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Delaware | 7389 | 26-1547801 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ (Do not check if a smaller reporting company) | Smaller reporting company o |
Proposed Maximum | Amount of | |||||||||||
Title of Each Class of | Amount to be | Offering | Proposed Maximum Aggregate | Registration | ||||||||
Securities to be Registered | Registered | Price per unit(1) | Offering Price | Fee | ||||||||
81/8% Senior Notes due 2016 | $375,000,000 | 100% | $375,000,000 | $14,737.50(2) | ||||||||
Guarantees of 81/8% Senior Notes due 2016(3) | $375,000,000 | — | — | None(4) | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) promulgated under the Securities Act of 1933. |
(2) | Previously paid. |
(3) | See the following page for a table of guarantor registrants. |
(4) | Pursuant to Rule 457(n) promulgated under the Securities Act of 1933, no separate filing fee is required for the guarantees. |
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State or Other | Primary Standard | |||||
Jurisdiction of | Industrial | |||||
Exact Name of Additional Registrant as Specified in its | Incorporation or | Classification Code | I.R.S. Employer | |||
Charter/Constituent Documents* | Organization | Number | Identification Number | |||
A.S.A.P. Legal Publication Services, Inc. | California | 7389 | 68-0112549 | |||
Aptitude Solutions, Inc. | Florida | 7389 | 59-3746614 | |||
Arizona Sales and Posting, Inc. | Arizona | 7389 | 86-0711879 | |||
Chase Vehicle Exchange, Inc. | Delaware | 7389 | 01-0626014 | |||
DOCX, LLC | Georgia | 8732 | 31-1379586 | |||
Espiel, Inc. | Delaware | 7371 | 13-3737393 | |||
Fidelity National Loan Portfolio Services, Inc. | California | 7389 | 94-1623891 | |||
Financial Systems Integrators, Inc. | Delaware | 7389 | 94-3373745 | |||
FIS Capital Markets, LLC | Delaware | 7389 | 20-2977448 | |||
FIS Data Services, Inc. | California | 7374 | 95-4237556 | |||
FIS Tax Services, Inc. f/k/a Fidelity National Tax Services, Inc. | California | 7389 | 95-3932563 | |||
FIS Valuation Solutions, LLC f/k/a Hansen Quality, LLC | California | 7389 | 68-0505888 | |||
FNIS Flood Group, LLC | Delaware | 7389 | 01-0616963 | |||
FNIS Flood of California, LLC | Delaware | 7389 | 01-0616992 | |||
FNIS Intellectual Property Holdings, Inc. | Delaware | 7389 | 01-0560719 | |||
FNIS Services, Inc. | Delaware | 7389 | 74-3026433 | |||
Geotrac, Inc. | Delaware | 7389 | 34-1966375 | |||
Indiana Residential Nominee Services, LLC | Indiana | 7389 | 75-3064873 | |||
Investment Property Exchange Services, Inc. | California | 6798 | 33-0320249 | |||
Lender’s Service Title Agency, Inc. | Ohio | 7389 | 25-1372340 | |||
LPS Agency Sales and Posting, Inc. | California | 7389 | 94-2882944 | |||
LPS Asset Management Solutions, Inc. | Colorado | 7389 | 84-1477780 | |||
LPS Field Services, Inc. | Delaware | 8732 | 34-1856603 | |||
LPS Foreclosure Solutions, Inc. | Delaware | 7389 | 01-0560689 | |||
LPS IP Holding Company, LLC | Delaware | 7389 | 51-0658830 | |||
LPS Management, LLC | Delaware | 7389 | 26-1550692 | |||
LPS Mortgage Processing Solutions, Inc. | Delaware | 6163 | 51-0658830 | |||
LPS National Flood, LP | Delaware | 7389 | 75-2597630 | |||
LPS Portfolio Solutions, LLC | Delaware | 7389 | 01-0560689 | |||
LRT Record Services, Inc. | Texas | 7389 | 75-2366840 | |||
LSI Alabama, LLC | Alabama | 7389 | 25-1896393 | |||
LSI Appraisal, LLC | Delaware | 7389 | 90-0172717 | |||
LSI Maryland, Inc. | Maryland | 7389 | 52-1956911 | |||
LSI Title Agency, Inc. | Illinois | 7389 | 90-0172717 | |||
LSI Title Company | California | 7389 | 94-2696070 | |||
LSI Title Company of Oregon, LLC | Oregon | 7389 | 94-2696070 | |||
LSI Title Insurance Agency of Utah, Inc. | Utah | 7389 | 34-2050114 | |||
Maine Residential Nominee Services, LLC | Maine | 7389 | 75-3064874 | |||
Massachusetts Residential Nominee Services, LLC | Massachusetts | 7389 | 33-1007581 | |||
McDash Analytics LLC | Colorado | 3826 | 95-3932563 | |||
National Residential Nominee Services Inc. | Delaware | 7389 | 77-0584282 | |||
National Safe Harbor Exchanges | California | 7389 | 77-0558360 | |||
NewInvoice, L.L.C. | Georgia | 8721 | 58-2493294 | |||
OnePointCity, L.L.C. | Ohio | 7389 | 59-2900658 | |||
SoftPro, LLC | Delaware | 7373 | 51-0658830 | |||
Strategic Property Investments, Inc. | Delaware | 7389 | 94-3382994 | |||
Vermont Residential Nominee Services, LLC | Vermont | 7389 | 73-1644259 |
* | The address for each of the additional registrants isc/o Lender Processing Services, Inc., 601 Riverside Avenue, Jacksonville, Florida 32204, telephone(904) 854-5100. The name and address, including zip code, of the agent for service for each additional registrant is Francis K. Chan, Lender Processing Services, Inc., 601 Riverside Avenue, Jacksonville, Florida 32204, telephone(904) 854-5100. |
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The information in this prospectus is not complete and may be changed. We may not complete the exchange offer or issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
• | Our offer to exchange old notes for new notes will be open until 5:00 p.m., New York City time, on , 2008, unless extended. | |
• | No public market currently exists for the notes. |
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601 Riverside Avenue
Jacksonville, Florida 32204
(904) 854-5100
Attention: Corporate Secretary
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• | “we,” “our,” “us,” “Company”and“LPS”refer to Lender Processing Services, Inc. and its subsidiaries where applicable. When the context so requires, we use these terms to refer to our historical businesses prior to the spin-off. | |
• | “FIS”refers to our former parent, Fidelity National Information Services, Inc. | |
• | “the spin-off”and“the spin-off transactions”refer to the transactions related to the separation of our business from FIS, as described in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — The spin-off transaction.” | |
• | “New notes”refers to the new series of notes having terms identical to the old notes, except that the new notes will be registered under the Securities Act of 1933 and therefore will not be subject to restrictions on transfer; will not be subject to provisions relating to additional interest; will bear a different CUSIP or ISIN number from the old notes; will not entitle their holders to registration rights; and will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the old notes. | |
• | “Notes”refers to both the old notes and the new notes. | |
• | “Old notes”refers to the currently outstanding $375,000,000 principal amount 81/8% Senior Notes due 2016 that we issued in the spin-off transactions. |
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• | our mortgage processing services, which we conduct using our market-leading mortgage servicing platform and our team of experienced support personnel based primarily at our Jacksonville, Florida data center; | |
• | our Desktop application, a workflow system that assists our customers in managing business processes, which today is primarily used in connection with mortgage loan default management but which has broader applications; | |
• | our other software and related service offerings, including our mortgage origination software, our real estate closing and title insurance production software and our middleware application which provides collaborative network connectivity among mortgage industry participants; and | |
• | our data and analytics businesses, the most significant of which are our alternative property valuations business, which provides a range of types of valuations other than traditional appraisals, our property records business and our advanced analytic services, which assist our customers in their loan marketing or loss mitigation efforts. |
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• | settlement services, which consist of title agency services, where we act as an agent for title insurers, closing services, in which we assist in the closing of real estate transactions, and lien recording and release services; | |
• | appraisal services, which consist of traditional appraisal and appraisal management services; and | |
• | other origination services, which consist of real estate tax services, which provide lenders with information about the tax status of a property, flood zone information, which assists lenders in determining whether a property is in a federally designated flood zone, and qualified exchange intermediary services for customers who seek to engage in qualified exchanges under Section 1031 of the Internal Revenue Code. |
• | foreclosure services, including access to a nationwide network of independent attorneys, document preparation and recording and other services; | |
• | property inspection and preservation services, designed to preserve the value of properties securing defaulted loans; and | |
• | asset management services, providing disposition services for our customers’ real estate owned properties through a network of independent real estate brokers, attorneys and other vendors to facilitate the transaction. |
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• | allowing us to separately focus on our core business, which may facilitate our potential expansion and growth by enabling us to separately prioritize our opportunities and better allocate resources and management time and attention to those opportunities; | |
• | allowing us to determine our own capital structure; | |
• | permitting us to allocate technology resources to minimize costs, which may lead to operating our business more efficiently; | |
• | allowing us to more properly market our products in the market niche we occupy, thus maximizing the advantages of our business in the view of the market; | |
• | enhancing our ability to execute a potential acquisition strategy more effectively; and | |
• | permitting us to enhance the efficiency and effectiveness of equity-based compensation programs offered to our employees by better aligning equity awards with the performance of our company. |
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Securities | $375,000,000 in aggregate principal amount of 81/8% Senior Notes due 2016, which we refer to as the new notes, which will be registered under the Securities Act of 1933. | |
The terms of the new notes offered in the exchange offer are identical in all material respects to those of the old notes, except that the new notes will: | ||
• be registered under the Securities Act of 1933 and therefore will not be subject to restrictions on transfer; | ||
• not be subject to provisions relating to additional interest; | ||
• bear a different CUSIP or ISIN number from the old notes; | ||
• not entitle their holders to registration rights; and | ||
• be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the old notes. | ||
The Exchange Offer | You may exchange old notes for new notes. Subject to the satisfaction or waiver of specified conditions, we will exchange the new notes for all old notes that are validly tendered and not validly withdrawn prior |
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to the expiration of the exchange offer. We will cause the exchange to be effected promptly after the expiration of the exchange offer. | ||
Resale of the New Notes | We believe the new notes that will be issued in the exchange offer may be resold by most investors without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, subject to some conditions. You should read the discussion under the heading “The Exchange Offer” for further information regarding the exchange offer and resale of the new notes. | |
Registration Rights Agreement | We have undertaken this exchange offer pursuant to the terms of a registration rights agreement entered into with the initial purchasers of the old notes. We have agreed to cause a registration statement with respect to an offer to exchange the notes for a new issue of notes registered under the Securities Act to be declared effective no later than 210 days after the issue date. We have further agreed to commence the exchange offer promptly after the registration statement of which this prospectus is a part becomes effective and to hold the offer open for the period required by applicable law (including pursuant to any applicable interpretation by the staff of the Securities and Exchange Commission), but in any event for at least 20 business days. See “The Exchange Offer.” | |
Consequences of Failure to Exchangethe Old Notes | You will continue to hold the old notes that remain subject to their existing transfer restrictions if you: | |
• do not tender your old notes; or | ||
• tender your old notes and they are not accepted for exchange. | ||
We will have no obligation to register the old notes after we consummate the exchange offer. See “The Exchange Offer — Terms of the Exchange Offer” and “Risk Factors — Risks related to the notes.” | ||
Upon completion of the exchange offer, there may be no market for the old notes that remain outstanding and you may have difficulty selling them. | ||
Expiration Date | The exchange offer will expire at 5:00 p.m., New York City time, on • , 2008, or the “expiration date,” unless we extend it, in which case expiration date means the latest date and time to which the exchange offer has been extended. | |
Interest on the New Notes | The new notes of each series will accrue interest from the most recent date to which interest has been paid or provided for on the old notes or, if no interest has been paid on the old notes, from the date of original issue of the old notes. | |
Conditions to the Exchange Offer | The exchange offer is subject to several customary conditions. We will not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if we determine in our reasonable judgment that the exchange offer violates applicable law, any applicable interpretation of the Securities and Exchange Commission or its staff or any action or proceeding has been instituted or threatened in any court or by any governmental agency that might materially impair our ability to proceed with the exchange offer, or any material adverse |
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development has occurred in any existing action or proceeding with respect to us. The foregoing conditions are for our sole benefit and may be waived by us. In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes if: | ||
• at any time any stop order is threatened or in effect with respect to the registration statement of which this prospectus is a part; or | ||
• at any time any stop order is threatened or in effect with respect to the qualification of the indenture governing the notes under the Trust Indenture Act of 1939. | ||
See “The Exchange Offer — Conditions.” We reserve the right to terminate or amend the exchange offer at any time prior to the expiration date upon the occurrence of any of the foregoing events. | ||
Procedures for Tendering Old Notes | If you wish to participate in the exchange offer, you must submit required documentation and tender your old notes pursuant to the procedures for book-entry transfer (or other applicable procedures), all in accordance with the instructions described in this prospectus and in the letter of transmittal or electronic acceptance instruction. See “The Exchange Offer — Procedures for Tendering Old Notes,” “— Book-Entry Transfer” and “— Guaranteed Delivery Procedures.” | |
Guaranteed Delivery Procedures | If you wish to tender your old notes, but cannot properly do so prior to the expiration date, you may tender your old notes according to the guaranteed delivery procedures set forth in “The Exchange Offer — Guaranteed Delivery Procedures.” | |
Withdrawal Rights | Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw a tender of old notes, a written or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in “The Exchange Offer — Exchange Agent” prior to 5:00 p.m., New York City time, on the expiration date. | |
Acceptance of Old Notes and Deliveryof New Notes | Except in some circumstances, any and all old notes that are validly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date will be accepted for exchange. The new notes issued pursuant to the exchange offer will be delivered promptly following the expiration date. We may reject any and all old notes that we determine have not been properly tendered or any old notes the acceptance of which would, in the opinion of our counsel, be unlawful. We may waive any irregularities in the tender of the old notes. See “The Exchange Offer — Procedures for Tendering Old Notes,” “— Book-Entry Transfer,” and “— Guaranteed Delivery Procedures.” We will have no obligation to register the old notes after we consummate the exchange offer. | |
Certain U.S. Federal Tax Considerations | We believe that the exchange of the old notes for the new notes will not constitute a taxable exchange for U.S. federal income tax purposes. See “Certain U.S. Federal Tax Considerations.” | |
Exchange Agent | U.S. Bank National Association, Corporate Trust Services |
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• | will be registered under the Securities Act of 1933 and, therefore, will not be subject to restrictions on transfer; | |
• | will not be subject to provisions relating to additional interest; | |
• | will bear a different CUSIP or ISIN number from the old notes; | |
• | will not entitle their holders to registration rights; and | |
• | will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the old notes. |
Issuer | Lender Processing Services, Inc. | |
Maturity | July 1, 2016. | |
Interest payment dates | 81/8% per annum, paid every six months on January 1 and July 1, with the first payment on January 1, 2009. | |
Optional redemption | Prior to July 1, 2011, we may redeem some or all of the notes at a redemption price equal to 100% plus a make-whole premium and accrued and unpaid interest. On or after July 1, 2011, we may redeem some or all of the notes at any time at the redemption prices set forth in “Description of Notes — Optional redemption.” | |
Before July 1, 2011, we may redeem up to 35% of the notes with the proceeds of certain sales of common stock or certain capital contributions at a price of 108.125% of principal plus accrued interest, as further described in “Description of Notes — Optional redemption.” | ||
Mandatory offer to repurchase | Upon the occurrence of certain change of control events described under “Description of Notes,” you may require us to repurchase some or all of your notes at 101% of their principal amount plus accrued interest. We cannot assure you that we will have sufficient resources to satisfy our repurchase obligation. You should read carefully the sections called “Risk Factors — Risks related to the notes— We may be unable to make a change of control offer required by the indenture governing the notes which would cause defaults under the indenture governing the notes and our new credit facilities” and “Description of Notes.” | |
Guarantors | Each of our domestic subsidiaries that guarantees our obligations under our old notes will guarantee the new notes on an unsecured senior basis. Additionally, if any material domestic subsidiary (that has not already guaranteed the old notes) guarantees our obligations under our senior secured credit agreement, then such subsidiary will also be required to guarantee the new notes on an unsecured senior basis. |
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Ranking | The new notes and the subsidiary guaranties thereof will be senior unsecured obligations and will rank equally with all of our and our guarantor subsidiaries’ existing and future senior debt, will rank senior to all of our and our guarantor subsidiaries’ future subordinated debt and will effectively rank junior to all secured debt to the extent of the value of the collateral and structurally junior to all liabilities of non-guarantor subsidiaries. | |
On apro formabasis: | ||
• at June 30, 2008 the Company and the guarantors would have had outstanding approximately $1.2 billion of secured debt; and | ||
• the Company’s subsidiaries which have not guaranteed the notes represent under 5% of our revenue for the twelve months ended June 30, 2008, and represent under 5% of our assets and outstanding liabilities as of June 30, 2008 (including trade payables). | ||
Certain covenants | The indenture governing the notes contains covenants limiting our ability and our subsidiaries’ ability to: | |
• incur additional debt or issue subsidiary preferred stock or stock with a mandatory redemption feature before the maturity of the notes; | ||
• pay dividends on our capital stock; | ||
• redeem or repurchase capital stock or prepay or repurchase subordinated debt; | ||
• make some types of investments and sell assets; | ||
• create liens or engage in sale and leaseback transactions; | ||
• engage in transactions with affiliates, except on an arms-length basis; and | ||
• consolidate or merge with, or sell substantially all our assets to, another person. | ||
Certain of these covenants will be subject to suspension if the notes are rated at least “BBB−” by Standard & Poor’s or at least “Baa3” by Moody’s. | ||
You should read “Description of Notes — Certain covenants” for a description of these covenants. | ||
Registration Rights | We are required to cause a registration statement with respect to an offer to exchange the notes for a new issue of notes registered under the Securities Act to be declared effective no later than 210 days after the issue date. We may be required to provide a registration statement to effect resales of the notes. | |
Use of proceeds | We will not receive any cash proceeds from the issuance of the new notes under the exchange offer. | |
Risk factors | See “Risk Factors” beginning on page 13 of this prospectus for important information regarding the notes and the Company. |
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Unaudited | ||||||||||||||||||||
Fiscal Year Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||
2005 | 2006 | 2007 | 2007 | 2008 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Statement of earnings data: | ||||||||||||||||||||
Processing and services revenues | $ | 1,382,479 | $ | 1,484,977 | $ | 1,690,568 | $ | 826,438 | $ | 913,106 | ||||||||||
Cost of revenues | 804,488 | 900,145 | 1,058,647 | 526,823 | 585,137 | |||||||||||||||
Gross profit | 577,991 | 584,832 | 631,921 | 299,615 | 327,969 | |||||||||||||||
Selling, general, and administrative expenses | 260,066 | 257,312 | 207,859 | 109,072 | 118,999 | |||||||||||||||
Operating income | 317,925 | 327,520 | 424,062 | 190,543 | 208,970 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 4,124 | 2,606 | 1,690 | 745 | 563 | |||||||||||||||
Interest expense | (270 | ) | (298 | ) | (146 | ) | (77 | ) | (58 | ) | ||||||||||
Other income (expense), net | (1,238 | ) | (106 | ) | — | — | 282 | |||||||||||||
Total other income (expense) | 2,616 | 2,202 | 1,544 | 668 | 787 | |||||||||||||||
Earnings before income taxes, equity in losses of unconsolidated entity and minority interest | 320,541 | 329,722 | 425,606 | 191,211 | 209,757 | |||||||||||||||
Provision for income taxes | 124,160 | 127,984 | 164,734 | 74,010 | 81,386 | |||||||||||||||
Earnings before equity in losses of unconsolidated entity and minority interest | 196,381 | 201,738 | 260,872 | 117,201 | 128,371 | |||||||||||||||
Equity in losses of unconsolidated entity | — | — | (3,048 | ) | (1,720 | ) | (2,370 | ) | ||||||||||||
Minority interest | (676 | ) | (683 | ) | (1,019 | ) | (436 | ) | (723 | ) | ||||||||||
Net earnings | $ | 195,705 | $ | 201,055 | $ | 256,805 | $ | 115,045 | $ | 125,278 | ||||||||||
Statement of cash flows data: | ||||||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||||||
Operating activities | $ | 272,792 | $ | 341,950 | $ | 282,994 | $ | 133,389 | $ | 136,683 | ||||||||||
Investing activities | (98,384 | ) | (81,589 | ) | (107,857 | ) | (62,456 | ) | (40,625 | ) | ||||||||||
Financing activities | (198,745 | ) | (272,334 | ) | (183,354 | ) | (69,639 | ) | (116,996 | ) | ||||||||||
Other financial data: | ||||||||||||||||||||
Capital expenditures | 92,458 | 70,248 | 70,552 | 25,036 | 25,137 | |||||||||||||||
Depreciation and amortization | 112,648 | 111,858 | 102,607 | 52,373 | 44,576 | |||||||||||||||
Balance sheet data (at period end): | ||||||||||||||||||||
Cash and cash equivalents | $ | 59,756 | $ | 47,783 | $ | 39,566 | $ | 49,077 | $ | 18,628 | ||||||||||
Working capital | 83,981 | 155,964 | 239,343 | 179,732 | 248,385 | |||||||||||||||
Property and equipment, net | 107,654 | 101,962 | 95,620 | 94,301 | 92,487 | |||||||||||||||
Goodwill and other intangible assets | 918,333 | 1,198,610 | 1,196,283 | 1,217,521 | 1,189,953 | |||||||||||||||
Computer software | 114,982 | 127,080 | 150,372 | 133,419 | 149,562 | |||||||||||||||
Total assets | 1,542,802 | 1,879,800 | 1,962,043 | 1,947,212 | 1,985,740 | |||||||||||||||
Total debt | — | — | — | — | — | |||||||||||||||
Total shareholder’s equity | 1,270,939 | 1,577,531 | 1,671,039 | 1,636,151 | 1,674,501 | |||||||||||||||
Credit Statistics: | ||||||||||||||||||||
Ratio of earnings to fixed charges(a) | — | — | — | — | — |
(a) | The historical ratio of earnings to fixed charges for each of the years in the three-year period ended December 31, 2007 and the six months ended June 30, 2008 and 2007 is not meaningful since we did not have any debt outstanding during those time periods. See the “Pro Forma Financial Information” section of this prospectus for a ratio of earnings to fixed charges, based on the pro forma income statements for the year ended December 31, 2007 and the six months ended June 30, 2008. For purposes of calculating the ratio of earnings to fixed charges, “earnings” consist of income before income taxes plus fixed charges. “Fixed charges” include interest expense and amortization of debt issuance costs. |
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• | our ongoing and future relationships with FIS or FNF, including related party agreements and other arrangements with respect to the administration of tax matters, employee benefits, indemnification, and other matters; and | |
• | the quality and pricing of services that we have agreed to provide to FIS or FNF or that it has agreed to provide to us. |
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• | interruption of business operations; | |
• | delay in market acceptance; | |
• | additional development and remediation costs; | |
• | diversion of technical and other resources; | |
• | loss of customers; | |
• | negative publicity; or | |
• | exposure to liability claims. |
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• | be expensive and time-consuming to defend; | |
• | cause us to cease making, licensing or using applications that incorporate the challenged intellectual property; | |
• | require us to redesign our applications, if feasible; | |
• | divert management’s attention and resources; and | |
• | require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies. |
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• | our historical financial information does not reflect the debt and related interest expense that we incurred as part of the spin-off, including debt we incurred in order to issue debt obligations to FIS in partial consideration of FIS’s contribution to us of our operations; and | |
• | the historical financial information does not reflect the increased costs associated with being a stand-alone company, including changes that we expect in our cost structure, personnel needs, financing and operations of the contributed business as a result of the spin-off from FIS. |
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• | our debt level may make it more difficult for us to satisfy our obligations under the notes; | |
• | the debt level makes us more vulnerable to economic downturns and adverse developments in our business, may cause us to have difficulty borrowing money in the future in excess of amounts available under our credit facility for working capital, capital expenditures, acquisitions or other purposes and will limit our ability to pursue other business opportunities and implement certain business strategies; | |
• | we will need to use a large portion of the money we earn to pay principal and interest on our debt, which will reduce the amount of money available to finance operations, acquisitions and other business activities and pay stockholder dividends; | |
• | a substantial portion of the debt has a variable rate of interest, which exposes us to the risk of increased interest rates (for example, a one percent increase in interest rates would result in a $1 million increase in our annual interest expense for every $100 million of floating rate debt we incur, which may make it more difficult for us to service our debt); | |
• | while we have entered into an agreement limiting our exposure to higher interest rates and may enter into additional similar agreements in the future, any such agreements may not offer complete protection from this risk; and | |
• | we have a higher level of debt than certain of our competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic conditions, including increased competition. |
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• | create, incur or assume any additional debt and issue preferred stock; | |
• | create, incur or assume certain liens; | |
• | redeemand/or prepay certain subordinated debt we might issue in the future; | |
• | pay dividends on our stock or repurchase stock; | |
• | make certain investments and acquisitions; | |
• | enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; | |
• | enter new lines of business; | |
• | engage in consolidations, mergers and acquisitions; | |
• | engage in specified sales of assets; and | |
• | enter into transactions with affiliates. |
• | was insolvent, | |
• | was rendered insolvent by reason of the spin-off, | |
• | had remaining assets constituting unreasonably small capital, or | |
• | intended to incur, or believed it would incur, debts beyond its ability to pay as such debts matured, |
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• | sales of assets; |
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• | sales of equity; and | |
• | negotiations with our lenders to restructure the applicable debt. |
• | incurred this debt with the intent of hindering, delaying or defrauding current or future creditors; or | |
• | received less than reasonably equivalent value or fair consideration for incurring this debt, |
• | was insolvent or was rendered insolvent by reason of the related financing transactions; | |
• | was engaged, or about to engage, in a business or transaction for which our remaining assets constituted unreasonably small capital to carry on our business; or | |
• | intended to incur, or believed that we would incur, debts beyond our ability to pay these debts as they mature, as all of the foregoing terms are defined in or interpreted under the relevant fraudulent transfer or conveyance statutes; |
• | it could not pay its debts or contingent liabilities as they become due; | |
• | the sum of its debts, including contingent liabilities, is greater than its assets, at fair valuation; or |
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• | the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and mature. |
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• | general political, economic, and business conditions, including the possibility of intensified international hostilities, acts of terrorism, and general volatility in the capital markets; | |
• | failures to adapt our services to changes in technology or in the marketplace; | |
• | consolidation in the mortgage lending or banking industry; | |
• | security breaches of our systems and computer viruses affecting our software; | |
• | a decrease in the volume of real estate transactions such as real estate sales and mortgage refinancings, which can be caused by high or increasing interest rates, a shortage of mortgage funding, or a weak United States economy; | |
• | the impact of competitive services and pricing; | |
• | the ability to identify suitable acquisition candidates and the ability to finance such acquisitions, which depends upon the availability of adequate cash reserves from operations or of acceptable financing terms and the variability of our stock price; | |
• | our ability to integrate any acquired business’ operations, services, customers, and personnel; | |
• | the effect of our substantial leverage, which may limit the funds available to make acquisitions and invest in our business; |
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• | changes in, or the failure to comply with, government regulations, including privacy regulations, and the possible effects of the new Code of Conduct with respect to appraisals which Fannie Mae and Freddie Mac are required to adopt, as described above; and | |
• | other risks detailed elsewhere in this information statement, including in the Risk Factors section. |
• | such new notes are acquired in the ordinary course of business; | |
• | at the time of the commencement of the exchange offer, such holder has no arrangement or understanding with any person to participate in a distribution of such new notes; and | |
• | such holder is not engaged in, and does not intend to engage in, a distribution of such new notes. |
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• | any new notes to be received by you will be acquired in the ordinary course of business; | |
• | you have no arrangements or understandings with any person to participate in the distribution of the new notes within the meaning of the Securities Act of 1933; and | |
• | you are not our “affiliate,” as defined in Rule 405 under the Securities Act of 1933. |
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• | complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signatures on the letter of transmittal guaranteed, and mail or otherwise deliver the letter of transmittal or such facsimile, together with any other required documents, to the exchange agent for the notes prior to 5:00 p.m., New York City time, on the expiration date; or | |
• | comply with the Automated Tender Offer Program procedures of the Depository Trust Company, or “DTC,” as described below. |
• | the exchange agent for the notes must receive certificates representing old notes along with the letter of transmittal; or | |
• | prior to the expiration date, the exchange agent for the notes must receive a timely confirmation of book-entry transfer of old notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agent’s message; or | |
• | you must comply with the guaranteed delivery procedures described below. |
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• | by a registered holder of old notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or | |
• | for the account of an eligible guarantor institution. |
• | DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering old notes that are the subject of the book-entry confirmation; | |
• | the participant has received and agrees to be bound by the terms of the letter of transmittal, or, in the case of an agent’s message relating to guaranteed delivery, such participant has received and agrees to be bound by the notice of guaranteed delivery; and | |
• | we may enforce that agreement against such participant. |
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• | certificates for such old notes or a timely book-entry confirmation of such old notes into the exchange agent’s account at the applicable book-entry transfer facility; and | |
• | a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message. |
• | to purchase or make offers for any old notes that remain outstanding subsequent to the expiration date or, as set forth under “— Conditions,” to terminate the exchange offer; | |
• | to redeem the old notes as a whole or in part at any time and from time to time, as set forth under “Description of Notes — Optional Redemption;” and | |
• | to the extent permitted under applicable law, to purchase the old notes in the open market, in privately negotiated transactions or otherwise. |
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• | the tender is made through an eligible guarantor institution within the meaning ofRule 17Ad-15 under the Securities Exchange Act of 1934; | |
• | prior to the expiration date, the exchange agent for the notes receives by facsimile transmission, mail or hand delivery from such eligible guarantor institution a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, which |
(1) | sets forth the name and address of the holder of the old notes and the principal amount of old notes tendered; | |
(2) | states the tender is being made thereby; and | |
(3) | guarantees that within three New York Stock Exchange, or NYSE, trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and |
• | the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. |
• | specify the name of the person having tendered the old notes to be withdrawn; | |
• | identify the old notes to be withdrawn, including the principal amount of such old notes; | |
• | in the case of old notes tendered by book-entry transfer, specify the number of the account at the book-entry transfer facility from which the old notes were tendered and specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn old notes and otherwise comply with the procedures of such facility; | |
• | contain a statement that such holder is withdrawing its election to have such old notes exchanged; | |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the old notes register the transfer of such old notes in the name of the person withdrawing the tender; and | |
• | specify the name in which such old notes are registered, if different from the person who tendered such old notes. |
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By Overnight Courier or Registered or Certified Mail: | By Hand Delivery: | |
U. S. Bank National Association West Side Flats Operations Center Attn: Specialized Finance 60 Livingston Avenue Mail Station — EP-MN-WS2N St. Paul, MN55107-2292 | U. S. Bank National Association West Side Flats Operations Center Attn: Specialized Finance 60 Livingston Avenue Mail Station — EP-MN-WS2N St. Paul, MN 55107-2292 | |
By Facsimile Transmission (for Eligible Institutions Only): | To confirm by telephone or for information: | |
404-898-2467 | 800-934-6802 |
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As of June 30, 2008 | ||||||||
Actual | As Adjusted | |||||||
(Dollars in thousands) | ||||||||
Cash and cash equivalents | $ | 18,628 | $ | 18,628 | ||||
Long-term debt: | ||||||||
New credit facilities | ||||||||
Revolver | — | 25,700 | (1) | |||||
Term Loan A | — | 700,000 | ||||||
Term Loan B | — | 510,000 | ||||||
Notes offered hereby | — | 375,000 | ||||||
Total long-term debt(2) | — | 1,610,700 | ||||||
Total equity | 1,674,501 | 89,501 | ||||||
Total capitalization | $ | 1,674,501 | $ | 1,700,201 | ||||
(1) | We have a $140 million revolving credit facility of which approximately $25.7 million was drawn to cover debt issuance costs at the spin-off date. Therefore, we have approximately $114.3 million additional borrowing capacity. | |
(2) | The first year committed principal payments under our new credit facility will be approximately $135.8 million. |
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as of June 30, 2008
Pro Forma | ||||||||||||
Historical | Adjustments | Pro Forma | ||||||||||
(Dollars in thousands) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 18,628 | $ | — | $ | 18,628 | ||||||
Trade receivables, net | 350,565 | — | 350,565 | |||||||||
Other receivables | 12,318 | — | 12,318 | |||||||||
Prepaid expenses and other current assets | 24,767 | — | 24,767 | |||||||||
Deferred income taxes | 34,640 | — | 34,640 | |||||||||
Total current assets | 440,918 | — | 440,918 | |||||||||
Property and equipment, net | 92,487 | — | 92,487 | |||||||||
Goodwill | 1,086,606 | — | 1,086,606 | |||||||||
Intangibles assets, net | 103,347 | — | 103,347 | |||||||||
Computer software, net | 149,562 | — | 149,562 | |||||||||
Other non-current assets | 112,820 | 25,700 | (1) | 138,520 | ||||||||
Total assets | $ | 1,985,740 | $ | 25,700 | $ | 2,011,440 | ||||||
Liabilities and equity | ||||||||||||
Current liabilities: | ||||||||||||
Trade accounts payable | $ | 28,358 | — | $ | 28,358 | |||||||
Accrued salaries and benefits | 23,037 | — | 23,037 | |||||||||
Recording and transfer tax liabilities | 17,555 | — | 17,555 | |||||||||
Other accrued liabilities | 65,189 | — | 65,189 | |||||||||
Current portion of long-term debt | — | 135,800 | (2) | 135,800 | ||||||||
Deferred revenues | 58,394 | — | 58,394 | |||||||||
Total current liabilities | 192,533 | 135,800 | 328,333 | |||||||||
Deferred revenues | 31,312 | — | 31,312 | |||||||||
Deferred income taxes | 54,844 | — | 54,844 | |||||||||
Long-term debt | — | 1,474,900 | (2) | 1,474,900 | ||||||||
Other long-term liabilities | 21,777 | — | 21,777 | |||||||||
Total liabilities | $ | 300,466 | $ | 1,610,700 | $ | 1,911,166 | ||||||
Minority interest | 10,773 | — | 10,773 | |||||||||
Preferred stock $0.0001 par value, 50 million shares authorized, none issued and outstanding | — | — | — | |||||||||
Common stock $0.0001 par value, 500 million shares authorized, 94.6 million shares issued and outstanding at June 30, 2008 on a pro forma basis | — | 10 | (3) | 10 | ||||||||
Additional paid-in capital | 1,667,268 | (1,585,010 | )(3) | 82,258 | ||||||||
Retained earnings | 6,983 | — | 6,983 | |||||||||
Accumulated other comprehensive earnings | 250 | — | 250 | |||||||||
Total equity | 1,674,501 | (1,585,000 | )(2)(3) | 89,501 | ||||||||
Total liabilities and equity | $ | 1,985,740 | $ | 25,700 | $ | 2,011,440 | ||||||
(1) | This amount represents the capitalized debt issuance costs in connection with the borrowings under the credit agreement and notes offering described in Footnote 2 below. |
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(2) | These amounts represent the new debt incurred by us in connection with the spin-off. Upon the closing of the spin-off, we had approximately $1,610.7 million of indebtedness, consisting of (i) a new senior secured credit agreement consisting of a $700 million Term Loan A and a $510 million Term Loan B and a revolving credit facility of $140 million with approximately $25.7 million drawn to cover debt issuance costs at the spin-off date and (ii) $375 million of senior notes. At the spin-off date we had approximately $114.3 million in additional borrowing capacity under the new revolving credit agreement. We currently estimate that the first year committed principal payments under our new credit agreement will be $135.8 million and thus are presenting that amount as current portion of long-term debt and the remaining $1,474.9 million as long-term debt. | |
(3) | These amounts represent the reclassification of the remaining net investment by FIS into common stock and additional paid-in capital subsequent to our issuance of long-term debt and the consummation of the spin-off. The number of outstanding shares shown equals one-half of the number of FIS shares outstanding as of June 30, 2008 because the number of outstanding common shares issued by us was equal to one-half the number of outstanding FIS shares as of the consummation date of the spin-off. |
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for the six months ended June 30, 2008
Pro Forma | ||||||||||||
Historical | Adjustments | Pro Forma | ||||||||||
(Dollars in thousands) | ||||||||||||
Processing and services revenues | $ | 913,106 | $ | — | $ | 913,106 | ||||||
Cost of revenues | 585,137 | — | 585,137 | |||||||||
Gross profit | 327,969 | — | 327,969 | |||||||||
Selling, general and administrative expenses | 118,999 | — | 118,999 | |||||||||
Operating income | 208,970 | — | 208,970 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 563 | — | 563 | |||||||||
Interest expense | (58 | ) | (45,966 | )(1) | (46,024 | ) | ||||||
Other income, net | 282 | — | 282 | |||||||||
Total other income (expense) | 787 | (45,966 | ) | (45,179 | ) | |||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 209,757 | (45,966 | ) | 163,791 | ||||||||
Provision for income taxes | 81,386 | (17,835 | )(2) | 63,551 | ||||||||
Earnings before equity in loss of unconsolidated entity and minority interest | 128,371 | (28,131 | ) | 100,240 | ||||||||
Equity in loss of unconsolidated entity | (2,370 | ) | — | (2,370 | ) | |||||||
Minority interest expense | (723 | ) | — | (723 | ) | |||||||
Net earnings (loss) | $ | 125,278 | $ | (28,131 | ) | $ | 97,147 | |||||
Note: | Based on our pro forma income statement for the six months ended June 30, 2008 the ratio of earnings to fixed charges is 4.6x. For purpose of calculating the ratio of earnings to fixed charges, “earnings” consist of income before income taxes plus fixed charges. “Fixed charges” include interest expense and amortization of debt issuance costs. |
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for the year ended December 31, 2007
Pro Forma | ||||||||||||
Historical | Adjustments | Pro Forma | ||||||||||
(Dollars in thousands) | ||||||||||||
Processing and services revenues | $ | 1,690,568 | $ | — | $ | 1,690,568 | ||||||
Cost of revenues | 1,058,647 | — | 1,058,647 | |||||||||
Gross profit | 631,921 | — | 631,921 | |||||||||
Selling, general and administrative expenses | 207,859 | — | 207,859 | |||||||||
Operating income | 424,062 | — | 424,062 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 1,690 | — | 1,690 | |||||||||
Interest expense | (146 | ) | (97,273 | )(1) | (97,419 | ) | ||||||
Total other income (expense) | 1,544 | (97,273 | ) | (95,729 | ) | |||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 425,606 | (97,273 | ) | 328,333 | ||||||||
Provision for income taxes | 164,734 | (37,644 | )(2) | 127,090 | ||||||||
Earnings before equity in loss of unconsolidated entity and minority interest | 260,872 | (59,629 | ) | 201,243 | ||||||||
Equity in loss of unconsolidated entity | (3,048 | ) | — | (3,048 | ) | |||||||
Minority interest expense | (1,019 | ) | — | (1,019 | ) | |||||||
Net earnings (loss) | $ | 256,805 | $ | (59,629 | ) | $ | 197,176 | |||||
(1) | This amount represents the interest expense associated with the $1,610.7 million in debt incurred by us in connection with the spin-off assuming the spin-off occurred on January 1, 2007. Our new bank debt bears interest at a floating rate, which would have been 4.98% on the revolving credit agreement, Term Loan A and Term Loan B based on the one month LIBOR rate on June 18, 2008 (2.48%) and a spread of 2.5%. Our new senior notes bear interest at a fixed rate of 8.125%. A 1/8% change in the assumed blended interest rate would result in a change in interest expense of approximately $2 million annually. Amortization of estimated capitalized debt issuance costs in connection with the borrowings included in the pro forma interest expense is approximately $6.1 million for the year ended December 31, 2007 and $2.7 million for the six months ended June 30, 2008. These estimates also reflect principal paydowns of approximately $36.3 million ($35 million of Term Loan A, $1.3 million of Term Loan B) per quarter under the credit agreement (other than in the first quarter after closing, in which only $1.3 million is payable) and the paydown of the revolver of $25.7 million during the first quarter of 2007. | |
(2) | This amount represents the tax benefit relating to the additional interest expense at the Company’s historical tax rate of 38.7% for the year ended December 31, 2007 and 38.8% for six months ended June 30, 2008. | |
Note: | Based on the pro forma income statement for the year ended December 31, 2007 the ratio of earnings to fixed charges is 4.4x. For purposes of calculating the ratio of earnings to fixed charges, “earnings” consist of income before taxes plus fixed charges. “Fixed charges” include interest expense and amortization of debt issuance costs. |
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Unaudited | ||||||||||||||||||||||||||||
Year Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | 2008 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Statement of earnings Data: | ||||||||||||||||||||||||||||
Processing and services revenues | $ | 1,217,768 | $ | 1,312,416 | $ | 1,382,479 | $ | 1,484,977 | $ | 1,690,568 | $ | 826,438 | $ | 913,106 | ||||||||||||||
Net earnings | $ | 138,480 | $ | 118,069 | $ | 195,705 | $ | 201,055 | $ | 256,805 | $ | 115,045 | $ | 125,278 | ||||||||||||||
Balance sheet data (at period end): | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 66,119 | $ | 84,093 | $ | 59,756 | $ | 47,783 | $ | 39,566 | $ | 49,077 | $ | 18,628 | ||||||||||||||
Total assets | $ | 1,420,896 | $ | 1,494,065 | $ | 1,542,802 | $ | 1,879,800 | $ | 1,962,043 | $ | 1,947,212 | $ | 1,985,740 |
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
2007 | ||||||||||||||||
Processing and services revenues | $ | 401,428 | $ | 425,010 | $ | 425,464 | $ | 438,666 | ||||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 90,486 | 100,725 | 112,674 | 121,721 | ||||||||||||
Net earnings | $ | 54,539 | $ | 60,506 | $ | 67,991 | $ | 73,769 | ||||||||
2006 | ||||||||||||||||
Processing and services revenues | $ | 351,163 | $ | 357,007 | $ | 384,748 | $ | 392,059 | ||||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 69,102 | (a) | 85,695 | (a) | 94,081 | 80,842 | ||||||||||
Net earnings | $ | 42,161 | $ | 52,245 | $ | 57,389 | $ | 49,260 | ||||||||
(a) | Amounts reflect an adjustment, of $8.7 million in stock compensation expense allocation, from amounts included in the Form 10, filed June 20, 2008. Subsequent to the filing, we determined $8.7 million of the allocation recorded in the three months end June 30, 2006 should have been recorded in the three months ended March 31, 2006. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• | our mortgage processing services, which we conduct using our market-leading mortgage servicing platform, or MSP, and our team of experienced support personnel based primarily at our Jacksonville, Florida data center; | |
• | our Desktop application, a workflow system that assists our customers in managing business processes, which today is primarily used in connection with mortgage loan default management but which has broader applications; | |
• | our other software and related service offerings, including our mortgage origination software, our real estate closing and title insurance production software and our middleware application which provides collaborative network connectivity among mortgage industry participants; and | |
• | our data and analytics businesses, the most significant of which is our alternative property valuations business, which provides a range of types of valuations other than traditional appraisals, our property records business and our advanced analytic services, which assist our customers in their loan marketing or loss mitigation efforts. |
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• | settlement services, which consist of title agency services, in which we act as an agent for title insurers, and closing services, in which we assist in the closing of real estate transactions; and | |
• | other origination services, which consist of traditional appraisal and appraisal management services, real estate tax services, which provide lenders with information about the tax status of a property, and flood zone information, which assists lenders in determining whether a property is in a federally designated flood zone. |
• | foreclosure services, including access to a nationwide network of independent attorneys, document preparation and recording and other services; | |
• | property inspection and preservation services, designed to preserve the value of properties securing defaulted loans; and | |
• | asset management services, providing REO disposition services through a network of independent real estate brokers, attorneys and other vendors to facilitate the transaction. |
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Six Months | ||||||||||||||||||||
Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Title agency commissions | $ | 132.2 | $ | 83.9 | $ | 80.9 | $ | 66.8 | $ | 68.3 | ||||||||||
Software development revenue | 59.5 | 32.7 | 7.7 | 28.1 | 28.7 | |||||||||||||||
Other data related services | 19.6 | 19.8 | 17.4 | 7.1 | 10.0 | |||||||||||||||
Total revenues | $ | 211.3 | $ | 136.4 | $ | 106.0 | $ | 102.0 | $ | 107.0 | ||||||||||
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Title plant information expense | $ | 5.8 | $ | 3.9 | $ | 3.0 | $ | 4.7 | $ | 2.6 | ||||||||||
Corporate services | 35.7 | 51.8 | 54.9 | 27.6 | 19.8 | |||||||||||||||
Licensing, leasing and cost sharing agreement | (12.2 | ) | (13.2 | ) | (10.8 | ) | (5.3 | ) | (9.5 | ) | ||||||||||
Total expenses | $ | 29.3 | $ | 42.5 | $ | 47.1 | $ | 27.0 | $ | 12.9 | ||||||||||
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Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Processing and services revenues | $ | 913,106 | $ | 826,438 | ||||
Cost of revenues | 585,137 | 526,823 | ||||||
Gross profit | 327,969 | 299,615 | ||||||
Selling, general, and administrative expenses | 118,999 | 109,072 | ||||||
Operating income | 208,970 | 190,543 | ||||||
Other income (expense): | ||||||||
Interest income | 563 | 745 | ||||||
Interest expense | (58 | ) | (77 | ) | ||||
Other income, net | 282 | — | ||||||
Total other income (expense) | 787 | 668 | ||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 209,757 | 191,211 | ||||||
Provision for income taxes | 81,386 | 74,010 | ||||||
Earnings before equity in loss of unconsolidated entity and minority interest | 128,371 | 117,201 | ||||||
Equity in loss of unconsolidated entity | (2,370 | ) | (1,720 | ) | ||||
Minority interest | (723 | ) | (436 | ) | ||||
Net earnings | $ | 125,278 | $ | 115,045 | ||||
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Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Processing and services revenues | $ | 277,568 | $ | 284,385 | ||||
Cost of revenues | 155,507 | 160,308 | ||||||
Gross profit | 122,061 | 124,077 | ||||||
Selling, general, and administrative expenses | 33,729 | 32,776 | ||||||
Operating income | 88,332 | 91,301 | ||||||
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Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Processing and services revenues | $ | 642,577 | $ | 540,929 | ||||
Cost of revenues | 436,793 | 369,167 | ||||||
Gross profit | 205,784 | 171,762 | ||||||
Selling, general, and administrative expenses | 57,829 | 54,753 | ||||||
Operating income | 147,955 | 117,009 | ||||||
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2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Processing and services revenues | $ | 1,690,568 | $ | 1,484,977 | $ | 1,382,479 | ||||||
Cost of revenues | 1,058,647 | 900,145 | 804,488 | |||||||||
Gross profit | 631,921 | 584,832 | 577,991 | |||||||||
Selling, general, and administrative expenses | 207,859 | 257,312 | 260,066 | |||||||||
Operating income | 424,062 | 327,520 | 317,925 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 1,690 | 2,606 | 4,124 | |||||||||
Interest expense | (146 | ) | (298 | ) | (270 | ) | ||||||
Other income (expense), net | — | (106 | ) | (1,238 | ) | |||||||
Total other income (expense) | 1,544 | 2,202 | 2,616 | |||||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 425,606 | 329,722 | 320,541 | |||||||||
Provision for income taxes | 164,734 | 127,984 | 124,160 | |||||||||
Earnings before equity in loss of unconsolidated entity and minority interest | 260,872 | 201,738 | 196,381 | |||||||||
Equity in loss of unconsolidated entity | (3,048 | ) | — | — | ||||||||
Minority interest | (1,019 | ) | (683 | ) | (676 | ) | ||||||
Net earnings | $ | 256,805 | $ | 201,055 | $ | 195,705 | ||||||
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2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Processing and services revenues | $ | 570,146 | $ | 546,961 | $ | 525,259 | ||||||
Cost of revenues | 313,747 | 299,696 | 281,974 | |||||||||
Gross profit | 256,399 | 247,265 | 243,285 | |||||||||
Selling, general, and administrative expenses | 64,770 | 67,732 | 81,143 | |||||||||
Operating income | $ | 191,629 | $ | 179,533 | $ | 162,142 | ||||||
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2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Processing and services revenues | $ | 1,125,879 | $ | 900,951 | $ | 820,098 | ||||||
Cost of revenues | 750,174 | 587,040 | 505,607 | |||||||||
Gross profit | 375,705 | 313,911 | 314,491 | |||||||||
Selling, general, and administrative expenses | 110,132 | 107,555 | 103,693 | |||||||||
Operating income | $ | 265,573 | $ | 206,356 | $ | 210,798 | ||||||
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Notional | Bank Pays | LPS Pays | ||||||||||
Amortization Period | Amount | Variable Rate of(1) | Fixed Rate of(2) | |||||||||
(In millions) | ||||||||||||
July 31, 2008 to December 31, 2008 | $ | 420.0 | 1 Month LIBOR | 3.275 | % | |||||||
December 31, 2008 to March 31, 2009 | $ | 400.0 | 1 Month LIBOR | 3.275 | % | |||||||
March 31, 2009 to June 30, 2009 | $ | 385.0 | 1 Month LIBOR | 3.275 | % | |||||||
June 30, 2009 to September 30, 2009 | $ | 365.0 | 1 Month LIBOR | 3.275 | % | |||||||
September 30, 2009 to December 31, 2009 | $ | 345.0 | 1 Month LIBOR | 3.275 | % | |||||||
December 31, 2009 to March 31, 2010 | $ | 330.0 | 1 Month LIBOR | 3.275 | % | |||||||
March 31, 2010 to June 30, 2010 | $ | 310.0 | 1 Month LIBOR | 3.275 | % | |||||||
June 30, 2010 to July 31, 2010 | $ | 290.0 | 1 Month LIBOR | 3.275 | % |
(1) | 2.46% as of July 2, 2008. | |
(2) | In addition to the fixed rate paid under the swaps, we pay an applicable margin to our bank lenders on the Term A Loan, Term B Loan and Revolving Loan equal to 2.50% as of July 2, 2008. |
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2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | ||||||||||||||||||||||
Long-term debt(1) | $ | 37,550 | $ | 145,100 | $ | 145,100 | $ | 145,100 | $ | 145,100 | $ | 992,750 | $ | 1,610,700 | ||||||||||||||
Interest on long-term debt(1) | 32,900 | 91,723 | 82,934 | 74,131 | 66,937 | 161,652 | 510,277 | |||||||||||||||||||||
Operating lease payments | 9,977 | 16,507 | 10,601 | 7,148 | 5,112 | 481 | 49,826 | |||||||||||||||||||||
Deferred compensation(2) | — | — | — | — | — | 20,572 | 20,572 | |||||||||||||||||||||
Total | $ | 80,427 | $ | 253,330 | $ | 238,635 | $ | 226,379 | $ | 217,149 | $ | 1,175,455 | $ | 2,191,375 | ||||||||||||||
(1) | Long-term debt and interest on long-term debt are presented on a pro forma basis, as the Company had no debt on the balance sheet as of June 30, 2008. | |
(2) | Deferred compensation is presented as payable after 2012 because of the uncertain timing of the payables. |
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• | MSP. Our mortgage servicing platform, or MSP, is an application that automates loan servicing, including loan setup and ongoing processing, customer service, accounting and reporting to the secondary mortgage market, and federal regulatory reporting. MSP serves as the core application through which our bank customers keep the primary records of their mortgage loans, and as a result is an important part of the bank’s underlying processing infrastructure. MSP processes a wide range of loan products, including fixed-rate mortgages, adjustable-rate mortgages, construction loans, equity lines of credit and daily simple interest loans. We believe a substantial opportunity exists to expand the use of MSP in processing home equity lines of credit, orHELOCs. Traditionally, the software systems that many banks use to process HELOCs are based on credit card systems, and we believe, as a result, are less robust than MSP in areas such as escrow tracking and regulatory reporting. We believe the banking industry is now beginning to realize that it needs better processing systems for HELOCs than most banks currently employ. We have also integrated some of our analytic tools into MSP, which can assist our customers’ loan marketing or loss mitigation efforts. |
• | Desktop. We have developed a web-based workflow information system, which we refer to as Desktop. The Desktop application can be used for managing a range of different workflow processes. It can be used to organize images of paper documents within a particular file, to capture information from imaged documents, to manage invoices and to provide multiple constituencies access to key data needed for various types of process management. We originally developed Desktop for use in our default management businesses, although it is an enterprise workflow application that is used to handle a wide range of other processes. The Desktop application enables our customers to seamlessly manage different processes through a single application and thus reduces our customers’ processing time and application maintenance costs. We provide electronic access for all our default management customers through our Desktop application that allows them to monitor the status of our services over the Internet. We can also create an automated interface between MSP and the Desktop that allows default services pre-selected by our customers to automatically begin at a pre-determined stage in the default of any loan which is serviced by our MSP application. The Desktop application was originally developed to serve as a core application for tracking all stages of the default management process, and managing a defaulted loan through our Desktop application offers a faster, more efficient handling of such loan. | |
• | Other software applications. We offer various software applications and services that facilitate the origination of mortgage loans in the U.S. For example, we offer a loan origination software system, known asEmpower!, which is used by banks, savings & loans, mortgage bankers and sub-prime lenders to automate the loan origination process. Empower provides seamless credit bureau access and interfaces with MSP, automated underwriting systems used by Freddie Mac and Fannie Mae and various vendors providing settlement services. We also offer a software system, known asSoftPro, which is a leading real estate closing and title insurance production application. SoftPro is used by over 12,500 customers to create the appropriate forms necessary for the closing of residential and commercial real |
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estate transactions in the U.S. Finally, we are the majority owner of RealEC Technologies, Inc., orRealEC, which is a provider of collaborative network solutions to the mortgage industry. RealEC’s applications enable lenders and their business partners to electronically connect, collaborate and automate their business processes to eliminate paper, manual processing and other obstacles in the origination and servicing of mortgage loans. RealEC provides partner connectivity, automated vendor management, advanced data capture, document management services, integration services, intelligent product decision tools, vendor sourcing tools and a B2B exchange to more than 2,000 mortgage originators (including 17 of the top 20). |
• | Data and analytics. In addition to our technology applications, this segment provides data and analytics that are used in different steps in the life cycle of a mortgage. Our primary data and analytics services are: |
• | Enhanced property data and information. We acquire and aggregate real estate property data on a national level and we have been a leader in making such data available to our customers in a single database with a standard national format. Our property database currently covers areas where approximately 88% of the U.S. population resides. We distribute this data through bulk sales, customized XML feeds and our web portal SiteX.com. We also offer a number of value added services that enable our customers to utilize this data to assess risk, determine property values, track market performance, generate leads and mitigate risk. Our customers include realtors, investors, mortgage brokers, title companies, direct marketers, appraisers, and lenders. | |
• | Alternative valuation services. In recent years, the increasing availability of reliable information related to real estate and real estate transactions has encouraged lenders and other real estate professionals to use alternatives to traditional appraisals. We offer our customers a broad range of property valuation services beyond the traditional appraisals offered by our Loan Transaction Services segment that allow them to match their risk of loss with alternative forms of property valuations, depending upon their needs and regulatory requirements. These include, among others, automated valuation models, broker price opinions, collateral risk scores, appraisal review services and valuation reconciliation services. To deliver these services, we utilize artificial intelligence software, detailed real estate statistical analysis, and modified physical property inspections. | |
• | Advanced analytic and capital markets services. We offer advanced analytic tools that enable our customers to take proactive steps with respect to their loan portfolios. For example, we provide pre-payment and default propensity tools as well as due diligence and property valuation services in connection with the marketing and sale of loan portfolios in the secondary market. Our due diligence services consist of a review of a loan pool’s data files for accuracy and completeness, analysis of the physical loan files to determine compliance with internal underwriting guidelines and various regulatory disclosure requirements and the preparation and presentation of reports reflecting our findings. |
2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage processing | $ | 339,670 | $ | 324,555 | $ | 314,193 | ||||||
Other | 230,476 | 222,406 | 211,066 | |||||||||
Total segment revenues | $ | 570,146 | $ | 546,961 | $ | 525,259 | ||||||
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• | Settlement services. We offer centralized title agency and closing services to our financial institution clients. Our title agency services include conducting title searches and preparing an abstract of title, reviewing the status of title in a title commitment, resolving any title exceptions, verifying the payment of existing loans secured by a subject property, verifying the amount of prorated expenses and arranging for the issuance of a title insurance policy by a title insurer. Our closing management services are currently available in 46 states and the District of Columbia and include preparing checks, deeds and affidavits and recording appropriate documents in connection with the closing. We maintain a network of independent closing agents that are trained to close loans in accordance with the lender’s instructions, and a network of independent notaries who are available to promptly assist with the closing. We also provide services with respect to recording and releases of liens. | |
• | Appraisal services. This segment provides traditional appraisals, as opposed to the alternative property valuations our Technology, Data and Analytics segment offers. Traditional property appraisals involve labor intensive inspections of the real property in question and of comparable properties in the same and similar neighborhoods, and typically take weeks to complete. We have developed processes and technologies that allow our lender customers to outsource their appraisal management function to us and we provide our customers with access to a nationwide network of over 19,000 independent, fully licensed appraisers. Our traditional appraisal services are typically provided in connection with first mortgages. | |
• | Other origination services. We offer lenders real estate tax information and federal flood zone certifications in connection with the origination of new mortgage loans. We also offer monitoring services that will notify a lender of any change in tax or flood zone status during the life of a loan. Additionally, we provide complete outsourcing of tax escrow services, including the establishment of a tax escrow account that is integrated with the lender’s mortgage servicing system and the processing of tax payments to taxing authorities. Finally, we act as a qualified exchange intermediary for those customers who seek to engage in qualified exchanges under Section 1031 of the Code, which allows capital gains tax deferral on the sale of certain investment assets. |
• | Default management services. In addition to loan facilitation services, our Loan Transaction Services segment offers default management services. These services allow our customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan through the default and foreclosure process. Based in part on the range and quality of default management services we offer and our focus on customer service, our default management business has grown significantly and we are now the largest mortgage default management outsourced service provider in the U.S. We offer a full spectrum of outsourcing services relating to the management of defaulted loans, from initial property inspection to recording the final release of a mortgage lien. |
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• | Foreclosure services. As our lender and servicing customers proceed toward the foreclosure of properties securing defaulted loans, we provide services that facilitate completing the foreclosure process. For example, we offer our customers a national network of independent attorneys, as well as comprehensive posting and publication of foreclosure and auction notices, and conduct mandatory title searches, in each case as necessary to meet state statutory requirements for foreclosure. We provide document preparation and recording services, including mortgage assignment and release preparation, and due diligence and research services. We also provide various other title services in connection with the foreclosure process. | |
• | Property inspection and preservation services. At the onset of a loan default, our services are designed to assess and preserve the value of the property securing the loan. For example, through a nationwide network of independent inspectors, we provide inspection services, including daily reports on vacant properties, occupancy inspections and disaster and insurance inspections. We also offer a national network of independent contractors to perform property preservation and maintenance services, such as lock changes, window replacement, lawn service and debris removal. | |
• | Asset management, default title and settlement services. After a property has been foreclosed, we provide services that aid our customers in managing their real estate owned, or REO, properties, including title services and property preservation field services that assist the lender in managing its REO properties. We also offer a variety of title and settlement services relating to the lender’s ownership and eventual sale of REO properties. Finally, we offer nationwide advisory and management services to facilitate a lender’s REO sales. |
2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Loan facilitation services | $ | 652,858 | $ | 623,115 | $ | 603,657 | ||||||
Default services | 473,021 | 277,836 | 216,441 | |||||||||
Total segment revenues | $ | 1,125,879 | $ | 900,951 | $ | 820,098 | ||||||
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• | Our clients are better able to leverage the strength of all of our solutions. When lenders are introduced to our enterprise sales approach, they are able to take advantage of streamlined processes to increase |
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efficiencies, which reduce their internal costs, shorten cycle time and, most importantly, create a better borrower experience. |
• | We eliminated the multiple silos that existed across all of our operating divisions. By offering a centralized point of contact at an executive level, combined with access to subject matter experts across the business lines, we were able to reduce confusion among our clients and more effectively communicate the power of our solutions. |
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Number of | ||||
State | Locations | |||
California | 25 | |||
Texas | 8 | |||
Florida | 7 | |||
Other | 31 |
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• | These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities. | |
• | In these matters, plaintiffs seek a variety of remedies including equitable relief in the form of injunctive and other remedies and monetary relief in the form of compensatory damages. In some cases, the monetary damages sought include punitive or treble damages. None of the cases described below includes a specific statement as to the dollar amount of damages demanded. Instead, each of the cases includes a demand in an amount to be proved at trial. | |
• | For the reasons specified above, it is not possible to make meaningful estimates of the amount or range of loss that could result from these matters at this time. We review these matters on an ongoing basis and follow the provisions of Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, we base our decision on our assessment of the ultimate outcome following all appeals. | |
• | We intend to vigorously defend each of these matters, and we do not believe that the ultimate disposition of these lawsuits will have a material adverse impact on our financial position. |
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Name | Age | Title | ||||
William P. Foley, II | 63 | Chairman of the Board | ||||
Jeffrey S. Carbiener | 46 | President and Chief Executive Officer | ||||
Francis K. Chan | 38 | Executive Vice President and Chief Financial Officer | ||||
Daniel T. Scheuble | 50 | Executive Vice President and Co-Chief Operating Officer | ||||
Eric D. Swenson | 49 | Executive Vice President and Co-Chief Operating Officer | ||||
Brent B. Bickett | 43 | Executive Vice President, Corporate Finance | ||||
Todd C. Johnson | 43 | Executive Vice President, General Counsel and Corporate Secretary | ||||
Joseph M. Nackashi | 45 | Executive Vice President and Chief Information Officer | ||||
Parag Bhansali | 46 | Senior Vice President, Investor Relations and Strategic Planning | ||||
Christopher P. Breakiron | 42 | Senior Vice President and Chief Accounting Officer | ||||
Marshall Haines | 40 | Director | ||||
James K. Hunt | 56 | Director | ||||
Lee A. Kennedy | 57 | Director | ||||
Daniel D. (Ron) Lane | 73 | Director | ||||
Cary H. Thompson | 51 | Director |
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• | the quality and integrity of our financial statements and related disclosure; | |
• | our compliance with legal and regulatory requirements; | |
• | the independent auditor’s qualifications and independence; and | |
• | the performance of our internal audit function and independent auditor. |
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• | to monitor our management resources, structure, succession planning, development and selection process as well as the performance of key executives; and | |
• | to review and approve executive compensation and broad-based and incentive compensation plans. |
Name | Age | Title(s) | ||||
William P. Foley, II | 63 | Chairman of the Board | ||||
Jeffrey S. Carbiener | 46 | President and Chief Executive Officer | ||||
Francis K. Chan | 38 | Executive Vice President and Chief Financial Officer | ||||
Daniel T. Scheuble | 50 | Executive Vice President and Co-Chief Operating Officer | ||||
Eric D. Swenson | 49 | Executive Vice President and Co-Chief Operating Officer |
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• | Affiliate Computer Services, Inc. | |
• | Automatic Data Processing, Inc. | |
• | CA, Inc. | |
• | DST Systems, Inc. | |
• | First Data Corporation | |
• | Fiserv, Inc. | |
• | Intuit Inc. | |
• | MasterCard Incorporated | |
• | NCR Corporation | |
• | SunGard Data Systems Inc. | |
• | Symantec Corporation | |
• | The Western Union Company | |
• | Telephone & Data Systems, Inc. | |
• | Unisys Corporation |
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• | base salary; | |
• | performance-based annual cash incentives; and | |
• | long-term equity-based incentive awards in the form of stock options. |
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• | an analysis of competitive marketplace compensation data provided to the compensation committee by Strategic Apex Group; | |
• | the executive’s level of responsibility and ability to influence the company’s performance; | |
• | the executive’s level of experience and skills; | |
• | the need to retain and motivate highly talented executives; and | |
• | a subjective review of FIS’s business environment, objectives and strategy. |
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• | the executive’s level of responsibility and potential to influence Company performance; | |
• | the executive’s level of experience and skills; | |
• | an analysis of competitive marketplace compensation data provided to the committee by Strategic Apex Group; | |
• | our current business environment, objectives and strategy; and | |
• | the need to retain and motivate our executives. |
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Restricted | ||||||||
Name | Options | Stock | ||||||
William P. Foley, II | 250,000 | 75,000 | ||||||
Jeffrey S. Carbiener | 250,000 | 75,000 | ||||||
Francis K. Chan | 50,000 | 15,000 | ||||||
Daniel T. Scheuble | 100,000 | 30,000 | ||||||
Eric D. Swenson | 100,000 | 30,000 |
Annual Cash Bonus Target (as a | ||||||||
Name | Base Salary | Percentage of Base Salary) | ||||||
Jeffrey S. Carbiener | $ | 850,000 | 150 | % | ||||
Francis K. Chan | $ | 350,000 | 100 | % | ||||
Daniel T. Scheuble | $ | 490,000 | 125 | % | ||||
Eric D. Swenson | $ | 540,000 | 125 | % |
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• | any earned but unpaid base salary and any expense reimbursement payments owed and any earned but unpaid annual bonus payments relating to the prior year; | |
• | a pro rated target bonus for the year in which the termination occurs; | |
• | a lump-sum payment equal to 300%, except in the case of Mr. Chan who is entitled to receive 200%, of the sum of the executive’s (1) annual base salary and (2) the highest annual bonus paid to the executive within the three years preceding his termination or, if higher, the target bonus opportunity in the year in which the termination of employment occurs; | |
• | immediate vestingand/or payment of all equity awards, except those awards which are based upon satisfaction of performance criteria which shall only vest in accordance with their express terms; and | |
• | for as long as the executive pays the full monthly premiums for COBRA coverage, continued receipt of health and dental insurance benefits for a period of 3 years, reduced by comparable benefits he may receive from another employer, together with a lump sum cash payment equal to 36 monthly medical and dental COBRA premiums based on the executive’s level of coverage on the date of termination. |
• | a material adverse change in the executive’s status, authority or responsibility; | |
• | a change in the person to whom the executive reports that results in a material adverse change to the executive’s service relationship or the conditions under which he performs his duties; | |
• | a material adverse change in the position to whom the executive reports or a material diminution in the authority, duties or responsibilities of that position; | |
• | a material diminution in the budget over which the executive has managing authority; or | |
• | a material change in the geographic location of Employee’s principal place of employment. |
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Position | Minimum Aggregate Value | |
Chairman and CEO | 5 x base salary | |
Other officers | 2 x base salary | |
Non-employee directors | 5 x annual retainer |
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�� | ||||||||||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Non-Equity | Value and | |||||||||||||||||||||||||||||||||||
Incentive | Nonqualified | |||||||||||||||||||||||||||||||||||
Plan | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Compensation | Compensation | All Other | ||||||||||||||||||||||||||||||||
Fiscal | Salary | Bonus | Awards | Awards | Earnings | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
Name and Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($)(7) | ($) | |||||||||||||||||||||||||||
William P. Foley, II | 2007 | 537,500 | — | 729,329 | 10,050,710 | 913,913 | — | 187,253 | 12,418,705 | |||||||||||||||||||||||||||
Chairman | 2006 | 417,535 | — | 152,598 | 13,007,899 | 2,407,821 | — | 161,774 | 16,147,627 | |||||||||||||||||||||||||||
Jeffrey S. Carbiener | 2007 | 485,897 | — | 188,547 | 1,257,496 | 375,887 | (18,347 | ) | 14,888 | 2,304,368 | ||||||||||||||||||||||||||
President and Chief Executive Officer | 2006 | 359,627 | 500,000 | — | 1,111,763 | 600,000 | 61,595 | 329,100 | 2,962,085 | |||||||||||||||||||||||||||
Francis K. Chan | 2007 | 259,375 | — | — | 125,511 | 68,143 | — | 24,019 | 477,048 | |||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
Daniel T. Scheuble | 2007 | 425,000 | — | 16,517 | 574,713 | 224,213 | — | 12,385 | 1,252,828 | |||||||||||||||||||||||||||
Executive Vice President and Co-Chief Operating Officer | ||||||||||||||||||||||||||||||||||||
Eric D. Swenson | 2007 | 497,740 | — | 99,099 | 658,960 | 250,591 | — | 51,975 | 1,558,365 | |||||||||||||||||||||||||||
Executive Vice President and Co-Chief Operating Officer |
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(1) | Amounts shown are not reduced to reflect the named executive officers’ elections, if any, to defer receipt of salary into FIS’s 401(k) plan, employee stock purchase plan or deferred compensation plans. | |
(2) | Represents a contractual bonus paid in 2006 in connection with the merger between Certegy and former FIS. | |
(3) | With respect to Messrs. Foley, Scheuble and Swenson, represents the dollar amount recognized for financial statement reporting purposes in accordance with FAS 123(R) for the fiscal years ended December 31, 2007 and 2006, of restricted stock awards granted by old FNF in 2003 and assumed by FIS in the merger between it and old FNF. With respect to Mr. Carbiener, 2007 amounts represent the dollar amount recognized for financial statement reporting purposes in accordance with FAS 123(R) with respect to a restricted stock award granted by FIS as a merit bonus in 2007. | |
(4) | Represents the dollar amount recognized for financial statement reporting purposes in accordance with FAS 123(R) for the fiscal years ended December 31, 2007 and 2006, of stock option awards granted in and prior to fiscal years 2007 and 2006. These awards consisted of options granted by FIS and options granted to acquire shares of old FNF under old FNF plans that FIS assumed in the merger between it and old FNF. Assumptions used in the calculation of these amounts are included in Note 11 to our combined financial statements included in this prospectus. For Mr. Foley, 2006 amounts include $8.9 million recorded relating to FIS’s performance-based stock option awards for which the vesting criterion was met during 2006 after the merger between Certegy and former FIS. | |
(5) | Represents amounts paid pursuant to FIS’s annual incentive plan which were earned in 2006 and paid in 2007, and earned in 2007 and paid in 2008, respectively. | |
(6) | Represents the change in pension value for Mr. Carbiener under the Pension plan. | |
(7) | Amounts shown for 2007 include matching contributions to FIS’s 401(k) plan and employee stock purchase plan; dividends paid on restricted stock; life insurance premiums paid by FIS; dividends from the split dollar plan, which are reinvested in the plan; personal use of a company airplane; club membership fees; financial planning services; and car allowance as set forth below: |
Foley | Carbiener | Chan | Scheuble | Swenson | ||||||||||||||||
401(k) Matching Contributions | $ | — | $ | 6,750 | $ | 6,750 | $ | 6,750 | $ | 6,750 | ||||||||||
ESPP Matching Contributions | 15,000 | — | 17,188 | 3,984 | 30,000 | |||||||||||||||
Restricted Stock Dividends | 2,217 | 825 | — | 1,515 | 9,095 | |||||||||||||||
Life Insurance Premiums | 371 | 93 | 81 | 135 | 129 | |||||||||||||||
Dividends from Split Dollar Plan | — | 7,220 | — | — | — | |||||||||||||||
Personal Airplane Use | 71,753 | — | — | — | — | |||||||||||||||
Club Membership Fees | 56,756 | — | — | — | — | |||||||||||||||
Financial Planning Services | 41,156 | — | — | — | — | |||||||||||||||
Car Allowance | $ | — | $ | — | $ | — | $ | — | $ | 6,000 |
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(d) | (e) | (g) | ||||||||||||||||||||||||||||||
All Other | All Other | Grant Date | ||||||||||||||||||||||||||||||
Stock | Option | (f) | Fair | |||||||||||||||||||||||||||||
Estimated Possible Payouts Under | Awards: | Awards: | Exercise | Value | ||||||||||||||||||||||||||||
Non-Equity Incentive Plan | Number of | Number of | or Base | of Stock | ||||||||||||||||||||||||||||
Awards(1) | Shares of | Securities | Price of | and | ||||||||||||||||||||||||||||
(a) | (b) | (c) | Stock or | Underlying | Option | Option | ||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Units | Options | Awards | Awards | |||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#)(2) | (#)(3) | ($) | ($) | ||||||||||||||||||||||||
William P. Foley, II | 12/20/2007 | — | — | — | — | 600,000 | $ | 42.56 | 7,710,120 | |||||||||||||||||||||||
5/14/2007 | — | — | — | — | 400,000 | $ | 10.00 | 208,100 | ||||||||||||||||||||||||
N/A | 671,875 | 1,343,750 | 4,031,251 | — | — | — | — | |||||||||||||||||||||||||
Jeffrey S. Carbiener | 12/20/2007 | — | — | — | — | 300,000 | $ | 42.56 | 3,855,060 | |||||||||||||||||||||||
3/30/2007 | — | — | — | 5,500 | — | — | 250,030 | |||||||||||||||||||||||||
N/A | 356,250 | 712,500 | 1,425,000 | — | — | — | — | |||||||||||||||||||||||||
Francis K. Chan | 12/20/2007 | — | — | — | — | 37,500 | $ | 42.56 | 481,883 | |||||||||||||||||||||||
N/A | 64,583 | 129,166 | 258,332 | — | — | — | — | |||||||||||||||||||||||||
Daniel T. Scheuble | 12/20/2007 | — | — | — | — | 200,000 | $ | 42.56 | 2,570,040 | |||||||||||||||||||||||
N/A | 212,500 | 425,000 | 849,999 | — | — | — | — | |||||||||||||||||||||||||
Eric D. Swenson | 12/20/2007 | — | — | — | — | 200,000 | $ | 42.56 | 2,570,040 | |||||||||||||||||||||||
N/A | 237,500 | 474,999 | 949,999 | — | — | — | — |
(1) | The amounts shown in column (a) reflect the minimum payment level under FIS’s annual incentive plan which is 50% of the target amount shown in column (b). The amount shown in column (c) for everyone except Mr. Foley is 200% of such target amount. For Mr. Foley, the amount in column (c) is 300% of the target amount. These amounts are based on the individual’s 2007 salary. | |
(2) | The amounts shown in column (d) reflect the number of shares of our restricted stock granted under the Certegy plan to Mr. Carbiener as a merit bonus. | |
(3) | The amounts shown in column (e) reflect (i) the number of stock options granted to each named executive officer under the Certegy plan on December 20, 2007 (grant date fair value per option is $12.85 per option granted); and (ii) with respect to Mr. Foley, the number of options granted to him under the FNRES stock plan on May 14, 2007 (grant date fair value per option is $0.52 per option granted). FIS owns approximately 39% of FNRES’s common stock and accounts for it under the equity method. |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||
Number of | Number of | |||||||||||||||||||||||||||
Securities | Securities | Number of | Market Value | |||||||||||||||||||||||||
Underlying | Underlying | Shares or | of Shares or | |||||||||||||||||||||||||
Option | Unexercised | Unexercised | Option | Option | Units of Stock | Units of Stock | ||||||||||||||||||||||
Grant | Options (#) | Options (#) | Exercise | Expiration | That Have | That Have | ||||||||||||||||||||||
Name | Date | Exercisable | Unexercisable | Price ($) | Date | not Vested (#) | not Vested ($) | |||||||||||||||||||||
William P. Foley, II | 10/15/2004 | 417,946 | (1) | — | 29.18 | 10/15/2012 | — | — | ||||||||||||||||||||
3/9/2005 | 213,186 | 426,374 | (2) | 15.63 | 3/9/2015 | — | — | |||||||||||||||||||||
8/19/2005 | 83,590 | (1) | 83,589 | (1) | 30.97 | 8/19/2015 | — | — | ||||||||||||||||||||
11/9/2006 | 276,667 | 553,333 | (2) | 41.35 | 11/9/2013 | — | — | |||||||||||||||||||||
12/20/2007 | — | 600,000 | (2) | 42.56 | 12/20/2014 | — | — | |||||||||||||||||||||
Jeffrey S. Carbiener | 6/1/1998 | 1,340 | — | 27.78 | 6/1/2008 | — | — | |||||||||||||||||||||
1/27/1999 | 4,492 | — | 27.50 | 1/27/2009 | — | — | ||||||||||||||||||||||
12/10/1999 | 13,410 | — | 17.15 | 12/10/2009 | — | — | ||||||||||||||||||||||
1/31/2000 | 20,320 | — | 16.03 | 1/31/2010 | — | — | ||||||||||||||||||||||
1/29/2001 | 6,680 | — | 21.68 | 1/29/2011 | — | — | ||||||||||||||||||||||
10/31/2001 | 11,552 | — | 26.04 | 10/31/2011 | — | — | ||||||||||||||||||||||
2/12/2002 | 5,632 | — | 31.94 | 2/12/2012 | — | — | ||||||||||||||||||||||
2/12/2002 | 38,459 | — | 31.94 | 2/12/2012 | — | — | ||||||||||||||||||||||
2/4/2004 | 18,982 | — | 29.74 | 2/4/2011 | — | — | ||||||||||||||||||||||
2/4/2005 | 24,175 | — | 32.20 | 2/4/2012 | — | — | ||||||||||||||||||||||
2/1/2006 | 87,500 | 262,500 | (2) | 39.48 | 2/1/2013 | — | — | |||||||||||||||||||||
3/30/2007 | — | — | — | — | 5,500 | (3) | 228,745 | |||||||||||||||||||||
12/20/2007 | — | 300,000 | (2) | 42.56 | 12/20/2014 | — | — | |||||||||||||||||||||
Francis K. Chan | 4/16/2001 | 5,548 | (1) | — | 8.42 | 4/16/2011 | — | — | ||||||||||||||||||||
9/10/2004 | 16,677 | (1) | — | 22.38 | 9/10/2012 | — | — | |||||||||||||||||||||
3/9/2005 | 4,093 | 2,729 | (2) | 15.63 | 3/9/2015 | — | — | |||||||||||||||||||||
3/9/2005 | 5,970 | — | 15.63 | 3/9/2015 | — | — | ||||||||||||||||||||||
12/22/2006 | 6,250 | 18,750 | (2) | 40.25 | 12/22/2016 | — | — | |||||||||||||||||||||
12/20/2007 | — | 37,500 | (2) | 42.56 | 12/20/2014 | — | — | |||||||||||||||||||||
Daniel T. Scheuble | 3/9/2005 | 5,117 | 20,466 | (2) | 15.63 | 3/9/2015 | — | — | ||||||||||||||||||||
12/22/2006 | 25,000 | 50,000 | (2) | 40.25 | 12/22/2016 | — | — | |||||||||||||||||||||
12/20/2007 | — | 200,000 | (2) | 42.56 | 12/20/2014 | — | — | |||||||||||||||||||||
Eric D. Swenson | 3/9/2005 | 17,055 | 68,220 | (2) | 15.63 | 3/9/2015 | — | — | ||||||||||||||||||||
12/22/2006 | 25,000 | 50,000 | (2) | 40.25 | 12/22/2016 | — | — | |||||||||||||||||||||
11/18/2003 | — | — | — | — | 1,773 | (1) | 73,739 | |||||||||||||||||||||
12/20/2007 | — | 200,000 | (2) | 42.56 | 12/20/2014 | — | — |
(1) | These options and restricted shares were originally granted by old FNF under plans assumed by FIS in the merger between FIS and old FNF. All unvested options vest ratably over a three-year period from the original date of grant. Mr. Swenson’s remaining restricted shares vest on November 18, 2008. | |
(2) | The unvested options listed above that FIS granted in 2005 vest quarterly over a4-year period from the date of grant. The unvested options listed above that FIS granted in 2006 and 2007 vest annually over 3 years from the date of grant, except for those granted to Mr. Carbiener in 2006 which vest annually over four years from the date of grant. | |
(3) | The restricted stock granted to Mr. Carbiener was made as a merit bonus and vests on the first anniversary of the date of grant. |
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Option Awards | ||||||||||||||||||||
Number of | Number of | |||||||||||||||||||
Securities | Securities | |||||||||||||||||||
Underlying | Underlying | |||||||||||||||||||
Unexercised | Unexercised | Option | Option | |||||||||||||||||
Options (#) | Options (#) | Exercise | Expiration | |||||||||||||||||
Name | Grant Date | Exercisable | Unexercisable | Price ($) | Date | |||||||||||||||
William P. Foley, II | 5/14/2007 | — | 400,000 | 10.00 | 5/14/2015 |
Option Awards | Stock Awards | |||||||||||||||
Number of | Value | Number of | Value | |||||||||||||
Shares Acquired | Realized on | Shares Acquired | Realized on | |||||||||||||
Name | on Exercise (#) | Exercise ($) | on Vesting (#) | Vesting ($) | ||||||||||||
William P. Foley, II | 2,558,440 | 81,274,422 | 14,779 | 635,054 | ||||||||||||
Jeffrey S. Carbiener | — | — | — | — | ||||||||||||
Francis K. Chan | — | — | — | — | ||||||||||||
Daniel T. Scheuble | 7,675 | 219,725 | 296 | 12,719 | ||||||||||||
Eric D. Swenson | 30,525 | 1,002,394 | 1,773 | 76,186 |
Number | Present | |||||||||||||
of Years | Value of | Payments | ||||||||||||
Credited | Accumulated | During Last | ||||||||||||
Name | Plan Name | Service (#) | Benefit ($) | Fiscal Year ($) | ||||||||||
Jeffrey S. Carbiener | Fidelity National Information Services, Inc. Pension Plan | 15 | — | 157,464 |
(1) | We received a determination letter from the Internal Revenue Service in July 2007 permitting us to distribute all pension plan benefits by purchasing an annuity contract or paying a lump sum benefit to each participant, and to terminate the plan effective May 31, 2006. Amounts reflected in the table with respect to Mr. Carbiener represent the lump sum payment received by him in 2007 with respect to his pension plan benefit. Additional information concerning the termination of the pension plan is set forth below. |
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Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||||
Contributions | Contributions | Earnings in | Withdrawals/ | Balance at | ||||||||||||||||||
in Last FY | in Last FY | Last FY | Distributions | Last FYE | ||||||||||||||||||
Name | Plan | ($) | ($)(1) | ($)(2) | ($) | ($)(3) | ||||||||||||||||
Jeffrey S. Carbiener | Special Plan | — | 55,000 | 61,754 | — | 198,419 | ||||||||||||||||
Francis K. Chan | Non-Qualified Deferred Compensation Plan | 50,938 | 471 | 27,822 | — | 348,990 |
(1) | With respect to Mr. Carbiener, amounts reflect premium paid on life insurance policy in 2007. Mr. Carbiener’s benefit under the special plan is based on the excess of the cash surrender value in the policy over the total premiums paid. | |
(2) | Represents the increase in the executive’s participant interest in 2007. | |
(3) | Represents the executive’s participant interest as of December 31, 2007. |
2007 | ||||
Rate of | ||||
Name of Fund | Return | |||
International Value | 6.24 | % | ||
International Small-Cap | 4.73 | % | ||
Equity Index | 5.23 | % | ||
Small-Cap Index | (2.02 | )% | ||
Diversified Research | 1.19 | % | ||
Equity | 6.27 | % | ||
American Funds Growth-Income | 4.66 | % | ||
American Funds Growth | 11.93 | % | ||
Large-Cap Value | 3.54 | % | ||
Technology | 23.03 | % | ||
Short Duration Bond | 4.47 | % | ||
Floating Rate Loan | (1.86 | )% | ||
Diversified Bond | 1.32 | % | ||
Growth LT | 15.63 | % | ||
Focused 30 | 31.84 | % | ||
Health Sciences | 16.47 | % | ||
Mid-Cap Value | (2.15 | )% | ||
Large-Cap Growth | 21.63 | % | ||
Small-Cap Growth | 15.10 | % | ||
International Large-Cap | 9.26 | % | ||
Small-Cap Value | 3.14 | % | ||
Multi-Strategy | 4.34 | % | ||
Main Street Core | 4.40 | % | ||
Emerging Markets | 33.09 | % |
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2007 | ||||
Rate of | ||||
Name of Fund | Return | |||
Managed Bond | 8.53 | % | ||
Inflation Managed | 10.14 | % | ||
Money Market | 4.99 | % | ||
High Yield Bond | 2.44 | % | ||
Comstock | (3.01 | )% | ||
Mid-Cap Growth | 22.92 | % | ||
Real Estate | (16.16 | )% | ||
Small-Cap Equity | 6.04 | % | ||
BlackRock Basic Value V.I. Fund Class III | 1.53 | % | ||
BlackRock Global Allocation V.I. Fund Class III | 16.75 | % | ||
Fidelity VIP Freedom 2010 Service Class 2 | 8.42 | % | ||
Fidelity VIP Freedom 2015 Service Class 2 | 9.07 | % | ||
Fidelity VIP Freedom 2020 Service Class 2 | 9.97 | % | ||
Fidelity VIP Freedom 2025 Service Class 2 | 10.26 | % | ||
Fidelity VIP Freedom 2030 Service Class 2 | 11.08 | % | ||
Fidelity VIP Freedom Income Service Class 2 | 5.92 | % | ||
Fidelity VIP Contrafund Service Class 2 | 17.30 | % | ||
Fidelity VIP Growth Service Class 2 | 26.66 | % | ||
Fidelity VIP Mid-Cap Service Class 2 | 15.34 | % | ||
Fidelity VIP Value Strategies Service Class 2 | 5.36 | % | ||
Janus Aspen Series International Growth Portfolio Service Shares | 28.02 | % | ||
Janus Aspen Series Mid Cap Growth Portfolio Service Shares | 21.74 | % | ||
Janus AspenSeries Risk-Managed Core Portfolio Service Shares | 6.13 | % | ||
Lazard Retirement U.S. Strategic Equity Portfolio | (0.95 | )% | ||
LMPV Aggressive Growth Portfolio Class II | (1.66 | )% | ||
LMPV Mid Cap Core Portfolio Class II | (5.72 | )% | ||
MFS VIT New Discovery Series Service Class | 2.25 | % | ||
MFS VIT Utilities Series Service Class | 27.56 | % | ||
Premier VIT Op Cap Small Cap Portfolio | 0.58 | % | ||
T. Rowe Price Blue Chip Growth Portfolio-II | 12.49 | % | ||
T. Rowe Price Equity Income Portfolio-II | 3.03 | % | ||
Van Eck Worldwide Hard Assets Fund | 45.36 | % | ||
XTF Advisors Trust — ETF 2010 Portfolio | (0.90 | )% | ||
XTF Advisors Trust — ETF 2015 Portfolio | (0.30 | )% | ||
XTF Advisors Trust — ETF 2020 Portfolio | (1.10 | )% | ||
XTF Advisors Trust — ETF 2025 Portfolio | (0.20 | )% | ||
XTF Advisors Trust — ETF 2030 Portfolio | (1.60 | )% | ||
XTF Advisors Trust — ETF 2040+ Portfolio | (2.60 | )% | ||
Brandes International Equity | 8.01 | % | ||
Turner Core Growth | 22.43 | % | ||
Frontier Capital Appreciation | 11.92 | % | ||
Business Opportunity Value | 5.44 | % |
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2007 | ||||
Rate of | ||||
Name of Fund | Return | |||
Nationwide NVIT Money Market V | 4.87 | % | ||
PIMCO VIT Real Return Portfolio | 10.66 | % | ||
PIMCO VIT Total Return Portfolio | 8.76 | % | ||
LASSO Long and Short Strategic Opportunities | 4.08 | % | ||
T. Rowe Price Equity Income II Portfolio | 3.03 | % | ||
Dreyfus Stock Index | 5.26 | % | ||
Fidelity VIP II Contrafund Portfolio | 17.51 | % | ||
American Funds IS Growth | 12.35 | % | ||
Goldman Sachs VIT Mid Cap Value | 3.20 | % | ||
T. Rowe Price Mid Cap Growth II Portfolio | 17.22 | % | ||
Royce Capital Small Cap Portfolio | (2.14 | )% | ||
Vanguard VIF Small Company Growth Portfolio | 3.77 | % | ||
AllianceBernstein VPS International Value Portfolio | 5.84 | % | ||
American Funds IS International | 20.02 | % |
• | Retirement. A participant may modify the distribution schedule for a retirement distribution from a lump-sum to annual installments or vice versa, however, a modification to the form of payment requires |
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that the payment(s) commence at least five years after the participant’s retirement, and this election must be filed with the administrator at least 12 months prior to retirement. |
• | In-service Distributions. Participant’s may modify each in-service distribution date by extending it by at least five years; however, participants may not accelerate the in-service distribution date and this election must be filed with the administrator at least 12 months prior to the scheduled in-service distribution date. |
• | any earned but unpaid base salary and any expense reimbursement payments owed and any earned but unpaid annual bonus payments relating to the prior year, which we refer to as “accrued obligations;” | |
• | a prorated annual bonus; | |
• | a lump-sum payment equal to 300% of the sum of the executive’s (1) annual base salary and (2) the highest annual bonus paid to the executive within the three years preceding his termination or, if higher, the target bonus opportunity in the year in which the termination of employment occurs; |
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• | immediate vestingand/or payment of all equity awards; and | |
• | continued receipt of life and health insurance benefits for a period of 3 years, reduced by comparable benefits he may receive from another employer. |
• | any accrued obligations; and | |
• | a prorated annual bonus based on (a) the target annual bonus opportunity in the year in which the termination occurs or the prior year if no target annual bonus opportunity has yet been determined and (b) the fraction of the year the executive was employed. |
• | persistent failure to perform duties consistent with a commercially reasonable standard of care; | |
• | willful neglect of duties; | |
• | criminal or other illegal activities; | |
• | material breach of the employment agreement; or | |
• | impeding or failing to materially cooperate with an investigation authorized by FIS’s board. |
• | an adverse change in the executive’s title, the assignment of duties materially inconsistent with the executive’s position of Executive Chairman, or a substantial diminution in authority; | |
• | FIS’s material breach of any of FIS’s other obligations under the employment agreement; | |
• | FIS giving notice of its intent not to extend the employment term any time during the 1 year period immediately following a change in control; | |
• | following a change in control, the relocation of the executive’s primary place of employment; or | |
• | FIS’s failure to obtain an assumption of the employment agreement by a successor. |
• | an acquisition by an individual, entity or group of 50% or more of FIS’s voting power; | |
• | a merger or consolidation in which FIS is not the surviving entity, unless FIS’s shareholders immediately before the transaction hold more than 50% of the combined voting power of the resulting corporation after the transaction; | |
• | a reverse merger in which FIS is the surviving entity but in which more than 50% of the combined voting power is transferred to persons different from those holding the securities immediately before the merger; | |
• | during any period of two consecutive years during the employment term, a change in the majority of FIS’s board, unless the changes are approved by 2/3 of the directors then in office; | |
• | a sale, transfer or other disposition of FIS’s assets that have a total fair market value equal to or more than 1/3 of the total fair market value of all of FIS’s assets immediately before the sale, transfer or disposition, other than a sale, transfer or disposition to an entity (1) which immediately after the sale, |
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transfer or disposition owns 50% of FIS’s voting stock or (2) 50% of the voting stock of which is owned by FIS after the sale, transfer or disposition; or |
• | FIS’s shareholders approve a plan or proposal for the complete liquidation or dissolution of FIS. |
• | annual base salary through the last day of the term of the agreement and, for Mr. Swenson only, an amount equal to the prior year’s annual bonus if termination is for good reason or a prorated annual bonus if termination is by FIS without cause; and | |
• | immediate vesting of options granted pursuant to the terms of the employment agreement. |
• | failure to perform duties consistent with a commercially reasonable standard of care; | |
• | willful neglect of duties; | |
• | criminal or other illegal activities; or | |
• | material breach of the employment agreement. |
• | the consummation of a consolidation or merger of FIS other than a consolidation or merger of FIS in which its shareholders immediately prior to the merger hold more than 50% of the combined voting power of the surviving corporation after the merger; | |
• | sale or other disposition of all or substantially all of FIS’s assets; | |
• | FIS’s shareholders approve a plan or proposal for the complete liquidation or dissolution of FIS; or | |
• | an acquisition by any person, entity or group of 30% or more of FIS’s voting power. |
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• | severance benefits under Mr. Foley’s agreement are conditioned upon the executive’s execution of a full release of FIS and related parties, thus limiting exposure to law suits from the executive; | |
• | the executive is prohibited from competing or soliciting employees or customers during employment and for one year thereafter if the executive’s employment terminates for a reason that does not entitle him to severance payments and the termination is not due to FIS’s decision not to extend the employment agreement term; and | |
• | the executive is prohibited during employment and at all times thereafter from sharing confidential information and trade secrets. |
• | the accumulation by any person, entity or group of 20% or more of FIS’s combined voting power; | |
• | consummation of a reorganization, merger or consolidation, which we refer to as a “business combination” of FIS, unless, immediately following such business combination, (i) the persons who were the beneficial owners of FIS’s voting stock immediately prior to the business combination beneficially own more than 662/3% of FIS’s then outstanding shares, (ii) no person, entity or group beneficially owns 20% or more of the then outstanding shares of common stock of the entity resulting from that business combination, and (iii) at least a majority of the members of the board of directors of the entity resulting from the business combination were members of FIS’s incumbent board; | |
• | a sale or other disposition of all or substantially all of FIS’s assets; or | |
• | FIS’s shareholders approve a plan or proposal for the complete liquidation or dissolution of FIS. |
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• | an acquisition by an individual, entity or group of 50% or more of FIS’s voting power; | |
• | a merger in which FIS is not the surviving entity, unless FIS’s shareholders immediately prior to the merger hold more than 50% of the combined voting power of the resulting corporation after the merger; | |
• | a reverse merger in which FIS is the surviving entity but in which more than 50% of the combined voting power is transferred to persons different from those holding the securities immediately prior to such merger; | |
• | a sale or other disposition of all or substantially all of FIS’s assets; or | |
• | FIS’s shareholders approve a plan or proposal for the liquidation or dissolution of FIS. |
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Share Beneficially Owned | ||||||||||||
Number of | ||||||||||||
Shares of | Number of | |||||||||||
LPS | Exercisable | |||||||||||
Common | LPS | Percentage | ||||||||||
Name and Address of Beneficial Owner | Stock | Options(1) | of Class(2) | |||||||||
Non-Employee Directors: | ||||||||||||
Marshall Haines | 0 | 4,576 | * | |||||||||
James K. Hunt | 0 | 4,576 | * | |||||||||
Lee A. Kennedy | 183,256 | (3) | 0 | * | ||||||||
Daniel D. (Ron) Lane | 37,181 | 91,077 | * | |||||||||
Cary H. Thompson | 2,014 | 40,565 | * | |||||||||
Named Executive Officers: | ||||||||||||
William P. Foley, II | 1,261,421 | (4) | 459,344 | 1.81 | % | |||||||
Jeffrey S. Carbiener | 45,482 | 364,592 | * | |||||||||
Francis K. Chan | 7,774 | 44,865 | * | |||||||||
Daniel T. Scheuble | 11,172 | 40,307 | * | |||||||||
Eric D. Swenson | 17,677 | (5) | 67,625 | * | ||||||||
All directors and executive officers as a group | 1,625,000 | 1,301,109 | 3.09 | % | ||||||||
Greater than 5% Stockholders: | ||||||||||||
O.S.S. Capital Management LP Group(6) | 5,063,599 | 5.34 | % | |||||||||
Glenview Capital Management, LLC(7) | 7,269,756 | 7.67 | % |
* | Represents less than 1% of class of common stock. | |
(1) | Represents shares subject to stock options that were exercisable on July 31, 2008, or become exercisable within 60 days of July 31, 2008. | |
(2) | Based on 94,810,490 shares of our common stock outstanding on July 31, 2008. | |
(3) | Included in this amount are 129 shares held by Mr. Kennedy’s children. | |
(4) | Included in this amount are 658,202 shares held by Folco Development Corporation, of which Mr. Foley and his spouse are the sole stockholders, and 155,611 shares held by the Foley Family Charitable Foundation. | |
(5) | Included in this amount are 2,229 shares held by Mr. Swenson’s spouse. | |
(6) | According to a Schedule 13G filed July 25, 2008, O.S.S. Capital Management LP and related persons, all of whose address is 598 Madison Avenue, New York, NY 10022, may be deemed to be the beneficial owner of 5,063,599 shares. Of such amount: (A) O.S.S. Capital Management LP beneficially owns |
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4,943,599 shares; (B) Oscar S. Schafer & Partners I LP beneficially owns 181,936 shares; (C) Oscar S. Schafer & Partners II LP beneficially owns 2,231,540 shares; (D) O.S.S. Overseas Fund Ltd. beneficially owns 2,495,736 shares; (E) O.S.S. Advisors LLC beneficially owns 2,413,476 shares; (F) Schafer Brothers LLC beneficially owns 4,943,599 shares; (G) Oscar S. Schafer beneficially owns 4,943,599 shares; and (H) Andrew Goffe beneficially owns 5,063,599 shares. | ||
(7) | According to a Schedule 13G filed July 14, 2008, Glenview Capital Management, LLC and Lawrence M. Robbins, whose address is 767 Fifth Avenue, 44th Floor, New York, NY 10153, may be deemed to be the beneficial owner of 7,269,756 shares. This amount consists of: (A) 200,643 shares held for the account of Glenview Capital Partners; (B) 3,508,660 shares held for the account of Glenview Capital Master Fund; (C) 1,394,641 shares held for the account of Glenview Institutional Partners; (D) 383,974 shares held for the account of GCM Little Arbor Master Fund; (E) 53,088 shares held for the account of GCM Little Arbor Institutional Partners; (F) 5,637 shares held for the account of GCM Little Arbor Partners; (G) 875,340 shares held for the account of Glenview Offshore Opportunity Master Fund; (H) 30,365 shares held for the account of GCM Opportunity Fund and (I) 817,408 shares held for the account of Glenview Capital Opportunity Fund. |
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• | the contribution and distribution agreement; | |
• | the tax disaffiliation agreement; | |
• | the employee matters agreement; | |
• | the corporate and transitional services agreements; | |
• | the interchange use and cost sharing agreements for corporate aircraft; | |
• | the lease agreement for office space for FIS in Jacksonville, Florida; and | |
• | the third party customer services support agreements. |
• | The ownership or operation of the assets or properties, or the operations or conduct, of the business transferred to us in connection with the spin-off, including all employment agreements relating to employees transferred to us, whether arising before or after the contribution of the assets to us; |
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• | Any guarantee, indemnification obligation, surety bond or other credit support arrangement by FIS or any of its affiliates for our benefit; | |
• | Any untrue statement of, or omission to state, a material fact in FIS’s public filings to the extent it was a result of information that we furnished to FIS, if that statement or omission was made or occurred after the contribution of the assets to us; and | |
• | Any untrue statement of, or omission to state, a material fact in any of our public filings, except to the extent the statement was made or omitted in reliance upon information about the FIS group provided to us by FIS or upon information contained in any FIS public filing. |
• | The ownership or operation of the assets or properties, or the operations or conduct, of FIS or any of its subsidiaries and affiliates (other than us and our subsidiaries and the business transferred to us), whether arising before or after the date of the contribution of the assets by FIS; | |
• | Any guarantee, indemnification obligation, surety bond or other credit support arrangement by us or any of our affiliates for the benefit of FIS; | |
• | Any untrue statement of, or omission to state, a material fact in any of our public filings about the FIS group to the extent it was as a result of information that FIS furnished to us or which was contained in FIS’s public filings; and | |
• | Any untrue statement of, or omission to state, a material fact in any FIS public filing, other than to the extent we are responsible as set forth above. |
• | FIS will file all FIS federal consolidated income tax returns, which will include our subsidiaries as members of the FIS group through the spin-off date. FIS will pay all the tax due on those returns, but we will indemnify FIS for the portion of the tax that is attributable to our income and that of our subsidiaries. |
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• | FIS will share responsibility with us for filing and paying tax on combined state returns that include both our companies and FIS group companies. We will file the return and pay the tax when one of our subsidiaries has the responsibility under applicable law for filing such return. FIS will indemnify us with respect to any state income tax paid by us or any member of our group that is attributable to the income of FIS or its subsidiaries. FIS will file the return and to pay the tax for all other combined returns. We will indemnify FIS for any state income taxes paid by FIS but attributable to our income or that of our subsidiaries. | |
• | We will indemnify FIS for all taxes and associated adverse consequences FIS incurs (including shareholder suits) associated with the spin-off, the preliminary restructuring transactions effected prior to the spin-off, or the debt-for-debt exchange if FIS’ liability for taxes and adverse consequences arising from the imposition of taxes is the result of a breach or inaccuracy of any representation or covenant of any member of our group or is a result of any action taken by any member of our group. | |
• | FIS will indemnify us for all taxes and associated adverse consequences we incur (including shareholder suits) associated with the spin-off, the preliminary restructuring transactions effected prior to the spin-off, or the debt-for-debt exchange if our liability for taxes and adverse consequences arising from the imposition of taxes is the result of a breach or inaccuracy of any representation or covenant of any member of the FIS group or is a result of any action taken by any member of the FIS group. | |
• | There are limitations on each group’s ability to amend tax returns if amendment would increase the tax liability of the other group. |
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• | the corporate and transitional services agreement; | |
• | the master information technology and application development services agreement; | |
• | the interchange use and cost sharing agreements for corporate aircraft; | |
• | the real estate management, lease and sublease agreements; | |
• | the eLender services agreement; | |
• | the software license agreement; | |
• | the issuing agency agreements; | |
• | the tax services agreements; and | |
• | the real estate data and support services agreements. |
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• | Our directors and officers may not have any financial interest (other than as a minor stockholder of a publicly traded company), either directly or indirectly, in any of our suppliers, contractors, customers or competitors, or in any business transaction involving us, without the prior written approval of our compliance officer. | |
• | Our directors and officers may not engage in any business transaction on our behalf with a relative by blood or marriage, or with a firm of which that relative is a principal, officer or representative, without the prior written approval of our compliance officer or another appropriate LPS officer. | |
• | Our directors and officers may not use LPS property or services for their personal benefit unless (i) use of that property and those services has been approved for general employee or public use, or (ii) he or she has obtained our prior approval. Our directors and officers are also expressly prohibited from selling, lending, giving away or otherwise disposing of LPS property, regardless of condition or value, without proper authorization. |
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• | Our directors and officers are prohibited from (a) taking for themselves personally business opportunities that conflict with our interests that are discovered through the use of LPS property, information or position; (b) using LPS property, information, or position for personal gain; and (c) competing with us;provided, that this does not limit their services to FIS or FNF or any actions permitted under our certificate of incorporation. |
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• | are unsecured unsubordinated obligations of the Company, ranking equally in right of payment with all existing and future unsubordinated obligations of the Company and senior in right of payment to any subordinated Debt of the Company; | |
• | will be unconditionally guaranteed by the Guarantors, which guaranties shall in each case be a senior unsecured obligation of the Guarantors and senior in right of payment to any subordinated Debt of the Guarantors; | |
• | are issued in an original aggregate principal amount of $375,000,000; | |
• | mature on July 1, 2016; and | |
• | bear interest commencing July 2, 2008 at 8.125%, payable semiannually on each January 1 and July 1, commencing on January 1, 2009, to holders of record on the June 15 or December 15 immediately preceding the interest payment date. |
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Year | Percentage | |||
2011 | 106.094 | % | ||
2012 | 104.063 | % | ||
2013 | 102.031 | % | ||
2014 and thereafter | 100.000 | % |
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• | declare or pay any dividend or make any distribution on its Equity Interests (other than dividends or distributions paid in the Company’s Qualified Equity Interests) held by Persons other than the Company or any of its Restricted Subsidiaries; | |
• | purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any Restricted Subsidiary held by Persons other than the Company or any of its Restricted Subsidiaries; | |
• | repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt except a payment of interest or principal at Stated Maturity (other than (x) Debt of the Company owing to and held by any Guarantor or Debt of a Guarantor owing to and held by the Company or any other Guarantor permitted under clause (2) of the second paragraph of the covenant “— Limitation on debt and disqualified and preferred stock” or (y) a purchase, repurchase, redemption, defeasance or other acquisition or retirement for value in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such acquisition or retirement); or | |
• | make any Investment other than a Permitted Investment; |
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• | consolidate with or merge with or into any Person, or | |
• | sell, convey, transfer, or otherwise dispose of all or substantially all of its assets as an entirety or substantially an entirety, in one transaction or a series of related transactions, to any Person or | |
• | permit any Person to merge with or into the Company |
“— Certain covenants — Limitation on debt and disqualified or preferred stock”; and
• | consolidate with or merge with or into any Person, or | |
• | sell, convey, transfer or dispose of, all or substantially all its assets as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person, or |
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• | permit any Person to merge with or into the Guarantor |
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• | insurance companies; | |
• | dealers or traders in securities or currencies; | |
• | tax-exempt organizations; | |
• | financial institutions; |
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• | mutual funds and real estate investment trusts; | |
• | qualified retirement plans; | |
• | partnerships, other entities treated as partnerships for federal income tax purposes, or other pass-through entities for United States federal income tax purposes and investors in these entities; | |
• | holders who hold their notes as a hedge, straddle, or appreciated financial position; | |
• | holders who are subject to the alternative minimum tax; or | |
• | holders whose functional currency is other than the United States dollar. |
• | an individual who is a citizen or a resident of the United States; | |
• | a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized in the United States or under the laws of the United States or any state thereof or the District of Columbia; | |
• | an estate, the income of which is subject to United States federal income taxation regardless of its source; or | |
• | a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions. |
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• | thenon-United States Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our shares; | |
• | thenon-United States Holder is not a controlled foreign corporation that is actually or constructively related to us; | |
• | thenon-United States Holder is not a bank receiving interest described in section 881(c)(3)(A) of the Code; and either: |
• | the beneficial owner of the note certifies to the applicable payor or its agent, under penalties of perjury, that it is not a United States person and provides its name and address on IRSForm W-8BEN, or a suitable substitute, form; | |
• | a financial institution (including a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business) holds the note and certifies under penalties of perjury that it has received aForm W-8BEN (or a suitable substitute |
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form) either from the beneficial owner or from a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof; or |
• | the United States payor otherwise possesses documentation upon which it may rely to treat the payment as made to anon-United States person, in accordance with Treasury Regulations. |
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• | such new notes are acquired in the ordinary course of business; | |
• | at the time of the commencement of the exchange offer, such holder has no arrangement or understanding with any person to participate in a distribution of such new notes; and | |
• | such holder is not engaged in, and does not intend to engage in, a distribution of such new notes. |
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Page | ||||
Report of KPMG LLP, Independent Registered Public Accounting Firm | F-2 | |||
Financial Statements: | ||||
Combined Balance Sheets as of December 31, 2007 and 2006 | F-3 | |||
Combined Statements of Earnings for the years ended December 31, 2007, 2006 and 2005 | F-4 | |||
Combined Statements of Parent’s Equity for the years ended December 31, 2007, 2006 and 2005 | F-5 | |||
Combined Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005 | F-6 | |||
Notes to the Combined Financial Statements for the years ended December 31, 2007, 2006 and 2005 | F-7 | |||
Unaudited Consolidated and Combined Balance Sheets as of June 30, 2008 and December 31, 2007 | F-30 | |||
Unaudited Consolidated and Combined Statements of Earnings for the three months ended June 30, 2008 and 2007 | F-31 | |||
Unaudited Consolidated and Combined Statements of Cash Flows for the three months ended June 30, 2008 and 2007 | F-34 | |||
Notes to the Unaudited Consolidated and Combined Financial Statements for the three months ended June 30, 2008 and 2007 | F-35 |
F-1
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except for note 2(b) which
is as of June 18, 2008 and
note 1 which is as of July 2, 2008
Jacksonville, Florida
Certified Public Accountants
F-2
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December 31, 2007 and 2006 | 2007 | 2006 | ||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 39,566 | $ | 47,783 | ||||
Trade receivables, net of allowance for doubtful accounts of $20.3 million and $13.1 million, respectively, at December 31, 2007 and 2006 | 286,236 | 185,588 | ||||||
Other receivables | 7,971 | 36,276 | ||||||
Prepaid expenses and other current assets | 33,323 | 30,255 | ||||||
Deferred income taxes | 40,440 | 55,203 | ||||||
Total current assets | 407,536 | 355,105 | ||||||
Property and equipment, net of accumulated depreciation of $126.1 million and $164.4 million, respectively, at December 31, 2007 and 2006 | 95,620 | 101,962 | ||||||
Goodwill | 1,078,154 | 1,045,781 | ||||||
Intangible assets, net of accumulated amortization of $239.0 million and $199.2 million, respectively, at December 31, 2007 and 2006 | 118,129 | 152,829 | ||||||
Computer software, net of accumulated amortization of $73.9 million and $94.6 million, respectively, at December 31, 2007 and 2006 | 150,372 | 127,080 | ||||||
Other non-current assets | 112,232 | 97,043 | ||||||
Total assets | $ | 1,962,043 | $ | 1,879,800 | ||||
LIABILITIES AND PARENT’S EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 19,499 | $ | 18,164 | ||||
Accrued salaries and benefits | 22,908 | 39,916 | ||||||
Recording and transfer tax liabilities | 10,657 | 5,976 | ||||||
Other accrued liabilities | 57,053 | 40,388 | ||||||
Deferred revenues | 58,076 | 94,697 | ||||||
Total current liabilities | 168,193 | 199,141 | ||||||
Deferred revenues | 23,146 | 14,563 | ||||||
Deferred income taxes | 55,196 | 56,908 | ||||||
Other long-term liabilities | 34,419 | 22,626 | ||||||
Total liabilities | 280,954 | 293,238 | ||||||
Minority interest | 10,050 | 9,031 | ||||||
Total parent’s equity | 1,671,039 | 1,577,531 | ||||||
Total liabilities and parent’s equity | $ | 1,962,043 | $ | 1,879,800 | ||||
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Years Ended December 31, 2007, 2006 and 2005 | 2007 | 2006 | 2005 | |||||||||
(In thousands, except per share amounts) | ||||||||||||
Processing and services revenues, including $211.3 million, $136.4 million, and $106.0 million of revenues from related parties for the years ended December 31, 2007, 2006 and 2005, respectively | $ | 1,690,568 | $ | 1,484,977 | $ | 1,382,479 | ||||||
Cost of revenues, including related party reimbursements of $6.4 million, $9.3 million, and $7.8 million for the years ended December 31, 2007, 2006, and 2005, respectively | 1,058,647 | 900,145 | 804,488 | |||||||||
Gross profit | 631,921 | 584,832 | 577,991 | |||||||||
Selling, general, and administrative expenses, including related party expenses of $35.7 million, $51.8 million and $54.9 million for the years ended December 31, 2007, 2006 and 2005, respectively | 207,859 | 257,312 | 260,066 | |||||||||
Operating income | 424,062 | 327,520 | 317,925 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 1,690 | 2,606 | 4,124 | |||||||||
Interest expense | (146 | ) | (298 | ) | (270 | ) | ||||||
Other income (expense), net | — | (106 | ) | (1,238 | ) | |||||||
Total other income (expense) | 1,544 | 2,202 | 2,616 | |||||||||
Earnings before income taxes, equity in loss of unconsolidated entity and minority interest | 425,606 | 329,722 | 320,541 | |||||||||
Provision for income taxes | 164,734 | 127,984 | 124,160 | |||||||||
Earnings before equity in loss of unconsolidated entity and minority interest, | 260,872 | 201,738 | 196,381 | |||||||||
Equity in loss of unconsolidated affiliate | (3,048 | ) | — | — | ||||||||
Minority interest | (1,019 | ) | (683 | ) | (676 | ) | ||||||
Net earnings | $ | 256,805 | $ | 201,055 | $ | 195,705 | ||||||
Unaudited pro forma net earnings per share — basic | $ | 2.64 | ||||||||||
Unaudited pro forma weighted average shares outstanding — basic | 97,335 | |||||||||||
Unaudited pro forma net earnings per share — diluted | $ | 2.63 | ||||||||||
Unaudited pro forma weighted average shares outstanding — diluted | 97,697 | |||||||||||
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Years Ended December 31, 2007, 2006 and 2005 | ||||
(In thousands) | ||||
Balance, December 31, 2004 | $ | 1,262,972 | ||
Net earnings | 195,705 | |||
Net distribution to parent | (187,738 | ) | ||
Balance, December 31, 2005 | $ | 1,270,939 | ||
Net earnings | 201,055 | |||
Contribution of goodwill (Note 6) | 353,768 | |||
Net distribution to parent | (248,231 | ) | ||
Balance, December 31, 2006 | $ | 1,577,531 | ||
Net earnings | 256,805 | |||
Net distribution to parent | (163,297 | ) | ||
Balance, December 31, 2007 | $ | 1,671,039 | ||
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and Affiliates
Years Ended December 31, 2007, 2006 and 2005 | 2007 | 2006 | 2005 | |||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net earnings | $ | 256,805 | $ | 201,055 | $ | 195,705 | ||||||
Adjustment to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 102,607 | 111,858 | 112,648 | |||||||||
Deferred income taxes | 12,840 | 12,123 | 52 | |||||||||
Stock-based compensation | 14,057 | 24,103 | 11,007 | |||||||||
Equity in loss of unconsolidated entities | 3,048 | — | — | |||||||||
Minority interest | 1,019 | 683 | 676 | |||||||||
Changes in assets and liabilities, net of effects from acquisitions: | ||||||||||||
Net (increase) decrease in trade receivables | (99,234 | ) | 1,734 | (16,444 | ) | |||||||
Net decrease (increase) in other receivables | 28,325 | 10,359 | (31,597 | ) | ||||||||
Net increase in prepaid expenses and other assets | (23,135 | ) | (2,032 | ) | (39,619 | ) | ||||||
Net (decrease) increase in deferred revenues | (29,946 | ) | (26,784 | ) | 8,725 | |||||||
Net increase in accounts payable, accrued liabilities, and other liabilities | 16,608 | 8,851 | 31,639 | |||||||||
Net cash provided by operating activities | 282,994 | 341,950 | 272,792 | |||||||||
Cash flows from investing activities: | ||||||||||||
Additions to property and equipment | (20,754 | ) | (24,156 | ) | (33,514 | ) | ||||||
Additions to capitalized software | (49,798 | ) | (46,092 | ) | (58,944 | ) | ||||||
Acquisitions, net of cash acquired | (37,305 | ) | (11,341 | ) | (5,926 | ) | ||||||
Net cash used in investing activities | (107,857 | ) | (81,589 | ) | (98,384 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Net distribution to Parent | (183,354 | ) | (272,334 | ) | (198,745 | ) | ||||||
Net cash used in financing activities | (183,354 | ) | (272,334 | ) | (198,745 | ) | ||||||
Net decrease in cash and cash equivalents | (8,217 | ) | (11,973 | ) | (24,337 | ) | ||||||
Cash and cash equivalents, beginning of year | 47,783 | 59,756 | 84,093 | |||||||||
Cash and cash equivalents, end of year | $ | 39,566 | $ | 47,783 | $ | 59,756 | ||||||
Non-cash contributions of goodwill by Parent | $ | — | $ | 353,768 | $ | — | ||||||
Non-cash contribution relating to stock compensation | $ | 14,057 | $ | 24,103 | $ | 11,007 | ||||||
Non-cash contribution for Espiel acquisition | $ | 6,000 | $ | — | $ | — | ||||||
F-6
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and Affiliates
Notes to combined financial statements
Years Ended December 31, 2007, 2006 and 2005
(1) | Description of business |
• | our mortgage processing services, which we conduct using our market-leading mortgage servicing platform, or MSP, and our team of experienced support personnel based primarily at our Jacksonville, Florida data center; |
F-7
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and Affiliates
Notes to combined financial statements — (Continued)
• | our Desktop application, a workflow system that assists our customers in managing business processes, which today is primarily used in connection with mortgage loan default management but which has broader applications; | |
• | our other software and related service offerings, including our mortgage origination software, our real estate closing and title insurance production software and our middleware application which provides collaborative network connectivity among mortgage industry participants; and | |
• | our data and analytics businesses, the most significant of which are our alternative property valuations business, which provides a range of types of valuations other than traditional appraisals, our property records business and our advanced analytic services, which assist our customers in their loan marketing or loss mitigation efforts. |
• | settlement services, which consist of title agency services, in which we act as an agent for title insurers, and closing services, in which we assist in the closing of real estate transactions; | |
• | appraisal services, which consist of traditional appraisal and appraisal management services; and | |
• | other origination services, which consist of real estate tax services, which provide lenders with information about the tax status of a property, flood zone information, which assists lenders in determining whether a property is in a federally designated flood zone, and qualified exchange intermediary services for customers who seek to engage in qualified exchanges under Section 1031 of the Internal Revenue Code. |
• | foreclosure services, including access to a nationwide network of independent attorneys, document preparation and recording and other services; | |
• | property inspection and preservation services, designed to preserve the value of properties securing defaulted loans; and | |
• | asset management services, providing disposition services for our customers’ real estate owned properties through a network of independent real estate brokers, attorneys and other vendors to facilitate the transaction. |
(2) | Significant accounting policies |
(a) | Principles of combination and basis of presentation |
F-8
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and Affiliates
Notes to combined financial statements — (Continued)
2007 | 2006 | 2005 | ||||||||||
Distribution of cash collections | $ | 1,561,388 | $ | 1,459,927 | $ | 1,374,760 | ||||||
Contribution of cash disbursements: | ||||||||||||
Payroll | (519,548 | ) | (492,474 | ) | (437,080 | ) | ||||||
Other cost of revenues | (576,679 | ) | (475,619 | ) | (474,704 | ) | ||||||
Current provision for income taxes | (151,894 | ) | (115,861 | ) | (124,108 | ) | ||||||
Additions to property, plant and equipment | (20,754 | ) | (24,156 | ) | (33,514 | ) | ||||||
Additions to capitalized software | (49,798 | ) | (46,092 | ) | (58,944 | ) | ||||||
Acquisitions, net of cash acquired | (37,305 | ) | (11,341 | ) | (5,926 | ) | ||||||
FIS corporate allocations | (22,056 | ) | (22,050 | ) | (41,739 | ) | ||||||
(1,378,034 | ) | (1,187,593 | ) | (1,176,015 | ) | |||||||
Net cash distributions to parent | 183,354 | 272,334 | 198,745 | |||||||||
Non-cash contribution relating to stock compensation | (14,057 | ) | (24,103 | ) | (11,007 | ) | ||||||
Non-cash contribution for Espiel acquisition | (6,000 | ) | — | — | ||||||||
Net distribution to Parent | $ | 163,297 | $ | 248,231 | $ | 187,738 | ||||||
F-9
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and Affiliates
Notes to combined financial statements — (Continued)
(b) | Reclassifications |
(c) | Cash and cash equivalents |
(d) | Fair value of financial instruments |
F-10
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and Affiliates
Notes to combined financial statements — (Continued)
(e) | Trade receivables, net |
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
Trade receivables — billed | $ | 298,422 | $ | 192,976 | ||||
Trade receivables — unbilled | 8,144 | 5,679 | ||||||
Total trade receivables | 306,566 | 198,655 | ||||||
Allowance for doubtful accounts | (20,330 | ) | (13,067 | ) | ||||
Total trade receivables, net | $ | 286,236 | $ | 185,588 | ||||
Allowance for doubtful accounts as of December 31, 2005 | $ | (11,739 | ) | |
Bad debt expense | (8,588 | ) | ||
Write offs | 7,260 | |||
Allowance for doubtful accounts as of December 31, 2006 | $ | (13,067 | ) | |
Bad debt expense | (11,353 | ) | ||
Write offs | 4,090 | |||
Allowance for doubtful accounts as of December 31, 2007 | $ | (20,330 | ) | |
(f) | Other receivables |
(g) | Goodwill |
(h) | Long-lived assets |
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and Affiliates
Notes to combined financial statements — (Continued)
(i) | Intangible assets |
(j) | Computer software |
(k) | Deferred contract costs |
F-12
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and Affiliates
Notes to combined financial statements — (Continued)
(l) | Property and equipment |
(m) | Income taxes |
(n) | Revenue recognition |
F-13
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and Affiliates
Notes to combined financial statements — (Continued)
F-14
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and Affiliates
Notes to combined financial statements — (Continued)
(o) | Cost of revenue and selling, general and administrative costs |
(p) | Stock-based compensation plans |
F-15
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and Affiliates
Notes to combined financial statements — (Continued)
(q) | Deferred compensation plan |
(r) | Management estimates |
(s) | Unaudited pro forma net earnings per share |
2007 | ||||
Net earnings | $ | 256,805 | ||
Pro forma weighted average shares outstanding — basic | 97,335 | |||
Plus: Pro forma common stock equivalent shares assumed from conversion of options | 362 | |||
Pro forma weighted average shares outstanding — diluted | 97,697 | |||
Pro forma net earnings per share-basic | $ | 2.64 | ||
Pro forma net earnings per share-diluted | $ | 2.63 | ||
(t) | Recent accounting pronouncements |
F-16
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and Affiliates
Notes to combined financial statements — (Continued)
(3) | Transactions with related parties |
• | Agreements to provide software development and services. These agreements govern the fee structure under which we are paid for providing software development and services to FNF which consist of developing software for use in the title operations of FNF. |
F-17
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and Affiliates
Notes to combined financial statements — (Continued)
• | Arrangements to provide other data services. Under these arrangements we are paid for providing other data services to FNF, which consist primarily of data services required by the title insurance operations. | |
• | Allocation by FIS of corporate services. FIS currently provides general management, accounting, treasury, tax, finance, payroll, human resources, employee benefits, internal audit, mergers and acquisitions, and other corporate and administrative support to us. The amounts included in these financials statements for these services have been allocated by management and management believes the methods used to allocate these amounts are reasonable. | |
• | Licensing, leasing, cost sharing and other agreements. These agreements provide for the reimbursement of certain amounts from FNF and FIS related to various miscellaneous leasing and cost sharing agreements, as well as the payment of certain amounts by us to FNF or its subsidiaries in connection with our use of certain intellectual property or other assets of or services by FNF. | |
• | Agreements to provide title agency services. These agreements allow us to provide services to existing customers through loan facilitation transactions, primarily with large national lenders. The arrangement involves providing title agency services which result in the issuance of title policies on behalf of title insurance underwriters owned by FNF and its subsidiaries. Subject to certain early termination provisions for cause, each of these agreements may be terminated upon five years’ prior written notice, which notice may not be given until after the fifth anniversary of the effective date of each agreement, which ranges from July 2004 through September 2006 (thus effectively resulting in a minimum ten year term and a rolling one-year term thereafter). Under this agreement, we earn commissions which, in aggregate, are equal to approximately 89% of the total title premium from title policies that we place with subsidiaries of FNF. We also perform similar functions in connection with trustee sale guarantees, a form of title insurance that subsidiaries of FNF issue as part of the foreclosure process on a defaulted loan. |
2007 | 2006 | 2005 | ||||||||||
Title agency commissions | $ | 132.2 | $ | 83.9 | $ | 80.9 | ||||||
Software development revenue | 59.5 | 32.7 | 7.7 | |||||||||
Other data services | 19.6 | 19.8 | 17.4 | |||||||||
Total revenues | $ | 211.3 | $ | 136.4 | $ | 106.0 | ||||||
2007 | 2006 | 2005 | ||||||||||
Title plant information expense | $ | 5.8 | $ | 3.9 | $ | 3.0 | ||||||
Corporate services | 35.7 | 51.8 | 54.9 | |||||||||
Licensing, leasing and cost sharing agreement | (12.2 | ) | (13.2 | ) | (10.8 | ) | ||||||
Total expenses | $ | 29.3 | $ | 42.5 | $ | 47.1 | ||||||
F-18
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and Affiliates
Notes to combined financial statements — (Continued)
(4) | Acquisitions |
(5) | Property and equipment |
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
Land | $ | 4,835 | $ | 4,835 | ||||
Buildings | 67,764 | 78,051 | ||||||
Leasehold improvements | 12,147 | 11,986 | ||||||
Computer equipment | 104,809 | 120,785 | ||||||
Furniture, fixtures, and other equipment | 32,151 | 50,717 | ||||||
221,706 | 266,374 | |||||||
Accumulated depreciation and amortization | (126,086 | ) | (164,412 | ) | ||||
$ | 95,620 | $ | 101,962 | |||||
F-19
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and Affiliates
Notes to combined financial statements — (Continued)
(6) | Goodwill |
Technology, | Loan | |||||||||||||||
Data and | Transaction | Corporate/ | ||||||||||||||
Analytics | Services | Eliminations | Total | |||||||||||||
Balance, December 31, 2005 | $ | 403,735 | $ | 290,361 | $ | 20,339 | $ | 714,435 | ||||||||
Goodwill removed due to deconsolidation of FNRES | — | — | (20,339 | ) | (20,339 | ) | ||||||||||
Goodwill relating to FIS change in reporting units(1) | 209,112 | 144,656 | — | 353,768 | ||||||||||||
Goodwill acquired during 2006 | 6,380 | — | — | 6,380 | ||||||||||||
Purchase price adjustments to prior period acquisitions | — | (8,463 | ) | — | (8,463 | ) | ||||||||||
Balance, December 31, 2006 | 619,227 | 426,554 | — | 1,045,781 | ||||||||||||
Goodwill acquired during 2007 relating to Espiel | 32,373 | — | — | 32,373 | ||||||||||||
Balance, December 31, 2007 | $ | 651,600 | $ | 426,554 | $ | — | $ | 1,078,154 | ||||||||
(1) | During 2006, FIS merged with Certegy Inc. and completed a corporate reorganization. As a result, FIS changed its operating segments and reporting units in accordance with SFAS No. 131 and SFAS No. 142, respectively. The change in operating segments and reporting units resulted in additional goodwill being allocated to the businesses which comprise the lender processing segment of FIS based on their relative fair values. This adjustment to our historical goodwill is reflected as a capital contribution by FIS during 2006. |
(7) | Intangible assets |
Accumulated | ||||||||||||
Cost | Amortization | Net | ||||||||||
Customer relationships | $ | 353,083 | $ | 238,989 | $ | 114,094 | ||||||
Trademarks | 4,035 | — | 4,035 | |||||||||
$ | 357,118 | $ | 238,989 | $ | 118,129 | |||||||
Accumulated | ||||||||||||
Cost | Amortization | Net | ||||||||||
Customer relationships | $ | 348,713 | $ | 199,235 | $ | 149,478 | ||||||
Trademarks | 3,351 | — | 3,351 | |||||||||
$ | 352,064 | $ | 199,235 | $ | 152,829 | |||||||
F-20
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and Affiliates
Notes to combined financial statements — (Continued)
(8) | Computer software |
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
Software from business acquisitions | $ | 82,203 | $ | 76,168 | ||||
Capitalized software development costs | 112,920 | 95,898 | ||||||
Purchased software | 29,130 | 49,614 | ||||||
Computer software | 224,253 | 221,680 | ||||||
Accumulated amortization | (73,881 | ) | (94,600 | ) | ||||
Computer software, net of accumulated amortization | $ | 150,372 | $ | 127,080 | ||||
(9) | Income taxes |
2007 | 2006 | 2005 | ||||||||||
Current provision (benefit): | ||||||||||||
Federal | $ | 130,830 | $ | 99,580 | $ | 106,837 | ||||||
State | 21,064 | 16,281 | 17,271 | |||||||||
Total current provision | $ | 151,894 | $ | 115,861 | $ | 124,108 | ||||||
Deferred provision (benefit): | ||||||||||||
Federal | $ | 10,805 | $ | 10,458 | $ | (87 | ) | |||||
State | 2,035 | 1,665 | 139 | |||||||||
Total deferred provision | $ | 12,840 | $ | 12,123 | $ | 52 | ||||||
Total provision for income taxes | $ | 164,734 | $ | 127,984 | $ | 124,160 | ||||||
2007 | 2006 | 2005 | ||||||||||
Federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes | 3.5 | % | 3.5 | % | 3.5 | % | ||||||
Other | 0.2 | % | 0.3 | % | 0.2 | % | ||||||
Effective income tax rate | 38.7 | % | 38.8 | % | 38.7 | % | ||||||
F-21
Table of Contents
and Affiliates
Notes to combined financial statements — (Continued)
2007 | 2006 | |||||||
Deferred income tax assets: | ||||||||
Deferred revenue | $ | 28,951 | $ | 39,142 | ||||
State taxes | 7,372 | 5,698 | ||||||
Employee benefit accruals | 2,194 | 7,658 | ||||||
Accruals and reserves | 3,007 | 3,281 | ||||||
Allowance for doubtful accounts | 7,829 | 5,032 | ||||||
Investments | 4,115 | 2,956 | ||||||
Depreciation | 2,389 | — | ||||||
Total gross deferred income tax assets | 55,857 | 63,767 | ||||||
Less: Valuation allowance | (4,115 | ) | (2,956 | ) | ||||
Total deferred income tax assets | $ | 51,742 | $ | 60,811 | ||||
Deferred income tax liabilities: | ||||||||
Amortization of goodwill and intangible assets | $ | 48,716 | $ | 45,350 | ||||
Deferred contract costs | 12,631 | 11,148 | ||||||
Investments | 5,151 | 5,020 | ||||||
Depreciation | — | 998 | ||||||
Total deferred income tax liabilities | 66,498 | 62,516 | ||||||
Net deferred income tax liability | $ | 14,756 | $ | 1,705 | ||||
2007 | 2006 | |||||||
Current assets | $ | 40,440 | $ | 55,203 | ||||
Noncurrent liabilities | 55,196 | 56,908 | ||||||
Net deferred income tax liability | $ | 14,756 | $ | 1,705 | ||||
F-22
Table of Contents
and Affiliates
Notes to combined financial statements — (Continued)
(10) | Commitments and contingencies |
• | These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities. | |
• | In these matters, plaintiffs seek a variety of remedies including equitable relief in the form of injunctive and other remedies and monetary relief in the form of compensatory damages. In some cases, the monetary damages sought include punitive or treble damages. None of the cases described below includes a specific statement as to the dollar amount of damages demanded. Instead, each of the cases includes a demand in an amount to be proved at trial. | |
• | For the reasons specified above, it is not possible to make meaningful estimates of the amount or range of loss that could result from these matters at this time. We review these matters on an on going basis and follow the provisions of SFAS No. 5, Accounting for Contingencies, (“SFAS 5”) when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, we base our decision on our assessment of the ultimate outcome following all appeals. | |
• | We intend to vigorously defend each of these matters, and we do not believe that the ultimate disposition of these lawsuits will have a material adverse impact on our financial position. |
F-23
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and Affiliates
Notes to combined financial statements — (Continued)
F-24
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and Affiliates
Notes to combined financial statements — (Continued)
2008 | $ | 16,776 | ||
2009 | 12,734 | |||
2010 | 6,160 | |||
2011 | 3,378 | |||
2012 | 2,049 | |||
Thereafter | — | |||
Total | $ | 41,097 | ||
(11) | Employee benefit plans |
F-25
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and Affiliates
Notes to combined financial statements — (Continued)
F-26
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and Affiliates
Notes to combined financial statements — (Continued)
(12) | Concentration of risk |
F-27
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and Affiliates
Notes to combined financial statements — (Continued)
(13) | Segment Information |
Technology | Loan | |||||||||||||||
Data and | Transaction | Corporate | ||||||||||||||
Analytics | Services | and Other | Total | |||||||||||||
Processing and services revenues | $ | 570,146 | $ | 1,125,879 | $ | (5,457 | ) | $ | 1,690,568 | |||||||
Cost of revenues | 313,747 | 750,174 | (5,274 | ) | 1,058,647 | |||||||||||
Gross profit | 256,399 | 375,705 | (183 | ) | 631,921 | |||||||||||
Selling, general and administrative expenses | 64,770 | 110,132 | 32,957 | 207,859 | ||||||||||||
Operating income | 191,629 | 265,573 | (33,140 | ) | 424,062 | |||||||||||
Depreciation and amortization | $ | 68,720 | $ | 28,752 | $ | 5,135 | $ | 102,607 | ||||||||
Capital expenditures | $ | 50,865 | $ | 14,615 | $ | 5,072 | $ | 70,552 | ||||||||
Total assets | $ | 1,019,271 | $ | 755,687 | $ | 187,085 | $ | 1,962,043 | ||||||||
Goodwill | $ | 651,600 | $ | 426,554 | $ | — | $ | 1,078,154 | ||||||||
Technology | Loan | |||||||||||||||
Data and | Transaction | Corporate | ||||||||||||||
Analytics | Services | and Other | Total | |||||||||||||
Processing and services revenues | $ | 546,961 | $ | 900,951 | $ | 37,065 | $ | 1,484,977 | ||||||||
Cost of revenues | 299,696 | 587,040 | 13,409 | 900,145 | ||||||||||||
Gross profit | 247,265 | 313,911 | 23,656 | 584,832 | ||||||||||||
Selling, general and administrative expenses | 67,732 | 107,555 | 82,025 | 257,312 | ||||||||||||
Operating income | 179,533 | 206,356 | (58,369 | ) | 327,520 | |||||||||||
Depreciation and amortization | $ | 69,581 | $ | 32,177 | $ | 10,100 | $ | 111,858 | ||||||||
Capital expenditures | $ | 47,293 | $ | 12,389 | $ | 10,566 | $ | 70,248 | ||||||||
Total assets | $ | 939,049 | $ | 683,054 | $ | 257,697 | $ | 1,879,800 | ||||||||
Goodwill | $ | 619,227 | $ | 426,554 | $ | — | $ | 1,045,781 | ||||||||
F-28
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and Affiliates
Notes to combined financial statements — (Continued)
Technology | Loan | |||||||||||||||
Data and | Transaction | Corporate | ||||||||||||||
Analytics | Services | and Other | Total | |||||||||||||
Processing and services revenues | $ | 525,259 | $ | 820,098 | $ | 37,122 | $ | 1,382,479 | ||||||||
Cost of revenues | 281,974 | 505,607 | 16,907 | 804,488 | ||||||||||||
Gross profit | 243,285 | 314,491 | 20,215 | 577,991 | ||||||||||||
Selling, general and administrative expenses | 81,143 | 103,693 | 75,230 | 260,066 | ||||||||||||
Operating income | 162,142 | 210,798 | (55,015 | ) | 317,925 | |||||||||||
Depreciation and amortization | $ | 70,545 | $ | 33,030 | $ | 9,073 | $ | 112,648 | ||||||||
Capital expenditures | $ | 64,289 | $ | 15,559 | $ | 12,610 | $ | 92,458 | ||||||||
Total assets | $ | 737,359 | $ | 617,433 | $ | 188,010 | $ | 1,542,802 | ||||||||
Goodwill | $ | 403,735 | $ | 290,361 | $ | 20,339 | $ | 714,435 | ||||||||
F-29
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AND SUBSIDIARIES AND AFFILIATES
Consolidated and Combined Balance Sheets
June 30, | December 31, | |||||||
2008 | 2007(1) | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,628 | $ | 39,566 | ||||
Trade receivables, net of allowance for doubtful accounts of $33.8 million and $20.3 million at June 30, 2008 and December 31, 2007 | 350,565 | 286,236 | ||||||
Other receivables | 12,318 | 7,971 | ||||||
Prepaid expenses and other current assets | 24,767 | 33,323 | ||||||
Deferred income taxes, net | 34,640 | 40,440 | ||||||
Total current assets | 440,918 | 407,536 | ||||||
Property and equipment, net of accumulated depreciation and amortization of $132.7 million and $126.1 million at June 30, 2008 and December 31, 2007 | 92,487 | 95,620 | ||||||
Goodwill | 1,086,606 | 1,078,154 | ||||||
Other intangible assets, net of accumulated amortization of $255.5 million and $239.0 million at June 30, 2008 and December 31, 2007 | 103,347 | 118,129 | ||||||
Computer software, net of accumulated amortization of $72.6 million and $73.9 million at June 30, 2008 and December 31, 2007 | 149,562 | 150,372 | ||||||
Other non-current assets | 112,820 | 112,232 | ||||||
Total assets | $ | 1,985,740 | $ | 1,962,043 | ||||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 28,358 | $ | 19,499 | ||||
Accrued salaries and benefits | 23,037 | 22,908 | ||||||
Recording and transfer tax liabilities | 17,555 | 10,657 | ||||||
Other accrued liabilities | 65,189 | 57,053 | ||||||
Deferred revenues | 58,394 | 58,076 | ||||||
Total current liabilities | 192,533 | 168,193 | ||||||
Deferred revenues | 31,312 | 23,146 | ||||||
Deferred income taxes, net | 54,844 | 55,196 | ||||||
Other long-term liabilities | 21,777 | 34,419 | ||||||
Total liabilities | 300,466 | 280,954 | ||||||
Minority interest | 10,773 | 10,050 | ||||||
Stockholder’s Equity: | ||||||||
Preferred stock $0.0001 par value; 50 million shares authorized, none issued at June 30, 2008 or December 31, 2007 | — | — | ||||||
Common stock $0.0001 par value; 500 million shares authorized, 1,000 shares issued at June 30, 2008 | — | — | ||||||
Additional paid-in capital | 1,667,268 | — | ||||||
Retained earnings | 6,983 | — | ||||||
FIS’s equity | — | 1,671,039 | ||||||
Accumulated other comprehensive earnings | 250 | — | ||||||
Total stockholder’s equity | 1,674,501 | 1,671,039 | ||||||
Total liabilities and stockholder’s equity | $ | 1,985,740 | $ | 1,962,043 | ||||
(1) | Derived from audited financial statements. |
F-30
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AND SUBSIDIARIES AND AFFILIATES
Six Months Ended June 30, | ||||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
(In thousands, except per share data) | ||||||||
Processing and services revenues, including $102.0 million and $107.0 million of revenues from related parties for the six months ended June 30, 2008 and 2007, respectively | $ | 913,106 | $ | 826,438 | ||||
Cost of revenues, including $4.7 million and $2.6 million for the six months ended June 30, 2008 and 2007, respectively | 585,137 | 526,823 | ||||||
Gross profit | 327,969 | 299,615 | ||||||
Selling, general, and administrative expenses, including related party expenses, net of expense reimbursements, of $22.3 million and $10.3 million for the six months ended June 30, 2008 and 2007, respectively | 118,999 | 109,072 | ||||||
Operating income | 208,970 | 190,543 | ||||||
Other income (expense): | ||||||||
Interest income | 563 | 745 | ||||||
Interest expense | (58 | ) | (77 | ) | ||||
Other income, net | 282 | — | ||||||
Total other income (expense) | 787 | 668 | ||||||
Earnings before income taxes, equity in losses of unconsolidated entity and minority interest | 209,757 | 191,211 | ||||||
Provision for income taxes | 81,386 | 74,010 | ||||||
Earnings before equity in losses of unconsolidated entity and minority interest | 128,371 | 117,201 | ||||||
Equity in losses of unconsolidated entity | (2,370 | ) | (1,720 | ) | ||||
Minority interest | (723 | ) | (436 | ) | ||||
Net earnings | $ | 125,278 | $ | 115,045 | ||||
Pro forma net earnings per share — basic (Note 3) | $ | 1.32 | ||||||
Pro forma weighted average shares outstanding — basic (Note 3) | 94,611 | |||||||
Pro forma net earnings per share — diluted (Note 3) | $ | 1.30 | ||||||
Pro forma weighted average shares outstanding — diluted (Note 3) | 96,334 | |||||||
F-31
Table of Contents
AND SUBSIDIARIES AND AFFILIATES
Six Months Ended June 30, | ||||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Net earnings | $ | 125,278 | $ | 115,045 | ||||
Other comprehensive earnings: | ||||||||
Unrealized gain on other investments, net of tax | 250 | — | ||||||
Other comprehensive earnings | 250 | — | ||||||
Comprehensive earnings | $ | 125,528 | $ | 115,045 | ||||
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Accumulated | ||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||
Common | Common | Paid-In | Retained | FIS’s | Comprehensive | Stockholder’s | ||||||||||||||||||||||
Shares | Stock | Capital | Earnings | Equity | Earnings | Equity | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balances, December 31, 2007 | — | $ | — | $ | — | $ | — | $ | 1,671,039 | $ | — | $ | 1,671,039 | |||||||||||||||
Net earnings (January 1, 2008 to June 20, 2008) | — | — | — | — | 118,295 | — | 118,295 | |||||||||||||||||||||
Net distribution to FIS | — | — | — | — | (121,677 | ) | — | (121,677 | ) | |||||||||||||||||||
Capitalization of Lender Processing Services, Inc. | 1 | — | 1,667,268 | — | (1,667,657 | ) | 389 | — | ||||||||||||||||||||
Net earnings (June 21, 2008 to June 30, 2008) | — | — | — | 6,983 | — | — | 6,983 | |||||||||||||||||||||
Unrealized loss on investments | — | — | — | — | — | (139 | ) | (139 | ) | |||||||||||||||||||
Balances, June 30, 2008 | 1 | $ | — | $ | 1,667,268 | $ | 6,983 | $ | — | $ | 250 | $ | 1,674,501 | |||||||||||||||
F-33
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AND SUBSIDIARIES AND AFFILIATES
Six Months Ended June 30, | ||||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 125,278 | $ | 115,045 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 44,576 | 52,373 | ||||||
Deferred income taxes, net | 3,968 | 13,634 | ||||||
Stock-based compensation cost | 9,120 | 7,215 | ||||||
Loss on unconsolidated entity | 2,370 | 1,720 | ||||||
Minority interest | 723 | 436 | ||||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
Net increase in trade receivables | (63,750 | ) | (55,628 | ) | ||||
Net (increase) decrease in other receivables | (4,348 | ) | 22,286 | |||||
Net decrease (increase) in prepaid expenses and other assets | 7,931 | (13,444 | ) | |||||
Net increase in deferred contract costs | (3,420 | ) | (18,674 | ) | ||||
Net decrease (increase) in deferred revenues | 8,235 | (18,249 | ) | |||||
Net decrease in accounts payable, accrued liabilities and other liabilities | 6,000 | 26,675 | ||||||
Net cash provided by operating activities | 136,683 | 133,389 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property and equipment | (9,376 | ) | (6,099 | ) | ||||
Additions to capitalized software | (15,761 | ) | (18,937 | ) | ||||
Acquisitions, net of cash acquired | (15,488 | ) | (37,420 | ) | ||||
Net cash used in investing activities | (40,625 | ) | (62,456 | ) | ||||
Cash flows from financing activities: | ||||||||
Net distributions to FIS | (116,996 | ) | (69,639 | ) | ||||
Net cash used in financing activities | (116,996 | ) | (69,639 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (20,938 | ) | 1,294 | |||||
Cash and cash equivalents, beginning of period | 39,566 | 47,783 | ||||||
Cash and cash equivalents, end of period | $ | 18,628 | $ | 49,077 | ||||
Non-cash contribution relating to stock compensation | $ | 9,120 | $ | 7,215 | ||||
Non-cash contribution for Espiel acquisition | $ | — | $ | 6,000 | ||||
Non-cash redistribution of assets to Parent | $ | (13,801 | ) | $ | — | |||
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)
Six Months Ended June 30, 2008 and 2007
(1) | Basis of Presentation |
F-35
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
F-36
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
• | our mortgage processing services, which we conduct using our market-leading mortgage servicing platform and our team of experienced support personnel based primarily at our Jacksonville, Florida data center; | |
• | our Desktop application, a workflow system that assists our customers in managing business processes, which today is primarily used in connection with mortgage loan default management, but which has broader applications; | |
• | our other software and related service offerings, including our mortgage origination software, our real estate closing and title insurance production software and our middleware application which provides collaborative network connectivity among mortgage industry participants; and | |
• | our data and analytics businesses, the most significant of which are our alternative property valuations business, which provides a range of valuations other than traditional appraisals, our property records business, and our advanced analytic services, which assist our customers in their loan marketing or loss mitigation efforts. |
• | settlement services, which consist of title agency services, in which we act as an agent for title insurers, closing services, in which we assist in the closing of real estate transactions, and lien recording and release services; | |
• | appraisal services, which consist of traditional appraisal and appraisal management services; and | |
• | other origination services, which consist of real estate tax services, which provide lenders with information about the tax status of a property, flood zone information, which assists lenders in determining whether a property is in a federally designated flood zone, and qualified exchange intermediary services for customers who seek to engage in qualified exchanges under Section 1031 of the Internal Revenue Code. |
• | foreclosure management services, including access to a nationwide network of independent attorneys, document preparation and recording and other services; | |
• | property inspection and preservation services, designed to preserve the value of properties securing defaulted loans; and | |
• | asset management services, providing disposition services for our customers’ real estate owned properties through a network of independent real estate brokers, attorneys and other vendors to facilitate the transaction. |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
(2) | Related Party Transactions |
• | Agreements to provide title agency services. These agreements allow us to provide services to existing customers through loan facilitation transactions, primarily with large national lenders. The arrangement involves providing title agency services which result in the issuance of title policies on behalf of title insurance underwriters owned by FNF and its subsidiaries. Subject to certain early termination provisions for cause, each of these agreements may be terminated upon five years’ prior written notice, which notice may not be given until after the fifth anniversary of the effective date of each agreement, which ranges from July 2004 through September 2006 (thus effectively resulting in a minimum ten year term and a rolling one-year term thereafter). Under these agreements, we earn commissions which, in aggregate, are equal to approximately 88% of the total title premium from title policies that we place with subsidiaries of FNF. We also perform similar functions in connection with trustee sale guarantees, a form of title insurance that subsidiaries of FNF issue as part of the foreclosure process on a defaulted loan. | |
• | Agreements to provide software development and services. These agreements govern the fee structure under which we are paid for providing software development and services to FNF which consist of developing software for use in the title operations of FNF. | |
• | Arrangements to provide other data services. Under these arrangements, we are paid for providing other data services to FNF, which consist primarily of data services required by the title insurance operations. |
Six Months Ended | ||||||||
June 30 | ||||||||
2008 | 2007 | |||||||
Title agency commissions | $ | 66.8 | $ | 68.3 | ||||
Software development revenue | 28.1 | 28.7 | ||||||
Other data related services | 7.1 | 10.0 | ||||||
Total revenues | $ | 102.0 | $ | 107.0 | ||||
• | Title plant information expense. These agreements provide for our title agency operations to access title plant assets owned by FNF. | |
• | Allocation by FIS of corporate services. Prior to the spin-off, FIS provided general management, accounting, treasury, tax, finance, payroll, human resources, employee benefits, internal audit, mergers and acquisitions, and other corporate and administrative support to the Company. Management believes the methods used to allocate the amounts included in these financial statements for corporate services are reasonable. |
F-38
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
• | Licensing, leasing, cost sharing and other agreements. These agreements provide for the reimbursement of certain amounts from FNF and FIS related to various ancillary leasing and cost sharing agreements, as well as the payment of certain amounts by the Company to FNF or its subsidiaries in connection with our use of certain intellectual property or other assets of or services by FNF. Included as expense reimbursements are amounts received related to leases of certain office space to FIS and FNF, as well as amounts received for property management services for office space located on our corporate headquarters campus. In addition, our expenses include expenses for a sublease of office space and furnishings from FNF at our corporate headquarters campus. |
Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Title plant information expense | $ | 4.7 | $ | 2.6 | ||||
Corporate services | 27.6 | 19.8 | ||||||
Licensing, leasing and cost sharing agreements | (5.3 | ) | (9.5 | ) | ||||
Total expenses | $ | 27.0 | $ | 12.9 | ||||
(3) | Unaudited Pro Forma Net Earnings per Share |
F-39
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Six Months Ended | ||||
June 30, 2008 | ||||
Pro forma weighted average shares outstanding — basic | 94,611 | |||
Plus: Pro forma common stock equivalent shares assumed from conversion of options | 1,723 | |||
Pro forma weighted average shares outstanding — diluted | 96,334 | |||
Pro forma basic net earnings per share | $ | 1.32 | ||
Pro forma diluted net earnings per share | $ | 1.30 | ||
(4) | Acquisitions |
(5) | Long-Term Debt |
(6) | Income Taxes |
(7) | Commitments and Contingencies |
F-40
Table of Contents
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
• | These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities. | |
• | In these matters, plaintiffs seek a variety of remedies including equitable relief in the form of injunctive and other remedies and monetary relief in the form of compensatory damages. In some cases, the monetary damages sought include punitive or treble damages. None of the cases described below includes a specific statement as to the dollar amount of damages demanded. Instead, each of the cases includes a demand in an amount to be proved at trial. | |
• | For the reasons specified above, it is not possible to make meaningful estimates of the amount or range of loss that could result from these matters at this time. We review these matters on an ongoing basis and follow the provisions of SFAS No. 5,Accounting for Contingencies, when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, we base our decision on our assessment of the ultimate outcome following all appeals. | |
• | We intend to vigorously defend each of these matters, and we do not believe that the ultimate disposition of these lawsuits will have a material adverse impact on our financial position. |
(8) | Stock Option Plans |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
(9) | Segment Information |
Technology, | Loan | |||||||||||||||
Data and | Transaction | Corporate | ||||||||||||||
Analytics | Services | and Other | Total | |||||||||||||
Processing and services revenues | $ | 277,568 | $ | 642,577 | $ | (7,039 | ) | $ | 913,106 | |||||||
Cost of revenues | 155,507 | 436,793 | (7,163 | ) | 585,137 | |||||||||||
Gross profit | 122,061 | 205,784 | 124 | 327,969 | ||||||||||||
Selling, general and administrative expenses | 33,729 | 57,829 | 27,441 | 118,999 | ||||||||||||
Operating income | $ | 88,332 | $ | 147,955 | $ | (27,317 | ) | $ | 208,970 | |||||||
Depreciation and amortization | $ | 29,986 | $ | 11,496 | $ | 3,094 | $ | 44,576 | ||||||||
Total Assets | $ | 1,014,288 | $ | 907,908 | $ | 63,544 | $ | 1,985,740 | ||||||||
Goodwill | $ | 662,172 | $ | 424,434 | $ | — | $ | 1,086,606 | ||||||||
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Technology, | Loan | |||||||||||||||
Data and | Transaction | Corporate | ||||||||||||||
Analytics | Services | and Other | Total | |||||||||||||
Processing and services revenues | $ | 284,385 | $ | 540,929 | $ | 1,124 | $ | 826,438 | ||||||||
Cost of revenues | 160,308 | 369,167 | (2,652 | ) | 526,823 | |||||||||||
Gross profit | 124,077 | 171,762 | 3,776 | 299,615 | ||||||||||||
Selling, general and administrative expenses | 32,776 | 54,753 | 21,543 | 109,072 | ||||||||||||
Operating income | $ | 91,301 | $ | 117,009 | $ | (17,767 | ) | $ | 190,543 | |||||||
Depreciation and amortization | $ | 35,619 | $ | 14,219 | $ | 2,535 | $ | 52,373 | ||||||||
Total Assets | $ | 1,007,360 | $ | 835,746 | $ | 104,106 | $ | 1,947,212 | ||||||||
Goodwill | $ | 650,412 | $ | 426,554 | $ | — | $ | 1,076,966 | ||||||||
(10) | Subsequent Events |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Bank Pays | LPS Pays | |||||||||||
Amortization Period | Notional Amount | Variable Rate of(1) | Fixed Rate of(2) | |||||||||
(In millions) | ||||||||||||
July 31, 2008 to December 31, 2008 | $ | 420.0 | 1 Month LIBOR | 3.275 | % | |||||||
December 31, 2008 to March 31, 2009 | $ | 400.0 | 1 Month LIBOR | 3.275 | % | |||||||
March 31, 2009 to June 30, 2009 | $ | 385.0 | 1 Month LIBOR | 3.275 | % | |||||||
June 30, 2009 to September 30, 2009 | $ | 365.0 | 1 Month LIBOR | 3.275 | % | |||||||
September 30, 2009 to December 31, 2009 | $ | 345.0 | 1 Month LIBOR | 3.275 | % | |||||||
December 31, 2009 to March 31, 2010 | $ | 330.0 | 1 Month LIBOR | 3.275 | % | |||||||
March 31, 2010 to June 30, 2010 | $ | 310.0 | 1 Month LIBOR | 3.275 | % | |||||||
June 30, 2010 to July 31, 2010 | $ | 290.0 | 1 Month LIBOR | 3.275 | % |
(1) | 2.46% as of July 2, 2008. |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
(2) | In addition to the fixed rate paid under the swaps, we pay an applicable margin to our bank lenders on the Term A Loan, Term B Loan and Revolving Loan equal to 2.50% as of July 2, 2008. |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Pro Forma | ||||||||||||
June 30, | Pro Forma | June 30, | ||||||||||
2008 | Adjustments | 2008 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 18,628 | $ | — | $ | 18,628 | ||||||
Trade receivables, net of allowance for doubtful accounts | 350,565 | — | 350,565 | |||||||||
Other current assets | 71,725 | — | 71,725 | |||||||||
Total current assets | 440,918 | — | 440,918 | |||||||||
Property and equipment, net of accumulated depreciation and amortization | 92,487 | — | 92,487 | |||||||||
Goodwill | 1,086,606 | — | 1,086,606 | |||||||||
Intangible assets, net of accumulated amortization | 103,347 | — | 103,347 | |||||||||
Computer software, net of accumulated amortization | 149,562 | — | 149,562 | |||||||||
Other non-current assets | 112,820 | 25,700 | (1) | 138,520 | ||||||||
Total assets | $ | 1,985,740 | $ | 25,700 | $ | 2,011,440 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Total current liabilities | $ | 192,533 | $ | 135,800 | (1) | $ | 328,333 | |||||
Total non-current liabilities | 107,933 | 1,474,900 | (1) | 1,582,833 | ||||||||
Total liabilities | 300,466 | 1,610,700 | 1,911,166 | |||||||||
Minority interest | 10,773 | — | 10,773 | |||||||||
Stockholders’ equity | 1,674,501 | (1,585,000 | )(1) | 89,501 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,985,740 | $ | 25,700 | $ | 2,011,440 | ||||||
(1) | The June 30, 2008 pro forma condensed consolidated balance sheet reflects $25.7 million in other non-current assets for the capitalization of debt issuance costs incurred in connection with the issuance of $1,585.0 million in debt. The current portion of the debt and the outstanding balance on our revolving line of credit, $110.1 million and $25.7 million, respectively, is reflected in current liabilities. The long-term portion of the debt, which totaled $1,474.9 million, is reflected in non-current liabilities. |
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AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Pro Forma | ||||||||||||
Six Month Period | Pro Forma | Six Months Ended | ||||||||||
Ended June 30, 2008 | Adjustments | June 30, 2008 | ||||||||||
Processing and services revenues | $ | 913,106 | $ | 913,106 | ||||||||
Operating income | $ | 208,970 | $ | 208,970 | ||||||||
Net earnings | $ | 125,278 | $ | (28,131 | )(2) | $ | 97,147 | |||||
Pro forma net earnings per share — basic | $ | 1.32 | $ | 1.03 | ||||||||
Pro forma net earnings per share — diluted | $ | 1.30 | $ | 1.01 |
(2) | The pro forma condensed consolidated statement of earnings for the six months ended June 30, 2008 reflects $46.0 million in interest expense ($28.1 million, net of tax, using our effective tax rate of 38.8%) we would have incurred on the $1,585.0 million in debt. |
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ITEM 20. | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
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ITEM 21. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit | ||||
Number | Description | |||
2 | .1 | Contribution and Distribution Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
3 | .1 | Amended and Restated Certificate of Incorporation of Lender Processing Services, Inc.(2) | ||
3 | .2 | Amended and Restated Bylaws of Lender Processing Services, Inc.(2) | ||
3 | .3 | Amended Certificate of Incorporation of A.S.A.P. Legal Publication Services, Inc.(6) | ||
3 | .4 | Amended and Restated Bylaws of A.S.A.P. Legal Publication Services, Inc.(6) | ||
3 | .5 | Certificate of Incorporation of Aptitude Solutions, Inc.(6) | ||
3 | .6 | Bylaws of Aptitude Solutions, Inc.(6) | ||
3 | .7 | Certificate of Incorporation of Arizona Sales and Posting, Inc.(6) | ||
3 | .8 | Amended and Restated Bylaws of Arizona Sales and Posting, Inc.(6) | ||
3 | .9 | Amended Certificate of Incorporation of Chase Vehicle Exchange, Inc.(6) | ||
3 | .10 | Bylaws of Chase Vehicle Exchange, Inc.(6) | ||
3 | .11 | Amended Certificate of Organization of DOCX, LLC(6) | ||
3 | .12 | Amended and Restated Operating Agreement of DOCX, LLC(6) | ||
3 | .13 | Amended Certificate of Incorporation of Espiel, Inc.(6) | ||
3 | .14 | Bylaws of Espiel, Inc.(6) | ||
3 | .15 | Amended Certificate of Incorporation of Fidelity National Loan Portfolio Services, Inc.(6) | ||
3 | .16 | Amended Bylaws of Fidelity National Loan Portfolio Services, Inc.(6) | ||
3 | .17 | Amended Certificate of Incorporation of Financial Systems Integrators, Inc.(6) | ||
3 | .18 | Bylaws of Financial Systems Integrators, Inc.(6) | ||
3 | .19 | Certificate of Formation of FIS Capital Markets, LLC(6) | ||
3 | .20 | Operating Agreement of FIS Capital Markets, LLC(6) | ||
3 | .21 | Amended Certificate of Incorporation of FIS Data Services, Inc.(6) | ||
3 | .22 | Amended and Restated Bylaws of FIS Data Services, Inc.(6) | ||
3 | .23 | Amended Certificate of Incorporation of FIS Tax Services, Inc. f/k/a Fidelity National Tax Services, Inc.(6) | ||
3 | .24 | Amended and Restated Bylaws of FIS Tax Services, Inc. f/k/a Fidelity National Tax Services, Inc.(6) | ||
3 | .25 | Amended Certificate of Organization of FIS Valuation Solutions, LLC f/k/a Hansen Quality, LLC(6) | ||
3 | .26 | Operating Agreement of Organization of FIS Valuation Solutions, LLC f/k/a Hansen Quality, LLC(6) | ||
3 | .27 | Certificate of Formation of FNIS Flood Group, LLC(6) | ||
3 | .28 | Amended and Restated Operating Agreement of FNIS Flood Group, LLC(6) | ||
3 | .29 | Certificate of Formation of FNIS Flood of California, LLC(6) | ||
3 | .30 | Operating Agreement of FNIS Flood of California, LLC(6) | ||
3 | .31 | Certificate of Incorporation of FNIS Intellectual Property Holdings, Inc.(6) | ||
3 | .32 | Amended and Restated Bylaws of FNIS Intellectual Property Holdings, Inc.(6) | ||
3 | .33 | Certificate of Incorporation of FNIS Services, Inc.(6) | ||
3 | .34 | Amended and Restated Bylaws of FNIS Services, Inc.(6) | ||
3 | .35 | Amended Certificate of Incorporation of Geotrac, Inc.(6) | ||
3 | .36 | Amended and Restated Bylaws of Geotrac, Inc.(6) |
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Exhibit | ||||
Number | Description | |||
3 | .37 | Certificate of Organization of Indiana Residential Nominee Services, LLC(6) | ||
3 | .38 | Amended Amended and Restated Operating Agreement of Indiana Residential Nominee Services, LLC(6) | ||
3 | .39 | Amended Certificate of Incorporation of Investment Property Exchange Services, Inc.(6) | ||
3 | .40 | Bylaws of Investment Property Exchange Services, Inc.(6) | ||
3 | .41 | Amended Certificate of Incorporation of Lender’s Service Title Agency, Inc.(6) | ||
3 | .42 | Amended and Restated Bylaws of Lender’s Service Title Agency, Inc.(6) | ||
3 | .43 | Amended Certificate of Incorporation of LPS Agency Sales and Posting, Inc.(6) | ||
3 | .44 | Amended and Restated Bylaws of LPS Agency Sales and Posting, Inc.(6) | ||
3 | .45 | Amended Certificate of Incorporation of LPS Asset Management Solutions, Inc.(6) | ||
3 | .46 | Amended and Restated Bylaws of LPS Asset Management Solutions, Inc.(6) | ||
3 | .47 | Amended Certificate of Incorporation of LPS Field Services, Inc.(6) | ||
3 | .48 | Amended and Restated Bylaws of LPS Field Services, Inc.(6) | ||
3 | .49 | Amended Certificate of Incorporation of LPS Foreclosure Solutions, Inc.(6) | ||
3 | .50 | Amended and Restated Bylaws of LPS Foreclosure Solutions, Inc.(6) | ||
3 | .51 | Certificate of Formation of LPS IP Holding Company, LLC(6) | ||
3 | .52 | Operating Agreement of LPS IP Holding Company, LLC(6) | ||
3 | .53 | Certificate of Formation of LPS Management, LLC(6) | ||
3 | .54 | Operating Agreement of LPS Management, LLC(6) | ||
3 | .55 | Amended Certificate of Incorporation of LPS Mortgage Processing Solutions, Inc.(6) | ||
3 | .56 | Bylaws of LPS Mortgage Processing Solutions, Inc.(6) | ||
3 | .57 | Amended Certificate of Limited Partnership of LPS National Flood, LP(6) | ||
3 | .58 | Limited Partnership Agreement of LPS National Flood, LP(6) | ||
3 | .59 | Amended Certificate of Formation of LPS Portfolio Solutions, LLC(6) | ||
3 | .60 | Operating Agreement of LPS Portfolio Solutions, LLC(6) | ||
3 | .61 | Certificate of Incorporation of LRT Record Services, Inc.(6) | ||
3 | .62 | Amended and Restated Bylaws of LRT Record Services, Inc.(6) | ||
3 | .63 | Certificate of Organization of LSI Alabama, LLC(6) | ||
3 | .64 | Amended Operating Agreement of LSI Alabama, LLC(6) | ||
3 | .65 | Certificate of Formation of LSI Appraisal, LLC(6) | ||
3 | .66 | Amended and Restated Operating Agreement of LSI Appraisal, LLC(6) | ||
3 | .67 | Certificate of Incorporation of LSI Maryland, Inc.(6) | ||
3 | .68 | Amended and Restated Bylaws of LSI Maryland, Inc.(6) | ||
3 | .69 | Certificate of Incorporation of LSI Title Agency, Inc.(6) | ||
3 | .70 | Amended and Restated Bylaws of LSI Title Agency, Inc.(6) | ||
3 | .71 | Amended Amended and Restated Certificate of Incorporation of LSI Title Company(6) | ||
3 | .72 | Amended and Restated Bylaws of LSI Title Company(6) | ||
3 | .73 | Certificate of Organization of LSI Title Company of Oregon, LLC(6) | ||
3 | .74 | Operating Agreement of LSI Title Company of Oregon, LLC(6) | ||
3 | .75 | Certificate of Incorporation of LSI Title Insurance Agency of Utah, Inc.(6) | ||
3 | .76 | Bylaws of LSI Title Insurance Agency of Utah, Inc.(6) | ||
3 | .77 | Amended Certificate of Organization of Maine Residential Nominee Services, LLC(6) | ||
3 | .78 | Amended and Restated Operating Agreement of Maine Residential Nominee Services, LLC(6) | ||
3 | .79 | Amended Certificate of Organization of Massachusetts Residential Nominee Services, LLC(6) |
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Exhibit | ||||
Number | Description | |||
3 | .80 | Amended and Restated Operating Agreement of Massachusetts Residential Nominee Services, LLC(6) | ||
3 | .81 | Certificate of Organization of McDash Analytics, LLC(6) | ||
3 | .82 | Amended and Restated Operating Agreement of McDash Analytics, LLC(6) | ||
3 | .83 | Certificate of Incorporation of National Residential Nominee Services, Inc.(6) | ||
3 | .84 | Bylaws of National Residential Nominee Services, Inc.(6) | ||
3 | .85 | Certificate of Incorporation of National Safe Harbor Exchanges(6) | ||
3 | .86 | Bylaws of National Safe Harbor Exchanges(6) | ||
3 | .87 | Certificate of Organization of NewInvoice, LLC(6) | ||
3 | .88 | Amended and Restated Operating Agreement of NewInvoice, LLC(6) | ||
3 | .89 | Certificate of Organization of OnePointCity, LLC(6) | ||
3 | .90 | Operating Agreement of OnePointCity, LLC(6) | ||
3 | .91 | Certificate of Formation of SoftPro, LLC(6) | ||
3 | .92 | Operating Agreement of SoftPro, LLC(6) | ||
3 | .93 | Certificate of Incorporation of Strategic Property Investments, Inc.(6) | ||
3 | .94 | Bylaws of Strategic Property Investments, Inc.(6) | ||
3 | .95 | Amended Certificate of Organization of Vermont Residential Nominee Services, LLC(6) | ||
3 | .96 | Amended and Restated Operating Agreement of Vermont Residential Nominee Services, LLC(6) | ||
4 | .1 | Indenture, dated as of July 2, 2008, among Lender Processing Services, Inc., the guarantors parties thereto and U.S. Bank National Association, Corporate Trust Services, as Trustee(2) | ||
4 | .2 | Registration Rights Agreement, dated July 2, 2008, among Lender Processing Services, Inc., the guarantors parties thereto and J.P. Morgan Securities Inc., Banc of America Securities LLC and Wachovia Capital Markets, LLC, as representatives of the several initial purchasers(2) | ||
4 | .3 | Form of 8.125% Senior Note Due 2016(6) | ||
5 | .1 | Opinion of Dewey & LeBoeuf LLP(6) | ||
10 | .1 | Tax Disaffiliation Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
10 | .2 | Form of Employee Matters Agreement(3) | ||
10 | .3 | Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
10 | .4 | Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Financial, Inc.(1) | ||
10 | .5 | Credit Agreement, dated as of July 2, 2008, among Lender Processing Services, Inc., the lenders parties thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer(2) | ||
10 | .6 | Lender Processing Services, Inc. Annual Incentive Plan(1) | ||
10 | .7 | Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(1) | ||
10 | .8 | Lender Processing Services, Inc. Employee Stock Purchase Plan(1) | ||
10 | .9 | Lender Processing Services, Inc. Deferred Compensation Plan(1) | ||
10 | .10 | Lender Processing Services, Inc. Executive Life and Supplemental Retirement Benefit Plan(1) | ||
10 | .11 | Lender Processing Services, Inc. Special Supplemental Executive Retirement Plan(1) | ||
10 | .12 | Form of Notice of Restricted Stock Grant and Restricted Stock Award Agreement under Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(4) | ||
10 | .13 | Form of Notice of Stock Option Grant and Stock Option Agreement under Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(4) | ||
10 | .14 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Jeffrey S. Carbiener(4) |
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Exhibit | ||||
Number | Description | |||
10 | .15 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Francis K. Chan(4) | ||
10 | .16 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Daniel T. Scheuble(4) | ||
10 | .17 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Eric D. Swenson(4) | ||
12 | .1 | Statement of Computation of Ratio of Earnings to Fixed Charges(6) | ||
21 | .1 | Subsidiaries of Lender Processing Services, Inc.(6) | ||
23 | .1 | Consent of KPMG LLP, Independent Registered Public Accounting Firm(6) | ||
23 | .2 | Consent of Counsel (included in Exhibit 5.1)(6) | ||
24 | .1 | Powers of Attorney of certain officers and directors of Lender Processing Services, Inc. (included on the signature pages to the Registration Statement)(6) | ||
25 | .1 | Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association, Corporate Trust Services, as trustee(6) | ||
99 | .1 | Form of Letter of Transmittal and Consent(6) | ||
99 | .2 | Form of Notice of Guaranteed Delivery(6) | ||
99 | .3 | Form of Instructions to Registered Holder and/or Book Entry Transfer Participant from Beneficial Owner(6) | ||
99 | .4 | Exchange Agreement, dated as of June 18, 2008, among Fidelity National Information Services, Inc., JPMorgan Chase Bank, N.A., Bank of America, N.A., Wachovia Bank, National Association, J.P. Morgan Securities Inc., Banc of America Securities LLC, Wachovia Capital Markets, LLC and, solely with respect to certain sections thereof, Lender Processing Services, Inc.(1) | ||
99 | .5 | Reverse Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
99 | .6 | Aircraft Interchange Agreement, dated as of July 2, 2008, among Fidelity National Financial, Inc., Fidelity National Information Services, Inc. and Lender Processing Services, Inc.(1) | ||
99 | .7 | Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as landlord, and Fidelity National Information Services, Inc., as tenant(1) | ||
99 | .8 | Master Information Technology and Application Development Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Financial, Inc.(1) | ||
99 | .9 | Property Management Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as property manager, and Fidelity National Financial, Inc., as property owner(1) | ||
99 | .10 | Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as landlord, and Fidelity National Financial, Inc., as tenant(1) | ||
99 | .11 | Sublease Agreement, dated as of June 13, 2008, between Fidelity National Financial, Inc., as sublessor, and Lender Processing Services, Inc., as sublessee(1) | ||
99 | .12 | Software License Agreement dated as of June 1, 2006 between Fidelity National Financial, Inc. (f/k/a Fidelity National Title Group, Inc.) and Fidelity Information Services, Inc., and its SoftPro division, as assigned to SoftPro, LLC, a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .13 | Amended and Restated eLender Services Agreement dated as of March 4, 2005 among Fidelity National Financial, Inc. (f/k/a Fidelity National Title Group, Inc.) and Rocky Mountain Support Services, Inc., a subsidiary of Fidelity National Financial, Inc., on the one hand, and LSI Title Company, a subsidiary of Lender Processing Services, Inc., and Fidelity National Information Services, LLC, as assigned to Lender Processing Services, Inc., on the other hand.(3) | ||
99 | .14 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company, a subsidiary of Lender Processing Services, Inc.(5) |
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Exhibit | ||||
Number | Description | |||
99 | .15 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .16 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and Lender’s Service Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .17 | Issuing Agency Contract dated as of August 9, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Alabama, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .18 | Issuing Agency Contract dated as of February 8, 2005 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company of Oregon, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .19 | Issuing Agency Contract dated as of August 22, 2006 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Agency of Utah, Inc., a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .20 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .21 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .22 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and Lender’s Service Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .23 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Alabama, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .24 | Issuing Agency Contract dated as of February 24, 2005 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company of Oregon, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .12 | Issuing Agency Contract dated as of August 28, 2006 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Agency of Utah, Inc., a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .12 | Tax Service Agreement dated as of June 20, 2005 between FIS Tax Service, Inc., a subsidiary of Lender Processing Services, Inc., and Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc. (together with a schedule describing other substantially identical Tax Service Agreements dated various dates from 2002 to 2006 between FIS Tax Service, Inc. and various title insurance subsidiaries of Fidelity National Financial, Inc.)(3) | ||
99 | .12 | Flood Zone Determination Agreement dated as of December 28, 2004 between FNIS Flood Services, L.P., a subsidiary of Lender Processing Services, Inc., and Ticor Title Insurance Company, a subsidiary of Fidelity National Financial, Inc.(3) | ||
99 | .12 | National Master Services Agreement dated as of November 1, 2006 between Property Insight LLC, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Company, a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .12 | Flood Zone Determination Agreement dated as of September 1, 2006 between FNIS Flood Services, L.P., through its LSI Flood Services division, a subsidiary of Lender Processing Services, Inc., and Fidelity National Insurance Services, a subsidiary of Fidelity National Financial, Inc.(3) | ||
99 | .12 | Title Production Services Agreement dated as of June 5, 2007 between Property Insight LLC, a subsidiary of Fidelity National Financial, Inc., and Fidelity National Default Solutions, Inc., a subsidiary of Lender Processing Services, Inc.(3) |
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(1) | Incorporated by reference to the Current Report onForm 8-K of Lender Processing Services, Inc.(File No. 001-34005) filed on July 9, 2008 | |
(2) | Incorporated by reference to the Registration Statement onForm S-8 of Lender Processing Services, Inc. (FileNo. 333-152177) filed on July 8, 2008 | |
(3) | Incorporated by reference to the Registration Statement on Form 10 of Lender Processing Services, Inc. (FileNo. 001-34005) filed on March 27, 2008, as amended | |
(4) | Incorporated by reference to the Current Report onForm 8-K of Lender Processing Services, Inc.(File No. 001-34005) filed on August 14, 2008 | |
(5) | Incorporated by reference to the Registration Statement onForm S-1 of Fidelity National Financial, Inc. (FileNo. 333-126402) filed on September 26, 2005 |
(6) | Previously filed |
ITEM 22. | UNDERTAKINGS |
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By: | /s/ Jeffrey S. Carbiener |
Title: | President and Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | President and Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* William P. Foley, II | Chairman | September 5, 2008 | ||||
* Marshall Haines | Director | September 5, 2008 | ||||
* James K. Hunt | Director | September 5, 2008 | ||||
* Lee A. Kennedy | Director | September 5, 2008 | ||||
* Daniel D. (Ron) Lane | Director | September 5, 2008 | ||||
* Cary H. Thompson | Director | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-10
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
II-11
Table of Contents
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Todd C. Johnson | Director | September 5, 2008 | ||||
* Eric D. Swenson | Director | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. Chan Attorney-in-fact |
II-12
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of LPS Mortgage Processing Solutions, Inc., the Managing Member of the above-named companies | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. Chan Attorney-in-fact |
II-13
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of LPS Foreclosure Solutions, Inc., the Managing Member of the above-named companies | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. Chan Attorney-in-fact |
II-14
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of National Residential Nominee Services, Inc., the Manager of the above-named companies | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-15
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of LSI Title Company, the Managing Member of the above-named companies | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-16
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of FNIS Flood Group, LLC, the Managing Member of the above-named company | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-17
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of LSI Title Agency, Inc., the Managing Member of the above-named company | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-18
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of Geotrac, Inc., the Managing Member of the above-named company | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-19
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Todd C. Johnson | Manager | September 5, 2008 | ||||
* Eric D. Swenson | Manager | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-20
Table of Contents
By: | /s/ Jeffrey S. Carbiener |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
* Jeffrey S. Carbiener | Chief Executive Officer (Principal Executive Officer) | September 5, 2008 | ||||
* Francis K. Chan | Chief Financial Officer (Principal Financial and Accounting Officer) | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of FNIS Flood Group, LLC, the General Partner of the above-named partnership | September 5, 2008 | ||||
* Jeffrey S. Carbiener | Chief Executive Officer of FNIS Flood of California, LLC, the Limited Partner of the above-named partnership | September 5, 2008 | ||||
*By: | /s/ Francis K. Chan Francis K. ChanAttorney-in-fact |
II-21
Table of Contents
Exhibit | ||||
Number | Description | |||
2 | .1 | Contribution and Distribution Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
3 | .1 | Amended and Restated Certificate of Incorporation of Lender Processing Services, Inc.(2) | ||
3 | .2 | Amended and Restated Bylaws of Lender Processing Services, Inc.(2) | ||
3 | .3 | Amended Certificate of Incorporation of A.S.A.P. Legal Publication Services, Inc.(6) | ||
3 | .4 | Amended and Restated Bylaws of A.S.A.P. Legal Publication Services, Inc.(6) | ||
3 | .5 | Certificate of Incorporation of Aptitude Solutions, Inc.(6) | ||
3 | .6 | Bylaws of Aptitude Solutions, Inc.(6) | ||
3 | .7 | Certificate of Incorporation of Arizona Sales and Posting, Inc.(6) | ||
3 | .8 | Amended and Restated Bylaws of Arizona Sales and Posting, Inc.(6) | ||
3 | .9 | Amended Certificate of Incorporation of Chase Vehicle Exchange, Inc.(6) | ||
3 | .10 | Bylaws of Chase Vehicle Exchange, Inc.(6) | ||
3 | .11 | Amended Certificate of Organization of DOCX, LLC(6) | ||
3 | .12 | Amended and Restated Operating Agreement of DOCX, LLC(6) | ||
3 | .13 | Amended Certificate of Incorporation of Espiel, Inc.(6) | ||
3 | .14 | Bylaws of Espiel, Inc.(6) | ||
3 | .15 | Amended Certificate of Incorporation of Fidelity National Loan Portfolio Services, Inc.(6) | ||
3 | .16 | Amended Bylaws of Fidelity National Loan Portfolio Services, Inc.(6) | ||
3 | .17 | Amended Certificate of Incorporation of Financial Systems Integrators, Inc.(6) | ||
3 | .18 | Bylaws of Financial Systems Integrators, Inc.(6) | ||
3 | .19 | Certificate of Formation of FIS Capital Markets, LLC(6) | ||
3 | .20 | Operating Agreement of FIS Capital Markets, LLC(6) | ||
3 | .21 | Amended Certificate of Incorporation of FIS Data Services, Inc.(6) | ||
3 | .22 | Amended and Restated Bylaws of FIS Data Services, Inc.(6) | ||
3 | .23 | Amended Certificate of Incorporation of FIS Tax Services, Inc. f/k/a Fidelity National Tax Services, Inc.(6) | ||
3 | .24 | Amended and Restated Bylaws of FIS Tax Services, Inc. f/k/a Fidelity National Tax Services, Inc.(6) | ||
3 | .25 | Amended Certificate of Organization of FIS Valuation Solutions, LLC f/k/a Hansen Quality, LLC(6) | ||
3 | .26 | Operating Agreement of Organization of FIS Valuation Solutions, LLC f/k/a Hansen Quality, LLC(6) | ||
3 | .27 | Certificate of Formation of FNIS Flood Group, LLC(6) | ||
3 | .28 | Amended and Restated Operating Agreement of FNIS Flood Group, LLC(6) | ||
3 | .29 | Certificate of Formation of FNIS Flood of California, LLC(6) | ||
3 | .30 | Operating Agreement of FNIS Flood of California, LLC(6) | ||
3 | .31 | Certificate of Incorporation of FNIS Intellectual Property Holdings, Inc.(6) | ||
3 | .32 | Amended and Restated Bylaws of FNIS Intellectual Property Holdings, Inc.(6) | ||
3 | .33 | Certificate of Incorporation of FNIS Services, Inc.(6) | ||
3 | .34 | Amended and Restated Bylaws of FNIS Services, Inc.(6) | ||
3 | .35 | Amended Certificate of Incorporation of Geotrac, Inc.(6) | ||
3 | .36 | Amended and Restated Bylaws of Geotrac, Inc.(6) | ||
3 | .37 | Certificate of Organization of Indiana Residential Nominee Services, LLC(6) | ||
3 | .38 | Amended Amended and Restated Operating Agreement of Indiana Residential Nominee Services, LLC(6) | ||
3 | .39 | Amended Certificate of Incorporation of Investment Property Exchange Services, Inc.(6) | ||
3 | .40 | Bylaws of Investment Property Exchange Services, Inc.(6) | ||
3 | .41 | Amended Certificate of Incorporation of Lender’s Service Title Agency, Inc.(6) |
Table of Contents
Exhibit | ||||
Number | Description | |||
3 | .42 | Amended and Restated Bylaws of Lender’s Service Title Agency, Inc.(6) | ||
3 | .43 | Amended Certificate of Incorporation of LPS Agency Sales and Posting, Inc.(6) | ||
3 | .44 | Amended and Restated Bylaws of LPS Agency Sales and Posting, Inc.(6) | ||
3 | .45 | Amended Certificate of Incorporation of LPS Asset Management Solutions, Inc.(6) | ||
3 | .46 | Amended and Restated Bylaws of LPS Asset Management Solutions, Inc.(6) | ||
3 | .47 | Amended Certificate of Incorporation of LPS Field Services, Inc.(6) | ||
3 | .48 | Amended and Restated Bylaws of LPS Field Services, Inc.(6) | ||
3 | .49 | Amended Certificate of Incorporation of LPS Foreclosure Solutions, Inc.(6) | ||
3 | .50 | Amended and Restated Bylaws of LPS Foreclosure Solutions, Inc.(6) | ||
3 | .51 | Certificate of Formation of LPS IP Holding Company, LLC(6) | ||
3 | .52 | Operating Agreement of LPS IP Holding Company, LLC(6) | ||
3 | .53 | Certificate of Formation of LPS Management, LLC(6) | ||
3 | .54 | Operating Agreement of LPS Management, LLC(6) | ||
3 | .55 | Amended Certificate of Incorporation of LPS Mortgage Processing Solutions, Inc.(6) | ||
3 | .56 | Bylaws of LPS Mortgage Processing Solutions, Inc.(6) | ||
3 | .57 | Amended Certificate of Limited Partnership of LPS National Flood, LP(6) | ||
3 | .58 | Limited Partnership Agreement of LPS National Flood, LP(6) | ||
3 | .59 | Amended Certificate of Formation of LPS Portfolio Solutions, LLC(6) | ||
3 | .60 | Operating Agreement of LPS Portfolio Solutions, LLC(6) | ||
3 | .61 | Certificate of Incorporation of LRT Record Services, Inc.(6) | ||
3 | .62 | Amended and Restated Bylaws of LRT Record Services, Inc.(6) | ||
3 | .63 | Certificate of Organization of LSI Alabama, LLC(6) | ||
3 | .64 | Amended Operating Agreement of LSI Alabama, LLC(6) | ||
3 | .65 | Certificate of Formation of LSI Appraisal, LLC(6) | ||
3 | .66 | Amended and Restated Operating Agreement of LSI Appraisal, LLC(6) | ||
3 | .67 | Certificate of Incorporation of LSI Maryland, Inc.(6) | ||
3 | .68 | Amended and Restated Bylaws of LSI Maryland, Inc.(6) | ||
3 | .69 | Certificate of Incorporation of LSI Title Agency, Inc.(6) | ||
3 | .70 | Amended and Restated Bylaws of LSI Title Agency, Inc.(6) | ||
3 | .71 | Amended Amended and Restated Certificate of Incorporation of LSI Title Company(6) | ||
3 | .72 | Amended and Restated Bylaws of LSI Title Company(6) | ||
3 | .73 | Certificate of Organization of LSI Title Company of Oregon, LLC(6) | ||
3 | .74 | Operating Agreement of LSI Title Company of Oregon, LLC(6) | ||
3 | .75 | Certificate of Incorporation of LSI Title Insurance Agency of Utah, Inc.(6) | ||
3 | .76 | Bylaws of LSI Title Insurance Agency of Utah, Inc.(6) | ||
3 | .77 | Amended Certificate of Organization of Maine Residential Nominee Services, LLC(6) | ||
3 | .78 | Amended and Restated Operating Agreement of Maine Residential Nominee Services, LLC(6) | ||
3 | .79 | Amended Certificate of Organization of Massachusetts Residential Nominee Services, LLC(6) | ||
3 | .80 | Amended and Restated Operating Agreement of Massachusetts Residential Nominee Services, LLC(6) | ||
3 | .81 | Certificate of Organization of McDash Analytics, LLC(6) | ||
3 | .82 | Amended and Restated Operating Agreement of McDash Analytics, LLC(6) | ||
3 | .83 | Certificate of Incorporation of National Residential Nominee Services, Inc.(6) | ||
3 | .84 | Bylaws of National Residential Nominee Services, Inc.(6) | ||
3 | .85 | Certificate of Incorporation of National Safe Harbor Exchanges(6) | ||
3 | .86 | Bylaws of National Safe Harbor Exchanges(6) |
Table of Contents
Exhibit | ||||
Number | Description | |||
3 | .87 | Certificate of Organization of NewInvoice, LLC(6) | ||
3 | .88 | Amended and Restated Operating Agreement of NewInvoice, LLC(6) | ||
3 | .89 | Certificate of Organization of OnePointCity, LLC(6) | ||
3 | .90 | Operating Agreement of OnePointCity, LLC(6) | ||
3 | .91 | Certificate of Formation of SoftPro, LLC(6) | ||
3 | .92 | Operating Agreement of SoftPro, LLC(6) | ||
3 | .93 | Certificate of Incorporation of Strategic Property Investments, Inc.(6) | ||
3 | .94 | Bylaws of Strategic Property Investments, Inc.(6) | ||
3 | .95 | Amended Certificate of Organization of Vermont Residential Nominee Services, LLC(6) | ||
3 | .96 | Amended and Restated Operating Agreement of Vermont Residential Nominee Services, LLC(6) | ||
4 | .1 | Indenture, dated as of July 2, 2008, among Lender Processing Services, Inc., the guarantors parties thereto and U.S. Bank National Association, Corporate Trust Services, as Trustee(2) | ||
4 | .2 | Registration Rights Agreement, dated July 2, 2008, among Lender Processing Services, Inc., the guarantors parties thereto and J.P. Morgan Securities Inc., Banc of America Securities LLC and Wachovia Capital Markets, LLC, as representatives of the several initial purchasers(2) | ||
4 | .3 | Form of 8.125% Senior Note Due 2016(6) | ||
5 | .1 | Opinion of Dewey & LeBoeuf LLP(6) | ||
10 | .1 | Tax Disaffiliation Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
10 | .2 | Form of Employee Matters Agreement(3) | ||
10 | .3 | Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
10 | .4 | Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Financial, Inc.(1) | ||
10 | .5 | Credit Agreement, dated as of July 2, 2008, among Lender Processing Services, Inc., the lenders parties thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer(2) | ||
10 | .6 | Lender Processing Services, Inc. Annual Incentive Plan(1) | ||
10 | .7 | Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(1) | ||
10 | .8 | Lender Processing Services, Inc. Employee Stock Purchase Plan(1) | ||
10 | .9 | Lender Processing Services, Inc. Deferred Compensation Plan(1) | ||
10 | .10 | Lender Processing Services, Inc. Executive Life and Supplemental Retirement Benefit Plan(1) | ||
10 | .11 | Lender Processing Services, Inc. Special Supplemental Executive Retirement Plan(1) | ||
10 | .12 | Form of Notice of Restricted Stock Grant and Restricted Stock Award Agreement under Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(4) | ||
10 | .13 | Form of Notice of Stock Option Grant and Stock Option Agreement under Lender Processing Services, Inc. 2008 Omnibus Incentive Plan(4) | ||
10 | .14 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Jeffrey S. Carbiener(4) | ||
10 | .15 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Francis K. Chan(4) | ||
10 | .16 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Daniel T. Scheuble(4) | ||
10 | .17 | Employment Agreement dated August 8, 2008 between Lender Processing Services, Inc. and Eric D. Swenson(4) | ||
12 | .1 | Statement of Computation of Ratio of Earnings to Fixed Charges(6) | ||
21 | .1 | Subsidiaries of Lender Processing Services, Inc.(6) | ||
23 | .1 | Consent of KPMG LLP, Independent Registered Public Accounting Firm(6) |
Table of Contents
Exhibit | ||||
Number | Description | |||
23 | .2 | Consent of Counsel (included in Exhibit 5.1)(6) | ||
24 | .1 | Powers of Attorney of certain officers and directors of Lender Processing Services, Inc. (included on the signature pages to the Registration Statement)(6) | ||
25 | .1 | Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association, Corporate Trust Services, as trustee(6) | ||
99 | .1 | Form of Letter of Transmittal and Consent(6) | ||
99 | .2 | Form of Notice of Guaranteed Delivery(6) | ||
99 | .3 | Form of Instructions to Registered Holder and/or Book Entry Transfer Participant from Beneficial Owner(6) | ||
99 | .4 | Exchange Agreement, dated as of June 18, 2008, among Fidelity National Information Services, Inc., JPMorgan Chase Bank, N.A., Bank of America, N.A., Wachovia Bank, National Association, J.P. Morgan Securities Inc., Banc of America Securities LLC, Wachovia Capital Markets, LLC and, solely with respect to certain sections thereof, Lender Processing Services, Inc.(1) | ||
99 | .5 | Reverse Corporate and Transitional Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.(1) | ||
99 | .6 | Aircraft Interchange Agreement, dated as of July 2, 2008, among Fidelity National Financial, Inc., Fidelity National Information Services, Inc. and Lender Processing Services, Inc.(1) | ||
99 | .7 | Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as landlord, and Fidelity National Information Services, Inc., as tenant(1) | ||
99 | .8 | Master Information Technology and Application Development Services Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Financial, Inc.(1) | ||
99 | .9 | Property Management Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as property manager, and Fidelity National Financial, Inc., as property owner(1) | ||
99 | .10 | Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc., as landlord, and Fidelity National Financial, Inc., as tenant(1) | ||
99 | .11 | Sublease Agreement, dated as of June 13, 2008, between Fidelity National Financial, Inc., as sublessor, and Lender Processing Services, Inc., as sublessee(1) | ||
99 | .12 | Software License Agreement dated as of June 1, 2006 between Fidelity National Financial, Inc. (f/k/a Fidelity National Title Group, Inc.) and Fidelity Information Services, Inc., and its SoftPro division, as assigned to SoftPro, LLC, a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .13 | Amended and Restated eLender Services Agreement dated as of March 4, 2005 among Fidelity National Financial, Inc. (f/k/a Fidelity National Title Group, Inc.) and Rocky Mountain Support Services, Inc., a subsidiary of Fidelity National Financial, Inc., on the one hand, and LSI Title Company, a subsidiary of Lender Processing Services, Inc., and Fidelity National Information Services, LLC, as assigned to Lender Processing Services, Inc., on the other hand.(3) | ||
99 | .14 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .15 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .16 | Issuing Agency Contract dated as of July 22, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and Lender’s Service Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .17 | Issuing Agency Contract dated as of August 9, 2004 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Alabama, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .18 | Issuing Agency Contract dated as of February 8, 2005 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company of Oregon, LLC, a subsidiary of Lender Processing Services, Inc.(5) |
Table of Contents
Exhibit | ||||
Number | Description | |||
99 | .19 | Issuing Agency Contract dated as of August 22, 2006 between Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Agency of Utah, Inc., a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .20 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .21 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .22 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and Lender’s Service Title Agency, Inc., a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .23 | Issuing Agency Contract dated as of September 28, 2004 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Alabama, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .24 | Issuing Agency Contract dated as of February 24, 2005 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Company of Oregon, LLC, a subsidiary of Lender Processing Services, Inc.(5) | ||
99 | .12 | Issuing Agency Contract dated as of August 28, 2006 between Fidelity National Title Insurance Company, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Agency of Utah, Inc., a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .12 | Tax Service Agreement dated as of June 20, 2005 between FIS Tax Service, Inc., a subsidiary of Lender Processing Services, Inc., and Chicago Title Insurance Company, a subsidiary of Fidelity National Financial, Inc. (together with a schedule describing other substantially identical Tax Service Agreements dated various dates from 2002 to 2006 between FIS Tax Service, Inc. and various title insurance subsidiaries of Fidelity National Financial, Inc.)(3) | ||
99 | .12 | Flood Zone Determination Agreement dated as of December 28, 2004 between FNIS Flood Services, L.P., a subsidiary of Lender Processing Services, Inc., and Ticor Title Insurance Company, a subsidiary of Fidelity National Financial, Inc.(3) | ||
99 | .12 | National Master Services Agreement dated as of November 1, 2006 between Property Insight LLC, a subsidiary of Fidelity National Financial, Inc., and LSI Title Insurance Company, a subsidiary of Lender Processing Services, Inc.(3) | ||
99 | .12 | Flood Zone Determination Agreement dated as of September 1, 2006 between FNIS Flood Services, L.P., through its LSI Flood Services division, a subsidiary of Lender Processing Services, Inc., and Fidelity National Insurance Services, a subsidiary of Fidelity National Financial, Inc.(3) | ||
99 | .12 | Title Production Services Agreement dated as of June 5, 2007 between Property Insight LLC, a subsidiary of Fidelity National Financial, Inc., and Fidelity National Default Solutions, Inc., a subsidiary of Lender Processing Services, Inc.(3) |
(1) | Incorporated by reference to the Current Report onForm 8-K of Lender Processing Services, Inc.(File No. 001-34005) filed on July 9, 2008 | |
(2) | Incorporated by reference to the Registration Statement onForm S-8 of Lender Processing Services, Inc. (FileNo. 333-152177) filed on July 8, 2008 | |
(3) | Incorporated by reference to the Registration Statement on Form 10 of Lender Processing Services, Inc. (FileNo. 001-34005) filed on March 27, 2008, as amended | |
(4) | Incorporated by reference to the Current Report onForm 8-K of Lender Processing Services, Inc.(File No. 001-34005) filed on August 14, 2008 | |
(5) | Incorporated by reference to the Registration Statement onForm S-1 of Fidelity National Financial, Inc. (FileNo. 333-126402) filed on September 26, 2005 |
(6) | Previously filed |