Exhibit 99.5
Lender Processing Services, Inc.
Third Quarter 2013 Operating Results
The following are condensed consolidated financial and operational results for Lender Processing Services, Inc. for the three-month and nine-month periods ended September 30, 2013 and 2012:
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 | — | ||||||||||||
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Total expenses | 355,572 | 385,592 | 1,151,565 | 1,315,622 | ||||||||||||
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Operating income | 63,409 | 111,859 | 207,957 | 181,000 | ||||||||||||
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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 | |||||||||||
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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 | ||||||||||||
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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 | ) | |||||||||
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Net earnings | $ | 35,480 | $ | 58,304 | $ | 108,494 | $ | 67,545 | ||||||||
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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 | ) | |||||||||
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Net earnings per share – diluted | $ | 0.41 | $ | 0.69 | $ | 1.27 | $ | 0.80 | ||||||||
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Weighted average shares outstanding – diluted | 85,984 | 84,948 | 85,569 | 84,774 | ||||||||||||
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1
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2013 | December 31, 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 | ||||||
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Total current assets | 568,179 | 684,107 | ||||||
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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 | ||||||
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Total assets | $ | 2,372,525 | $ | 2,445,834 | ||||
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| 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 | ||||||
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Total current liabilities | 450,230 | 598,360 | ||||||
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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 | ||||||
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Total liabilities | 1,728,346 | 1,902,938 | ||||||
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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 | ) | ||||
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Total stockholders’ equity | 644,179 | 542,896 | ||||||
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Total liabilities and stockholders’ equity | $ | 2,372,525 | $ | 2,445,834 | ||||
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2
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 | |||||
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Net cash provided by operating activities | 107,605 | 303,570 | ||||||
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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 | ||||||
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Net cash used in investing activities | (112,695 | ) | (119,445 | ) | ||||
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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 | ) | ||||
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Net cash used in financing activities | (27,944 | ) | (100,764 | ) | ||||
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Net (decrease) increase in cash and cash equivalents | (33,034 | ) | 83,361 | |||||
Cash and cash equivalents, beginning of period | 236,241 | 77,355 | ||||||
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Cash and cash equivalents, end of period | $ | 203,207 | $ | 160,716 | ||||
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Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 30,398 | $ | 54,774 | ||||
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Cash paid for taxes | $ | 6,956 | $ | 46,853 | ||||
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3
