Lender Processing Services Reports First Quarter 2013 Earnings

Adjusted EPS from continuing operations increased 10% to $0.66 from prior year

Technology, Data and Analytics revenue climbed 10% from prior year

24 Apr, 2013, 16:28 ET from Lender Processing Services, Inc.

JACKSONVILLE, Fla., April 24, 2013 /PRNewswire/ -- Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced first quarter 2013 GAAP net earnings of $53.9 million, or $0.63 per diluted share, an increase of 12.5% compared to $47.1 million, or $0.56 per diluted share in the first quarter 2012.  Revenue was $471.7 million in the first quarter 2013, a decrease of 2.9% from the prior year quarter.   

(Logo: http://photos.prnewswire.com/prnh/20120802/FL50731LOGO

"LPS' strong first quarter results demonstrate the successful execution of our strategy to deliver technology-driven solutions that our clients need to address evolving mortgage industry requirements," said Hugh Harris, president and chief executive officer of LPS.  

First Quarter 2013

  • Technology, Data & Analytics (TD&A) revenue increased 10.4% over the prior year fueled by growth in all sub-segments
  • Origination Services revenue increased 12.0% from the prior year driven by strong refinance volumes
  • EBITDA margin increased more than two percentage points over the prior year to 26.6%
  • Adjusted earnings per diluted share from continuing operations increased 10.0% to $0.66 compared to the prior year,  reflecting add-back for purchase accounting amortization
  • Completed previously reported settlements of many legal and regulatory matters related to legacy issues, while maintaining a strong financial position

"Strong results in TD&A and Origination Services drove an increase of more than two percentage points in our EBITDA margin year-over-year to 26.6%," Tom Schilling, chief financial officer, said. "TD&A is our growth platform and we expect it to deliver a growing share of LPS' future revenue and profitability.  We also remain focused on delivering high-value Transaction Services while managing for profitability in line with industry volumes." 

First quarter 2013 revenue was $471.7 million, a decrease of 2.9% compared to the prior year quarter, due to lower Default Services revenue that primarily resulted from a decline in industry foreclosure volume, partially offset by higher revenue in TD&A and Origination Services.  First quarter 2013 operating income increased 6.7% from the prior year quarter to $99.4 million due to higher contributions from TD&A and Origination Services.  

Net cash used in operating activities on a GAAP basis was $97.5 million in the first quarter 2013, compared to net cash provided by operating activities of $90.1 million in the prior year quarter.  This decrease was primarily due to the payment of previously announced settlements for legacy legal and regulatory matters in the first quarter 2013.  Excluding the impact of cash payments of previous non-GAAP items, primarily payments of legal and regulatory settlements, adjusted free cash flow was $49.5 million compared to $68.7 million in the prior year quarter.  The decrease in adjusted free cash flow primarily resulted from changes in working capital.  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.

The company maintained a strong balance sheet including cash of $88.4 million and credit facility availability of $398 million at the end of the first quarter 2013.  The legal and regulatory reserve was $61.1 million at the end of the first quarter 2013. 

Technology, Data and Analytics (TD&A)

Revenue for the first quarter increased 10.4% from the prior year to $193.6 million driven by growth in all sub-segments.  Revenue from Servicing Technology increased 6.8% primarily due to growth in loans and revenue per loan; Origination Technology increased 17.7% primarily due to higher industry origination volume which drove incremental transaction fees; Default Technology increased 16.0% primarily as a result of higher professional services revenue and market share gains partially offset by lower foreclosure referral volumes; and Data and Analytics increased 15.5% primarily due to contract wins.  Operating income increased 15.6% to $60.2 million in the first quarter 2013, while operating margin increased to 31.1% from 29.7% in the prior year quarter due to increased operating leverage. 

Transaction Services  

Revenue for the first quarter decreased 11.0% from the prior year period to $278.0 million as a result of a 31.4% decrease in Default Services revenue, which was partially offset by a 12.0% increase in Origination Services revenue.  Default Services revenue and operating income declined primarily as a result of lower industry 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.  Operating income was $50.5 million, down from $52.3 million in the prior year period, due to lower Default Services contributions, which were partially offset by higher Origination Services contributions.  Operating margin increased to 18.2% from 16.7% in the prior year quarter due to a revenue mix shift toward Origination Services.

Corporate and Other

Net corporate expenses in the first quarter 2013 were $11.3 million, about flat with the prior year period.   

Outlook

Based on the current environment, the company expects second 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 May 3, 2013, by dialing 888-203-1112 (access code: 6301734).

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); "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 mortgage industry and the foreclosure process in particular; 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  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 March 31,

2013

2012

(In thousands, except per share data)

Revenues

$        471,661

$         485,794

Expenses:

Operating expenses

346,159

368,674

Depreciation and amortization

26,074

23,914

Total expenses

372,233

392,588

Operating income

99,428

93,206

Other income (expense):

Interest income

579

448

Interest expense

(13,514)

(16,402)

Other income, net

9

85

Total other income (expense)

(12,926)

(15,869)

Earnings from continuing operations before income taxes

86,502

77,337

Provision for income taxes

32,006

28,846

Net earnings from continuing operations

54,496

48,491

Loss from discontinued operations, net of tax

(566)

(1,370)

Net earnings

$          53,930

$           47,121

Net earnings per share - diluted from continuing operations

$              0.64

$               0.58

Net loss per share - diluted from discontinued operations

(0.01)

(0.02)

Net earnings per share - diluted

$              0.63

$               0.56

Weighted average shares outstanding - diluted

85,144

84,567

 

 

Exhibit B

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

March 31,

December 31,

2013

2012

(In thousands)

Assets

Current assets:

Cash and cash equivalents

$         88,418

$      236,241

Trade receivables, net of allowance for doubtful accounts

253,562

274,783

Other receivables

9,674

3,800

Income tax receivable

24,912

--

Prepaid expenses and other current assets

41,403

41,541

Deferred income taxes

82,079

127,742

Total current assets

500,048

684,107

Property and equipment, net

127,161

126,633

Computer software, net

252,388

245,271

Other intangible assets, net

21,416

23,670

Goodwill

1,109,304

1,109,304

Other non-current assets

268,692

256,849

Total assets

$     2,279,009

$   2,445,834

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt

$         13,375

$               --

Trade accounts payable

36,912

38,901

Accrued salaries and benefits

61,664

107,984

Legal and regulatory accrual

61,061

223,149

Other accrued liabilities

152,525

169,458

Deferred revenues

59,937

58,868

Total current liabilities

385,474

598,360

Deferred revenues

23,546

24,987

Deferred income taxes, net

185,640

174,303

Long-term debt, net of current portion

1,054,750

1,068,125

Other non-current liabilities

34,947

37,163

Total liabilities

1,684,357

1,902,938

Stockholders' equity:

Preferred stock $0.0001 par value; 50 million shares authorized, none issued

at March 31, 2013 and December 31, 2012

--

--

Common stock $0.0001 par value; 500 million shares authorized, 97.4 million

shares issued at March 31, 2013 and December 31, 2012

10

10

Additional paid-in capital

255,076

250,016

Retained earnings

739,489

694,148

Accumulated other comprehensive loss

(2,740)

(3,079)

Treasury stock at cost; 12.5 million shares at March 31, 2013 and

December 31, 2012

(397,183)

(398,199)

Total stockholders' equity

594,652

542,896

Total liabilities and stockholders' equity

$     2,279,009

$   2,445,834

 

 

Exhibit C

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three months ended March 31,

2013

2012

(In thousands)

Cash flows from operating activities:

Net earnings

$          53,930

$          47,121

Adjustments to reconcile net earnings to net 

cash (Used in) provided by operating activities:

Depreciation and amortization

26,056

24,902

Amortization of debt issuance costs

1,044

1,117

Asset impairment charges

--

2,842

Gain on sale of discontinued operations

--

(8,064)

Deferred income taxes, net

56,793

11,036

Stock-based compensation cost

6,529

5,257

Income tax effect of equity compensation

(9)

342

Changes in assets and liabilities, net of effects of acquisitions:

Trade receivables

21,219

12,700

Other receivables

(5,875)

(2,159)

Income tax receivable

(24,912)

--

Prepaid expenses and other assets

(4,137)

(8,853)

Deferred revenues

(371)

8,965

Accounts payable, accrued liabilities and other liabilities

(227,808)

(5,155)

     Net cash (Used in) provided by operating activities

(97,541)

90,051

Cash flows from investing activities:

Additions to property and equipment

(8,736)

(6,595)

Additions to capitalized software

(19,404)

(17,124)

Purchases of investments, net of proceeds from sales

(3,563)

(5,763)

Acquisition of title plants and property records data

(8,767)

(11,821)

Proceeds from sales of discontinued operations, net of cash distributed

--

6,398

Net cash used in investing activities

(40,470)

(34,905)

Cash flows from financing activities:

Debt service payments

--

(17,327)

Exercise of stock options and restricted stock vesting

(376)

(655)

Income tax effect of equity compensation

9

(342)

Dividends paid

(8,493)

(8,449)

Payment of contingent consideration related to acquisitions

(952)

(2,000)

Net cash used in financing activities

(9,812)

(28,773)

Net (decrease) increase in cash and cash equivalents

(147,823)

26,373

Cash and cash equivalents, beginning of period

236,241

77,355

Cash and cash equivalents, end of period

$          88,418

$        103,728

Supplemental disclosures of cash flow information:

Cash paid for interest

$            4,406

$          20,830

Cash paid for taxes

$            5,435

$            4,053

 

 

Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)

QUARTER

QUARTER

YEAR ENDED

Q1-2013

Q1-2012

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

1.

Revenues - Continuing Operations

Technology, Data and Analytics:

Technology

$   177,425

$   161,290

$  177,425

$  174,110

$  173,985

$  168,515

$161,290

$    677,900

Servicing Technology

115,667

108,351

115,667

114,818

111,572

111,284

108,351

446,025

Default Technology

36,623

31,576

36,623

34,762

36,163

34,051

31,576

136,552

Origination Technology

25,135

21,363

25,135

24,530

26,250

23,180

21,363

95,323

Data and Analytics

16,205

14,027

16,205

15,202

15,009

14,767

14,027

59,005

Total

193,630

175,317

193,630

189,312

188,994

183,282

175,317

736,905

Transaction Services:

Origination Services

164,425

146,750

164,425

173,934

154,057

150,741

146,750

625,482

Default Services

113,561

165,461

113,561

137,783

154,394

179,618

165,461

637,256

Total

277,986

312,211

277,986

311,717

308,451

330,359

312,211

1,262,738

Corporate

45

(1,734)

45

--

6

(264)

(1,734)

(1,992)

Total Revenues

$   471,661

$   485,794

$  471,661

$  501,029

$  497,451

$  513,377

$485,794

$ 1,997,651

Revenue Growth from Prior Year Period

Technology, Data and Analytics:

Technology

10.0%

6.6%

10.0%

8.0%

11.2%

10.4%

6.6%

9.1%

Servicing Technology

6.8%

4.9%

6.8%

7.2%

4.0%

7.3%

4.9%

5.9%

Default Technology

16.0%

8.3%

16.0%

3.0%

28.3%

16.6%

8.3%

13.5%

Origination Technology

17.7%

13.7%

17.7%

20.3%

25.3%

17.1%

13.7%

19.2%

Data and Analytics

15.5%

-4.2%

15.5%

6.3%

7.8%

-2.6%

-4.2%

1.7%

Total

10.4%

5.7%

10.4%

7.8%

11.0%

9.2%

5.7%

8.4%

Transaction Services:

Origination Services

12.0%

13.8%

12.0%

14.8%

15.7%

42.4%

13.8%

20.4%

Default Services

-31.4%

-22.4%

-31.4%

-26.0%

-19.9%

-9.4%

-22.4%

-19.4%

Total

-11.0%

-8.8%

-11.0%

-7.7%

-5.3%

8.6%

-8.8%

-3.6%

Corporate

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Total Revenues

-2.9%

-4.1%

-2.9%

-2.1%

0.6%

9.1%

-4.1%

0.7%

Revenue Growth from Sequential Period

Technology, Data and Analytics:

Technology

1.9%

0.0%

1.9%

0.1%

3.2%

4.5%

0.0%

9.1%

Servicing Technology

0.7%

1.2%

0.7%

2.9%

0.3%

2.7%

1.2%

5.9%

Default Technology

5.4%

-6.4%

5.4%

-3.9%

6.2%

7.8%

-6.4%

13.5%

Origination Technology

2.5%

4.7%

2.5%

-6.6%

13.2%

8.5%

4.7%

19.2%

Data and Analytics

6.6%

-1.9%

6.6%

1.3%

1.6%

5.3%

-1.9%

1.7%

Total

2.3%

-0.1%

2.3%

0.2%

3.1%

4.5%

-0.1%

8.4%

Transaction Services:

Origination Services

-5.5%

-3.2%

-5.5%

12.9%

2.2%

2.7%

-3.2%

20.4%

Default Services

-17.6%

-11.2%

-17.6%

-10.8%

-14.0%

8.6%

-11.2%

-19.4%

Total

-10.8%

-7.6%

-10.8%

1.1%

-6.6%

5.8%

-7.6%

-3.6%

Corporate

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Total Revenues

-5.9%

-5.1%

-5.9%

0.7%

-3.1%

5.7%

-5.1%

0.7%

 

 

Exhibit E

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)

QUARTER

QUARTER

YEAR ENDED

Q1-2013

Q1-2012

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

1.

Operating Results - Continuing Operations

Consolidated

Revenues

$   471,661

$   485,794

$   471,661

$   501,029

$   497,451

$   513,377

$   485,794

$1,997,651

Operating Income (Loss), as reported

99,428

93,206

99,428

51,935

111,859

(24,065)

93,206

232,935

Adjustments:

Legal, Regulatory and Other Charges (1)

--

--

--

58,401

--

144,476

--

202,877

Operating Income, as adjusted

99,428

93,206

99,428

110,336

111,859

120,411

93,206

435,812

Depreciation and Amortization

26,074

23,914

26,074

25,136

24,241

23,453

23,914

96,744

EBITDA, as adjusted

$   125,502

$   117,120

$   125,502

$   135,472

$   136,100

$   143,864

$   117,120

$   532,556

Operating Margin, as adjusted

21.1%

19.2%

21.1%

22.0%

22.5%

23.5%

19.2%

21.8%

EBITDA Margin, as adjusted

26.6%

24.1%

26.6%

27.0%

27.4%

28.0%

24.1%

26.7%

Technology, Data and Analytics

Revenues

$   193,630

$   175,317

$   193,630

$   189,312

$   188,994

$   183,282

$   175,317

$   736,905

Operating Income, as reported

60,204

52,075

60,204

51,971

58,318

56,003

52,075

218,367

Adjustments:

Legal, Regulatory and Other Charges (1)

--

--

--

2,827

--

--

--

2,827

Operating Income, as adjusted

60,204

52,075

60,204

54,798

58,318

56,003

52,075

221,194

Depreciation and Amortization

20,332

18,546

20,332

19,730

18,726

17,997

18,546

74,999

EBITDA, as adjusted

$     80,536

$     70,621

$     80,536

$     74,528

$     77,044

$     74,000

$     70,621

$   296,193

Operating Margin, as adjusted

31.1%

29.7%

31.1%

28.9%

30.9%

30.6%

29.7%

30.0%

EBITDA Margin, as adjusted

41.6%

40.3%

41.6%

39.4%

40.8%

40.4%

40.3%

40.2%

Transaction Services

Revenues

$   277,986

$   312,211

$   277,986

$   311,717

$   308,451

$   330,359

$   312,211

$1,262,738

Operating Income, as reported

50,517

52,250

50,517

65,892

65,651

76,603

52,250

260,396

Adjustments:

Legal, Regulatory and Other Charges (1)

--

--

--

1,531

--

--

--

1,531

Operating Income, as adjusted

50,517

52,250

50,517

67,423

65,651

76,603

52,250

261,927

Depreciation and Amortization

4,860

4,400

4,860

4,498

4,531

4,408

4,400

17,837

EBITDA, as adjusted

$     55,377

$     56,650

$     55,377

$     71,921

$     70,182

$     81,011

$     56,650

$   279,764

Operating Margin, as adjusted

18.2%

16.7%

18.2%

21.6%

21.3%

23.2%

16.7%

20.7%

EBITDA Margin, as adjusted

19.9%

18.1%

19.9%

23.1%

22.8%

24.5%

18.1%

22.2%

Corporate and Other

Revenues

$           45

$      (1,734)

$           45

$            --

$             6

$        (264)

$      (1,734)

$      (1,992)

Operating Loss, as reported

(11,293)

(11,119)

(11,293)

(65,928)

(12,110)

(156,671)

(11,119)

(245,828)

Adjustments:

Legal, Regulatory and Other Charges (1)

--

--

--

54,043

--

144,476

--

198,519

Operating Loss, as adjusted

(11,293)

(11,119)

(11,293)

(11,885)

(12,110)

(12,195)

(11,119)

(47,309)

Depreciation and Amortization

882

968

882

908

984

1,048

968

3,908

EBITDA, as adjusted

$    (10,411)

$    (10,151)

$    (10,411)

$    (10,977)

$    (11,126)

$    (11,147)

$    (10,151)

$    (43,401)

 

 

Exhibit E - Continued

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)

QUARTER

QUARTER

YEAR ENDED

Q1-2013

Q1-2012

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

2.

Net Earnings - Reconciliation

Net Earnings (Loss)

$     53,930

$     47,121

$     53,930

$       2,814

$     58,304

$    (37,880)

$     47,121

$     70,359

Adjustments - Continuing Operations:

Legal, Regulatory and Other Charges, net (1)

--

--

--

34,676

--

100,624

--

135,300

Total Adjustments to Continuing Operations

--

--

--

34,676

--

100,624

--

135,300

Adjustments - Discontinued Operations:

Impairment, Restructuring and Disposal Charges, net

--

--

--

2,494

--

--

--

2,494

Total Adjustments to Discontinued Operations

--

--

--

2,494

--

--

--

2,494

Adjustments - Non-operating:

Debt Refinancing Charges, net (2)

--

--

--

15,445

--

--

--

15,445

Income Tax Adjustments (3)

--

--

--

5,621

--

--

--

5,621

Total Non-operating Adjustments

--

--

--

21,066

--

--

--

21,066

Net Earnings, as adjusted

53,930

47,121

53,930

61,050

58,304

62,744

47,121

229,219

Purchase Accounting Amortization, net (4)

1,567

2,421

1,567

1,712

1,712

1,733

2,421

7,578

Adjusted Net Earnings

$     55,497

$     49,542

$     55,497

$     62,762

$     60,016

$     64,477

$     49,542

$   236,797

Adjusted EPS - Continuing Operations

$        0.66

$        0.60

$        0.66

$        0.74

$        0.72

$        0.79

$        0.60

$        2.85

Adjusted EPS - Discontinued Operations

(0.01)

(0.01)

(0.01)

--

(0.01)

(0.03)

(0.01)

(0.05)

Adjusted EPS - Consolidated

$        0.65

$        0.59

$        0.65

$        0.74

$        0.71

$        0.76

$        0.59

$        2.80

Diluted Weighted Average Shares

85,144

84,567

85,144

85,106

84,948

84,578

84,567

84,857

3.

Cash Flow - Reconciliation

Cash Flows from Operating Activities:

Net Earnings (Loss)

$     53,930

$     47,121

$     53,930

$       2,814

$     58,304

$    (37,880)

$     47,121

$     70,359

Adjustments to Reconcile Net Earnings (Loss) to

Net Cash (Used in) Provided by Operating Activities:

Non-cash Adjustments

90,413

37,432

90,413

24,978

49,196

7,022

37,432

118,628

Working Capital Adjustments

(241,884)

5,498

(241,884)

103,100

(21,816)

158,693

5,498

245,475

Net Cash (Used in) Provided by Operating Activities

(97,541)

90,051

(97,541)

130,892

85,684

127,835

90,051

434,462

Capital Expenditures Included in Investing Activities

(28,140)

(23,719)

(28,140)

(41,131)

(22,220)

(26,258)

(23,719)

(113,328)

Free Cash Flow

(125,681)

66,332

(125,681)

89,761

63,464

101,577

66,332

321,134

Less Cash Impact of Adjustments, net (5)

175,185

2,353

175,185

2,491

5,746

13,335

2,353

23,925

Adjusted Free Cash Flow

$     49,504

$     68,685

$     49,504

$     92,252

$     69,210

$   114,912

$     68,685

$   345,059

Adjusted Free Cash Flow Per Diluted Share

$         0.58

$         0.81

$         0.58

$         1.08

$         0.82

$         1.36

$         0.81

$