Lender Processing Services Reports Second Quarter 2013 Earnings Adjusted EPS from continuing operations of $0.65 and free cash flow of $78 million

JACKSONVILLE, Fla., Aug. 8, 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 second quarter 2013 GAAP net earnings of $19.1 million, or $0.22 per diluted share, compared to a net loss of $37.9 million, or $0.45 per diluted share, in the prior year quarter. 

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

Second Quarter Highlights

  • Technology, Data & Analytics (TD&A) revenue increased 6% over the prior year
  • Adjusted EBITDA margin of 27%
  • GAAP EPS from continuing operations of $0.24, reflecting a charge totaling $0.39 per diluted share primarily for estimated legal and regulatory contingencies
  • Adjusted EPS from continuing operations of $0.65, excluding charge and reflecting add-back for purchase accounting amortization
  • Adjusted free cash flow of $78 million or $0.91 per diluted share

"LPS' solid second quarter operating results demonstrate our ongoing commitment to meeting our customers' technology and service needs in today's complex mortgage market," said Hugh Harris, president and chief executive officer of LPS. 

"LPS' positive performance reflects solid demand for Technology Data & Analytics solutions and strong Origination Services volumes as we benefitted from continued low interest rates and elevated refinance activity during most of the quarter," commented chief financial officer Tom Schilling. "As a result of rising mortgage interest rates late in the second quarter 2013, refinance volumes were negatively impacted in June and July.  We expect Origination Services revenue to decrease sequentially in the third quarter based on these trends.   As we have in prior market cycles, we will continue to rigorously manage expenses to reduce the impact of lower Origination and Default Services transaction volumes on profitability."

Second quarter 2013 revenue was $468.9 million, a decrease of 8.7% from the prior year quarter, due to lower Default Services revenue, partially offset by higher revenue in TD&A and Origination Services.  Second quarter 2013 GAAP operating income was $45.1 million, compared to an operating loss of $24.1 million in the prior year quarter.  Adjusted operating income in the second quarter 2013 was $98.4 million, a decrease of 18.3% from $120.4 million in the prior year quarter, primarily due to a decline in Default Services.   Second quarter 2013 adjusted net earnings from continuing operations were $0.65 per diluted share compared to $0.79 per diluted share in the prior year quarter. 

Adjusted results from continuing operations in the second quarter 2013 exclude a pre-tax charge of $53.3 million, or $0.39 per diluted share, including $0.35 per share for estimated legal and regulatory contingencies and $0.04 per share primarily for transaction costs associated with the pending merger with Fidelity National Financial, Inc. and severance costs resulting from cost reduction initiatives.  Adjusted results from continuing operations in the second quarter 2012 exclude a pre-tax charge of $144.5 million, or $1.19 per diluted share, for estimated legal and regulatory contingencies.  Adjusted net earnings from continuing operations also include an add-back for purchase accounting amortization of $0.01 per diluted share in the current quarter and $0.02 per diluted share in the second quarter 2012. 

Net cash provided by operating activities for the second quarter of 2013 was $104.0 million, compared to $127.8 million in the prior year period, while adjusted free cash flow for the second quarter of 2013 was $77.7 million, compared to $114.9 million in the prior year period.  On an adjusted basis, the decrease was primarily due to lower earnings and reduced contributions from working capital, primarily accounts receivable. 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 ended the second quarter 2013 with cash of $142.5 million and credit facility availability of $398.1 million.  The legal and regulatory accrual was $88.6 million at the end of the second quarter 2013.

Technology, Data and Analytics (TD&A)
Revenue for the second quarter increased 5.8% from the prior year to $194.0 million.  Revenue from Servicing Technology increased 5.4% primarily due to higher loan counts and revenue per loan.  Origination Technology revenue increased 14.7% primarily due to higher origination volumes and contributions from the LendingSpace platform acquired in July 2012.  Default Technology revenue decreased 1.8% reflecting lower foreclosure referral volumes and Data and Analytics revenue increased 13.3% primarily due to higher demand for loan products data and predictive analytics.  Adjusted operating income increased 6.5% to $59.6 million in the second quarter 2013 primarily due to increased operating leverage and favorable revenue mix. 

Transaction Services  
Revenue for the second quarter decreased 16.8% from the prior year period to $274.9 million.  Origination Services revenue increased 4.4% to $157.4 million primarily as a result of higher refinance volumes due to historically low interest rates resulting in increased title, escrow and flood revenue.  Default Services revenue decreased 34.6% from the prior year period to $117.4 million primarily as a result of lower foreclosure activity reflecting a decline in seriously delinquent mortgages as the U.S. economy and housing market strengthened, delays in processing foreclosure volumes resulting from new regulatory requirements, as well as strategic actions to align risk and return resulting in the non-renewal of certain contracts.  Adjusted operating income was $51.1 million, a decrease of 33.3% from the prior year period primarily due to lower Default Services revenue and reduced operating leverage.   

Corporate and Other
Adjusted net corporate expenses in the second quarter 2013 were $12.3 million, flat with the prior year period.      

Outlook
Based on the current environment, the company expects third quarter 2013 revenue to be in the range of $415 million to $435 million and adjusted net earnings per diluted share from continuing operations to be in the range of $0.51 to $0.55.   The expected sequential decrease in revenue and net earnings per share is primarily a result of lower Origination Services revenue due to higher interest rates leading to a decline in refinance volumes.  

Merger Agreement
On May 28, 2013, LPS and Fidelity National Financial, Inc. (NYSE: FNF) executed an Agreement and Plan of Merger pursuant to which LPS would be acquired by FNF. The agreement was approved by the Board of Directors and is subject to customary closing conditions. Those conditions include the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the approval of LPS and FNF stockholders and approvals from applicable federal and state regulators.

Conference Call
Due to the pending acquisition by Fidelity National Financial, Inc., LPS will not host a conference call.

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.  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. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the ability to consummate the proposed transaction with Fidelity National Financial, Inc. ("FNF"); the ability to obtain requisite regulatory and stockholder approval and the satisfaction of other conditions to the consummation of the proposed transaction with FNF; the ability of FNF to successfully integrate LPS' operations and employees and realize anticipated synergies and cost savings; the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers and competitors; FNF and  LPS are subject to intense competition and increased competition is expected in the future; LPS' ability to adapt its services to changes in technology or the marketplace; the impact of changes in the level of real estate activity (including, among others, loan originations, and refinancings in particular, and foreclosures) on demand for certain of LPS' services; LPS' ability to maintain and grow its relationship with its customers; the effects of LPS' substantial leverage on its ability to make acquisitions and invest in its business; the level of scrutiny being placed on participants in the foreclosure business; risks associated with federal and state enforcement proceedings, inquiries and examinations currently underway or that may be commenced in the future with respect to LPS' default management operations, and with civil litigation relating to these matters; changes to the laws, rules and regulations that regulate LPS' 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 LPS' business and reputation; and risks associated with protecting information security and privacy. Additional information concerning these and other factors can be found in LPS' filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  LPS assumes no obligation to update the information in this communication, except as otherwise required by law.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof and LPS undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 











Exhibit A























LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)






































Three months ended June 30,


Six months ended June 30,





2013


2012


2013


2012





(In thousands, except per share data)












Revenues


$        468,880


$         513,377


$         940,541


$         999,171

Expenses:










Operating expenses


343,841


369,513


690,000


738,187


Depreciation and amortization


26,652


23,453


52,726


47,367


Legal and regulatory charges


47,641


144,476


51,566


144,476


Exit costs, impairments and other charges


5,626


--


1,701


--



Total expenses


423,760


537,442


795,993


930,030



Operating income (loss)


45,120


(24,065)


144,548


69,141












Other income (expense):










Interest income


565


454


1,144


902


Interest expense


(13,083)


(16,455)


(26,597)


(32,857)


Other income, net


282


74


291


159



Total other income (expense)


(12,236)


(15,927)


(25,162)


(31,796)



Earnings (loss) from continuing operations before income taxes

32,884


(39,992)


119,386


37,345

Provision (benefit) for income taxes


12,162


(4,878)


44,168


23,968



Net earnings (loss) from continuing operations


20,722


(35,114)


75,218


13,377

Loss from discontinued operations, net of tax


(1,638)


(2,766)


(2,204)


(4,136)

Net earnings (loss)


$          19,084


$          (37,880)


$           73,014


$             9,241












Net earnings (loss) per share -- diluted from continuing operations

$              0.24


$              (0.42)


$               0.88


$               0.16

Net loss per share -- diluted from discontinued operations


(0.02)


(0.03)


(0.02)


(0.05)

Net earnings (loss) per share -- diluted


$              0.22


$              (0.45)


$               0.86


$               0.11

Weighted average shares outstanding -- diluted


85,560


84,578


85,359


84,680

 

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)




















June 30,


December 31,









2013


2012









(In thousands)

Assets





Current assets:






Cash and cash equivalents


$        142,490


$      236,241


Trade receivables, net of allowance for doubtful accounts


248,210


274,783


Other receivables


5,806


3,800


Income tax receivable


17,503


--


Prepaid expenses and other current assets


42,739


41,541


Deferred income taxes


88,213


127,742



Total current assets


544,961


684,107












Property and equipment, net


122,398


126,633

Computer software, net


262,431


245,271

Other intangible assets, net


20,161


23,670

Goodwill


1,109,304


1,109,304

Other non-current assets


279,322


256,849



Total assets


$     2,338,577


$   2,445,834























Liabilities and Stockholders' Equity





Current liabilities:






Current portion of long-term debt


$          26,750


$                --


Trade accounts payable


45,373


38,901


Accrued salaries and benefits


77,175


107,984


Legal and regulatory accrual


88,578


223,149


Other accrued liabilities


140,137


169,458


Deferred revenues


58,144


58,868



Total current liabilities


436,157


598,360












Deferred revenues


23,325


24,987

Deferred income taxes, net


194,314


174,303

Long-term debt, net of current portion


1,041,375


1,068,125

Other non-current liabilities


32,862


37,163



Total liabilities


1,728,033


1,902,938












Stockholders' equity:






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







at June 30, 2013 and December 31, 2012


--


--


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







shares issued at June 30, 2013 and December 31, 2012


10


10


Additional paid-in capital


245,297


250,016


Retained earnings


749,876


694,148


Accumulated other comprehensive loss


(2,983)


(3,079)


Treasury stock at cost; 12.1 million and 12.5 million shares at June 30, 2013 and 





December 31, 2012, respectively


(381,656)


(398,199)



Total stockholders' equity


610,544


542,896



Total liabilities and stockholders' equity


$     2,338,577


$   2,445,834

 











Exhibit C












LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)




















Six months ended June 30,









2013


2012









(In thousands)

Cash flows from operating activities:






Net earnings


$          73,014


$            9,241


Adjustments to reconcile net earnings to net 







cash provided by operating activities:








Depreciation and amortization


52,710


48,889




Amortization of debt issuance costs


2,091


2,231




Asset impairment charges


785


3,688




Gain on sale of discontinued operations


--


(8,321)




Deferred income taxes, net


59,086


(15,415)




Stock-based compensation cost


13,653


12,348




Income tax effect of equity compensation


(533)


1,034















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









Trade receivables


26,484


26,911





Other receivables


(2,006)


(2,296)





Income tax receivable


(17,503)


--





Prepaid expenses and other assets


(10,847)


(14,053)





Deferred revenues


(2,385)


7,752





Accounts payable, accrued liabilities and other liabilities


(188,073)


145,877






Net cash provided by operating activities


6,476


217,886












Cash flows from investing activities:






Additions to property and equipment


(12,619)


(11,989)


Additions to capitalized software


(42,819)


(37,988)


Purchases of investments, net of proceeds from sales


(10,039)


(8,728)


Acquisition of title plants and property records data


(15,482)


(22,613)


Proceeds from sales of discontinued operations, net of cash distributed

--


18,706






Net cash used in investing activities


(80,959)


(62,612)

Cash flows from financing activities:






Debt service payments


--


(71,457)


Exercise of stock options and restricted stock vesting


(1,829)


(2,734)


Income tax effect of equity compensation


533


(1,034)


Dividends paid


(17,020)


(16,913)


Payment of contingent consideration related to acquisitions


(952)


(2,000)






Net cash used in financing activities


(19,268)


(94,138)






Net (decrease) increase in cash and cash equivalents

(93,751)


61,136

Cash and cash equivalents, beginning of period


236,241


77,355

Cash and cash equivalents, end of period


$        142,490


$        138,491












Supplemental disclosures of cash flow information:






Cash paid for interest


$          26,087


$          29,378


Cash paid for taxes


$            6,483


$          21,589

 






















Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES














SUPPLEMENTAL FINANCIAL INFORMATION -- UNAUDITED














(In thousands)























YEAR-TO-DATE


QUARTER


YEAR ENDED






Q2-2013


Q2-2012


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012























1.


Revenues -- Continuing Operations




















Technology, Data and Analytics:





















Technology

$  354,690


$  329,805


$  177,265


$  177,425


$  174,110


$  173,985


$  168,515


$  161,290


$     677,900





Servicing Technology

232,931


219,635


117,264


115,667


114,818


111,572


111,284


108,351


446,025





Default Technology

70,048


65,627


33,425


36,623


34,762


36,163


34,051


31,576


136,552





Origination Technology

51,711


44,543


26,576


25,135


24,530


26,250


23,180


21,363


95,323




Data and Analytics

32,940


28,794


16,735


16,205


15,202


15,009


14,767


14,027


59,005





Total

387,630


358,599


194,000


193,630


189,312


188,994


183,282


175,317


736,905



Transaction Services:





















Origination Services

321,858


297,491


157,433


164,425


173,934


154,057


150,741


146,750


625,482




Default Services

230,988


345,079


117,427


113,561


137,783


154,394


179,618


165,461


637,256





Total

552,846


642,570


274,860


277,986


311,717


308,451


330,359


312,211


1,262,738



Corporate

65


(1,998)


20


45


--


6


(264)


(1,734)


(1,992)




Total Revenue

$  940,541


$  999,171


$  468,880


$  471,661


$  501,029


$  497,451


$  513,377


$  485,794


$  1,997,651

























Revenue Growth from Prior Year Period




















Technology, Data and Analytics:





















Technology

7.5%


8.5%


5.2%


10.0%


8.0%


11.2%


10.4%


6.6%


9.1%





Servicing Technology

6.1%


6.1%


5.4%


6.8%


7.2%


4.0%


7.3%


4.9%


5.9%





Default Technology

6.7%


12.5%


-1.8%


16.0%


3.0%


28.3%


16.6%


8.3%


13.5%





Origination Technology

16.1%


15.4%


14.7%


17.7%


20.3%


25.3%


17.1%


13.7%


19.2%




Data and Analytics

14.4%


-3.4%


13.3%


15.5%


6.3%


7.8%


-2.6%


-4.2%


1.7%





Total

8.1%


7.5%


5.8%


10.4%


7.8%


11.0%


9.2%


5.7%


8.4%



Transaction Services:





















Origination Services

8.2%


26.7%


4.4%


12.0%


14.8%


15.7%


42.4%


13.8%


20.4%




Default Services

-33.1%


-16.1%


-34.6%


-31.4%


-26.0%


-19.9%


-9.4%


-22.4%


-19.4%





Total

-14.0%


-0.6%


-16.8%


-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


n/m




Total Revenue

-5.9%


2.3%


-8.7%


-2.9%


-2.1%


0.6%


9.1%


-4.1%


0.7%

























Revenue Growth from Sequential Period



















Technology, Data and Analytics:





















Technology

7.5%


8.5%


-0.1%


1.9%


0.1%


3.2%


4.5%


0.0%


9.1%





Servicing Technology

6.1%


6.1%


1.4%


0.7%


2.9%


0.3%


2.7%


1.2%


5.9%





Default Technology

6.7%


12.5%


-8.7%


5.4%


-3.9%


6.2%


7.8%


-6.4%


13.5%





Origination Technology

16.1%


15.4%


5.7%


2.5%


-6.6%


13.2%


8.5%


4.7%


19.2%




Data and Analytics

14.4%


-3.4%


3.3%


6.6%


1.3%


1.6%


5.3%


-1.9%


1.7%





Total

8.1%


7.5%


0.2%


2.3%


0.2%


3.1%


4.5%


-0.1%


8.4%



Transaction Services:





















Origination Services

8.2%


26.7%


-4.3%


-5.5%


12.9%


2.2%


2.7%


-3.2%


20.4%




Default Services

-33.1%


-16.1%


3.4%


-17.6%


-10.8%


-14.0%


8.6%


-11.2%


-19.4%





Total

-14.0%


-0.6%


-1.1%


-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


n/m




Total Revenue

-5.9%


2.3%


-0.6%


-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)


























YEAR-TO-DATE


QUARTER


YEAR ENDED









Q2-2013


Q2-2012


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012

1.


Operating Results -- Continuing Operations




















Consolidated






















Revenues


$      940,541


$    999,171


$     468,880


$      471,661


$    501,029


$      497,451


$      513,377


$      485,794


$   1,997,651




Operating Income (Loss), as reported

144,548


69,141


45,120


99,428


51,935


111,859


(24,065)


93,206


232,935




Adjustments:






















Legal, Regulatory and Other Charges (1)

53,267


144,476


53,267


--


58,401


--


144,476


--


202,877




Operating Income, as adjusted

197,815


213,617


98,387


99,428


110,336


111,859


120,411


93,206


435,812




Depreciation and Amortization

52,726


47,367


26,652


26,074


25,136


24,241


23,453


23,914


96,744




EBITDA, as adjusted

$      250,541


$    260,984


$     125,039


$      125,502


$    135,472


$      136,100


$      143,864


$      117,120


$      532,556






Operating Margin, as adjusted

21.0%


21.4%


21.0%


21.1%


22.0%


22.5%


23.5%


19.2%


21.8%






EBITDA Margin, as adjusted

26.6%


26.1%


26.7%


26.6%


27.0%


27.4%


28.0%


24.1%


26.7%




























Technology, Data and Analytics





















Revenues


$      387,630


$    358,599


$     194,000


$      193,630


$    189,312


$      188,994


$      183,282


$      175,317


$      736,905




Operating Income, as reported

119,710


108,078


59,506


60,204


51,971


58,318


56,003


52,075


218,367




Adjustments:






















Legal, Regulatory and Other Charges (1)

115


--


115


--


2,827


--


--


--


2,827




Operating Income, as adjusted

119,825


108,078


59,621


60,204


54,798


58,318


56,003


52,075


221,194




Depreciation and Amortization

41,212


36,543


20,880


20,332


19,730


18,726


17,997


18,546


74,999




EBITDA, as adjusted

$      161,037


$    144,621


$       80,501


$        80,536


$      74,528


$        77,044


$        74,000


$        70,621


$      296,193






Operating Margin, as adjusted

30.9%


30.1%


30.7%


31.1%


28.9%


30.9%


30.6%


29.7%


30.0%






EBITDA Margin, as adjusted

41.5%


40.3%


41.5%


41.6%


39.4%


40.8%


40.4%


40.3%


40.2%




























Transaction Services





















Revenues


$      552,846


$    642,570


$     274,860


$      277,986


$    311,717


$      308,451


$      330,359


$      312,211


$   1,262,738




Operating Income, as reported

101,033


128,853


50,516


50,517


65,892


65,651


76,603


52,250


260,396




Adjustments:






















Legal, Regulatory and Other Charges (1)

575


--


575


--


1,531


--


--


--


1,531




Operating Income, as adjusted

101,608


128,853


51,091


50,517


67,423


65,651


76,603


52,250


261,927




Depreciation and Amortization

9,702


8,808


4,842


4,860


4,498


4,531


4,408


4,400


17,837




EBITDA, as adjusted

$      111,310


$    137,661


$       55,933


$        55,377


$      71,921


$        70,182


$        81,011


$        56,650


$      279,764






Operating Margin, as adjusted

18.4%


20.1%


18.6%


18.2%


21.6%


21.3%


23.2%


16.7%


20.7%






EBITDA Margin, as adjusted

20.1%


21.4%


20.3%


19.9%


23.1%


22.8%


24.5%


18.1%


22.2%




























Corporate and Other





















Revenues


$               65


$      (1,998)


$              20


$              45


$              --


$                 6


$           (264)


$        (1,734)


$        (1,992)




Operating Loss, as reported

(76,195)


(167,790)


(64,902)


(11,293)


(65,928)


(12,110)


(156,671)


(11,119)


(245,828)




Adjustments:






















Legal, Regulatory and Other Charges (1)

52,577


144,476


52,577


--


54,043


--


144,476


--


198,519




Operating Loss, as adjusted

(23,618)


(23,314)


(12,325)


(11,293)


(11,885)


(12,110)


(12,195)


(11,119)


(47,309)




Depreciation and Amortization

1,812


2,016


930


882


908


984


1,048


968


3,908




EBITDA, as adjusted

$       (21,806)


$    (21,298)


$     (11,395)


$      (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)


























YEAR-TO-DATE


QUARTER


YEAR ENDED









Q2-2013


Q2-2012


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012


























2.


Net Earnings -- Reconciliation





















Net Earnings (Loss)

$         73,014


$        9,241


$        19,084


$        53,930


$        2,814


$        58,304


$       (37,880)


$        47,121


$        70,359




Adjustments -- Continuing Operations:






















Legal, Regulatory and Other Charges, net (1)

33,559


100,624


33,559


--


34,676


--


100,624


--


135,300






Total Adjustments to Continuing Operations

33,559


100,624


33,559


--


34,676


--


100,624


--


135,300




Adjustments -- Discontinued Operations:






















Impairment, Restructuring and Disposal Charges, net

1,079


--


1,079


--


2,494


--


--


--


2,494






Total Adjustments to Discontinued Operations

1,079


--


1,079


--


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

107,652


109,865


53,722


53,930


61,050


58,304


62,744


47,121


229,219




Purchase Accounting Amortization, net (4)

2,479


4,154


912


1,567


1,712


1,712


1,733


2,421


7,578




Adjusted Net Earnings

$       110,131


$    114,019


$        54,634


$        55,497


$      62,762


$        60,016


$        64,477


$        49,542


$      236,797





























Adjusted EPS -- Continuing Operations

$             1.31


$          1.39


$            0.65


$            0.66


$          0.74


$            0.72


$            0.79


$            0.60


$            2.85




Adjusted EPS -- Discontined Operations

(0.02)


(0.04)


(0.01)


(0.01)


--


(0.01)


(0.03)


(0.01)


(0.05)




Adjusted EPS -- Consolidated

$             1.29


$          1.35


$            0.64


$            0.65


$          0.74


$            0.71


$            0.76


$            0.59


$            2.80





























Diluted Weighted Average Shares

85,359


84,680


85,560


85,144


85,106


84,948


84,578


84,567


84,857


























3.


Cash Flow -- Reconciliation





















Cash Flows from Operating Activities:






















Net Earnings (Loss)

$         73,014


$        9,241


$        19,084


$        53,930


$        2,814


$        58,304


$       (37,880)


$        47,121


$        70,359





Adjustments to reconcile net earnings to























net cash provided by operating activities:
























Non-cash adjustments

127,792


44,454


37,379


90,413


24,978


49,196


7,022


37,432


118,628







Working capital adjustments

(194,330)


164,191


47,554


(241,884)


103,100


(21,816)


158,693


5,498


245,475








Net cash provided by (used in) operating activities

6,476


217,886


104,017


(97,541)


130,892


85,684


127,835


90,051


434,462





Capital expenditures included in investing activities

(55,438)


(49,977)


(27,298)


(28,140)


(41,131)


(22,220)


(26,258)


(23,719)


(113,328)





Free Cash Flow

(48,962)


167,909


76,719


(125,681)


89,761


63,464


101,577


66,332


321,134





Payment of Legal, Regulatory and Other Charges, net (5)

176,132


15,688


947


175,185


2,491


5,746


13,335


2,353


23,925




Adjusted Free Cash Flow

$       127,170


$    183,597


$        77,666


$        49,504


$      92,252


$        69,210


$      114,912


$        68,685


$      345,059




Adjusted Free Cash Flow Per Diluted Share

$             1.49


$          2.17


$            0.91


$            0.58


$          1.08


$            0.82


$            1.36


$            0.81


$            4.07




Diluted Weighted Average Shares

85,359


84,680


85,560


85,144


85,106


84,948


84,578


84,567


84,857





























Notes:
















































(1)

Reflects the impact of charges taken for various legal and regulatory matters, costs associated with the pending merger with Fidelity National Financial, Inc., and asset and facility lease impairment charges.




(2)

Charge related to the refinancing of our bonds and senior credit facilities during 2012.




(3)

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




(4)

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.




(5)

Reflects the impact of payments, less applicable taxes, for adjustments included in item 2. "Net Earnings - Reconciliation" of the GAAP to non-GAAP reconciliation.

SOURCE Lender Processing Services, Inc.



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