Lender Processing Services, Inc. Reports Record Second Quarter Earnings

Year-over-year revenues increase 35.3% Adjusted EPS of 83 cents per diluted share JACKSONVILLE, Fla., July 29 /PRNewswire-FirstCall/ -- Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today reported consolidated revenues of $613.2 million for the second quarter of 2009, an increase of 35.3% compared to the second quarter of 2008, and net earnings of $75.2 million or 78 cents per diluted share. Pro forma adjusted net earnings for the second quarter of 2009 were $79.8 million, or 83 cents per share, compared to $57.8 million, or 61 cents per share, in the second quarter of 2008. Pro forma adjusted net earnings in the current quarter include $2.6 million in after-tax incremental public company costs incurred as a result of LPS being spun-off on July 2, 2008. Also, these results include an adjustment for purchase amortization of 5 cents per share for the second quarter of 2009 while adjustments for the prior year quarter included pro forma interest expense of 15 cents per share, purchase amortization of 6 cents per share and excluded certain non-recurring charges that accounted for 3 cents per share. "LPS had a very strong second quarter despite a challenging macroeconomic environment. LPS, with its comprehensive end-to-end solutions for the mortgage and real estate industries, remains well positioned for an outstanding year in 2009 and to continue to grow profitably in 2010 and beyond," said Lee A. Kennedy, Chairman of LPS. "Second quarter earnings were very solid across all our businesses. Our Default Services business continued to deliver strong results while our Loan Facilitation Services benefitted from the improved origination environment. Also, our Mortgage Processing and other technology businesses had an excellent quarter," added Jeff Carbiener, President and CEO of LPS. Operating income was $143.7 million in the quarter compared to $101.3 million in the second quarter of 2008. Adjusting for certain non-recurring charges in the second quarter of 2008, operating income increased 35.9% year-over-year. Pro forma adjusted free cash flow (net cash provided by operating activities including the pro forma interest expense noted earlier, minus additions to property and equipment and capitalized software) for the first half of 2009 of $160.2 million compared to $86.7 million for the first half of 2008. Technology, Data and Analytics Revenues for the segment were $171.9 million compared to $141.7 million in the second quarter of 2008 while operating income of $55.1 million compared to adjusted operating income of $45.1 million in the prior year quarter. Mortgage Processing revenues of $89.6 million were 9.1% above the second quarter of 2008, primarily due to higher activity based fees. Other TD&A revenues increased by 37.9% to $82.3 million compared to the prior year quarter, mainly due to strong growth in Data and Analytics services, our Desktop application, and the impact of the FNRES acquisition completed in the first quarter of 2009. Excluding the impact of FNRES, Other TD&A revenues were up a strong 20.8%. Overall operating income for the segment was higher primarily due to higher contributions from Data & Analytics and higher activity based fees. Loan Transaction Services Revenues for the segment increased by 42.1% to $448.0 million compared to the second quarter of 2008 while operating income of $109.6 million compared to adjusted operating income of $72.5 million in the prior year period. Loan Facilitation Services revenues of $148.5 million were up 25.8% compared to the same period last year, mainly due to higher settlement services and increased appraisal volumes. Default Services revenues of $299.5 million increased 51.9% over the second quarter of 2008, primarily due to ongoing strength in the default market and our ability to continue to gain market share. Overall operating income for the segment grew due to higher income in loan origination related offerings, like settlement services, and across all major services in Default. Other Items Net corporate expenses were $21.0 million compared to net adjusted corporate expenses of $11.8 million in the second quarter of 2008 and were higher primarily due to the incremental public company costs and higher incentive compensation expenses in the current quarter. Outlook "Second quarter and first half 2009 results were very solid and while some of our markets and the broader economy in general pose challenges, LPS with its market leading presence is well positioned for a strong second half in 2009 and to continue to grow revenue and earnings in 2010," said Jeff Carbiener. "Building on the strong first half of the year, we expect third quarter adjusted earnings to be in the range of $0.72-$0.78 per diluted share. For full year 2009, we now expect revenues to grow 20%-22% compared to 2008 and adjusted earnings to be in the $2.91-$3.01 per diluted share range." Use of Non-GAAP Financial Information LPS reports several non-GAAP measures, including pro forma adjusted net earnings and pro forma adjusted free cash flow. The adjusted results exclude acquisition related amortization costs and include pro forma debt related interest expenses. 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 net earnings. 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 on Thursday, July 30, 2009, at 8:00 a.m. Eastern time. Interested parties are invited to listen to the live webcast by logging on to the Investor Relations section 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 August 6, 2009 by dialing 888-203-1112 (access code: 4385628). To access a printer friendly version of this release and accompanying exhibits, go to http://www.lpsvcs.com/investor. About Lender Processing Services Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology and services to the mortgage and real estate industries. LPS offers solutions that span the mortgage continuum, including lead generation, origination, workflow automation (Desktop), servicing, portfolio retention and default, augmented by the company's award-winning customer support and professional services. Approximately 55 percent of all U.S. mortgages by dollar volume are serviced using LPS' Mortgage Servicing Package (MSP). In fact, many of the nation's top servicers rely on MSP, including eight of the top 10 and 14 of the top 20. LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. 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: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage on our ability to make acquisitions and invest in our business; the elimination of existing and potential customers as a result of failures and consolidations in the banking and financial services industries; changes to the laws, rules and regulations that regulate our businesses as a result of the current economic and financial environment; the impact of adverse changes in the level of real estate activity on demand for certain of our services; our ability to adapt our services to changes in technology or the marketplace; risks associated with protecting information security and privacy; the impact of any potential defects, development delays, installation difficulties or system failures on our business and reputation; risks associated with our spin-off from Fidelity National Information Services, Inc., including those relating to our new stand-alone public company status and limitations on our strategic and operating flexibility as a result of the tax-free nature of the spin-off; and other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission. Exhibit A LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) Three months ended Six months ended June 30, June 30, 2009 2008 2009 2008 (In thousands) Processing and services revenues $613,171 $453,347 $1,142,988 $896,907 Cost of revenues 404,014 293,464 758,716 581,850 Gross profit 209,157 159,883 384,272 315,057 Selling, general and administrative expenses 65,431 58,570 136,609 113,668 Operating income 143,726 101,313 247,663 201,389 Other income (expense): Interest income 442 303 966 563 Interest expense (21,625) (38) (43,539) (56) Other expense, net (13) 282 (14) 282 Total other income (expense) (21,196) 547 (42,587) 789 Earnings from continuing operations before income taxes and equity in losses of unconsolidated entity 122,530 101,860 205,076 202,178 Provision for income taxes 46,866 39,522 78,441 78,445 Earnings from continuing operations before equity in losses of unconsolidated entity 75,664 62,338 126,635 123,733 Equity in losses of unconsolidated entity - (413) (37) (2,370) Earnings from continuing operations 75,664 61,925 126,598 121,363 Discontinued operation, net of tax - 2,032 (504) 4,638 Net earnings 75,664 63,957 126,094 126,001 Noncontrolling minority interest (424) (411) (808) (723) Net earnings attributable to Lender Processing Services, Inc. $75,240 $63,546 $125,286 $125,278 Exhibit B LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) June 30, December 31, 2009 2008 (In thousands) Assets Current assets: Cash and cash equivalents $62,243 $125,966 Trade receivables, net of allowance for doubtful accounts 428,650 344,848 Other receivables 7,143 17,393 Due from affiliates 140 2,713 Prepaid expenses and other current assets 23,395 22,030 Deferred income taxes 40,757 40,757 Total current assets 562,328 553,707 Property and equipment, net of accumulated depreciation 108,705 95,542 Computer software, net of accumulated amortization 169,530 157,539 Other intangible assets, net of accumulated amortization 79,929 83,489 Goodwill 1,130,803 1,091,056 Other non-current assets 112,608 122,300 Total assets $2,163,903 $2,103,633 Liabilities and Equity Current liabilities: Current portion of long-term debt $77,649 $145,101 Trade accounts payable 52,014 31,720 Accrued salaries and benefits 41,661 36,492 Recording and transfer tax liabilities 17,932 14,639 Due to affiliates 1,921 1,573 Other accrued liabilities 159,831 101,612 Deferred revenues 45,970 51,628 Total current liabilities 396,978 382,765 Deferred revenues 46,839 40,343 Deferred income taxes, net 26,733 36,557 Long-term debt, net of current portion 1,330,481 1,402,350 Other non-current liabilities 36,320 39,217 Total liabilities 1,837,351 1,901,232 Equity: Lender Processing Services, Inc. stockholders' equity: Preferred stock $0.0001 par value; 50 million shares authorized, none issued at June 30, 2009 or December 31, 2008 - - Common stock $0.0001 par value; 500 million shares authorized, 96.6 million and 95.3 million shares issued at June 30, 2009 and December 31, 2008 10 9 Additional paid-in capital 139,541 111,849 Retained earnings 199,692 93,540 Accumulated other comprehensive loss (10,809) (13,667) Treasury stock $0.0001 par value; 469,556 and 19,870 shares at June 30, 2009 and December 31, 2008 (13,942) (582) Total Lender Processing Services, Inc. stockholders' equity 314,492 191,149 Noncontrolling minority interest 12,060 11,252 Total equity 326,552 202,401 Total liabilities and equity $2,163,903 $2,103,633 Exhibit C LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2009 2008 (In thousands) Cash flows from operating activities: Net earnings attributable to Lender Processing Services, Inc. $125,286 $125,278 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 47,579 44,576 Amortization of debt issuance costs 2,645 - Gain on sale of discontinued operation (2,574) - Deferred income taxes, net (651) 3,968 Stock-based compensation cost 13,302 9,120 Tax benefit associated with equity compensation (1,356) - Equity in losses of unconsolidated entity 37 2,370 Noncontrolling minority interest 808 723 Changes in assets and liabilities, net of effects of acquisitions: Trade receivables (76,919) (63,750) Other receivables 10,264 (4,348) Prepaid expenses and other assets (11,599) 4,511 Deferred revenues (158) 8,235 Accounts payable and other liabilities 97,606 6,000 Net cash provided by operating activities 204,270 136,683 Cash flows from investing activities: Additions to property and equipment (23,201) (9,376) Additions to capitalized software (25,206) (15,761) Acquisition of title plants (9,395) - Acquisitions, net of cash acquired (16,403) (15,488) Proceeds from sale of discontinued operation, net of cash distributed (32,638) - Net cash used in investing activities (106,843) (40,625) Cash flows from financing activities: Debt service payments (143,481) - Stock options exercised 109 - Tax benefit associated with equity compensation 1,356 - Cash dividends paid (19,134) - Net distributions to FIS - (116,996) Net cash used in financing activities (161,150) (116,996) Net decrease in cash and cash equivalents (63,723) (20,938) Cash and cash equivalents, beginning of period 125,966 39,566 Cash and cash equivalents, end of period $62,243 $18,628 Supplemental disclosures of cash flow information: Cash paid for interest $41,828 $- Cash paid for taxes $47,862 $- Non-cash contribution of stock compensation by FIS $- $9,120 Non-cash redistribution of assets to FIS $434 $(13,801) Non-cash consideration received from sale of discontinued operation $40,310 $- Non-cash consideration issued in acquisition of business $(5,162) $- Exhibit D LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED (In thousands) Six Months ended June 30, 2009 2008 6/30/2009 3/31/2009 1. Revenues - Continuing Operations Technology, Data and Analytics (TD&A): Mortgage Processing $180,717 $162,228 $89,567 $91,150 Other TD&A 151,051 115,340 82,322 68,729 Total 331,768 277,568 171,889 159,879 Loan Transaction Services: Loan Facilitation Services 267,724 260,130 148,510 119,214 Default Services 554,843 366,248 299,534 255,309 Total 822,567 626,378 448,044 374,523 Corporate and Other (11,347) (7,039) (6,762) (4,585) Total Revenue $1,142,988 $896,907 $613,171 $529,817 Revenue Growth from Prior Year Period Technology, Data and Analytics: Mortgage Processing 11.4% -2.0% 9.1% 13.7% Other TD&A 31.0% -3.0% 37.9% 23.5% Total 19.5% -2.4% 21.3% 17.7% Loan Transaction Services: Loan Facilitation Services 2.9% -15.7% 25.8% -16.1% Default Services 51.5% 78.2% 51.9% 51.0% Total 31.3% 21.8% 42.1% 20.4% Corporate and Other n/m n/m n/m n/m Total Revenue 27.4% 12.2% 35.3% 19.4% 2. Depreciation and Amortization - Continuing Operations Depreciation and Amortization $29,505 $24,784 $15,431 $14,074 Purchase Price Amortization 15,487 18,680 7,404 8,083 Other Amortization 2,582 1,069 753 1,829 Total Depreciation and Amortization $47,574 $44,533 $23,588 $23,986 3. Stock Compensation Expense (1) Stock Compensation Expense, Excluding Acceleration Charges $12,503 $8,982 $6,459 $6,044 Stock Acceleration Expense 799 138 - 799 Total Stock Compensation Expense $13,302 $9,120 $6,459 $6,843 4. EBIT - Discontinued Operations (2) Revenue $296 $16,199 $- $296 Cost of Sales 503 $3,287 - 503 Selling, General and Administrative Expenses 499 5,331 - 499 Operating Income (706) 7,581 - (706) Less Non-recurring Charges: Restructuring Costs - - - - LPS Spin Related Costs - - - - Acceleration of Performance-Based Shares - - - - EBIT, as adjusted $(706) $7,581 $- $(706) Depreciation and Amortization $5 $43 $- $5 12/31/2008 9/30/2008 6/30/2008 3/31/2008 1. Revenues - Continuing Operations Technology, Data and Analytics (TD&A): Mortgage Processing $88,364 $83,592 $82,062 $80,166 Other TD&A 60,754 55,372 59,682 55,658 Total 149,118 138,964 141,744 135,824 Loan Transaction Services: Loan Facilitation Services 83,914 87,629 118,091 142,039 Default Services 243,736 241,844 197,223 169,025 Total 327,650 329,473 315,314 311,064 Corporate and Other (2,847) (1,675) (3,711) (3,328) Total Revenue $473,921 $466,762 $453,347 $443,560 Revenue Growth from Prior Year Period Technology, Data and Analytics: Mortgage Processing -4.9% 2.9% -1.4% -2.6% Other TD&A 14.6% -5.5% 1.5% -7.4% Total 2.2% -0.6% -0.2% -4.6% Loan Transaction Services: Loan Facilitation Services -39.6% -42.8% -28.3% -1.3% Default Services 68.3% 97.1% 89.7% 66.5% Total 15.4% 19.4% 17.3% 26.7% Corporate and Other n/m n/m n/m n/m Total Revenue 11.0% 13.3% 10.0% 14.4% 2. Depreciation and Amortization - Continuing Operations Depreciation and Amortization $13,697 $12,594 $11,286 $13,498 Purchase Price Amortization 10,711 10,627 8,980 9,700 Other Amortization 596 579 594 475 Total Depreciation and Amortization $25,004 $23,800 $20,860 $23,673 3. Stock Compensation Expense (1) Stock Compensation Expense, Excluding Acceleration Charges $6,603 $5,790 $4,295 $4,687 Stock Acceleration Expense - - 138 - Total Stock Compensation Expense $6,603 $5,790 $4,433 $4,687 4. EBIT - Discontinued Operations (2) Revenue $2,204 $5,916 $7,033 $9,166 Cost of Sales 1,571 1,521 1,499 1,788 Selling, General and Administrative Expenses 1,814 1,837 2,212 3,119 Operating Income (1,181) 2,558 3,322 4,259 Less Non-recurring Charges: Restructuring Costs - - - - LPS Spin Related Costs - - - - Acceleration of Performance- Based Shares - - - - EBIT, as adjusted $(1,181) $2,558 $3,322 $4,259 Depreciation and Amortization $17 $19 $20 $23 (1) As the Company does not allocate stock compensation expense to the individual business units, there is no related expense associated with the discontinued operation. (2) The business unit included in discontinued operations has historically been reported as a component of Loan Facilitation Services in the Loan Transaction Services reporting segment. Exhibit E LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES NON-GAAP FINANCIAL INFORMATION - UNAUDITED (In thousands, except per share data) Six Months ended June 30, 2009 2008 6/30/2009 3/31/2009 1. EBIT - Continuing Operations Consolidated Revenue $1,142,988 $896,907 $613,171 $529,817 Cost of Sales 758,716 581,850 404,014 354,702 Selling, General and Administrative Expenses 136,609 113,668 65,431 71,178 Operating Income 247,663 201,389 143,726 103,937 Less Non-recurring Charges: Restructuring Costs 8,186 2,353 - 8,186 LPS Spin Related Costs - 2,963 - - Acceleration of Performance-Based Shares 799 138 - 799 EBIT, as adjusted $256,648 $206,843 $143,726 $112,922 EBIT Margin, as adjusted 22.5% 23.1% 23.4% 21.3% Depreciation and Amortization $47,574 $44,533 $23,588 $23,986 Technology, Data and Analytics Revenue $331,768 $277,568 $171,889 $159,879 Cost of Sales 189,392 155,507 98,929 90,463 Selling, General and Administrative Expenses 33,890 33,729 17,824 16,066 Operating Income 108,486 88,332 55,136 53,350 Less Non-recurring Charges: Restructuring Costs - 2,178 - - LPS Spin Related Costs - - - - Acceleration of Performance-Based Shares - - - - EBIT, as adjusted $108,486 $90,510 $55,136 $53,350 EBIT Margin, as adjusted 32.7% 32.6% 32.1% 33.4% Depreciation and Amortization $33,816 $29,986 $16,441 $17,375 Loan Transaction Services Revenue $822,567 $626,378 $448,044 $374,523 Cost of Sales 580,285 433,506 311,349 268,936 Selling, General and Administrative Expenses 54,423 52,498 27,064 27,359 Operating Income 187,859 140,374 109,631 78,228 Less Non-recurring Charges: Restructuring Costs - 163 - - LPS Spin Related Costs - - - - Acceleration of Performance-Based Shares - - - - EBIT, as adjusted $187,859 $140,537 $109,631 $78,228 EBIT Margin, as adjusted 22.8% 22.4% 24.5% 20.9% Depreciation and Amortization $9,734 $11,453 $5,126 $4,608 Corporate and Other Revenue $(11,347) $(7,039) $(6,762) $(4,585) Cost of Sales (10,961) (7,163) (6,264) (4,697) Selling, General and Administrative Expenses 48,296 27,441 20,543 27,753 Operating Income (48,682) (27,317) (21,041) (27,641) Less Non-recurring Charges: Restructuring Costs 8,186 12 - 8,186 LPS Spin Related Costs - 2,963 - - Acceleration of Performance-Based Shares 799 138 - 799 EBIT, as adjusted $(39,697) $(24,204) $(21,041) $(18,656) Depreciation and Amortization $4,024 $3,094 $2,021 $2,003 2. Net Earnings - Reconciliation Net Earnings $125,286 125,278 $75,240 $50,046 Less Non-recurring Charges: Restructuring Costs, net of tax 5,055 1,440 - 5,055 LPS Spin Related Costs, net of tax - 1,814 - - Acceleration of Performance-Based Shares, net of tax 493 84 - 493 Impact of change in tax rate on non-recurring items - - - - Net Earnings, excluding non-recurring items 130,834 128,616 75,240 55,594 Pro Forma Interest Expense, net of tax (1) - 28,131 - - Pro Forma Net Earnings 130,834 100,485 75,240 55,594 Purchase Price Amortization, net of tax (2) 9,563 11,432 4,572 4,991 Pro Forma Adjusted Net Earnings $140,397 $111,917 $79,812 $60,585 Pro Forma Net Earnings Per Share $1.36 $1.04 $0.78 $0.58 Pro Forma Adjusted Net Earnings Per Share (3) $1.47 $1.16 $0.83 $0.64 Pro Forma Diluted Weighted Average Shares (3) 95,709 96,334 96,133 95,284 3. Cashflow - Reconciliation Cash Flows from Operating Activities: Net Earnings $125,286 $125,278 $75,240 $50,046 Less Non-recurring Charges: Restructuring Costs, net of tax 4,304 1,440 - 4,304 LPS Spin Related Costs, net of tax - 1,814 - - Impact of change in tax rate on non- recurring items - - - - Net Earnings, excluding non- recurring items 129,590 128,532 75,240 54,350 Pro Forma Interest Expense, net of tax - 28,131 - - Pro Forma Adjusted Net Earnings 129,590 100,401 75,240 54,350 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash adjustments 59,790 60,757 31,700 28,090 Working capital adjustments 19,194 (49,352) 21,957 (2,763) Net cash provided by (used in) operating activities 208,574 111,806 128,897 79,677 Capital expenditures included in investing activities (48,407) (25,137) (25,836) (22,571) Pro Forma Adjusted Net Free Cash Flow $160,167 $86,669 $103,061 $57,106 12/31/2008 9/30/2008 6/30/2008 3/31/2008 1. EBIT - Continuing Operations Consolidated Revenue $473,921 $466,762 $453,347 $443,560 Cost of Sales 294,069 300,560 293,464 288,386 Selling, General and Administrative Expenses 58,298 57,909 58,570 55,098 Operating Income 121,554 108,293 101,313 100,076 Less Non-recurring Charges: Restructuring Costs - - 2,353 - LPS Spin Related Costs - - 1,960 1,003 Acceleration of Performance-Based Shares - - 138 - EBIT, as adjusted $121,554 $108,293 $105,764 $101,079 EBIT Margin, as adjusted 25.6% 23.2% 23.3% 22.8% Depreciation and Amortization $25,004 $23,800 $20,860 $23,673 Technology, Data and Analytics Revenue $149,118 $138,964 $141,744 $135,824 Cost of Sales 80,482 73,980 81,397 74,110 Selling, General and Administrative Expenses 15,121 15,790 17,471 16,258 Operating Income 53,515 49,194 42,876 45,456 Less Non-recurring Charges: Restructuring Costs - - 2,178 - LPS Spin Related Costs - - - - Acceleration of Performance-Based Shares - - - - EBIT, as adjusted $53,515 $49,194 $45,054 $45,456 EBIT Margin, as adjusted 35.9% 35.4% 31.8% 33.5% Depreciation and Amortization $15,990 $15,229 $13,971 $16,015 Loan Transaction Services Revenue $327,650 $329,473 $315,314 $311,064 Cost of Sales 217,242 228,283 215,838 217,668 Selling, General and Administrative Expenses 26,314 26,487 27,154 25,344 Operating Income 84,094 74,703 72,322 68,052 Less Non-recurring Charges: Restructuring Costs - - 163 - LPS Spin Related Costs - - - - Acceleration of Performance-Based Shares - - - - EBIT, as adjusted $84,094 $74,703 $72,485 $68,052 EBIT Margin, as adjusted 25.7% 22.7% 23.0% 21.9% Depreciation and Amortization $7,028 $6,651 $5,290 $6,163 Corporate and Other Revenue $(2,847) $(1,675) $(3,711) $(3,328) Cost of Sales (3,655) (1,703) (3,771) (3,392) Selling, General and Administrative Expenses 16,863 15,632 13,945 13,496 Operating Income (16,055) (15,604) (13,885) (13,432) Less Non-recurring Charges: Restructuring Costs - - 12 - LPS Spin Related Costs - - 1,960 1,003 Acceleration of Performance-Based Shares - - 138 - EBIT, as adjusted $(16,055) $(15,604) $(11,775) $(12,429) Depreciation and Amortization $1,986 $1,920 $1,599 $1,495 2. Net Earnings - Reconciliation Net Earnings $54,329 $51,281 $63,546 $61,732 Less Non-recurring Charges: Restructuring Costs, net of tax - - 1,440 - LPS Spin Related Costs, net of tax - - 1,200 614 Acceleration of Performance-Based Shares, net of tax - - 84 - Impact of change in tax rate on non-recurring items (223) - - - Net Earnings, excluding non-recurring items 54,106 51,281 66,270 62,346 Pro Forma Interest Expense, net of tax (1) - - 13,951 14,180 Pro Forma Net Earnings 54,106 51,281 52,319 48,166 Purchase Price Amortization, net of tax (2) 6,815 6,504 5,496 5,936 Pro Forma Adjusted Net Earnings $60,921 $57,785 $57,815 $54,102 Pro Forma Net Earnings Per Share $0.57 $0.54 $0.55 $0.49 Pro Forma Adjusted Net Earnings Per Share (3) $0.64 $0.61 $0.61 $0.55 Pro Forma Diluted Weighted Average Shares (3) 95,126 95,223 95,070 97,597 3. Cashflow - Reconciliation Cash Flows from Operating Activities: Net Earnings $54,329 $51,281 $63,546 $61,732 Less Non-recurring Charges: Restructuring Costs, net of tax - - 1,440 - LPS Spin Related Costs, net of tax - - 1,200 614 Impact of change in tax rate on non-recurring items (223) - - - Net Earnings, excluding non- recurring items 54,106 51,281 66,186 62,346 Pro Forma Interest Expense, net of tax - - 13,951 14,180 Pro Forma Adjusted Net Earnings 54,106 51,281 52,235 48,166 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash adjustments 30,081 32,420 18,262 42,495 Working capital adjustments 32,158 26,908 (91,474) 42,122 Net cash provided by (used in) operating activities 116,345 110,609 (20,977) 132,783 Capital expenditures included in investing activities (23,946) (13,205) (14,344) (10,793) Pro Forma Adjusted Net Free Cash Flow $92,399 $97,404 $(35,321) $121,990 Notes: (1) Pro forma interest expense for each of the two quarters in the period ended June 30, 2008 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 we estimate would have been 4.96% on the revolving credit agreement, Term Loan A and Term Loan B based on the one month LIBOR rate on June 30, 2008 (2.46%) plus a spread of 2.5%. Our new senior notes bear interest at a fixed rate of 8.125%. Amortization of capitalized debt issuance costs in connection with the borrowings included in pro forma interest expense total approximately $2.7 million for the six months ended June 30, 2008. These projections 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) Purchase price amortization, net of tax represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements. (3) Pro forma earnings per share and pro forma diluted weighted average shares for the quarter ended June 30, 2008 are provided based on the 94,611 shares of Lender Processing Services, Inc. common stock issued to FIS shareholders on the July 2, 2008 spin date along with dilutive common stock equivalents calculated under the treasury stock method using the $33 per share closing price of LPS on July 2, 2008 as the average market price and the number of LPS options and awards issued to our employees per the terms of the spin-off. Pro forma earnings per share and pro forma diluted weighted average shares for all other periods presented above are based on the pro forma diluted shares as included in the Company's Form 10 filed on June 20, 2008. DATASOURCE: Lender Processing Services, Inc. CONTACT: Investors: Parag Bhansali, +1-904-854-8640; or Media: Michelle Kersch, +1-904-854-5043 Web Site: http://www.lpsvcs.com/