Lender Processing Services Reports Third Quarter 2013 Earnings Adjusted EPS of $0.51

JACKSONVILLE, Fla., Oct. 22, 2013 /PRNewswire/ -- Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and services to the mortgage and real estate industries, today announced third quarter 2013 GAAP net earnings of $35.5 million, or $0.41 per diluted share, compared to $58.3 million, or $0.69 per diluted share, in the prior year quarter. 

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

Third Quarter Highlights

  • GAAP EPS of $0.41 reflects a charge totaling $0.09 per diluted share for severance costs, merger related costs, and legal and regulatory contingencies
  • Adjusted EPS of $0.51, excluding charge and reflecting add-back for purchase accounting amortization
  • Adjusted EBITDA margin of 24%
  • Adjusted free cash flow of $56 million, or $0.65 per diluted share

"LPS continues to successfully execute our technology-driven strategy recently signing a five year commitment with a major mortgage servicer to convert a minimum of 500,000 loans to the MSP servicing system.  In addition, we are beginning to benefit from investments in our origination technology platforms as we recently signed a top ten mortgage lender," said Hugh Harris, president and chief executive officer of LPS.  "Our unique combination of scale, expertise and innovation continues to define LPS as a leader in technology-driven solutions for the evolving mortgage industry."

"We also continue to adjust to changing market dynamics including lower mortgage refinance volumes, declining foreclosure activity, and the cost of implementing new mortgage industry regulations," added Harris.

Chief Financial Officer Tom Schilling commented, "LPS delivered solid third quarter adjusted earnings of $44 million or $0.51 per share and strong adjusted free cash flow of $56 million, while continuing to invest in our core technology and data platforms.  We are rigorously managing expenses to mitigate the impact of the sharp decline in Origination and Default Services transaction volumes as we have in prior market cycles."  

Third quarter 2013 revenue was $419.0 million, a decrease of 15.8% from $497.5 million in the prior year quarter primarily due to lower contributions from Origination and Default Services.  Third quarter 2013 GAAP operating income was $63.4 million, a decrease of 43.3% from $111.9 million in the prior year quarter.  Adjusted operating income was $76.2 million, a decrease of 31.9% from the prior year quarter, primarily due to a decline in contributions from Origination and Default Services.   During the third quarter, the Company lowered its effective tax rate to reflect the realization of various tax planning initiatives.  Third quarter 2013 adjusted net earnings were $44.0 million, or $0.51 per diluted share, compared to $60.0 million, or $0.71 per diluted share in the prior year quarter. 

Adjusted results from continuing operations in the third quarter 2013 exclude a pre-tax charge of $12.8 million, or $0.09 per diluted share after-tax, including $0.06 per share for severance costs, $0.02 for estimated legal and regulatory contingencies, and $0.01 for costs related to the pending merger with Fidelity National Financial, Inc. 

Net cash provided by operating activities for the third quarter of 2013 was $101.1 million, while adjusted free cash flow was $56.0 million, a decrease from $69.2 million in the prior year period primarily due to lower earnings.  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 third quarter 2013 with cash of $203.2 million and credit facility availability of $398.1 million.  The legal and regulatory accrual was $86.6 million at the end of the third quarter 2013.

Technology, Data and Analytics (TD&A)

Revenue for the third quarter 2013 was $183.4 million, a decrease of 3.0% from $189.0 million in the prior year quarter.  Revenue from Servicing Technology increased 1.8% from the prior year quarter due to higher loan counts and professional services and decreased 3.1% sequentially primarily due to lower transactional usage volume on the platform.  Origination Technology revenue decreased 8.3% from the prior year quarter due to lower refinance transaction volume on the Loan Quality Gateway platform.  Default Technology revenue decreased 14.5% from the prior year quarter due to lower foreclosure referral volumes.  Data and Analytics revenue decreased 1.4% primarily due to lower transactional volumes.  Adjusted operating income was $49.4 million, a 15.2% decrease from $58.3 million in the prior year quarter primarily due to lower revenue and increased operating expenses driven by continued investment in technology and data platforms. 

Transaction Services  

Revenue for the third quarter 2013 was $235.5 million, a decrease of 23.6% from $308.5 million in the prior year period.  Origination Services revenue was $120.9 million, a decrease of 21.5% from the prior year period due to a decline in mortgage refinance volumes resulting in lower title, escrow and appraisal revenue.  Default Services revenue was $114.6 million, a decrease of 25.8% from the prior year period due to lower foreclosure activity, which reflects the decline in seriously delinquent mortgages as the U.S. economy and housing market strengthened, as well as from strategic actions to align risk and return resulting in the non-renewal of certain contracts.  Adjusted operating income was $37.1 million, a decrease of 43.6% from $65.7 million in the prior year period due to lower revenue.

Corporate and Other

Adjusted net corporate expenses in the third quarter 2013 were $10.3 million, a decrease of 14.9% from $12.1 million in the prior year period.          

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 and reporting.  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 Earnings

(Unaudited)






































Three months ended September 30,


Nine months ended September 30,





2013


2012


2013


2012





(In thousands, except per share data)












Revenues


$        418,981


$         497,451


$       1,359,522


$       1,496,622

Expenses:










Operating expenses


316,923


361,351


1,006,923


1,099,538


Depreciation and amortization


25,870


24,241


78,596


71,608


Legal and regulatory charges


2,445


-


54,011


144,476


Exit costs, impairments and other charges


10,334


-


12,035


-



Total expenses


355,572


385,592


1,151,565


1,315,622



Operating income


63,409


111,859


207,957


181,000












Other income (expense):










Interest income


554


463


1,698


1,365


Interest expense


(13,014)


(16,112)


(39,611)


(48,969)


Other income (expense), net


(79)


14


212


173



Total other income (expense)


(12,539)


(15,635)


(37,701)


(47,431)



Earnings from continuing operations before income taxes


50,870


96,224


170,256


133,569

Provision for income taxes


15,421


35,892


59,589


59,860



Net earnings from continuing operations


35,449


60,332


110,667


73,709

Earnings (loss) from discontinued operations, net of tax


31


(2,028)


(2,173)


(6,164)

Net earnings


$          35,480


$           58,304


$         108,494


$           67,545












Net earnings per share - diluted from continuing operations


$              0.41


$               0.71


$               1.29


$               0.87

Net loss per share - diluted from discontinued operations


-


(0.02)


(0.02)


(0.07)

Net earnings per share - diluted


$              0.41


$               0.69


$               1.27


$               0.80

Weighted average shares outstanding - diluted


85,984


84,948


85,569


84,774












 











Exhibit B























LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)




















September 30,


December 31,









2013


2012









(In thousands)

Assets





Current assets:








Cash and cash equivalents


$        203,207


$      236,241


Trade receivables, net of allowance for doubtful accounts


233,322


274,783


Other receivables


6,344


3,800


Prepaid expenses and other current assets


37,216


41,541


Deferred income taxes


88,090


127,742



Total current assets


568,179


684,107












Property and equipment, net


121,542


126,633

Computer software, net


272,714


245,271

Other intangible assets, net


18,978


23,670

Goodwill






1,109,304


1,109,304

Other non-current assets


281,808


256,849



Total assets



$     2,372,525


$   2,445,834























Liabilities and Stockholders' Equity





Current liabilities:







Current portion of long-term debt


$         40,125


$               -


Trade accounts payable


39,658


38,901


Accrued salaries and benefits


72,848


107,984


Legal and regulatory accrual


86,563


223,149


Other accrued liabilities


152,766


169,458


Deferred revenues


58,270


58,868



Total current liabilities


450,230


598,360












Deferred revenues



27,382


24,987

Deferred income taxes, net


189,825


174,303

Long-term debt, net of current portion


1,028,000


1,068,125

Other non-current liabilities


32,909


37,163



Total liabilities


1,728,346


1,902,938












Stockholders' equity:






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







at September 30, 2013 and December 31, 2012


-


-


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







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


10


10


Additional paid-in capital


249,145


250,016


Retained earnings


776,654


694,148


Accumulated other comprehensive loss


(3,106)


(3,079)


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





December 31, 2012, respectively


(378,524)


(398,199)



Total stockholders' equity


644,179


542,896



Total liabilities and stockholders' equity


$     2,372,525


$   2,445,834























 

 











Exhibit C












LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)




















Nine months ended September 30,









2013


2012









(In thousands)

Cash flows from operating activities:






Net earnings



$        108,494


$          67,545


Adjustments to reconcile net earnings to net 







cash provided by operating activities:








Depreciation and amortization


78,580


73,407




Amortization of debt issuance costs


3,141


3,317




Asset impairment charges


785


3,812




Gain on sale of discontinued operations


-


(6,688)




Deferred income taxes, net


54,630


776




Stock-based compensation cost


20,777


19,520




Income tax effect of equity compensation


(917)


(494)















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









Trade receivables


41,304


27,543





Other receivables


(2,544)


(1,748)





Prepaid expenses and other assets


(11,162)


(18,512)





Deferred revenues


1,798


10,605





Accounts payable, accrued liabilities and other liabilities


(187,281)


124,487






Net cash provided by operating activities


107,605


303,570












Cash flows from investing activities:






Additions to property and equipment


(20,208)


(16,109)


Additions to capitalized software


(65,909)


(56,088)


Purchases of investments, net of proceeds from sales


(8,094)


(17,604)


Acquisition of title plants and property records data


(18,484)


(33,600)


Acquisitions, net of cash acquired


-


(12,250)


Proceeds from sales of discontinued operations, net of cash distributed

-


16,206






Net cash used in investing activities


(112,695)


(119,445)

Cash flows from financing activities:






Debt service payments


-


(72,082)


Exercise of stock options and restricted stock vesting


(2,186)


(1,792)


Income tax effect of equity compensation


917


494


Dividends paid


(25,723)


(25,384)


Payment of contingent consideration related to acquisitions


(952)


(2,000)






Net cash used in financing activities


(27,944)


(100,764)






Net (decrease) increase in cash and cash equivalents


(33,034)


83,361

Cash and cash equivalents, beginning of period


236,241


77,355

Cash and cash equivalents, end of period


$        203,207


$        160,716












Supplemental disclosures of cash flow information:






Cash paid for interest


$          30,398


$          54,774













Cash paid for taxes


$            6,956


$          46,853























 

 
























Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES



















SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED



















(In thousands)













YEAR-TO-DATE


QUARTER


YEAR ENDED






Q3-2013


Q3-2012


Q3-2013


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012

























1.


Revenues - Continuing Operations






















Technology, Data and Analytics:























Technology

$   523,286


$   503,790


$  168,596


$  177,265


$  177,425


$  174,110


$  173,985


$  168,515


$161,290


$     677,900





Servicing Technology

346,552


331,207


113,621


117,264


115,667


114,818


111,572


111,284


108,351


446,025





Default Technology

100,959


101,790


30,911


33,425


36,623


34,762


36,163


34,051


31,576


136,552





Origination Technology

75,775


70,793


24,064


26,576


25,135


24,530


26,250


23,180


21,363


95,323




Data and Analytics

47,735


43,803


14,795


16,735


16,205


15,202


15,009


14,767


14,027


59,005





Total

571,021


547,593


183,391


194,000


193,630


189,312


188,994


183,282


175,317


736,905



Transaction Services:























Origination Services

442,785


451,548


120,927


157,433


164,425


173,934


154,057


150,741


146,750


625,482




Default Services

345,585


499,473


114,597


117,427


113,561


137,783


154,394


179,618


165,461


637,256





Total

788,370


951,021


235,524


274,860


277,986


311,717


308,451


330,359


312,211


1,262,738



Corporate

131


(1,992)


66


20


45


-


6


(264)


(1,734)


(1,992)




Total Revenue

$1,359,522


$1,496,622


$  418,981


$  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

3.9%


9.4%


-3.1%


5.2%


10.0%


8.0%


11.2%


10.4%


6.6%


9.1%





Servicing Technology

4.6%


5.4%


1.8%


5.4%


6.8%


7.2%


4.0%


7.3%


4.9%


5.9%





Default Technology

-0.8%


17.6%


-14.5%


-1.8%


16.0%


3.0%


28.3%


16.6%


8.3%


13.5%





Origination Technology

7.0%


18.9%


-8.3%


14.7%


17.7%


20.3%


25.3%


17.1%


13.7%


19.2%




Data and Analytics

9.0%


0.2%


-1.4%


13.3%


15.5%


6.3%


7.8%


-2.6%


-4.2%


1.7%





Total

4.3%


8.6%


-3.0%


5.8%


10.4%


7.8%


11.0%


9.2%


5.7%


8.4%



Transaction Services:























Origination Services

-1.9%


22.7%


-21.5%


4.4%


12.0%


14.8%


15.7%


42.4%


13.8%


20.4%




Default Services

-30.8%


-17.3%


-25.8%


-34.6%


-31.4%


-26.0%


-19.9%


-9.4%


-22.4%


-19.4%





Total

-17.1%


-2.2%


-23.6%


-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


n/m




Total Revenue

-9.2%


1.7%


-15.8%


-8.7%


-2.9%


-2.1%


0.6%


9.1%


-4.1%


0.7%



























Revenue Growth from Sequential Period





















Technology, Data and Analytics:























Technology

3.9%


9.4%


-4.9%


-0.1%


1.9%


0.1%


3.2%


4.5%


0.0%


9.1%





Servicing Technology

4.6%


5.4%


-3.1%


1.4%


0.7%


2.9%


0.3%


2.7%


1.2%


5.9%





Default Technology

-0.8%


17.6%


-7.5%


-8.7%


5.4%


-3.9%


6.2%


7.8%


-6.4%


13.5%





Origination Technology

7.0%


18.9%


-9.5%


5.7%


2.5%


-6.6%


13.2%


8.5%


4.7%


19.2%




Data and Analytics

9.0%


0.2%


-11.6%


3.3%


6.6%


1.3%


1.6%


5.3%


-1.9%


1.7%





Total

4.3%


8.6%


-5.5%


0.2%


2.3%


0.2%


3.1%


4.5%


-0.1%


8.4%



Transaction Services:























Origination Services

-1.9%


22.7%


-23.2%


-4.3%


-5.5%


12.9%


2.2%


2.7%


-3.2%


20.4%




Default Services

-30.8%


-17.3%


-2.4%


3.4%


-17.6%


-10.8%


-14.0%


8.6%


-11.2%


-19.4%





Total

-17.1%


-2.2%


-14.3%


-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


n/m




Total Revenue

-9.2%


1.7%


-10.6%


-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









Q3-2013


Q3-2012


Q3-2013


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012

1.


Operating Results - Continuing Operations






















Consolidated
























Revenues


$    1,359,522


$ 1,496,622


$      418,981


$      468,880


$      471,661


$    501,029


$      497,451


$      513,377


$      485,794


$   1,997,651




Operating Income (Loss), as reported

207,957


181,000


63,409


45,120


99,428


51,935


111,859


(24,065)


93,206


232,935




Adjustments:
























Legal, Regulatory and Other Charges (1)

66,046


144,476


12,779


53,267


-


58,401


-


144,476


-


202,877




Operating Income, as adjusted

274,003


325,476


76,188


98,387


99,428


110,336


111,859


120,411


93,206


435,812




Depreciation and Amortization

78,596


71,608


25,870


26,652


26,074


25,136


24,241


23,453


23,914


96,744




EBITDA, as adjusted

$       352,599


$    397,084


$      102,058


$      125,039


$      125,502


$    135,472


$      136,100


$      143,864


$      117,120


$      532,556






Operating Margin, as adjusted

20.2%


21.7%


18.2%


21.0%


21.1%


22.0%


22.5%


23.5%


19.2%


21.8%






EBITDA Margin, as adjusted

25.9%


26.5%


24.4%


26.7%


26.6%


27.0%


27.4%


28.0%


24.1%


26.7%






























Technology, Data and Analytics























Revenues


$       571,021


$    547,593


$      183,391


$      194,000


$      193,630


$    189,312


$      188,994


$      183,282


$      175,317


$      736,905




Operating Income, as reported

168,768


166,396


49,058


59,506


60,204


51,971


58,318


56,003


52,075


218,367




Adjustments:
























Legal, Regulatory and Other Charges (1)

501


-


386


115


-


2,827


-


-


-


2,827




Operating Income, as adjusted

169,269


166,396


49,444


59,621


60,204


54,798


58,318


56,003


52,075


221,194




Depreciation and Amortization

61,665


55,269


20,453


20,880


20,332


19,730


18,726


17,997


18,546


74,999




EBITDA, as adjusted

$       230,934


$    221,665


$        69,897


$        80,501


$        80,536


$      74,528


$        77,044


$        74,000


$        70,621


$      296,193






Operating Margin, as adjusted

29.6%


30.4%


27.0%


30.7%


31.1%


28.9%


30.9%


30.6%


29.7%


30.0%






EBITDA Margin, as adjusted

40.4%


40.5%


38.1%


41.5%


41.6%


39.4%


40.8%


40.4%


40.3%


40.2%






























Transaction Services























Revenues


$       788,370


$    951,021


$      235,524


$      274,860


$      277,986


$    311,717


$      308,451


$      330,359


$      312,211


$   1,262,738




Operating Income, as reported

132,598


194,504


31,565


50,516


50,517


65,892


65,651


76,603


52,250


260,396




Adjustments:
























Legal, Regulatory and Other Charges (1)

6,061


-


5,486


575


-


1,531


-


-


-


1,531




Operating Income, as adjusted

138,659


194,504


37,051


51,091


50,517


67,423


65,651


76,603


52,250


261,927




Depreciation and Amortization

14,243


13,339


4,541


4,842


4,860


4,498


4,531


4,408


4,400


17,837




EBITDA, as adjusted

$       152,902


$    207,843


$        41,592


$        55,933


$        55,377


$      71,921


$        70,182


$        81,011


$        56,650


$      279,764






Operating Margin, as adjusted

17.6%


20.5%


15.7%


18.6%


18.2%


21.6%


21.3%


23.2%


16.7%


20.7%






EBITDA Margin, as adjusted

19.4%


21.9%


17.7%


20.3%


19.9%


23.1%


22.8%


24.5%


18.1%


22.2%






























Corporate and Other























Revenues


$             131


$      (1,992)


$              66


$              20


$              45


$             -


$                6


$           (264)


$        (1,734)


$        (1,992)




Operating Loss, as reported

(93,409)


(179,900)


(17,214)


(64,902)


(11,293)


(65,928)


(12,110)


(156,671)


(11,119)


(245,828)




Adjustments:
























Legal, Regulatory and Other Charges (1)

59,484


144,476


6,907


52,577


-


54,043


-


144,476


-


198,519




Operating Loss, as adjusted

(33,925)


(35,424)


(10,307)


(12,325)


(11,293)


(11,885)


(12,110)


(12,195)


(11,119)


(47,309)




Depreciation and Amortization

2,688


3,000


876


930


882


908


984


1,048


968


3,908




EBITDA, as adjusted

$        (31,237)


$     (32,424)


$        (9,431)


$       (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









Q3-2013


Q3-2012


Q3-2013


Q2-2013


Q1-2013


Q4-2012


Q3-2012


Q2-2012


Q1-2012


12/31/2012




























2.


Net Earnings - Reconciliation























Net Earnings (Loss)

$       108,494


$      67,545


$        35,480


$        19,084


$        53,930


$        2,814


$        58,304


$       (37,880)


$        47,121


$        70,359




Adjustments - Continuing Operations:
























Legal, Regulatory and Other Charges, net (1)

41,158


100,624


7,599


33,559


-


34,676


-


100,624


-


135,300






Total Adjustments to Continuing Operations

41,158


100,624


7,599


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

150,731


168,169


43,079


53,722


53,930


61,050


58,304


62,744


47,121


229,219




Purchase Accounting Amortization, net (4)

3,430


5,866


951


912


1,567


1,712


1,712


1,733


2,421


7,578




Adjusted Net Earnings

$       154,161


$     174,035


$        44,030


$        54,634


$        55,497


$      62,762


$        60,016


$        64,477


$        49,542


$      236,797































Adjusted EPS - Continuing Operations

$            1.82


$          2.11


$           0.51


$           0.65


$           0.66


$         0.74


$           0.72


$           0.79


$           0.60


$           2.85




Adjusted EPS - Discontinued Operations

(0.02)


(0.05)


-


(0.01)


(0.01)


-


(0.01)


(0.03)


(0.01)


(0.05)




Adjusted EPS - Consolidated

$            1.80


$          2.06


$           0.51


$           0.64


$           0.65


$         0.74


$           0.71


$           0.76


$           0.59


$           2.80































Diluted Weighted Average Shares

85,569


84,774


85,984


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)

$       108,494


$      67,545


$        35,480


$        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

156,996


93,650


29,204


37,379


90,413


24,978


49,196


7,022


37,432


118,628







Working capital adjustments

(157,885)


142,375


36,445


47,554


(241,884)


103,100


(21,816)


158,693


5,498


245,475








Net cash provided by operating activities

107,605


303,570


101,129


104,017


(97,541)


130,892


85,684


127,835


90,051


434,462





Capital expenditures included in investing activities

(86,117)


(72,197)


(30,679)


(27,298)


(28,140)


(41,131)


(22,220)


(26,258)


(23,719)


(113,328)





Free Cash Flow

21,488


231,373


70,450


76,719


(125,681)


89,761


63,464


101,577


66,332


321,134





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

161,678


21,434


(14,454)


947


175,185


2,491


5,746


13,335


2,353


23,925




Adjusted Free Cash Flow

$       183,166


$     252,807


$        55,996


$        77,666


$        49,504


$      92,252


$        69,210


$      114,912


$        68,685


$      345,059




Adjusted Free Cash Flow Per Diluted Share

$            2.14


$          2.99


$           0.65


$           0.91


$           0.58


$         1.08


$           0.82


$           1.36


$           0.81


$           4.07




Diluted Weighted Average Shares

85,569


84,774


85,984


85,560


85,144


85,106


84,948


84,578


84,567


84,857































Notes:




















































(1)

Reflects the impact of charges taken on various legal and regulatory matters, as well severance, asset impairment and facility lease impairment charges.





































(2)

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





































(3)

Primarily reflects the impact of 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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