Year Period
	Technology, Data and Analytics:
	Technology	9.1		%	3.5		%	8.0		%	11.2		%	10.4		%	6.6		%	4.6		%	0.1		%	2.7		%	6.9		%
	Servicing Technology	5.9		%	3.9		%	7.2		%	4.0		%	7.3		%	4.9		%	5.8		%	4.0		%	0.7		%	5.3		%
	Default Technology	13.5		%	0.8		%	3.0		%	28.3		%	16.6		%	8.3		%	1.9		%	(14.7		)%	15.1		%	5.0		%
	Origination Technology	19.2		%	5.5		%	20.3		%	25.3		%	17.1		%	13.7		%	3.4		%	4.7		%	(2.7		)%	20.2		%
	Data and Analytics	1.7		%	(11.0		)%	6.3		%	7.8		%	(2.6		)%	(4.2		)%	(16.6		)%	(11.3		)%	(5.3		)%	(10.6		)%
	Total	8.4		%	2.1		%	7.8		%	11.0		%	9.2		%	5.7		%	2.5		%	(0.9		)%	1.9		%	5.1		%
	Transaction Services:
	Origination Services	20.4		%	(14.2		)%	14.8		%	15.7		%	42.4		%	13.8		%	(15.5		)%	(14.8		)%	(19.5		)%	(7.0		)%
	Default Services	(19.4		)%	(15.3		)%	(26.0		)%	(19.9		)%	(9.4		)%	(22.4		)%	(19.1		)%	(19.4		)%	(15.3		)%	(7.1		)%
	Total	(3.6		)%	(14.9		)%	(7.7		)%	(5.3		)%	8.6		%	(8.8		)%	(17.5		)%	(17.6		)%	(16.8		)%	(7.0		)%
	Corporate	n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m
	Total Revenue	0.7		%	(9.7		)%	(2.1		)%	0.6		%	9.1		%	(4.1		)%	(11.6		)%	(12.6		)%	(11.0		)%	(3.3		)%



Revenue Growth from Sequential Period
Technology, Data and Analytics:
Technology	9.1	%	3.5	%	0.1	%	3.2	%	4.5	%	—	%	3.1	%	2.4	%	0.9	%	(1.9	)%
Servicing Technology	5.9	%	3.9	%	2.9	%	0.3	%	2.7	%	1.2	%	(0.2	)%	3.5	%	0.4	%	2.0	%
Default Technology	13.5	%	0.8	%	(3.9	)%	6.2	%	7.8	%	(6.4	)%	19.8	%	(3.5	)%	0.2	%	(12.0	)%
Origination Technology	19.2	%	5.5	%	(6.6	)%	13.2	%	8.5	%	4.7	%	(2.7	)%	5.8	%	5.4	%	(4.8	)%
Data and Analytics	1.7	%	(11.0	)%	1.3	%	1.6	%	5.3	%	(1.9	)%	2.7	%	(8.2	)%	3.6	%	(14.6	)%
Total	8.4	%	2.1	%	0.2	%	3.1	%	4.5	%	(0.1	)%	3.1	%	1.5	%	1.2	%	(3.2	)%
Transaction Services:
Origination Services	20.4	%	(14.2	)%	12.9	%	2.2	%	2.7	%	(3.2	)%	13.8	%	25.7	%	(17.9	)%	(28.1	)%
Default Services	(19.4	)%	(15.3	)%	(10.8	)%	(14.0	)%	8.6	%	(11.2	)%	(3.3	)%	(2.8	)%	(7.0	)%	(7.3	)%
Total	(3.6	)%	(14.9	)%	1.1	%	(6.6	)%	5.8	%	(7.6	)%	3.7	%	7.1	%	(11.1	)%	(16.4	)%
Corporate	n/m		n/m		n/m		n/m		n/m		n/m		n/m		n/m		n/m		n/m
Total Revenue	0.7	%	(9.7	)%	0.7	%	(3.1	)%	5.7	%	(5.1	)%	3.6	%	5.1	%	(7.1	)%	(12.5	)%

(1) 2011 revenue has been reclassified to conform to the current year presentation.

Exhibit E

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)



		CALENDAR YEAR						QUARTER
		2012			2011			Q4-2012			Q3-2012			Q2-2012			Q1-2012			Q4-2011			Q3- 2011			Q2-2011			Q1 - 2011
1.	Operating Results - Continuing Operations
	Consolidated
	Revenue	$	1,997,651		$	1,983,433		$	501,029		$	497,451		$	513,377		$	485,794		$	512,033		$	494,312		$	470,453		$	506,635
	Operating Income (Loss), as reported	232,935			278,724			51,935			111,859			(24,065		)	93,206			3,395			92,181			77,129			106,019
	Adjustments:
	Legal and Regulatory Charges (1)	192,417			78,484			47,941			—			144,476			—			78,484			—			—			—
	Exit costs, Impairments and Other Charges (2)	10,460			56,912			10,460			—			—			—			27,714			—			9,887			19,311
	Operating Income, as adjusted	435,812			414,120			110,336			111,859			120,411			93,206			109,593			92,181			87,016			125,330
	Depreciation and Amortization	96,744			88,942			25,136			24,241			23,453			23,914			23,600			20,471			22,259			22,612
	EBITDA, as adjusted	$	532,556		$	503,062		$	135,472		$	136,100		$	143,864		$	117,120		$	133,193		$	112,652		$	109,275		$	147,942
	Operating Margin, as adjusted	21.8		%	20.9		%	22.0		%	22.5		%	23.5		%	19.2		%	21.4		%	18.6		%	18.5		%	24.7		%
	EBITDA Margin, as adjusted	26.7		%	25.4		%	27.0		%	27.4		%	28.0		%	24.1		%	26.0		%	22.8		%	23.2		%	29.2		%
	Technology, Data and Analytics
	Revenue	$	736,905		$	679,599		$	189,312		$	188,994		$	183,282		$	175,317		$	175,549		$	170,334		$	167,837		$	165,879
	Operating Income, as reported	218,367			206,761			51,971			58,318			56,003			52,075			49,607			56,814			47,741			52,599
	Adjustments:
	Exit costs, Impairments and Other Charges (2)	2,827			16,858			2,827			—			—			—			7,971			—			6,585			2,302
	Operating Income, as adjusted	221,194			223,619			54,798			58,318			56,003			52,075			57,578			56,814			54,326			54,901
	Depreciation and Amortization	74,999			67,184			19,730			18,726			17,997			18,546			18,066			15,081			16,843			17,194
	EBITDA, as adjusted	$	296,193		$	290,803		$	74,528		$	77,044		$	74,000		$	70,621		$	75,644		$	71,895		$	71,169		$	72,095
	Operating Margin, as adjusted	30.0		%	32.9		%	28.9		%	30.9		%	30.6		%	29.7		%	32.8		%	33.4		%	32.4		%	33.1		%
	EBITDA Margin, as adjusted	40.2		%	42.8		%	39.4		%	40.8		%	40.4		%	40.3		%	43.1		%	42.2		%	42.4		%	43.5		%
	Transaction Services
	Revenue	$	1,262,738		$	1,309,905		$	311,717		$	308,451		$	330,359		$	312,211		$	337,776		$	325,774		$	304,129		$	342,226
	Operating Income, as reported	260,396			256,004			65,892			65,651			76,603			52,250			70,955			55,714			50,858			78,477

	Adjustments:



Exit costs, Impairments and Other Charges (2)	1,531			3,816			1,531			—			—			—			(236		)	—			1,074			2,978
Operating Income, as adjusted	261,927			259,820			67,423			65,651			76,603			52,250			70,719			55,714			51,932			81,455
Depreciation and Amortization	17,837			17,555			4,498			4,531			4,408			4,400			4,558			4,414			4,320			4,263
EBITDA, as adjusted	$	279,764		$	277,375		$	71,921		$	70,182		$	81,011		$	56,650		$	75,277		$	60,128		$	56,252		$	85,718
Operating Margin, as adjusted	20.7		%	19.8		%	21.6		%	21.3		%	23.2		%	16.7		%	20.9		%	17.1		%	17.1		%	23.8		%
EBITDA Margin, as adjusted	22.2		%	21.2		%	23.1		%	22.8		%	24.5		%	18.1		%	22.3		%	18.5		%	18.5		%	25.0		%
Corporate and Other
Revenue	$	(1,992	)	$	(6,071	)	—			$	6		$	(264	)	$	(1,734	)	$	(1,292	)	$	(1,796	)	$	(1,513	)	$	(1,470	)
Operating Loss, as reported	(245,828		)	(184,041		)	(65,928		)	(12,110		)	(156,671		)	(11,119		)	(117,167		)	(20,347		)	(21,470		)	(25,057		)
Adjustments:
Legal and Regulatory Charges (1)	192,417			78,484			47,941			—			144,476			—			78,484			—			—			—
Exit costs, Impairments and Other Charges (2)	6,102			36,238			6,102			—			—			—			19,979			—			2,228			14,031
Operating Loss, as adjusted	(47,309		)	(69,319		)	(11,885		)	(12,110		)	(12,195		)	(11,119		)	(18,704		)	(20,347		)	(19,242		)	(11,026		)
Depreciation and Amortization	3,908			4,203			908			984			1,048			968			976			976			1,096			1,155
EBITDA, as adjusted	$	(43,401	)	$	(65,116	)	$	(10,977	)	$	(11,126	)	$	(11,147	)	$	(10,151	)	$	(17,728	)	$	(19,371	)	$	(18,146	)	$	(9,871	)

Exhibit E - Continued

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)



		CALENDAR YEAR					QUARTER
		2012		2011			Q4-2012		Q3-2012		Q2-2012			Q1-2012		Q4-2011			Q3- 2011		Q2-2011		Q1 - 2011
2.	Net Earnings - Reconciliation
	Net Earnings (Loss)	$	70,359	$	96,543		$	2,814	$	58,304	$	(37,880	)	$	47,121	$	(21,201	)	$	40,450	$	21,365	$	55,929
	Adjustments - Continuing Operations:
	Legal and Regulatory Charges, net (1)	128,710		53,086			28,086		—		100,624			—		53,086			—		—		—
	Exit costs, Impairments and Other Charges, net (2)	6,590		34,999			6,590		—		—			—		16,822			—		6,204		11,973
	Total Adjustments to Continuing Operations	135,300		88,085			34,676		—		100,624			—		69,908			—		6,204		11,973
	Adjustments - Discontinued Operations:
	Impairment, Restructuring and Disposal Charges, net	2,494		34,440			2,494		—		—			—		15,157			1,486		17,759		38
	Total Adjustments to Discontinued Operations	2,494		34,440			2,494		—		—			—		15,157			1,486		17,759		38
	Adjustments - Non-operating:
	Debt Refinancing Charges, net (3)	15,445		4,978			15,445		—		—			—		—			4,978		—		—
	Income Tax Adjustments (4)	5,621		(6,089		)	5,621		—		—			—		(6,089		)	—		—		—
	Total Non-operating Adjustments	21,066		(1,111		)	21,066		—		—			—		(6,089		)	4,978		—		—
	Net Earnings, as adjusted	229,219		217,957			61,050		58,304		62,744			47,121		57,775			46,914		45,328		67,940
	Purchase Accounting Amortization, net (5)	7,578		10,952			1,712		1,712		1,733			2,421		2,655			2,495		2,674		3,128
	Adjusted Net Earnings	$	236,797	$	228,909		62,762		$	60,016	$	64,477		$	49,542	$	60,430		$	49,409	$	48,002	$	71,068
	Adjusted Net Earnings Per Diluted Share	$	2.80	$	2.68		$	0.74	$	0.71	$	0.76		$	0.59	$	0.72		$	0.59	$	0.56	$	0.81
	Diluted Weighted Average Shares	84,857		85,685			85,106		84,948		84,578			84,567		84,430			84,415		85,812		88,134

3.	Cash Flow - Reconciliation
	Cash Flows from Operating Activities:
	Net Earnings (Loss)	$	70,359	$	96,543		$	2,814	$	58,304	$	(37,880	)	$	47,121	$	(21,201	)	$	40,450	$	21,365	$	55,929
	Adjustments:
	Cash Related Restructuring Costs, net	23,925		8,177			2,491		5,746		13,335			2,353		(3,302		)	2,107		5,220		4,152
	Net Earnings (Loss), as adjusted	94,284		104,720			5,305		64,050		(24,545		)	49,474		(24,503		)	42,557		26,585		60,081



Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash adjustments	118,628			219,510			24,978			49,196			7,022			37,432			62,763			50,508			61,260			44,979
Working capital adjustments	245,475			161,806			103,100			(21,816		)	158,693			5,498			106,696			11,756			23,822			19,532
Net cash provided by operating activities	458,387			486,036			133,383			91,430			141,170			92,404			144,956			104,821			111,667			124,592
Capital expenditures included in investing activities	(113,328		)	(104,879		)	(41,131		)	(22,220		)	(26,258		)	(23,719		)	(23,408		)	(28,243		)	(29,907		)	(23,321		)
Adjusted Free Cash Flow	$	345,059		$	381,157		$	92,252		$	69,210		$	114,912		$	68,685		$	121,548		$	76,578		$	81,760		$	101,271
Adjusted Free Cash Flow Per Diluted Share	$	4.07		$	4.45		$	1.08		$	0.82		$	1.36		$	0.81		$	1.44		$	0.91		$	0.95		$	1.15
Diluted Weighted Average Shares	84,857			85,685			85,106			84,948			84,578			84,567			84,430			84,415			85,812			88,134

Notes:

(1) During 2012 and 2011, we recognized pre-tax legal and regulatory contingency charges of $192.4 million and $78.5 million ($128.7 million and $53.1 million, net of tax), respectively, for estimated settlement and third-party legal expenses related to various ongoing legal and regulatory matters.

(2) 2012 reflects the impact of various severance charges totaling $8.7 million ($5.5 million net of tax) and asset impairment charges totaling $1.8 million ($1.1 million net of tax). 2011 includes severance charges for the departure of certain executives, including our former chief executive officer and former co-chief operating officer, as well as the impact of other personnel restructuring programs, which totaled $33.4 million ($20.6 million net of tax). 2011 also includes asset impairment and restructuring charges, which totaled $23.5 million ($14.4 million net of tax) primarily related to the write-down of various assets as well as provisions for operating lease impairments.

(3) During 2012, we recorded a charge totaling $24.5 million ($15.4 million net of tax) related to the refinancing of our bonds and senior credit facilities. During 2011, we recorded a charge totaling $8.0 million ($5.0 million net of tax) related to the write-off of certain debt issuance costs in connection with the refinancing of our senior credit facilities.

(4) Reflects the impact of favorable prior year tax true-ups recognized in 2012 and 2011 offset by non-cash adjustments during 2012 related to equity forfeitures from severance and restructuring initiatives.

(5) Purchase accounting amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.

Exhibit F

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)



	CALENDAR YEAR						QUARTER
Reconciliation of Discontinued Operations	2012			2011			Q4-2012			Q3-2012			Q2-2012			Q1-2012			Q4-2011			Q3-2011			Q2-2011			Q1-2011

Discontinued Operations, as previously reported
Revenue	$	9,529		$	70,143		$	471		$	578		$	1,693		$	6,787		$	13,313		$	18,379		$	19,436		$	19,015
Expenses	27,916			147,518			4,454			2,765			5,683			15,014			44,290			22,924			54,852			25,452
Operating Loss	(18,387		)	(77,375		)	(3,983		)	(2,187		)	(3,990		)	(8,227		)	(30,977		)	(4,545		)	(35,416		)	(6,437		)
Total Other Income (Expense)	6,679			(414		)	(14		)	(1,633		)	261			8,065			1,590			(2,165		)	97			64
Loss Before Income Taxes	(11,708		)	(77,789		)	(3,997		)	(3,820		)	(3,729		)	(162		)	(29,387		)	(6,710		)	(35,319		)	(6,373		)
Provision (Benefit) for Income Taxes	(1,865		)	(31,526		)	(2,190		)	(1,425		)	(144		)	1,894			(12,370		)	(2,516		)	(14,218		)	(2,422		)
Net Loss	$	(9,843	)	$	(46,263	)	$	(1,807	)	$	(2,395	)	$	(3,585	)	$	(2,056	)	$	(17,017	)	$	(4,194	)	$	(21,101	)	$	(3,951	)

Technology, Data and Analytics
Revenue	$	11,269		$	10,931		$	2,658		$	2,962		$	2,823		$	2,826		$	2,722		$	2,804		$	2,736		$	2,669
Expenses	3,631			3,788			867			904			925			935			988			903			951			946
Operating Income	7,638			7,143			1,791			2,058			1,898			1,891			1,734			1,901			1,785			1,723
Total Other Income (Expense)	13,518			—			13,518			—			—			—			—			—			—			—
Income Before Income Taxes	21,156			7,143			15,309			2,058			1,898			1,891			1,734			1,901			1,785			1,723
Provision for Income Taxes	15,393			2,429			13,212			768			708			705			400			713			661			655
Net Earnings	$	5,763		$	4,714		$	2,097		$	1,290		$	1,190		$	1,186		$	1,334		$	1,188		$	1,124		$	1,068

Transaction Services
Revenue	$	51,439		$	95,748		$	4,768		$	12,263		$	17,007		$	17,401		$	19,077		$	22,321		$	26,471		$	27,879
Expenses	60,142			91,433			10,610			13,736			17,599			18,197			19,280			22,211			24,719			25,223
Operating Income (Loss)	(8,703		)	4,315			(5,842		)	(1,473		)	(592		)	(796		)	(203		)	110			1,752			2,656
Total Other Income (Expense)	—			—			—			—			—			—			—			—			—			—
Income (Loss) Before Income Taxes	(8,703		)	4,315			(5,842		)	(1,473		)	(592		)	(796		)	(203		)	110			1,752			2,656
Provision (Benefit) for Income Taxes	(3,705		)	1,467			(2,638		)	(550		)	(221		)	(296		)	(226		)	41			643			1,009
Net Earnings (Loss)	$	(4,998	)	$	2,848		$	(3,204	)	$	(923	)	$	(371	)	$	(500	)	$	23		$	69		$	1,109		$	1,647



Discontinued Operations, as adjusted
Revenue	$	72,237		$	176,822		$	7,897		$	15,803		$	21,523		$	27,014		$	35,112		$	43,504		$	48,643		$	49,563
Expenses	91,689			242,739			15,931			17,405			24,207			34,146			64,558			46,038			80,522			51,621
Operating Loss	(19,452		)	(65,917		)	(8,034		)	(1,602		)	(2,684		)	(7,132		)	(29,446		)	(2,534		)	(31,879		)	(2,058		)
Total Other Income (Expense)	20,197			(414		)	13,504			(1,633		)	261			8,065			1,590			(2,165		)	97			64
Income (Loss) Before Income Taxes	745			(66,331		)	5,470			(3,235		)	(2,423		)	933			(27,856		)	(4,699		)	(31,782		)	(1,994		)
Provision (Benefit) for Income Taxes	9,823			(27,630		)	8,384			(1,207		)	343			2,303			(12,196		)	(1,762		)	(12,914		)	(758		)
Net Loss	$	(9,078	)	$	(38,701	)	$	(2,914	)	$	(2,028	)	$	(2,766	)	$	(1,370	)	$	(15,660	)	$	(2,937	)	$	(18,868	)	$	(1,236	)

Discontinued Operations - Reconciliation
Net Loss, as reported	$	(9,078	)	$	(38,701	)	$	(2,914	)	$	(2,028	)	$	(2,766	)	$	(1,370	)	$	(15,660	)	$	(2,937	)	$	(18,868	)	$	(1,236	)
Adjustments:
Impairment, Restructuring and Disposal Charges, net	2,494			34,440			2,494			—			—			—			15,157			1,486			17,759			38
Net Loss, as adjusted	(6,584		)	(4,261		)	(420		)	(2,028		)	(2,766		)	(1,370		)	(503		)	(1,451		)	(1,109		)	(1,198		)
Purchase Accounting Amortization, net (1)	204			912			10			14			52			128			215			136			286			275
Adjusted Net Loss	$	(6,380	)	$	(3,349	)	$	(410	)	$	(2,014	)	$	(2,714	)	$	(1,242	)	$	(288	)	$	(1,315	)	$	(823	)	$	(923	)
Adjusted Net Loss Per Diluted Share	$	(0.05	)	$	(0.04	)	$	—		$	(0.01	)	$	(0.03	)	$	(0.01	)	$	—		$	(0.02	)	$	(0.01	)	$	(0.01	)
Diluted Weighted Average Shares	84,857			85,685			85,106			84,948			84,578			84,567			$	84,430		84,415			85,812			88,134

(1) Purchase accounting amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.

Black Knight InfoServ, LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 7, 2013

Attached files

Black Knight InfoServ, LLC Reports