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Lender Processing Services Reports Fourth Quarter and Full Year 2011 Earnings
Fiscal year adjusted earnings per diluted share of $2.68 and free cash flow of $381 million

JACKSONVILLE, Fla., Feb. 13, 2012 /PRNewswire/ -- Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced financial results for the fourth quarter and full year 2011.

"Today, LPS is a different and improved company. In 2011, we took the right steps to strengthen our core business and improve accountability in our operations by enhancing our management team," said Hugh Harris, president and chief executive officer of LPS. "LPS has a significant opportunity to leverage our technologies and services and capitalize on our leading market positions, strong client relationships and expertise. Our priorities in 2012 are to continue to deliver outstanding service and technology solutions to our customers, demonstrate our commitment to operational excellence and leverage our strong cash flow to build shareholder value."

Fiscal Year 2011

  • Revenue of $2.1 billion
  • GAAP earnings of $96.5 million or $1.13 per diluted share reflecting a charge of $1.42 per share, including a reserve for legal and regulatory actions and for exiting non-core businesses
  • Adjusted earnings per diluted share of $2.68 excluding the fiscal year charge and reflecting the add back for purchase amortization
  • Adjusted free cash flow of $381.2 million

Fourth Quarter 2011

  • Revenue of $533.8 million
  • GAAP net loss of $21.2 million or $0.25 per diluted share reflecting a charge of $0.94 per share, including a reserve for legal and regulatory actions and for exiting non-core businesses
  • Adjusted earnings per diluted share of $0.72 excluding the fourth quarter charge and reflecting the add back for purchase amortization
  • Adjusted free cash flow of $121.5 million

Expanded Customer Relationships

  • Signed 7 new MSP customers and 15 new Desktop technology customers in 2011
  • 8 of the top 10 mortgage institutions now use MSP and/or Desktop technology
  • Developed technology solutions critical to helping customers with compliance requirements

"Although 2011 was a very challenging year, we generated solid earnings - adjusted EBITDA margin of 25 percent - and strong free cash flow," commented Tom Schilling, chief financial officer. "Our Technology, Data and Analytics segment grew revenue and EBITDA for the third consecutive year. We continued to gain market share in our Loan Transaction Services segment, although revenue declined due to lower industry volumes in both mortgage refinance originations and notices of default."

Fourth quarter results are adjusted for a pretax charge of $131.7 million, or $0.94 per diluted share, including $0.63 per share related to estimated legal and regulatory contingencies, $0.18 per share related to exiting non-core businesses, and $0.21 per share related to other non-recurring charges, partially offset by an $0.08 per share income tax benefit. The non-core businesses that were discontinued in the fourth quarter generated revenue of $51 million and an adjusted operating loss of $18 million in fiscal year 2011.

($ in millions, except EPS)



Sequential


Full Year

GAAP

Q411

Q311

%PQ


FY11

FY10

%YOY

Revenue

$ 545.8

$ 532.1

2.6%


$ 2,141.5

$ 2,420.8

-11.5%

Q4 Discontinued Operations

12.0

12.7

-5.3%


51.4

44.0

16.8%

Revenue from Continuing Operations

533.8

519.4

2.8%


2,090.1

2,376.9

-12.1%









Operating Income

4.9

94.2

-94.8%


290.2

580.1

-50.0%

Net Earnings (Loss)

(21.2)

40.5

nm


96.5

302.3

-68.1%

EPS Diluted

$ (0.25)

$ 0.48

nm


$ 1.13

$ 3.23

-65.0%









Adjusted Results

Q411

Q311

%PQ


FY11

FY10

%YOY

Revenue

$ 533.8

$ 519.4

2.8%


$ 2,090.1

$ 2,376.9

-12.1%









Operating Income

111.1

94.2

18.0%


425.6

594.2

-28.4%

Adjusted Net Earnings

60.4

49.4

22.3%


228.9

326.4

-29.9%

EPS Diluted

$ 0.72

$ 0.59

22.0%


$ 2.68

$ 3.50

-23.4%



Consolidated Fourth Quarter and Full Year Performance

Fourth quarter 2011 revenue was $533.8 million, a decrease of 13.6% compared to the prior year quarter, due to lower origination and default volume in the Loan Transaction Services segment which was partially offset by higher revenue in the Technology, Data and Analytics segment. Sequentially, fourth quarter revenue increased 2.8% as a result of higher origination volumes in the Loan Transaction Services segment and higher revenue in the Technology, Data and Analytics segment. Adjusting for the charges noted earlier, fourth quarter 2011 operating income was $111.1 million, down from $148.8 million in the comparable period in 2010, due to lower revenue in the Loan Transaction Services segment and higher legal and compliance expenses. Adjusted net earnings were $60.4 million, or $0.72 per diluted share.

Full year 2011 revenue was $2.1 billion, down 12.1% from the prior year, due to lower origination and default volume in the Loan Transaction Services segment. Loan Facilitation Services revenue was $539.3 million, a 14.6% decrease from 2010 which compares favorably to the industry decline in total market refinancing volume of 22% as reported by the Mortgage Bankers Association (MBA). Default Services revenue was $816.2 million, a 23.0% decline from the prior year, which compares favorably to the RealtyTrac report of a 30.8% industry-wide decline in default notices as compared to the prior year. Adjusting for the charges recorded during 2011, full year operating income was $425.6 million down from $594.2 million in the comparable period in 2010. Adjusted net earnings were $228.9 million, or $2.68 per diluted share.

Net cash provided by operating activities for full year 2011 increased to $477.9 million from $448.7 million in 2010. Adjusted free cash flow (net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software) was $381.2 million compared to $342.0 million in 2010. Fourth quarter adjusted free cash flow of $121.5 million exceeded guidance as a result of higher net earnings and changes in working capital primarily resulting from continued reductions in accounts receivable. Additionally, in the fourth quarter the company reduced debt by $112.3 million to $1.1 billion.

Technology, Data and Analytics Segment

Fourth quarter 2011 revenue was $192.1 million, up 4.7% from the same period in 2010. Mortgage Processing revenue increased 5.8% to $106.1 million primarily due to increased professional services revenue, while Other Technology, Data and Analytics revenue increased 3.5% to $86.0 million as a result of several Desktop implementations completed in 2011. Adjusted operating income increased to $65.5 million from $63.6 million in the fourth quarter 2010 primarily due to higher contributions from Mortgage Processing.

Loan Transaction Services Segment

Fourth quarter 2011 revenue was $343.0 million, down 21.4% from the same period in 2010 as a result of lower transaction volumes. Loan Facilitation Services revenue was $156.4 million, down 15.6% from the fourth quarter 2010, as a result of a decline in refinancing volume year over year. Sequentially, Loan Facilitation Services revenue increased 13.3% as a result of higher refinancing volume. Default Services revenue was $186.6 million, down 25.7% from the prior year quarter and 6.0% sequentially, due to a continued slowdown in the initiation of mortgage foreclosure proceedings industry-wide. Fourth quarter adjusted operating income for the segment was $75.6 million down from $108.7 million in the prior year period, due to lower operating leverage resulting from reduced volumes.

Corporate and Other

Net corporate expenses in the fourth quarter of 2011, excluding the impact of the corporate portion of charges recorded in the fourth quarter totaling $100.4 million, increased to $30.0 million from $23.5 million in the prior year quarter primarily due to higher legal and compliance related expenses.

Outlook

Based on the current environment, the company expects first quarter 2012 revenue to be in the range of $470 million to $490 million and adjusted earnings per diluted share to be in the range of $0.50 to $0.55.

Use of Non-GAAP Financial Information

U.S. Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, LPS reports several non-GAAP measures, including "EBITDA" (GAAP operating income plus depreciation and amortization); "EBITDA, as adjusted" (EBITDA adjusted for the impact of certain non-recurring adjustments, if applicable); "EBIT, as adjusted" or "adjusted operating income" (GAAP operating income adjusted for the impact of certain non-recurring adjustments, if applicable); "adjusted net earnings" (GAAP net earnings adjusted for the impact of certain non-recurring adjustments, if applicable, plus the after-tax purchase price amortization of intangible assets added through acquisitions); "adjusted net earnings per diluted share" or "adjusted EPS per diluted share" (adjusted net earnings divided by diluted weighted average shares); and "adjusted free cash flow" (net cash provided by operating activities less additions to property, equipment and computer software, as well as non-recurring adjustments, if applicable). LPS provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring charges, and to better understand our financial performance, competitive position and future prospects. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.

Conference Call and Webcast

LPS will host a conference call to discuss these results today, Monday, February 13, 2012, at 5:00 p.m. ET. Interested parties are invited to listen to the live webcast by logging on to the Investor Relations section of the Company's website at http://www.lpsvcs.com/. Supplemental materials will be available on the website. Those wishing to participate via the conference call may do so by calling 866-823-5035. A replay of the webcast will be available on the website shortly after the call where it will be archived for one month. A replay of the conference call will be available through February 20, 2012, by dialing 888-203-1112 (access code: 6443271).

To access a printer-friendly version of this release and accompanying exhibits, go to LPS Investor Relations.

About Lender Processing Services

Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology, services and loan performance data and analytics to the mortgage, consumer lending, capital markets and real estate industries. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, workflow automation, portfolio retention and default, augmented by the company's award-winning customer support and professional services. Almost half of all U.S. mortgages are serviced using LPS' Mortgage Servicing Package (MSP). For more information about LPS, visit http://www.lpsvcs.com/.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to adapt our services to changes in technology or the marketplace; the impact of adverse changes in the level of real estate activity (including among others, loan originations and foreclosures) on demand for certain of our services; our ability to maintain and grow our relationships with our customers; the effects of our substantial leverage on our ability to make acquisitions and invest in our business; the level of scrutiny being placed on participants in the foreclosure process; risks associated with federal and state enforcement actions, inquiries and examinations currently underway or that may be commenced in the future with respect to our default management operations, and with civil litigation related to these matters; changes to the laws, rules and regulations that regulate our businesses as a result of the current economic and financial environment; changes in general economic, business and political conditions, including changes in the financial markets; the impact of any potential defects, development delays, installation difficulties or system failures on our business and reputation; risks associated with protecting information security and privacy; and other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10-K, the Company's subsequent reports on Form 10-Q and other filings with the Securities and Exchange Commission.











Exhibit A












LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)






































Three months ended December 31,


Year ended December 31,





2011


2010


2011


2010





(In thousands, except per share data)












Revenues


$  533,832


$ 618,152


$ 2,090,112


$ 2,376,861

Cost of revenues


360,200


416,961


1,418,324


1,562,818


Gross profit


173,632


201,191


671,788


814,043










Selling, general and administrative expenses


168,706


66,462


381,606


233,953


Operating income


4,926


134,729


290,182


580,090










Other income (expense):










Interest income


387


119


1,451


982


Interest expense


(16,622)


(16,457)


(67,583)


(71,277)


Other income (expense), net


(8)


70


(182)


340



Total other (expense)


(16,243)


(16,268)


(66,314)


(69,955)












Earnings (loss) from continuing operations before income taxes


(11,317)


118,461


223,868


510,135

Provision (benefit) for income taxes


(7,133)


44,036


81,062


193,849


Earnings (loss) from continuing operations


(4,184)


74,425


142,806


316,286


Discontinued operations, net of tax


(17,017)


(3,701)


(46,263)


(13,942)



Net earnings (loss)


$  (21,201)


$ 70,724


$ 96,543


$ 302,344












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


$  (0.05)


$ 0.82


$ 1.67


$ 3.38

Net loss per share - diluted from discontinued operations


(0.20)


(0.04)


(0.54)


(0.15)

Net earnings (loss) per share - diluted


$  (0.25)


$ 0.78


$ 1.13


$ 3.23

Weighted average shares outstanding - diluted


84,430


90,296


85,685


93,559




Exhibit B


LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)








December 31,



2011


2010



(In thousands)

Assets





Current assets:











Cash and cash equivalents


$ 77,355


$ 52,287


Trade receivables, net


345,048


419,647


Other receivables


1,423


4,910


Prepaid expenses and other current assets


33,004


38,328


Deferred income taxes


74,006


44,102








Total current assets


530,836


559,274






Property and equipment, net


121,245


123,897

Computer software, net


228,882


217,573

Other intangible assets, net


39,140


58,269

Goodwill


1,132,828


1,159,539

Other non-current assets


192,484


133,291








Total assets


$ 2,245,415


$ 2,251,843











Liabilities and Stockholders' Equity





Current liabilities:












Current portion of long-term debt


$ 39,310


$ 145,154


Trade accounts payable


43,105


51,610


Accrued salaries and benefits


64,383


55,230


Recording and transfer tax liabilities


11,901


10,879


Other accrued liabilities


235,209


145,203


Deferred revenues


64,078


57,651



Total current liabilities


457,986


465,727







Deferred revenues


34,737


36,893

Deferred income taxes, net


122,755


96,732

Long-term debt, net of current portion


1,109,850


1,104,247

Other non-current liabilities


32,099


22,030









Total liabilities


1,757,427


1,725,629







Stockholders' equity:






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


-


-



issued at December 31, 2011 and 2010






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


10


10



shares issued at December 31, 2011 and 2010






Additional paid-in capital


250,533


216,896


Retained earnings


658,146


596,168


Accumulated other comprehensive loss


(1,783)


(283)


Treasury stock at cost; 13.0 million and 8.6 million shares at







December 31, 2011 and 2010, respectively


(418,918)


(286,577)



Total stockholders' equity


487,988


526,214










Total liabilities and stockholders' equity


$ 2,245,415


$ 2,251,843




Exhibit C


LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)







Year ended December 31,



2011


2010



(In thousands)

Cash flows from operating activities:






Net earnings


$ 96,543


$ 302,344








Adjustments to reconcile net earnings to net







cash provided by operating activities:








Depreciation and amortization


98,828


98,761




Amortization of debt issuance costs


10,017


4,716




Asset impairment charges


71,995


-




Loss on sale of discontinued operations


849


-




Deferred income taxes, net


(4,761)


30,417




Stock-based compensation cost


41,709


32,077




Income tax effect of equity compensation


873


(165)









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









Trade receivables


72,446


(17,802)





Other receivables


3,303


(1,126)





Prepaid expenses and other assets


(6,274)


(22,859)





Deferred revenues


3,975


(11,687)





Accounts payable, accrued liabilities and other liabilities


88,356


34,018











Net cash provided by operating activities


477,859


448,694








Cash flows from investing activities:






Additions to property and equipment


(32,768)


(40,653)


Additions to capitalized software


(72,111)


(67,603)


Purchases of investments, net of proceeds from sales


(21,509)


(20,956)


Acquisition of title plants and property records data


(23,967)


(4,401)


Acquisitions, net of cash acquired


(9,802)


(18,823)


Proceeds from sale of discontinued operation, net of cash distributed


4,451


-








Net cash used in investing activities


(155,706)


(152,436)

Cash flows from financing activities:






Borrowings


1,005,000


-


Debt service payments


(1,100,242)


(40,109)


Exercise of stock options and restricted stock vesting


(2,662)


12,111


Income tax effect of equity compensation


(873)


165


Dividends paid


(34,446)


(37,139)


Debt issuance costs paid


(22,059)


-


Treasury stock repurchases


(136,878)


(246,549)


Bond repurchases


(4,925)


-


Payment of contingent consideration related to acquisitions


-


(2,978)











Net cash used in financing activities


(297,085)


(314,499)











Net increase (decrease) in cash and cash equivalents


25,068


(18,241)







Cash and cash equivalents, beginning of year


52,287


70,528







Cash and cash equivalents, end of year


$ 77,355


$ 52,287











Supplemental disclosures of cash flow information:






Cash paid for interest


$ 56,975


$ 69,005







Cash paid for taxes


$ 56,538


$ 151,436



LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES


Exhibit D

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED



(In thousands)




CALENDAR YEAR


QUARTER


2011


2010


Q4-2011


Q3-2011


Q2-2011


Q1-2011


Q4-2010


Q3-2010


Q2-2010


Q1-2010





















1.

Revenues - Continuing Operations









































Technology, Data and Analytics (TD&A):






















Mortgage Processing

$ 417,586


$ 402,692


$ 106,123


$ 106,365


$ 102,765


$ 102,333


$ 100,341


$ 102,362


$ 102,356


$ 97,633



Other TD&A

323,106


290,572


86,007


78,247


77,937


80,915


83,118


77,561


66,246


63,647




Total

740,692


693,264


192,130


184,612


180,702


183,248


183,459


179,923


168,602


161,280






















Loan Transaction Services:






















Loan Facilitation Services

539,303


631,313


156,431


138,096


110,371


134,405


185,341


162,546


137,579


145,847



Default Services

816,188


1,060,113


186,563


198,525


210,100


221,000


251,245


265,454


274,743


268,671




Total

1,355,491


1,691,426


342,994


336,621


320,471


355,405


436,586


428,000


412,322


414,518






















Corporate and Other

(6,071)


(7,829)


(1,292)


(1,796)


(1,513)


(1,470)


(1,893)


(1,939)


(1,644)


(2,353)























Total Revenue

$  2,090,112


$  2,376,861


$ 533,832


$ 519,437


$ 499,660


$ 537,183


$ 618,152


$ 605,984


$ 579,280


$ 573,445






















Revenue Growth from Prior Year Period









































Technology, Data and Analytics:






















Mortgage Processing

3.7%


3.8%


5.8%


3.9%


0.4%


4.8%


-3.7%


-0.6%


14.3%


7.1%



Other TD&A

11.2%


16.0%


3.5%


0.9%


17.6%


27.1%


24.7%


20.5%


1.7%


17.2%




Total

6.8%


8.6%


4.7%


2.6%


7.2%


13.6%


7.4%


7.5%


9.0%


10.9%






















Loan Transaction Services:






















Loan Facilitation Services

-14.6%


15.8%


-15.6%


-15.0%


-19.8%


-7.8%


30.1%


20.9%


-7.4%


22.0%



Default Services

-23.0%


-6.8%


-25.7%


-25.2%


-23.5%


-17.7%


-9.8%


-12.6%


-8.3%


5.2%




Total

-19.9%


0.5%


-21.4%


-21.4%


-22.3%


-14.3%


3.7%


-2.3%


-8.0%


10.6%

























Corporate and Other

n/m


n/m


n/m


n/m


n/m


n/m


n/m


n/m


n/m


n/m























Total Revenue

-12.1%


3.4%


-13.6%


-14.3%


-13.7%


-6.3%


4.9%


1.3%


-2.8%


11.2%









































2.

Depreciation and Amortization









































Depreciation and Amortization

$ 67,332


$ 59,335


$ 18,201


$ 15,276


$ 17,142


$ 16,713


$ 16,883


$ 15,386


$ 13,875


$ 13,191


Purchase Price Amortization

16,076


22,536


3,854


3,796


3,803


4,623


5,341


5,338


5,499


6,358


Other Amortization

6,968


7,208


1,876


1,750


1,682


1,660


1,676


1,653


1,958


1,921



Total continuing operations

90,376


89,079


23,931


20,822


22,627


22,996


23,900


22,377


21,332


21,470


Depreciation and Amortization - Discontinued Operations

8,452


9,682


1,144


3,496


1,940


1,872


3,047


2,143


2,308


2,184



Total Depreciation and Amortization

$ 98,828


$ 98,761


$ 25,075


$ 24,318


$ 24,567


$ 24,868


$ 26,947


$ 24,520


$ 23,640


$ 23,654





















3.

Stock Compensation Expense









































Stock Compensation Expense, Excluding Acceleration Charges

$ 31,190


$ 30,280


$ 6,880


$ 9,313


$ 8,238


$ 6,759


$ 8,228


$ 8,215


$ 7,280


$ 6,557


Stock Acceleration Expense

10,519


1,797


6,650


-


-


3,869


1,797


-


-


-



Total Stock Compensation Expense

$ 41,709


$ 32,077


$ 13,530


$ 9,313


$ 8,238


$ 10,628


$ 10,025


$ 8,215


$ 7,280


$ 6,557



LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Exhibit D - Continued

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED


(In thousands)



CALENDAR YEAR


QUARTER

4.

Reconciliation of Discontinued Operations

2011


2010


Q4-2011


Q3-2011


Q2-2011


Q1-2011


Q4-2010


Q3-2010


Q2-2010


Q1-2010






















Discontinued Operations, as previously reported (1)









































Revenue

$ 18,770


$ 35,498


$ 1,312


$ 5,702


$  6,045


$  5,711


$ 7,012


$  9,038


$ 9,280


$ 10,168






















Cost of Revenues

48,487


35,420


1,336


5,684


35,362


6,105


9,261


8,288


8,294


9,577






















Selling, General and Administrative Expenses

3,067


7,027


182


189


1,580


1,116


1,647


1,602


1,888


1,890























Operating Loss

(32,784)


(6,949)


(206)


(171)


(30,897)


(1,510)


(3,896)


(852)


(902)


(1,299)






















Total Other Income (Expense)

(539)


301


1,548


(2,195)


43


65


110


95


34


62























Income (Loss) Before Income Taxes

(33,323)


(6,648)


1,342


(2,366)


(30,854)


(1,445)


(3,786)


(757)


(868)


(1,237)






















Benefit for Income Taxes

(14,666)


(2,524)


(661)


(887)


(12,569)


(549)


(1,431)


(289)


(331)


(473)























Net Earnings (Loss)

$ (18,657)


$ (4,124)


$ 2,003


$ (1,479)


$ (18,285)


$ (896)


$ (2,355)


$ (468)


$ (537)


$ (764)






















Technology, Data and Analytics (2)









































Revenue

$ 38,736


$ 33,877


$ 9,143


$ 9,136


$ 10,172


$ 10,285


$ 10,582


$  7,955


$ 7,326


$  8,014






















Cost of Revenues

38,897


21,141


17,042


5,916


8,175


7,764


6,001


4,816


4,974


5,350






















Selling, General and Administrative Expenses

15,227


15,309


3,695


3,765


3,819


3,948


3,846


3,749


3,843


3,871























Operating Income (Loss)

(15,388)


(2,573)


(11,594)


(545)


(1,822)


(1,427)


735


(610)


(1,491)


(1,207)






















Total Other Income (Expense)

104


18


42


34


29


(1)


5


4


4


5























Income (Loss) Before Income Taxes

(15,284)


(2,555)


(11,552)


(511)


(1,793)


(1,428)


740


(606)


(1,487)


(1,202)






















Provision (Benefit) for Income Taxes

(5,797)


(972)


(4,398)


(192)


(665)


(542)


290


(232)


(570)


(460)























Net Earnings (Loss)

$ (9,487)


$ (1,583)


$ (7,154)


$ (319)


$ (1,128)


$ (886)


$ 450


$ (374)


$ (917)


$ (742)






















Loan Transaction Services (2)









































Revenue

$ 12,637


$ 10,099


$ 2,858


$ 3,541


$  3,219


$  3,019


$ 3,074


$  3,063


$ 3,195


$ 767






















Cost of Revenues

40,173


22,696


21,788


6,975


5,396


6,014


5,740


6,068


6,106


4,782






















Selling, General and Administrative Expenses

1,667


1,061


247


395


520


505


344


359


281


77























Operating Loss

(29,203)


(13,658)


(19,177)


(3,829)


(2,697)


(3,500)


(3,010)


(3,364)


(3,192)


(4,092)






















Total Other Income (Expense)

21


374


-


(4)


25


-


154


24


-


196























Loss Before Income Taxes

(29,182)


(13,284)


(19,177)


(3,833)


(2,672)


(3,500)


(2,856)


(3,340)


(3,192)


(3,896)






















Benefit for Income Taxes

(11,063)


(5,049)


(7,311)


(1,437)


(984)


(1,331)


(1,060)


(1,278)


(1,221)


(1,490)























Net Loss

$ (18,119)


$ (8,235)


$ (11,866)


$ (2,396)


$ (1,688)


$ (2,169)


$ (1,796)


$ (2,062)


$ (1,971)


$ (2,406)






















Discontinued Operations, as adjusted






























































Revenue

$ 70,143


$ 79,474


$ 13,313


$ 18,379


$ 19,436


$ 19,015


$ 20,668


$ 20,056


$ 19,801


$ 18,949






















Cost of Revenues

127,557


79,257


40,166


18,575


48,933


19,883


21,002


19,172


19,374


19,709






















Selling, General and Administrative Expenses

19,961


23,397


4,124


4,349


5,919


5,569


5,837


5,710


6,012


5,838























Operating Loss

(77,375)


(23,180)


(30,977)


(4,545)


(35,416)


(6,437)


(6,171)


(4,826)


(5,585)


(6,598)






















Total Other Income (Expense)

(414)


693


1,590


(2,165)


97


64


269


123


38


263























Loss Before Income Taxes

(77,789)


(22,487)


(29,387)


(6,710)


(35,319)


(6,373)


(5,902)


(4,703)


(5,547)


(6,335)






















Benefit for Income Taxes

(31,526)


(8,545)


(12,370)


(2,516)


(14,218)


(2,422)


(2,201)


(1,799)


(2,122)


(2,423)























Net Loss

$ (46,263)


$ (13,942)


$ (17,017)


$ (4,194)


$ (21,101)


$ (3,951)


$ (3,701)


$ (2,904)


$ (3,425)


$ (3,912)






















Discontinued Operations - Reconciliation









































Net Loss, as reported

$ (46,263)


$ (13,942)


$ (17,017)


$ (4,194)


$ (21,101)


$ (3,951)


$ (3,701)


$ (2,904)


$ (3,425)


$ (3,912)






















Adjustments:






















Impairment and Restructuring Charges, net (3)

34,251


-


16,454


-


17,759


38


-


-


-


-



(Gain)/Loss on Disposal of Operations, net (4)

558


-


(928)


1,486


-


-


-


-


-


-
























Net Loss, as adjusted

(11,454)


(13,942)


(1,491)


(2,708)


(3,342)


(3,913)


(3,701)


(2,904)


(3,425)


(3,912)






















Purchase Price Amortization, net

857


1,397


201


122


272


262


707


230


238


222






















Adjusted Net Loss

$ (10,597)


$ (12,545)


$ (1,290)


$ (2,586)


$ (3,070)


$ (3,651)


$ (2,994)


$ (2,674)


$ (3,187)


$ (3,690)






















Adjusted Net Loss Per Diluted Share

$ (0.13)


$ (0.13)


$ (0.02)


$ (0.03)


$ (0.04)


$  (0.04)


$ (0.03)


$  (0.03)


$ (0.03)


$ (0.04)






















Diluted Weighted Average Shares

85,685


93,559


84,430


84,415


85,812


88,134


90,296


92,682


94,910


96,416

Notes:




















(1)

Represents the quarterly results of business units that were reflected as discontinued operations as of September 30, 2011.

(2)

During the fourth quarter of 2011, we discontinued certain operations that were previously included within the Technology, Data & Analytics and Loan Transaction Services segments. The historical results for these operations have been reclassified from continuing operations to discontinued operations, as summarize above.

(3)

Includes charges totaling $57.0 million ($34.3 million net of tax) relating to severance accruals and the write-down of net assets for businesses that have been classified as discontinued operations.

(4)

Reflects the (gain) or loss, net of tax, included in "Total Other Income (Expense)" above, recognized upon the disposition of business units that have been sold or disposed of.



LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES


Exhibit E

NON-GAAP FINANCIAL INFORMATION - UNAUDITED



(In thousands, except per share data)




CALENDAR YEAR


QUARTER


2011


2010


Q4-2011


Q3-2011


Q2-2011


Q1-2011


Q4-2010


Q3-2010


Q2-2010


Q1-2010

1.

Operating Results - Continuing Operations









































Consolidated






















Revenue

$ 2,090,112


$  2,376,861


$ 533,832


$ 519,437


$ 499,660


$ 537,183


$ 618,152


$ 605,984


$ 579,280


$ 573,445























Cost of Revenues

1,418,324


1,562,818


360,200


357,397


350,000


350,727


416,961


398,071


371,473


376,313























Selling, General and Administrative Expenses

381,606


233,953


168,706


67,848


68,994


76,058


66,462


58,806


53,803


54,882
























Operating Income

290,182


580,090


4,926


94,192


80,666


110,398


134,729


149,107


154,004


142,250























Adjustments:























Legal and Regulatory Accrual (1)

78,484


-


78,484


-


-


-


-


-


-


-




Restructuring Charges (2)

33,403


4,269


12,132


-


5,977


15,294


4,269


-


-


-




Asset Impairment and Other Charges

23,509


-


15,582


-


3,910


4,017


-


-


-


-




Out-of-period Adjustment (3)

-


9,800


-


-


-


-


9,800


-


-


-























EBIT, as adjusted

$ 425,578


$ 594,159


$ 111,124


$ 94,192


$ 90,553


$ 129,709


$ 148,798


$ 149,107


$ 154,004


$ 142,250



EBIT Margin, as adjusted

20.4%


25.0%


20.8%


18.1%


18.1%


24.1%


24.1%


24.6%


26.6%


24.8%























Depreciation and Amortization

90,376


89,079


23,931


20,822


22,627


22,996


23,900


22,377


21,332


21,470























EBITDA, as adjusted

$ 515,954


$ 683,238


$ 135,055


$ 115,014


$ 113,180


$ 152,705


$ 172,698


$ 171,484


$ 175,336


$ 163,720



EBITDA Margin, as adjusted

24.7%


28.7%


25.3%


22.1%


22.7%


28.4%


27.9%


28.3%


30.3%


28.6%






















Technology, Data and Analytics






















Revenue

$ 740,692


$ 693,264


$ 192,130


$ 184,612


$ 180,702


$ 183,248


$ 183,459


$ 179,923


$ 168,602


$ 161,280























Cost of Revenues

437,088


378,576


112,806


105,803


110,689


107,790


105,343


95,316


87,049


90,868























Selling, General and Administrative Expenses

67,752


58,699


19,869


15,661


15,387


16,835


14,555


15,757


14,336


14,051
























Operating Income

235,852


255,989


59,455


63,148


54,626


58,623


63,561


68,850


67,217


56,361























Adjustments:























Restructuring Charges (2)

8,394


-


1,519


-


4,641


2,234


-


-


-


-




Asset Impairment and Other Charges

4,855


-


4,515


-


340


-


-


-


-


-























EBIT, as adjusted

$ 249,101


$ 255,989


$ 65,489


$ 63,148


$ 59,607


$ 60,857


$ 63,561


$ 68,850


$ 67,217


$ 56,361



EBIT Margin, as adjusted

33.6%


36.9%


34.1%


34.2%


33.0%


33.2%


34.6%


38.3%


39.9%


34.9%























Depreciation and Amortization

67,942


59,901


17,649


17,125


16,382


16,786


16,066


14,896


14,257


14,682























EBITDA, as adjusted

$ 317,043


$ 315,890


$ 83,138


$ 80,273


$ 75,989


$ 77,643


$ 79,627


$ 83,746


$ 81,474


$ 71,043



EBITDA Margin, as adjusted

42.8%


45.6%


43.3%


43.5%


42.1%


42.4%


43.4%


46.5%


48.3%


44.0%






















Loan Transaction Services






















Revenue

$ 1,355,491


$  1,691,426


$ 342,994


$ 336,621


$ 320,471


$ 355,405


$ 436,586


$ 428,000


$ 412,322


$ 414,518























Cost of Revenues

987,089


1,190,086


248,618


253,322


240,797


244,352


311,545


304,713


286,001


287,827























Selling, General and Administrative Expenses

78,482


94,595


18,506


18,251


19,689


22,036


26,098


23,202


21,516


23,779
























Operating Income

289,920


406,745


75,870


65,048


59,985


89,017


98,943


100,085


104,805


102,912























Adjustments:























Restructuring Charges (2)

3,757


-


(259)


-


1,074


2,942


-


-


-


-




Asset Impairment and Other Charges

1,604


-


-


-


1,604


-


-


-


-


-




Out-of-period Adjustment (3)

-


9,800


-


-


-


-


9,800


-


-


-























EBIT, as adjusted

$ 295,281


$ 416,545


$ 75,611


$ 65,048


$ 62,663


$ 91,959


$ 108,743


$ 100,085


$ 104,805


$ 102,912



EBIT Margin, as adjusted

21.8%


24.6%


22.0%


19.3%


19.6%


25.9%


24.9%


23.4%


25.4%


24.8%























Depreciation and Amortization

15,432


21,753


4,575


2,033


4,429


4,395


6,019


5,645


5,231


4,858























EBITDA, as adjusted

$ 310,713


$ 438,298


$ 80,186


$ 67,081


$ 67,092


$ 96,354


$ 114,762


$ 105,730


$ 110,036


$ 107,770



EBITDA Margin, as adjusted

22.9%


25.9%


23.4%


19.9%


20.9%


27.1%


26.3%


24.7%


26.7%


26.0%






















Corporate and Other






















Revenue

$  (6,071)


$ (7,829)


$ (1,292)


$ (1,796)


$ (1,513)


$ (1,470)


$ (1,893)


$ (1,939)


$ (1,644)


$ (2,353)























Cost of Revenues

(5,853)


(5,844)


(1,224)


(1,728)


(1,486)


(1,415)


73


(1,958)


(1,577)


(2,382)























Selling, General and Administrative Expenses

235,372


80,659


130,331


33,936


33,918


37,187


25,809


19,847


17,951


17,052
























Operating Loss

(235,590)


(82,644)


(130,399)


(34,004)


(33,945)


(37,242)


(27,775)


(19,828)


(18,018)


(17,023)























Adjustments:























Legal and Regulatory Accrual (1)

78,484


-


78,484


-


-


-


-


-


-


-




Restructuring Charges (2)

21,252


4,269


10,872


-


262


10,118


4,269


-


-


-




Asset Impairment and Other Charges

17,050


-


11,067


-


1,966


4,017


-


-


-


-























EBIT, as adjusted

$ (118,804)


$  (78,375)


$ (29,976)


$ (34,004)


$ (31,717)


$ (23,107)


$ (23,506)


$ (19,828)


$ (18,018)


$ (17,023)























Depreciation and Amortization

7,002


7,425


1,707


1,664


1,816


1,815


1,815


1,836


1,844


1,930























EBITDA, as adjusted

$ (111,802)


$  (70,950)


$ (28,269)


$ (32,340)


$ (29,901)


$ (21,292)


$ (21,691)


$ (17,992)


$ (16,174)


$ (15,093)



LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Exhibit E - Continued

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)


CALENDAR YEAR