Exhibit 99.1
Press Release
|
| | |
| Investors: | | Media: |
| Nancy Murphy | | Michelle Kersch |
| (904) 854-8640; nancy.murphy@lpsvcs.com | | (904) 854-5043; michelle.kersch@lpsvcs.com |
Lender Processing Services Reports Fourth Quarter and Full Year 2012 Earnings
Fourth quarter adjusted earnings per share of $0.74 and free cash flow of $92 million
Full year adjusted earnings per share of $2.80 and free cash flow of $345 million
Leading technology-driven solutions enable mortgage industry to meet new requirements
JACKSONVILLE, Fla. - February 7, 2013 - Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced fourth quarter 2012 GAAP net earnings of $2.8 million, or $0.03 per diluted share, compared to a net loss of $21.2 million, or $0.25 per diluted share in fourth quarter 2011, and full year 2012 GAAP net earnings of $70.4 million, or $0.83 per diluted share, compared to net earnings of $96.5 million, or $1.13 per diluted share in 2011.
“LPS enters 2013 a stronger company that is increasingly well positioned to enhance the mortgage value chain and deliver innovative technology, data and expertise to our clients,” said Hugh Harris, president and chief executive officer of LPS. “The rapidly evolving mortgage landscape continues to create new requirements for our clients that result in significant long-term growth opportunities for LPS.”
“We are extremely pleased with the recent conclusion of many of the company's legacy legal and regulatory matters which allows us to focus more of our time and energy on growth and innovation,” added Harris. “LPS' technology leadership, scale and commitment to compliance excellence provide significant strategic advantages. We are confident these unique capabilities, together with our company's strong cash flow and disciplined capital allocation, will create significant long-term value for our stakeholders.”
Fourth Quarter 2012
| |
• | Technology, Data & Analytics (TD&A) revenue increased 8% over the prior year fueled by growth in all sub-segments |
| |
• | Origination Services revenue increased 15% from the prior year driven by strong refinance volume and market share gains |
| |
• | Adjusted EBITDA margin increased more than one percentage point over the prior year to 27% |
| |
• | Adjusted earnings were $63 million, or $0.74 per diluted share, excluding a charge totaling $0.69 per diluted share, and reflecting the add-back for purchase accounting amortization |
| |
• | Adjusted free cash flow of $92 million or $1.08 per diluted share |
| |
• | Completed debt refinancing to lower cost of capital and further strengthen the balance sheet |
Full Year 2012
| |
• | Record TD&A revenue increased 8% to $737 million, compared to the prior year |
| |
• | Record Origination Services revenue of $625 million, up 20% from the prior year |
| |
• | Adjusted EBITDA margin increased more than one percentage point to 27%, driven by growth in high return businesses |
| |
• | Adjusted earnings of $237 million, or $2.80 per diluted share, excluding a charge totaling $1.88 per diluted share, and reflecting the add-back for purchase accounting amortization |
| |
• | Adjusted free cash flow of $345 million or $4.07 per diluted share |
Delivering Innovative Technology, Data and Expertise
| |
• | Increased Servicing Technology leadership - mortgage loans on the system climbed 3% from the prior year including 5 new client implementations |
| |
• | Invested more than $200 million in technology and data solutions in the past two years to enable customers to meet evolving industry requirements |
| |
• | Implementing 20 new clients during 2013 on to expanded Origination Technology platforms |
“Our strong financial performance in 2012 clearly demonstrates the strength of LPS' business model and our company's ability to thrive in a rapidly changing market,” Tom Schilling, chief financial officer, said. “Since our spin-off in 2008, LPS has consistently delivered annual adjusted free cash flow exceeding $340 million. This success enables ongoing investment in growth initiatives to further strengthen our leadership in TD&A. We continue to enhance Transaction Services, which delivers high value, regulatory compliant solutions to the nation's largest mortgage lenders. In 2012, we significantly strengthened LPS' financial position, which is a key competitive advantage, while continuing to improve the risk/return profile of Default Services.”
Fourth quarter 2012 results are adjusted for charges totaling $0.69 per diluted share, including $0.33 per share for estimated legal and regulatory contingencies, $0.18 per share related to the refinancing of credit facilities, $0.07 per share related to income tax adjustments, $0.03 per share related to the disposition of non-core businesses, and $0.08 per share for other non-recurring charges.
Consolidated Fourth Quarter and Full Year Performance
Fourth quarter 2012 revenue was $501.0 million, a decrease of 2.1% compared to the prior year quarter, due to lower Default Services revenue that resulted from a drop in industry-wide foreclosure starts, partially offset by higher revenue in TD&A and Origination Services. Fourth quarter 2012 operating income on a GAAP basis was $51.9 million and on an adjusted basis was $110.3 million, an increase of 0.7% from the comparable period in 2011 primarily driven by higher contributions from Origination Services.
Full year 2012 revenue was $2.0 billion, a 0.7% increase from the prior year, due to increased revenue from Origination Services and TD&A, partially offset by lower revenue in Default Services. Full year 2012 operating income on a GAAP basis was $232.9 million and on an adjusted basis was $435.8 million, an increase of 5.2% from 2011 primarily driven by higher contributions from Origination Services and TD&A, partially offset by lower contributions from Default Services.
Net cash provided by operating activities for the full year 2012 was $434.5 million compared to $477.9 million in 2011, and adjusted free cash flow was $345.1 million compared to $381.2 million in the prior year. The decrease in adjusted free cash flow resulted primarily from higher capital expenditures and changes in working capital. Fourth quarter adjusted free cash flow was $92.3 million, compared to $121.5 million in the prior year period. Adjusted free cash flow is defined as net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software.
Technology, Data and Analytics (TD&A)
Revenue for the fourth quarter increased 7.8% from the prior year to $189.3 million driven by growth in all lines of business. Revenue from Servicing Technology increased 7.2% primarily due to growth in loans and revenue per loan; Origination Technology increased 20.3% due to higher industry refinance volumes; Default Technology increased 3.0% as a result of annualized market share gains achieved in 2011 that were partially offset by lower industry-wide foreclosure volumes; and Data and Analytics increased 6.3%. Adjusted operating income was $54.8 million compared to $57.6 million in the prior year period due to higher expenses related to growth initiatives and an increase in depreciation. Adjusted operating margin was 28.9%, down from 32.8% in the prior year quarter due to investment in growth initiatives including origination technology and data and analytics.
Transaction Services
Revenue for the fourth quarter decreased 7.7% from the prior year period to $311.7 million as a result of a 26.0% decrease in Default Services revenue, which was partially offset by a 14.8% increase in Origination Services revenue. Default Services revenue and operating income decreased as a result of lower industry-wide foreclosure activity and strategic actions to reduce risk and enhance returns. Origination Services revenue and operating income increased as a result of higher industry refinance volume. Adjusted operating income was $67.4 million down from $70.7 million in the prior year period due to lower Default Services revenue which was partially offset by higher Origination Services title, escrow and flood revenue. Adjusted operating margin increased to 21.6% from 20.9% in the prior year period.
Corporate and Other
Net corporate expenses in the fourth quarter of 2012 were $66.0 million compared to $117.2 million in the prior year period, which reflects increases to the legal and regulatory reserve of $47.9 million and $78.5 million, respectively. Adjusting for these and other non-recurring items, corporate expenses decreased to $11.9 million from $18.7 million in the prior year period as a result of 2011 legal expenses being charged to expense prior to establishing a contingency reserve for the company's legal and regulatory matters.
Outlook
Based on the current environment, the company expects first quarter 2013 revenue to be in the range of $460 million to $480 million and adjusted net earnings per diluted share from continuing operations to be in the range of $0.63 to $0.67.
Earnings Conference Call and Webcast
LPS will host a conference call tomorrow at 10:00 a.m. ET with a live webcast on the Investor Relations section of its website at www.lpsvcs.com. Earnings information, including this press release and our financial results presentation, is available on the website. A replay of the webcast will be available on the website shortly after the call where it will be archived for one month. A replay of the call will be available until February 15, 2013, by dialing 888-203-1112 (access code: 3830545).
About Lender Processing Services
LPS (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS
offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.
These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries. Lender Processing Services is a Fortune 1000 company headquartered in Jacksonville, Fla., employing approximately 8,000 professionals. For more information, please visit www.lpsvcs.com.
Use of Non-GAAP Financial Information
U.S. Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, LPS reports several non-GAAP measures, including “EBITDA” (GAAP operating income plus depreciation and amortization); “EBITDA, as adjusted” (EBITDA adjusted for the impact of certain non-recurring adjustments, if applicable); “EBIT, as adjusted” or “adjusted operating income” (GAAP operating income adjusted for the impact of certain non-recurring adjustments, if applicable); “adjusted net earnings” (GAAP net earnings adjusted for the impact of certain non-recurring adjustments, if applicable, plus the after-tax purchase price amortization of intangible assets added through acquisitions); “adjusted net earnings per diluted share” or “adjusted EPS per diluted share” (adjusted net earnings divided by diluted weighted average shares); and “adjusted free cash flow” (net cash provided by operating activities less additions to property, equipment and computer software, as well as non-recurring adjustments, if applicable). LPS provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring and other charges, and to better understand our financial performance, competitive position and future prospects. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to adapt our services to changes in technology or the marketplace; the impact of adverse changes in the level of real estate activity (including among others, loan originations and foreclosures) on demand for certain of our services; our ability to maintain and grow our relationships with our customers; the effects of our substantial leverage on our ability to make acquisitions and invest in our business; the level of scrutiny being placed on participants in the foreclosure process; risks associated with federal and state enforcement proceedings, inquiries and examinations currently underway or that may be commenced in the future with respect to our default management operations, and with civil litigation related to these matters; the impact of continued delays in the foreclosure process on the timing and collectability of our fees for certain of our services; changes to the laws, rules and regulations that regulate our businesses as a result of the current economic and financial environment; changes in general economic, business and political conditions, including changes in the financial markets; the impact of any potential defects, development delays, installation difficulties or system failures on our business and reputation; risks associated with protecting information security and privacy; and other risks and uncertainties detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.
###
Exhibit A
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three months ended December 31, | | Year ended December 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| | (In thousands, except per share data) |
| Revenue | $ | 501,029 |
| | $ | 512,033 |
| | $ | 1,997,651 |
| | $ | 1,983,433 |
|
| Expenses: | | | | | | | |
| Operating expenses | 365,557 |
| | 378,840 |
| | 1,465,095 |
| | 1,480,371 |
|
| Depreciation and amortization | 25,136 |
| | 23,600 |
| | 96,744 |
| | 88,942 |
|
| Legal and regulatory charges | 47,941 |
| | 78,484 |
| | 192,417 |
| | 78,484 |
|
| Exit costs, impairments and other charges | 10,460 |
| | 27,714 |
| | 10,460 |
| | 56,912 |
|
| Total expenses | 449,094 |
| | 508,638 |
| | 1,764,716 |
| | 1,704,709 |
|
| Operating income | 51,935 |
| | 3,395 |
| | 232,935 |
| | 278,724 |
|
| Other income (expense): | | | | | | | |
| Interest income | 497 |
| | 387 |
| | 1,862 |
| | 1,451 |
|
| Interest expense | (39,039 | ) | | (16,622 | ) | | (88,008 | ) | | (67,583 | ) |
| Other income, net | 21 |
| | (8 | ) | | 194 |
| | (181 | ) |
| Total other income (expense) | (38,521 | ) | | (16,243 | ) | | (85,952 | ) | | (66,313 | ) |
| Earnings (loss) from continuing operations before income taxes | 13,414 |
| | (12,848 | ) | | 146,983 |
| | 212,411 |
|
| Provision (benefit) for income taxes | 7,686 |
| | (7,307 | ) | | 67,546 |
| | 77,167 |
|
| Net earnings (loss) from continuing operations | 5,728 |
| | (5,541 | ) | | 79,437 |
| | 135,244 |
|
| Loss from discontinued operations, net of tax | (2,914 | ) | | (15,660 | ) | | (9,078 | ) | | (38,701 | ) |
| Net earnings (loss) | $ | 2,814 |
| | $ | (21,201 | ) | | $ | 70,359 |
| | $ | 96,543 |
|
| | | | | | | | |
| Net earnings (loss) per share - diluted from continuing operations | $ | 0.06 |
| | $ | (0.06 | ) | | $ | 0.93 |
| | $ | 1.58 |
|
| Net loss per share - diluted from discontinued operations | (0.03 | ) | | (0.19 | ) | | (0.10 | ) | | (0.45 | ) |
| Net earnings (loss) per share - diluted | $ | 0.03 |
| | $ | (0.25 | ) | | $ | 0.83 |
| | $ | 1.13 |
|
| Weighted average shares outstanding - diluted | 85,106 |
| | 84,430 |
| | 84,857 |
| | 85,685 |
|
Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited) |
| | | | | | | |
| | December 31, |
| | 2012 | | 2011 |
| | (In thousands) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 236,241 |
| | $ | 77,355 |
|
| Trade receivables, net of allowance for doubtful accounts | 274,783 |
| | 345,048 |
|
| Other receivables | 3,800 |
| | 1,423 |
|
| Prepaid expenses and other current assets | 38,194 |
| | 33,004 |
|
| Deferred income taxes | 127,742 |
| | 74,006 |
|
| Total current assets | 680,760 |
| | 530,836 |
|
| | | | |
| Property and equipment, net | 126,633 |
| | 121,245 |
|
| Computer software, net | 245,271 |
| | 228,882 |
|
| Other intangible assets, net | 23,670 |
| | 39,140 |
|
| Goodwill | 1,109,304 |
| | 1,132,828 |
|
| Other non-current assets | 260,196 |
| | 192,484 |
|
| Total assets | $ | 2,445,834 |
| | $ | 2,245,415 |
|
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
| Current liabilities: | | | |
| Current portion of long-term debt | $ | — |
| | $ | 39,310 |
|
| Trade accounts payable | 38,901 |
| | 43,105 |
|
| Accrued salaries and benefits | 107,984 |
| | 64,383 |
|
| Legal and regulatory accrual | 223,149 |
| | 78,483 |
|
| Other accrued liabilities | 169,458 |
| | 168,627 |
|
| Deferred revenues | 58,868 |
| | 64,078 |
|
| Total current liabilities | 598,360 |
| | 457,986 |
|
| | | | |
| Deferred revenues | 24,987 |
| | 34,737 |
|
| Deferred income taxes, net | 174,303 |
| | 122,755 |
|
| Long-term debt, net of current portion | 1,068,125 |
| | 1,109,850 |
|
| Other non-current liabilities | 37,163 |
| | 32,099 |
|
| Total liabilities | 1,902,938 |
| | 1,757,427 |
|
| | | | |
| Stockholders' equity: | | | |
| Preferred stock $0.0001 par value; 50 million shares authorized, none issued at December 31, 2012 and December 31, 2011 | — |
| | — |
|
| Common stock $0.0001 par value; 500 million shares authorized, 97.4 million shares issued at December 31, 2012 and December 31, 2011 | 10 |
| | 10 |
|
| Additional paid-in capital | 250,016 |
| | 250,533 |
|
| Retained earnings | 694,148 |
| | 658,146 |
|
| Accumulated other comprehensive loss | (3,079 | ) | | (1,783 | ) |
| Treasury stock at cost; 12.5 million and 13.0 million shares at December 31, 2012 and December 31, 2011, respectively | (398,199 | ) | | (418,918 | ) |
| Total stockholders' equity | 542,896 |
| | 487,988 |
|
| Total liabilities and stockholders' equity | $ | 2,445,834 |
| | $ | 2,245,415 |
|
Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
| | | | | | | |
| | Year ended December 31, |
| | 2012 | | 2011 |
| | (In thousands) |
| Cash flows from operating activities: | | | |
| Net earnings | $ | 70,359 |
| | $ | 96,543 |
|
| Adjustments to reconcile net earnings to net cash provided by operating activities: | | | |
| Depreciation and amortization | 98,778 |
| | 98,828 |
|
| Amortization of debt issuance costs | 12,250 |
| | 10,017 |
|
| Asset impairment charges | 6,603 |
| | 71,995 |
|
| (Gain) loss on sale of discontinued operations | (20,207 | ) | | 849 |
|
| Deferred income taxes, net | (3,654 | ) | | (4,761 | ) |
| Stock-based compensation cost | 25,749 |
| | 41,709 |
|
| Income tax effect of equity compensation | (891 | ) | | 873 |
|
| Changes in assets and liabilities, net of effects of acquisitions: | | | |
| Trade receivables | 62,571 |
| | 72,446 |
|
| Other receivables | (896 | ) | | 3,303 |
|
| Prepaid expenses and other assets | (27,168 | ) | | (6,274 | ) |
| Deferred revenues | 18,054 |
| | 3,975 |
|
| Accounts payable, accrued liabilities and other liabilities | 192,914 |
| | 88,356 |
|
| Net cash provided by operating activities | 434,462 |
| | 477,859 |
|
| | | | |
| Cash flows from investing activities: | | | |
| Additions to property and equipment | (38,905 | ) | | (32,768 | ) |
| Additions to capitalized software | (74,423 | ) | | (72,111 | ) |
| Purchases of investments | (24,533 | ) | | (25,211 | ) |
| Proceeds from sale of investments | 5,917 |
| | 3,702 |
|
| Acquisition of title plants and property records data | (44,766 | ) | | (23,967 | ) |
| Acquisitions, net of cash acquired | (12,250 | ) | | (9,802 | ) |
| Proceeds from sale of discontinued operations, net of cash distributed | 42,628 |
| | 4,451 |
|
| Net cash used in investing activities | (146,332 | ) | | (155,706 | ) |
| | | | |
| Cash flows from financing activities: | | | |
| Borrowings | 600,000 |
| | 1,005,000 |
|
| Debt service payments | (318,957 | ) | | (1,100,242 | ) |
| Exercise of stock options and restricted stock vesting | (2,681 | ) | | (2,662 | ) |
| Income tax effect of equity compensation | 891 |
| | (873 | ) |
| Dividends paid | (33,875 | ) | | (34,446 | ) |
| Debt issuance costs paid | (10,622 | ) | | (22,059 | ) |
| Treasury stock repurchases | — |
| | (136,878 | ) |
| Bond repurchases | (362,000 | ) | | (4,925 | ) |
| Payment of contingent consideration related to acquisitions | (2,000 | ) | | — |
|
| Net cash used in financing activities | (129,244 | ) | | (297,085 | ) |
| | | | |
| Net increase in cash and cash equivalents | 158,886 |
| | 25,068 |
|
| Cash and cash equivalents, beginning of period | 77,355 |
| | 52,287 |
|
| Cash and cash equivalents, end of period | $ | 236,241 |
| | $ | 77,355 |
|
| | | | |
| Supplemental disclosures of cash flow information: | | | |
| Cash paid for interest | $ | 68,827 |
| | $ | 56,975 |
|
| Cash paid for taxes | $ | 74,704 |
| | $ | 56,538 |
|
Exhibit D
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | CALENDAR YEAR | | QUARTER (1) |
| | | 2012 | | 2011 | | Q4-2012 | | Q3-2012 | | Q2-2012 | | Q1-2012 | | Q4-2011 | | Q3-2011 | | Q2-2011 | | Q1-2011 |
| 1. | Revenue - Continuing Operations | | | | | | | | | | | | | | | | | | | |
| | Technology, Data and Analytics: | | | | | | | | | | | | | | | | | | | |
| | Technology | $ | 677,900 |
| | $ | 621,585 |
| | $ | 174,110 |
| | $ | 173,985 |
| | $ | 168,515 |
| | $ | 161,290 |
| | $ | 161,252 |
| | $ | 156,414 |
| | $ | 152,676 |
| | $ | 151,243 |
|
| | Servicing Technology | 446,025 |
| | 421,352 |
| | 114,818 |
| | 111,572 |
| | 111,284 |
| | 108,351 |
| | 107,103 |
| | 107,273 |
| | 103,676 |
| | 103,300 |
|
| | Default Technology | 136,552 |
| | 120,288 |
| | 34,762 |
| | 36,163 |
| | 34,051 |
| | 31,576 |
| | 33,752 |
| | 28,185 |
| | 29,201 |
| | 29,150 |
|
| | Origination Technology | 95,323 |
| | 79,945 |
| | 24,530 |
| | 26,250 |
| | 23,180 |
| | 21,363 |
| | 20,397 |
| | 20,956 |
| | 19,799 |
| | 18,793 |
|
| | Data and Analytics | 59,005 |
| | 58,014 |
| | 15,202 |
| | 15,009 |
| | 14,767 |
| | 14,027 |
| | 14,297 |
| | 13,920 |
| | 15,161 |
| | 14,636 |
|
| | Total | 736,905 |
| | 679,599 |
| | 189,312 |
| | 188,994 |
| | 183,282 |
| | 175,317 |
| | 175,549 |
| | 170,334 |
| | 167,837 |
| | 165,879 |
|
| | Transaction Services: | | | | | | | | | | | | | | | | | | | |
| | Origination Services | 625,482 |
| | 519,438 |
| | 173,934 |
| | 154,057 |
| | 150,741 |
| | 146,750 |
| | 151,527 |
| | 133,099 |
| | 105,856 |
| | 128,956 |
|
| | Default Services | 637,256 |
| | 790,467 |
| | 137,783 |
| | 154,394 |
| | 179,618 |
| | 165,461 |
| | 186,249 |
| | 192,675 |
| | 198,273 |
| | 213,270 |
|
| | Total | 1,262,738 |
| | 1,309,905 |
| | 311,717 |
| | 308,451 |
| | 330,359 |
| | 312,211 |
| | 337,776 |
| | 325,774 |
| | 304,129 |
| | 342,226 |
|
| | Corporate | (1,992 | ) | | (6,071 | ) | | — |
| | 6 |
| | (264 | ) | | (1,734 | ) | | (1,292 | ) | | (1,796 | ) | | (1,513 | ) | | (1,470 | ) |
| | Total Revenue | $ | 1,997,651 |
| | $ | 1,983,433 |
| | $ | 501,029 |
| | $ | 497,451 |
| | $ | 513,377 |
| | $ | 485,794 |
| | $ | 512,033 |
| | $ | 494,312 |
| | $ | 470,453 |
| | $ | 506,635 |
|
| | | | | | | | | | | | | | | | | | | | | |
| | Revenue Growth from Prior Year Period | | | | | | | | | | | | | | | | | | | |
| | Technology, Data and Analytics: | | | | | | | | | | | | | | | | | | | |
| | Technology | 9.1 | % | | 3.5 | % | | 8.0 | % | | 11.2 | % | | 10.4 | % | | 6.6 | % | | 4.6 | % | | 0.1 | % | | 2.7 | % | | 6.9 | % |
| | Servicing Technology | 5.9 | % | | 3.9 | % | | 7.2 | % | | 4.0 | % | | 7.3 | % | | 4.9 | % | | 5.8 | % | | 4.0 | % | | 0.7 | % | | 5.3 | % |
| | Default Technology | 13.5 | % | | 0.8 | % | | 3.0 | % | | 28.3 | % | | 16.6 | % | | 8.3 | % | | 1.9 | % | | (14.7 | )% | | 15.1 | % | | 5.0 | % |
| | Origination Technology | 19.2 | % | | 5.5 | % | | 20.3 | % | | 25.3 | % | | 17.1 | % | | 13.7 | % | | 3.4 | % | | 4.7 | % | | (2.7 | )% | | 20.2 | % |
| | Data and Analytics | 1.7 | % | | (11.0 | )% | | 6.3 | % | | 7.8 | % | | (2.6 | )% | | (4.2 | )% | | (16.6 | )% | | (11.3 | )% | | (5.3 | )% | | (10.6 | )% |
| | Total | 8.4 | % | | 2.1 | % | | 7.8 | % | | 11.0 | % | | 9.2 | % | | 5.7 | % | | 2.5 | % | | (0.9 | )% | | 1.9 | % | | 5.1 | % |
| | Transaction Services: | | | | | | | | | | | | | | | | | | | |
| | Origination Services | 20.4 | % | | (14.2 | )% | | 14.8 | % | | 15.7 | % | | 42.4 | % | | 13.8 | % | | (15.5 | )% | | (14.8 | )% | | (19.5 | )% | | (7.0 | )% |
| | Default Services | (19.4 | )% | | (15.3 | )% | | (26.0 | )% | | (19.9 | )% | | (9.4 | )% | | (22.4 | )% | | (19.1 | )% | | (19.4 | )% | | (15.3 | )% | | (7.1 | )% |
| | Total | (3.6 | )% | | (14.9 | )% | | (7.7 | )% | | (5.3 | )% | | 8.6 | % | | (8.8 | )% | | (17.5 | )% | | (17.6 | )% | | (16.8 | )% | | (7.0 | )% |
| | Corporate | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
|
| | Total Revenue | 0.7 | % | | (9.7 | )% | | (2.1 | )% | | 0.6 | % | | 9.1 | % | | (4.1 | )% | | (11.6 | )% | | (12.6 | )% | | (11.0 | )% | | (3.3 | )% |
| | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Revenue Growth from Sequential Period | | | | | | | | | | | | | | | | | | | |
| | Technology, Data and Analytics: | | | | | | | | | | | | | | | | | | | |
| | Technology | 9.1 | % | | 3.5 | % | | 0.1 | % | | 3.2 | % | | 4.5 | % | | — | % | | 3.1 | % | | 2.4 | % | | 0.9 | % | | (1.9 | )% |
| | Servicing Technology | 5.9 | % | | 3.9 | % | | 2.9 | % | | 0.3 | % | | 2.7 | % | | 1.2 | % | | (0.2 | )% | | 3.5 | % | | 0.4 | % | | 2.0 | % |
| | Default Technology | 13.5 | % | | 0.8 | % | | (3.9 | )% | | 6.2 | % | | 7.8 | % | | (6.4 | )% | | 19.8 | % | | (3.5 | )% | | 0.2 | % | | (12.0 | )% |
| | Origination Technology | 19.2 | % | | 5.5 | % | | (6.6 | )% | | 13.2 | % | | 8.5 | % | | 4.7 | % | | (2.7 | )% | | 5.8 | % | | 5.4 | % | | (4.8 | )% |
| | Data and Analytics | 1.7 | % | | (11.0 | )% | | 1.3 | % | | 1.6 | % | | 5.3 | % | | (1.9 | )% | | 2.7 | % | | (8.2 | )% | | 3.6 | % | | (14.6 | )% |
| | Total | 8.4 | % | | 2.1 | % | | 0.2 | % | | 3.1 | % | | 4.5 | % | | (0.1 | )% | | 3.1 | % | | 1.5 | % | | 1.2 | % | | (3.2 | )% |
| | Transaction Services: | | | | | | | | | | | | | | | | | | | |
| | Origination Services | 20.4 | % | | (14.2 | )% | | 12.9 | % | | 2.2 | % | | 2.7 | % | | (3.2 | )% | | 13.8 | % | | 25.7 | % | | (17.9 | )% | | (28.1 | )% |
| | Default Services | (19.4 | )% | | (15.3 | )% | | (10.8 | )% | | (14.0 | )% | | 8.6 | % | | (11.2 | )% | | (3.3 | )% | | (2.8 | )% | | (7.0 | )% | | (7.3 | )% |
| | Total | (3.6 | )% | | (14.9 | )% | | 1.1 | % | | (6.6 | )% | | 5.8 | % | | (7.6 | )% | | 3.7 | % | | 7.1 | % | | (11.1 | )% | | (16.4 | )% |
| | Corporate | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
| | n/m |
|
| | Total Revenue | 0.7 | % | | (9.7 | )% | | 0.7 | % | | (3.1 | )% | | 5.7 | % | | (5.1 | )% | | 3.6 | % | | 5.1 | % | | (7.1 | )% | | (12.5 | )% |
(1) 2011 revenue has been reclassified to conform to the current year presentation.
Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION - UNAUDITED
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | CALENDAR YEAR | | QUARTER |
| | | 2012 | | 2011 | | Q4-2012 | | Q3-2012 | | Q2-2012 | | Q1-2012 | | Q4-2011 | | Q3- 2011 | | Q2-2011 | | Q1 - 2011 |
| 1. | Operating Results - Continuing Operations | | | | | | | | | | | | | | | | | | | |
| | Consolidated | | | | | | | | | | | | | | | | | | | |
| | Revenue | $ | 1,997,651 |
| | $ | 1,983,433 |
| | $ | 501,029 |
| | $ | 497,451 |
| | $ | 513,377 |
| | $ | 485,794 |
| | $ | 512,033 |
| | $ | 494,312 |
| | $ | 470,453 |
| | $ | 506,635 |
|
| | Operating Income (Loss), as reported | 232,935 |
| | 278,724 |
| | 51,935 |
| | 111,859 |
| | (24,065 | ) | | 93,206 |
| | 3,395 |
| | 92,181 |
| | 77,129 |
| | 106,019 |
|
| | Adjustments: | | | | | | | | | | | | | | | | | | | |
| | Legal and Regulatory Charges (1) | 192,417 |
| | 78,484 |
| | 47,941 |
| | — |
| | 144,476 |
| | — |
| | 78,484 |
| | — |
| | — |
| | — |
|
| | Exit costs, Impairments and Other Charges (2) | 10,460 |
| | 56,912 |
| | 10,460 |
| | — |
| | — |
| | — |
| | 27,714 |
| | — |
| | 9,887 |
| | 19,311 |
|
| | Operating Income, as adjusted | 435,812 |
| | 414,120 |
| | 110,336 |
| | 111,859 |
| | 120,411 |
| | 93,206 |
| | 109,593 |
| | 92,181 |
| | 87,016 |
| | 125,330 |
|
| | Depreciation and Amortization | 96,744 |
| | 88,942 |
| | 25,136 |
| | 24,241 |
| | 23,453 |
| | 23,914 |
| | 23,600 |
| | 20,471 |
| | 22,259 |
| | 22,612 |
|
| | EBITDA, as adjusted | $ | 532,556 |
| | $ | 503,062 |
| | $ | 135,472 |
| | $ | 136,100 |
| | $ | 143,864 |
| | $ | 117,120 |
| | $ | 133,193 |
| | $ | 112,652 |
| | $ | 109,275 |
| | $ | 147,942 |
|
| | Operating Margin, as adjusted | 21.8 | % | | 20.9 | % | | 22.0 | % | | 22.5 | % | | 23.5 | % | | 19.2 | % | | 21.4 | % | | 18.6 | % | | 18.5 | % | | 24.7 | % |
| | EBITDA Margin, as adjusted | 26.7 | % | | 25.4 | % | | 27.0 | % | | 27.4 | % | | 28.0 | % | | 24.1 | % | | 26.0 | % | | 22.8 | % | | 23.2 | % | | 29.2 | % |
| | Technology, Data and Analytics | | | | | | | | | | | | | | | | | | | |
| | Revenue | $ | 736,905 |
| | $ | 679,599 |
| | $ | 189,312 |
| | $ | 188,994 |
| | $ | 183,282 |
| | $ | 175,317 |
| | $ | 175,549 |
| | $ | 170,334 |
| | $ | 167,837 |
| | $ | 165,879 |
|
| | Operating Income, as reported | 218,367 |
| | 206,761 |
| | 51,971 |
| | 58,318 |
| | 56,003 |
| | 52,075 |
| | 49,607 |
| | 56,814 |
| | 47,741 |
| | 52,599 |
|
| | Adjustments: | | | | | | | | | | | | | | | | | | | |
| | Exit costs, Impairments and Other Charges (2) | 2,827 |
| | 16,858 |
| | 2,827 |
| | — |
| | — |
| | — |
| | 7,971 |
| | — |
| | 6,585 |
| | 2,302 |
|
| | Operating Income, as adjusted | 221,194 |
| | 223,619 |
| | 54,798 |
| | 58,318 |
| | 56,003 |
| | 52,075 |
| | 57,578 |
| | 56,814 |
| | 54,326 |
| | 54,901 |
|
| | Depreciation and Amortization | 74,999 |
| | 67,184 |
| | 19,730 |
| | 18,726 |
| | 17,997 |
| | 18,546 |
| | 18,066 |
| | 15,081 |
| | 16,843 |
| | 17,194 |
|
| | EBITDA, as adjusted | $ | 296,193 |
| | $ | 290,803 |
| | $ | 74,528 |
| | $ | 77,044 |
| | $ | 74,000 |
| | $ | 70,621 |
| | $ | 75,644 |
| | $ | 71,895 |
| | $ | 71,169 |
| | $ | 72,095 |
|
| | Operating Margin, as adjusted | 30.0 | % | | 32.9 | % | | 28.9 | % | | 30.9 | % | | 30.6 | % | | 29.7 | % | | 32.8 | % | | 33.4 | % | | 32.4 | % | | 33.1 | % |
| | EBITDA Margin, as adjusted | 40.2 | % | | 42.8 | % | | 39.4 | % | | 40.8 | % | | 40.4 | % | | 40.3 | % | | 43.1 | % | | 42.2 | % | | 42.4 | % | | 43.5 | % |
| | Transaction Services | | | | | | | | | | | | | | | | | | | |
| | Revenue | $ | 1,262,738 |
| | $ | 1,309,905 |
| | $ | 311,717 |
| | $ | 308,451 |
| | $ | 330,359 |
| | $ | 312,211 |
| | $ | 337,776 |
| | $ | 325,774 |
| | $ | 304,129 |
| | $ | 342,226 |
|
| | Operating Income, as reported | 260,396 |
| | 256,004 |
| | 65,892 |
| | 65,651 |
| | 76,603 |
| | 52,250 |
| | 70,955 |
| | 55,714 |
| | 50,858 |
| | 78,477 |
|
| | | | | | | | | | | | | | | | | | | | | |
| | Adjustments: | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Exit costs, Impairments and Other Charges (2) | 1,531 |
| | 3,816 |
| | 1,531 |
| | — |
| | — |
| | — |
| | (236 | ) | | — |
| | 1,074 |
| | 2,978 |
|
| | Operating Income, as adjusted | 261,927 |
| | 259,820 |
| | 67,423 |
| | 65,651 |
| | 76,603 |
| | 52,250 |
| | 70,719 |
| | 55,714 |
| | 51,932 |
| | 81,455 |
|
| | Depreciation and Amortization | 17,837 |
| | 17,555 |
| | 4,498 |
| | 4,531 |
| | 4,408 |
| | 4,400 |
| | 4,558 |
| | 4,414 |
| | 4,320 |
| | 4,263 |
|
| | EBITDA, as adjusted | $ | 279,764 |
| | $ | 277,375 |
| | $ | 71,921 |
| | $ | 70,182 |
| | $ | 81,011 |
| | $ | 56,650 |
| | $ | 75,277 |
| | $ | 60,128 |
| | $ | 56,252 |
| | $ | 85,718 |
|
| | Operating Margin, as adjusted | 20.7 | % | | 19.8 | % | | 21.6 | % | | 21.3 | % | | 23.2 | % | | 16.7 | % | | 20.9 | % | | 17.1 | % | | 17.1 | % | | 23.8 | % |
| | EBITDA Margin, as adjusted | 22.2 | % | | 21.2 | % | | 23.1 | % | | 22.8 | % | | 24.5 | % | | 18.1 | % | | 22.3 | % | | 18.5 | % | | 18.5 | % | | 25.0 | % |
| | Corporate and Other | | | | | | | | | | | | | | | | | | | |
| | Revenue | $ | (1,992 | ) | | $ | (6,071 | ) | | — |
| | $ | 6 |
| | $ | (264 | ) | | $ | (1,734 | ) | | $ | (1,292 | ) | | $ | (1,796 | ) | | $ | (1,513 | ) | | $ | (1,470 | ) |
| | Operating Loss, as reported | (245,828 | ) | | (184,041 | ) | | (65,928 | ) | | (12,110 | ) | | (156,671 | ) | | (11,119 | ) | | (117,167 | ) | | (20,347 | ) | | (21,470 | ) | | (25,057 | ) |
| | Adjustments: | | | | | | | | | | | | | | | | | | | |
| | Legal and Regulatory Charges (1) | 192,417 |
| | 78,484 |
| | 47,941 |
| | — |
| | 144,476 |
| | — |
| | 78,484 |
| | — |
| | — |
| | — |
|
| | Exit costs, Impairments and Other Charges (2) | 6,102 |
| | 36,238 |
| | 6,102 |
| | — |
| | — |
| | — |
| | 19,979 |
| | — |
| | 2,228 |
| | 14,031 |
|
| | Operating Loss, as adjusted | (47,309 | ) | | (69,319 | ) | | (11,885 | ) | | (12,110 | ) | | (12,195 | ) | | (11,119 | ) | | (18,704 | ) | | (20,347 | ) | | (19,242 | ) | | (11,026 | ) |
| | Depreciation and Amortization | 3,908 |
| | 4,203 |
| | 908 |
| | 984 |
| | 1,048 |
| | 968 |
| | 976 |
| | 976 |
| | 1,096 |
| | 1,155 |
|
| | EBITDA, as adjusted | $ | (43,401 | ) | | $ | (65,116 | ) | | $ | (10,977 | ) | | $ | (11,126 | ) | | $ | (11,147 | ) | | $ | (10,151 | ) | | $ | (17,728 | ) | | $ | (19,371 | ) | | $ | (18,146 | ) | | $ | (9,871 | ) |
Exhibit E - Continued
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL INFORMATION - UNAUDITED
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | CALENDAR YEAR | | QUARTER |
| | | 2012 | | 2011 | | Q4-2012 | | Q3-2012 | | Q2-2012 | | Q1-2012 | | Q4-2011 | | Q3- 2011 | | Q2-2011 | | Q1 - 2011 |
| 2. | Net Earnings - Reconciliation | | | | | | | | | | | | | | | | | | | |
| | Net Earnings (Loss) | $ | 70,359 |
| | $ | 96,543 |
| | $ | 2,814 |
| | $ | 58,304 |
| | $ | (37,880 | ) | | $ | 47,121 |
| | $ | (21,201 | ) | | $ | 40,450 |
| | $ | 21,365 |
| | $ | 55,929 |
|
| | Adjustments - Continuing Operations: | | | | | | | | | | | | | | | | | | | |
| | Legal and Regulatory Charges, net (1) | 128,710 |
| | 53,086 |
| | 28,086 |
| | — |
| | 100,624 |
| | — |
| | 53,086 |
| | — |
| | — |
| | — |
|
| | Exit costs, Impairments and Other Charges, net (2) | 6,590 |
| | 34,999 |
| | 6,590 |
| | — |
| | — |
| | — |
| | 16,822 |
| | — |
| | 6,204 |
| | 11,973 |
|
| | Total Adjustments to Continuing Operations | 135,300 |
| | 88,085 |
| | 34,676 |
| | — |
| | 100,624 |
| | — |
| | 69,908 |
| | — |
| | 6,204 |
| | 11,973 |
|
| | Adjustments - Discontinued Operations: | | | | | | | | | | | | | | | | | | | |
| | Impairment, Restructuring and Disposal Charges, net | 2,494 |
| | 34,440 |
| | 2,494 |
| | — |
| | — |
| | — |
| | 15,157 |
| | 1,486 |
| | 17,759 |
| | 38 |
|
| | Total Adjustments to Discontinued Operations | 2,494 |
| | 34,440 |
| | 2,494 |
| | — |
| | — |
| | — |
| | 15,157 |
| | 1,486 |
| | 17,759 |
| | 38 |
|
| | Adjustments - Non-operating: | | | | | | | | | | | | | | | | | | | |
| | Debt Refinancing Charges, net (3) | 15,445 |
| | 4,978 |
| | 15,445 |
| | — |
| | — |
| | — |
| | — |
| | 4,978 |
| | — |
| | — |
|
| | Income Tax Adjustments (4) | 5,621 |
| | (6,089 | ) | | 5,621 |
| | — |
| | — |
| | — |
| | (6,089 | ) | | — |
| | — |
| | — |
|
| | Total Non-operating Adjustments | 21,066 |
| | (1,111 | ) | | 21,066 |
| | — |
| | — |
| | — |
| | (6,089 | ) | | 4,978 |
| | — |
| | — |
|
| | Net Earnings, as adjusted | 229,219 |
| | 217,957 |
| | 61,050 |
| | 58,304 |
| | 62,744 |
| | 47,121 |
| | 57,775 |
| | 46,914 |
| | 45,328 |
| | 67,940 |
|
| | Purchase Accounting Amortization, net (5) | 7,578 |
| | 10,952 |
| | 1,712 |
| | 1,712 |
| | 1,733 |
| | 2,421 |
| | 2,655 |
| | 2,495 |
| | 2,674 |
| | 3,128 |
|
| | Adjusted Net Earnings | $ | 236,797 |
| | $ | 228,909 |
| | 62,762 |
| | $ | 60,016 |
| | $ | 64,477 |
| | $ | 49,542 |
| | $ | 60,430 |
| | $ | 49,409 |
| | $ | 48,002 |
| | $ | 71,068 |
|
| | Adjusted Net Earnings Per Diluted Share | $ | 2.80 |
| | $ | 2.68 |
| | $ | 0.74 |
| | $ | 0.71 |
| | $ | 0.76 |
| | $ | 0.59 |
| | $ | 0.72 |
| | $ | 0.59 |
| | $ | 0.56 |
| | $ | 0.81 |
|
| | Diluted Weighted Average Shares | 84,857 |
| | 85,685 |
| | 85,106 |
| | 84,948 |
| | 84,578 |
| | 84,567 |
| | 84,430 |
| | 84,415 |
| | 85,812 |
| | 88,134 |
|
| | | | | | | | | | | | | | | | | | | | | |
| 3. | Cash Flow - Reconciliation | | | | | | | | | | | | | | | | | | | |
| | Cash Flows from Operating Activities: | | | | | | | | | | | | | | | | | | | |
| | Net Earnings (Loss) | $ | 70,359 |
| | $ | 96,543 |
| | $ | 2,814 |
| | $ | 58,304 |
| | $ | (37,880 | ) | | $ | 47,121 |
| | $ | (21,201 | ) | | $ | 40,450 |
| | $ | 21,365 |
| | $ | 55,929 |
|
| | Adjustments: | | | | | | | | | | | | | | | | | | | |
| | Cash Related Restructuring Costs, net | 23,925 |
| | 8,177 |
| | 2,491 |
| | 5,746 |
| | 13,335 |
| | 2,353 |
| | (3,302 | ) | | 2,107 |
| | 5,220 |
| | 4,152 |
|
| | Net Earnings (Loss), as adjusted | 94,284 |
| | 104,720 |
| | 5,305 |
| | 64,050 |
| | (24,545 | ) | | 49,474 |
| | (24,503 | ) | | 42,557 |
| | 26,585 |
| | 60,081 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | | | | | | | | | | | | | | |
| | Non-cash adjustments | 118,628 |
| | 219,510 |
| | 24,978 |
| | 49,196 |
| | 7,022 |
| | 37,432 |
| | 62,763 |
| | 50,508 |
| | 61,260 |
| | 44,979 |
|
| | Working capital adjustments | 245,475 |
| | 161,806 |
| | 103,100 |
| | (21,816 | ) | | 158,693 |
| | 5,498 |
| | 106,696 |
| | 11,756 |
| | 23,822 |
| | 19,532 |
|
| | Net cash provided by operating activities | 458,387 |
| | 486,036 |
| | 133,383 |
| | 91,430 |
| | 141,170 |
| | 92,404 |
| | 144,956 |
| | 104,821 |
| | 111,667 |
| | 124,592 |
|
| | Capital expenditures included in investing activities | (113,328 | ) | | (104,879 | ) | | (41,131 | ) | | (22,220 | ) | | (26,258 | ) | | (23,719 | ) | | (23,408 | ) | | (28,243 | ) | | (29,907 | ) | | (23,321 | ) |
| | Adjusted Free Cash Flow | $ | 345,059 |
| | $ | 381,157 |
| | $ | 92,252 |
| | $ | 69,210 |
| | $ | 114,912 |
| | $ | 68,685 |
| | $ | 121,548 |
| | $ | 76,578 |
| | $ | 81,760 |
| | $ | 101,271 |
|
| | Adjusted Free Cash Flow Per Diluted Share | $ | 4.07 |
| | $ | 4.45 |
| | $ | 1.08 |
| | $ | 0.82 |
| | $ | 1.36 |
| | $ | 0.81 |
| | $ | 1.44 |
| | $ | 0.91 |
| | $ | 0.95 |
| | $ | 1.15 |
|
| | Diluted Weighted Average Shares | 84,857 |
| | 85,685 |
| | 85,106 |
| | 84,948 |
| | 84,578 |
| | 84,567 |
| | 84,430 |
| | 84,415 |
| | 85,812 |
| | 88,134 |
|
Notes:
(1) During 2012 and 2011, we recognized pre-tax legal and regulatory contingency charges of $192.4 million and $78.5 million ($128.7 million and $53.1 million, net of tax), respectively, for estimated settlement and third-party legal expenses related to various ongoing legal and regulatory matters.
(2) 2012 reflects the impact of various severance charges totaling $8.7 million ($5.5 million net of tax) and asset impairment charges totaling $1.8 million ($1.1 million net of tax). 2011 includes severance charges for the departure of certain executives, including our former chief executive officer and former co-chief operating officer, as well as the impact of other personnel restructuring programs, which totaled $33.4 million ($20.6 million net of tax). 2011 also includes asset impairment and restructuring charges, which totaled $23.5 million ($14.4 million net of tax) primarily related to the write-down of various assets as well as provisions for operating lease impairments.
(3) During 2012, we recorded a charge totaling $24.5 million ($15.4 million net of tax) related to the refinancing of our bonds and senior credit facilities. During 2011, we recorded a charge totaling $8.0 million ($5.0 million net of tax) related to the write-off of certain debt issuance costs in connection with the refinancing of our senior credit facilities.
(4) Reflects the impact of favorable prior year tax true-ups recognized in 2012 and 2011 offset by non-cash adjustments during 2012 related to equity forfeitures from severance and restructuring initiatives.
(5) Purchase accounting amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.
Exhibit F
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED
(In thousands) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | CALENDAR YEAR | | QUARTER |
| Reconciliation of Discontinued Operations | 2012 | | 2011 | | Q4-2012 | | Q3-2012 | | Q2-2012 | | Q1-2012 | | Q4-2011 | | Q3-2011 | | Q2-2011 | | Q1-2011 |
| | | | | | | | | | | | | | | | | | | | |
| Discontinued Operations, as previously reported | | | | | | | | | | | | | | | | | | | |
| Revenue | $ | 9,529 |
| | $ | 70,143 |
| | $ | 471 |
| | $ | 578 |
| | $ | 1,693 |
| | $ | 6,787 |
| | $ | 13,313 |
| | $ | 18,379 |
| | $ | 19,436 |
| | $ | 19,015 |
|
| Expenses | 27,916 |
| | 147,518 |
| | 4,454 |
| | 2,765 |
| | 5,683 |
| | 15,014 |
| | 44,290 |
| | 22,924 |
| | 54,852 |
| | 25,452 |
|
| Operating Loss | (18,387 | ) | | (77,375 | ) | | (3,983 | ) | | (2,187 | ) | | (3,990 | ) | | (8,227 | ) | | (30,977 | ) | | (4,545 | ) | | (35,416 | ) | | (6,437 | ) |
| Total Other Income (Expense) | 6,679 |
| | (414 | ) | | (14 | ) | | (1,633 | ) | | 261 |
| | 8,065 |
| | 1,590 |
| | (2,165 | ) | | 97 |
| | 64 |
|
| Loss Before Income Taxes | (11,708 | ) | | (77,789 | ) | | (3,997 | ) | | (3,820 | ) | | (3,729 | ) | | (162 | ) | | (29,387 | ) | | (6,710 | ) | | (35,319 | ) | | (6,373 | ) |
| Provision (Benefit) for Income Taxes | (1,865 | ) | | (31,526 | ) | | (2,190 | ) | | (1,425 | ) | | (144 | ) | | 1,894 |
| | (12,370 | ) | | (2,516 | ) | | (14,218 | ) | | (2,422 | ) |
| Net Loss | $ | (9,843 | ) | | $ | (46,263 | ) | | $ | (1,807 | ) | | $ | (2,395 | ) | | $ | (3,585 | ) | | $ | (2,056 | ) | | $ | (17,017 | ) | | $ | (4,194 | ) | | $ | (21,101 | ) | | $ | (3,951 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Technology, Data and Analytics | | | | | | | | | | | | | | | | | | | |
| Revenue | $ | 11,269 |
| | $ | 10,931 |
| | $ | 2,658 |
| | $ | 2,962 |
| | $ | 2,823 |
| | $ | 2,826 |
| | $ | 2,722 |
| | $ | 2,804 |
| | $ | 2,736 |
| | $ | 2,669 |
|
| Expenses | 3,631 |
| | 3,788 |
| | 867 |
| | 904 |
| | 925 |
| | 935 |
| | 988 |
| | 903 |
| | 951 |
| | 946 |
|
| Operating Income | 7,638 |
| | 7,143 |
| | 1,791 |
| | 2,058 |
| | 1,898 |
| | 1,891 |
| | 1,734 |
| | 1,901 |
| | 1,785 |
| | 1,723 |
|
| Total Other Income (Expense) | 13,518 |
| | — |
| | 13,518 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income Before Income Taxes | 21,156 |
| | 7,143 |
| | 15,309 |
| | 2,058 |
| | 1,898 |
| | 1,891 |
| | 1,734 |
| | 1,901 |
| | 1,785 |
| | 1,723 |
|
| Provision for Income Taxes | 15,393 |
| | 2,429 |
| | 13,212 |
| | 768 |
| | 708 |
| | 705 |
| | 400 |
| | 713 |
| | 661 |
| | 655 |
|
| Net Earnings | $ | 5,763 |
| | $ | 4,714 |
| | $ | 2,097 |
| | $ | 1,290 |
| | $ | 1,190 |
| | $ | 1,186 |
| | $ | 1,334 |
| | $ | 1,188 |
| | $ | 1,124 |
| | $ | 1,068 |
|
| | | | | | | | | | | | | | | | | | | | |
| Transaction Services | | | | | | | | | | | | | | | | | | | |
| Revenue | $ | 51,439 |
| | $ | 95,748 |
| | $ | 4,768 |
| | $ | 12,263 |
| | $ | 17,007 |
| | $ | 17,401 |
| | $ | 19,077 |
| | $ | 22,321 |
| | $ | 26,471 |
| | $ | 27,879 |
|
| Expenses | 60,142 |
| | 91,433 |
| | 10,610 |
| | 13,736 |
| | 17,599 |
| | 18,197 |
| | 19,280 |
| | 22,211 |
| | 24,719 |
| | 25,223 |
|
| Operating Income (Loss) | (8,703 | ) | | 4,315 |
| | (5,842 | ) | | (1,473 | ) | | (592 | ) | | (796 | ) | | (203 | ) | | 110 |
| | 1,752 |
| | 2,656 |
|
| Total Other Income (Expense) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income (Loss) Before Income Taxes | (8,703 | ) | | 4,315 |
| | (5,842 | ) | | (1,473 | ) | | (592 | ) | | (796 | ) | | (203 | ) | | 110 |
| | 1,752 |
| | 2,656 |
|
| Provision (Benefit) for Income Taxes | (3,705 | ) | | 1,467 |
| | (2,638 | ) | | (550 | ) | | (221 | ) | | (296 | ) | | (226 | ) | | 41 |
| | 643 |
| | 1,009 |
|
| Net Earnings (Loss) | $ | (4,998 | ) | | $ | 2,848 |
| | $ | (3,204 | ) | | $ | (923 | ) | | $ | (371 | ) | | $ | (500 | ) | | $ | 23 |
| | $ | 69 |
| | $ | 1,109 |
| | $ | 1,647 |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Discontinued Operations, as adjusted | | | | | | | | | | | | | | | | | | | |
| Revenue | $ | 72,237 |
| | $ | 176,822 |
| | $ | 7,897 |
| | $ | 15,803 |
| | $ | 21,523 |
| | $ | 27,014 |
| | $ | 35,112 |
| | $ | 43,504 |
| | $ | 48,643 |
| | $ | 49,563 |
|
| Expenses | 91,689 |
| | 242,739 |
| | 15,931 |
| | 17,405 |
| | 24,207 |
| | 34,146 |
| | 64,558 |
| | 46,038 |
| | 80,522 |
| | 51,621 |
|
| Operating Loss | (19,452 | ) | | (65,917 | ) | | (8,034 | ) | | (1,602 | ) | | (2,684 | ) | | (7,132 | ) | | (29,446 | ) | | (2,534 | ) | | (31,879 | ) | | (2,058 | ) |
| Total Other Income (Expense) | 20,197 |
| | (414 | ) | | 13,504 |
| | (1,633 | ) | | 261 |
| | 8,065 |
| | 1,590 |
| | (2,165 | ) | | 97 |
| | 64 |
|
| Income (Loss) Before Income Taxes | 745 |
| | (66,331 | ) | | 5,470 |
| | (3,235 | ) | | (2,423 | ) | | 933 |
| | (27,856 | ) | | (4,699 | ) | | (31,782 | ) | | (1,994 | ) |
| Provision (Benefit) for Income Taxes | 9,823 |
| | (27,630 | ) | | 8,384 |
| | (1,207 | ) | | 343 |
| | 2,303 |
| | (12,196 | ) | | (1,762 | ) | | (12,914 | ) | | (758 | ) |
| Net Loss | $ | (9,078 | ) | | $ | (38,701 | ) | | $ | (2,914 | ) | | $ | (2,028 | ) | | $ | (2,766 | ) | | $ | (1,370 | ) | | $ | (15,660 | ) | | $ | (2,937 | ) | | $ | (18,868 | ) | | $ | (1,236 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Discontinued Operations - Reconciliation | | | | | | | | | | | | | | | | | | | |
| Net Loss, as reported | $ | (9,078 | ) | | $ | (38,701 | ) | | $ | (2,914 | ) | | $ | (2,028 | ) | | $ | (2,766 | ) | | $ | (1,370 | ) | | $ | (15,660 | ) | | $ | (2,937 | ) | | $ | (18,868 | ) | | $ | (1,236 | ) |
| Adjustments: | | | | | | | | | | | | | | | | | | | |
| Impairment, Restructuring and Disposal Charges, net | 2,494 |
| | 34,440 |
| | 2,494 |
| | — |
| | — |
| | — |
| | 15,157 |
| | 1,486 |
| | 17,759 |
| | 38 |
|
| Net Loss, as adjusted | (6,584 | ) | | (4,261 | ) | | (420 | ) | | (2,028 | ) | | (2,766 | ) | | (1,370 | ) | | (503 | ) | | (1,451 | ) | | (1,109 | ) | | (1,198 | ) |
| Purchase Accounting Amortization, net (1) | 204 |
| | 912 |
| | 10 |
| | 14 |
| | 52 |
| | 128 |
| | 215 |
| | 136 |
| | 286 |
| | 275 |
|
| Adjusted Net Loss | $ | (6,380 | ) | | $ | (3,349 | ) | | $ | (410 | ) | | $ | (2,014 | ) | | $ | (2,714 | ) | | $ | (1,242 | ) | | $ | (288 | ) | | $ | (1,315 | ) | | $ | (823 | ) | | $ | (923 | ) |
| Adjusted Net Loss Per Diluted Share | $ | (0.05 | ) | | $ | (0.04 | ) | | $ | — |
| | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | (0.01 | ) | | $ | — |
| | $ | (0.02 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) |
| Diluted Weighted Average Shares | 84,857 |
| | 85,685 |
| | 85,106 |
| | 84,948 |
| | 84,578 |
| | 84,567 |
| | $ | 84,430 |
| | 84,415 |
| | 85,812 |
| | 88,134 |
|
(1) Purchase accounting amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.
