Black Knight InfoServ, LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
8-K - 8-K - Black Knight InfoServ, LLC	q320128k.htm
EX-99.2 - EXHIBIT 99.2 - Black Knight InfoServ, LLC	supplementalmaterialsq3e.htm

Exhibit 99.1

Press Release



Investors:		Media:
Nancy Murphy		Michelle Kersch
(904) 854-8640		(904) 854-5043
nancy.murphy@lpsvcs.com		michelle.kersch@lpsvcs.com

Lender Processing Services Reports Third Quarter 2012 Earnings

Adjusted EPS increased 20% from prior year to $0.71

Technology, Data and Analytics revenue increased 11% with growth across all lines of business

Investment in technology-driven solutions supports mortgage industry requirements

JACKSONVILLE, Fla. - October 29, 2012 - Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today reported consolidated revenue of $512.7 million for the third quarter of 2012, a decrease of 1.3% from the prior year quarter, and GAAP net earnings of $58.3 million, or $0.69 per diluted share, an increase of 44% from the prior year quarter.

Third Quarter Highlights


•	Technology, Data and Analytics revenue of $192.0 million, up 11% from prior year


•	Adjusted earnings per diluted share of $0.71, including $0.02 per share loss from discontinued operations


•	EBITDA margin of 26.7%, up 460 basis points from prior year


•	Adjusted free cash flow of $69.2 million in the third quarter and $252.8 million year-to-date


•	Initiated debt refinancing to lower cost of capital and further strengthen the balance sheet


•	Completed conversion of 240,000 home equity loans to the MSP Servicing Technology platform

“Our strong third quarter results demonstrate LPS' continued delivery of high-value, technology-driven solutions to our clients to meet evolving compliance, loan quality and efficiency requirements,” said Hugh Harris, president and chief executive officer of LPS. “Our proven business model consistently generates strong cash flow allowing LPS to invest in innovative solutions that enhance the mortgage lending value chain, enable our clients to succeed, and drive long-term value for our shareholders through sustainable growth.”

“The positive quarterly results were driven by increased demand for LPS' technology solutions, record low interest rates resulting in strong refinance activity and the benefits of ongoing investments to expand our platforms. Technology, Data and Analytics is our growth platform for the future, and we are very pleased with its strong performance this quarter,” commented Chief Financial Officer Tom Schilling. “Strong margins and cash flow resulted from our focus on high-return core markets, disciplined cost management and favorable revenue mix.”

Operating income for the third quarter increased 19.4% to $112.4 million from the prior year period, while the operating margin increased to 21.9% from 18.1% in the third quarter of 2011.

Net cash provided by operating activities for the third quarter of 2012 was $85.7 million compared to $102.7 million in the prior year period, and $303.6 million in the first three quarters of 2012 compared to $329.6 million in the same period in 2011. Adjusted free cash flow for the third quarter of 2012 decreased to $69.2 million from $76.6 million in the prior year due to changes in working capital, which offset the increase in net earnings. Adjusted free cash flow is defined as net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software.

Technology, Data and Analytics Segment (TD&A)

Revenue for the Technology, Data and Analytics segment for the third quarter increased 11.2% from the prior year to $192.0 million as a result of growth in all lines of business. Revenue from Servicing Technology increased 4.0% primarily due to loan growth on the MSP platform; Default Technology revenue increased 28.3% primarily reflecting market share gains achieved during 2011 and strong demand for professional services; and Origination Technology revenue increased 25.3% due principally to higher transaction volume on the Loan Quality Gateway platform resulting from elevated refinance activity and new client implementations. In addition, Data and Analytics revenue increased 7.5% driven by greater demand for data to support elevated origination volume. Third quarter operating income increased to $60.4 million from $58.7 million in the same period in 2011 as a result of higher income from all TD&A sub-segments.

Transaction Services Segment

Revenue for the Transaction Services segment for the third quarter decreased 7.9% from the prior year period to $320.7 million. Origination Services revenue increased 15.7% to $154.1 million from the prior year as a result of higher refinance origination volume that generated increased title and escrow orders, partially offset by lower appraisal volume as the Company exited lower margin contracts. Default Services revenue decreased 22.5% to $166.7 million from the prior year quarter primarily reflecting lower transaction volumes due to industry-wide foreclosure delays. Operating income increased 15.0% from the prior year quarter to $64.2 million, while the operating margin increased 400 basis points to 20.0% reflecting higher Origination Services contributions, favorable revenue mix and prudent cost management.

Corporate

Net corporate expenses in the third quarter of 2012 decreased to $12.1 million from $20.3 million in the prior year period primarily as a result of current period legal-related expenses being charged against our previously established legal and regulatory reserve.

Balance Sheet and Capital Resources

During the third quarter, the company initiated a debt refinancing to lower the cost of capital and further strengthen the balance sheet by extending the maturity of long-term debt and reducing secured debt. The Company commenced an offering of $600 million of Senior Notes due 2023 at a coupon of 5.75% issued at par value. The net proceeds, along with cash on hand, is being used to repay $609 million of outstanding debt including $362 million of 8.125% Notes due 2016 and $247 million of Term Loan B under its senior credit facility, and pay fees and expenses. The refinancing will result in annual net interest expense savings of approximately $9.0 million. The Senior Note offering was completed on October 12, 2012.

The legal and regulatory accrual decreased by $6.7 million during the current quarter to $196.4 million, due to the payment of expenses that were previously recognized in our legal and regulatory reserve established in prior quarters. No reserves for legal and regulatory matters were added during the third quarter.

The company ended the third quarter with cash of $160.7 million compared to $138.5 million in the second quarter 2012.

Outlook

Based on the current environment, the company expects fourth quarter 2012 revenue to be in the range of $475 million to $495 million and adjusted net earnings per diluted share to be in the range of $0.65 to $0.69.

Earnings Conference Call and Webcast

LPS will host a conference call tomorrow at 10:00 a.m. ET with a live webcast on the Investor Relations section of its website at www.lpsvcs.com. Earnings information, including this press release and our financial results presentation, is available on the website. A replay of the webcast will be available on the website shortly after the call where it will be archived for one month. A replay of the call will be available until November 6, 2012, by dialing 888-203-1112 (access code: 4041948).

About Lender Processing Services

LPS (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.

These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries. Lender Processing Services is a Fortune 1000 company headquartered in Jacksonville, Fla., employing approximately 8,000 professionals. For more information, please visit www.lpsvcs.com.

Use of Non-GAAP Financial Information

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

Forward-Looking Statements

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

Information,” “Risk Factors” and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.

###

Exhibit A

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In thousands, except per share data)
Revenues	$	512,676		$	519,437		$	1,551,904		$	1,556,280
Expenses:
Operating expenses	375,716			404,423			1,150,905			1,175,381
Depreciation and amortization	24,516			20,822			72,538			66,445
Legal and regulatory charges	—			—			144,476			—
Exit costs, impairments and other charges	—			—			—			29,198
Total expenses	400,232			425,245			1,367,919			1,271,024
Operating income	112,444			94,192			183,985			285,256
Other income (expense):
Interest income	463			353			1,365			1,064
Interest expense	(16,112		)	(22,986		)	(48,969		)	(50,961		)
Other income, net	14			(128		)	173			(174		)
Total other income (expense)	(15,635		)	(22,761		)	(47,431		)	(50,071		)
Earnings from continuing operations before income taxes	96,809			71,431			136,554			235,185
Provision for income taxes	36,110			26,787			60,973			88,195
Net earnings from continuing operations	60,699			44,644			75,581			146,990
Loss from discontinued operations, net of tax	(2,395		)	(4,194		)	(8,036		)	(29,246		)
Net earnings	$	58,304		$	40,450		$	67,545		$	117,744

Net earnings per share - diluted from continuing operations	$	0.71		$	0.53		$	0.88		$	1.71
Net loss per share - diluted from discontinued operations	(0.02		)	(0.05		)	(0.08		)	(0.34		)
Net earnings per share - diluted	$	0.69		$	0.48		$	0.80		$	1.37
Weighted average shares outstanding - diluted	84,948			84,415			84,774			86,108

Exhibit B

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)



	September 30, 2012			December 31, 2011
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	160,716		$	77,355
Trade receivables, net of allowance for doubtful accounts	308,359			345,048
Other receivables	3,652			1,423
Prepaid expenses and other current assets	33,726			33,004
Deferred income taxes	111,853			74,006
Total current assets	618,306			530,836

Property and equipment, net	112,463			121,245
Computer software, net	241,103			228,882
Other intangible assets, net	26,299			39,140
Goodwill	1,126,090			1,132,828
Other non-current assets	245,267			192,484
Total assets	$	2,369,528		$	2,245,415

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	2,500		$	39,310
Trade accounts payable	37,655			43,105
Accrued salaries and benefits	79,042			64,383
Legal and regulatory accrual	196,446			78,483
Other accrued liabilities	158,659			168,627
Deferred revenues	53,210			64,078
Total current liabilities	527,512			457,986

Deferred revenues	25,724			34,737
Deferred income taxes, net	160,360			122,755
Long-term debt, net of current portion	1,074,500			1,109,850
Other non-current liabilities	36,375			32,099
Total liabilities	1,824,471			1,757,427

Stockholders' equity:
Preferred stock $0.0001 par value; 50 million shares authorized, none issued at September 30, 2012 and December 31, 2011	—			—
Common stock $0.0001 par value; 500 million shares authorized, 97.4 million shares issued at September 30, 2012 and December 31, 2011	10			10
Additional paid-in capital	253,285			250,533
Retained earnings	699,895			658,146
Accumulated other comprehensive loss	(3,427		)	(1,783		)
Treasury stock at cost; 12.7 million and 13.0 million shares at September 30, 2012 and December 31, 2011, respectively	(404,706		)	(418,918		)
Total stockholders' equity	545,057			487,988
Total liabilities and stockholders' equity	$	2,369,528		$	2,245,415

Exhibit C

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Nine months ended September 30,
	2012			2011
	(In thousands)
Cash flows from operating activities:
Net earnings	$	67,545		$	117,744
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	73,407			73,753
Amortization of debt issuance costs	3,317			8,901
Asset impairment charges	3,812			31,855
(Gain) loss on sale of discontinued operations	(6,688		)	1,486
Deferred income taxes, net	776			11,985
Stock-based compensation cost	19,520			28,179
Income tax effect of equity compensation	(494		)	588
Changes in assets and liabilities, net of effects of acquisitions:
Trade receivables	27,543			64,291
Other receivables	(1,748		)	2,708
Prepaid expenses and other assets	(18,512		)	(6,258		)
Deferred revenues	10,605			(3,382		)
Accounts payable, accrued liabilities and other liabilities	124,487			(2,249		)
Net cash provided by operating activities	303,570			329,601

Cash flows from investing activities:
Additions to property and equipment	(16,109		)	(25,970		)
Additions to capitalized software	(56,088		)	(55,501		)
Purchases of investments, net of proceeds from sales	(17,604		)	(14,918		)
Acquisition of title plants and property records data	(33,600		)	(15,686		)
Acquisitions, net of cash acquired	(12,250		)	(9,802		)
Proceeds from sale of discontinued operations, net of cash distributed	16,206			—
Net cash used in investing activities	(119,445		)	(121,877		)

Cash flows from financing activities:
Borrowings	—			960,000
Debt service payments	(72,082		)	(942,915		)
Exercise of stock options and restricted stock vesting	(1,792		)	(2,680		)
Income tax effect of equity compensation	494			(588		)
Dividends paid	(25,384		)	(26,006		)
Debt issuance costs paid	—			(22,059		)
Treasury stock repurchases	—			(136,878		)
Bond Repurchases	—			(4,925		)
Payment of contingent consideration related to acquisitions	(2,000		)	—
Net cash used in financing activities	(100,764		)	(176,051		)

Net increase in cash and cash equivalents	83,361			31,673
Cash and cash equivalents, beginning of period	77,355			52,287
Cash and cash equivalents, end of period	$	160,716		$	83,960

Supplemental disclosures of cash flow information:
Cash paid for interest	$	54,774		$	48,672
Cash paid for taxes	$	46,853		$	49,181

Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)



		YEAR-TO-DATE (1)						QUARTER (1)
		Q3-2012			Q3-2011			Q3-2012			Q2-2012			Q1-2012			Q4-2011			Q3-2011			Q2-2011			Q1-2011
1.	Revenues - Continuing Operations
	Technology, Data and Analytics:
	Technology	$	503,790		$	460,333		$	173,985		$	168,515		$	161,290		$	161,252		$	156,414		$	152,676		$	151,243
	Servicing Technology	331,207			314,249			111,572			111,284			108,351			107,103			107,273			103,676			103,300
	Default Technology	101,790			86,536			36,163			34,051			31,576			33,752			28,185			29,201			29,150
	Origination Technology	70,793			59,548			26,250			23,180			21,363			20,397			20,956			19,799			18,793
	Data and Analytics	52,414			51,926			17,971			17,590			16,853			17,019			16,724			17,897			17,305
	Total	556,204			512,259			191,956			186,105			178,143			178,271			173,138			170,573			168,548
	Transaction Services:
	Origination Services	451,548			367,911			154,057			150,741			146,750			151,527			133,099			105,856			128,956
	Default Services	546,144			680,889			166,657			196,625			182,862			205,326			214,996			224,744			241,149
	Total	997,692			1,048,800			320,714			347,366			329,612			356,853			348,095			330,600			370,105
	Corporate	(1,992		)	(4,779		)	6			(264		)	(1,734		)	(1,292		)	(1,796		)	(1,513		)	(1,470		)
	Total Revenues	$	1,551,904		$	1,556,280		$	512,676		$	533,207		$	506,021		$	533,832		$	519,437		$	499,660		$	537,183

	Revenue Growth from Prior Year Period
	Technology, Data and Analytics:
	Technology	9.4		%	3.1		%	11.2		%	10.4		%	6.6		%	4.6		%	0.1		%	2.7		%	6.9		%
	Servicing Technology	5.4		%	3.3		%	4		%	7.3		%	4.9		%	5.8		%	4		%	0.7		%	5.3		%
	Default Technology	17.6		%	0.4		%	28.3		%	16.6		%	8.3		%	1.9		%	(14.7		)%	15.1		%	5		%
	Origination Technology	18.9		%	6.3		%	25.3		%	17.1		%	13.7		%	3.4		%	4.7		%	(2.7		)%	20.2		%
	Data and Analytics	0.9		%	(6.8		)%	7.5		%	(1.7		)%	(2.6		)%	(13.7		)%	(8.1		)%	(3.9		)%	(8.5		)%
	Total	8.6		%	2		%	10.9		%	9.1		%	5.7		%	2.5		%	(0.7		)%	2.0		%	5		%
	Transaction Services:
	Origination Services	22.7		%	(13.7		)%	15.7		%	42.4		%	13.8		%	(15.5		)%	(14.8		)%	(19.5		)%	(7.0		)%
	Default Services	(19.8		)%	(18.6		)%	(22.5		)%	(12.5		)%	(24.2		)%	(23.0		)%	(22.5		)%	(20.4		)%	(12.9		)%
	Total	(4.9		)%	(16.9		)%	(7.9		)%	5.1		%	(10.9		)%	(20.0		)%	(19.7		)%	(20.1		)%	(10.9		)%
	Corporate	n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m
	Total Revenues	(0.3		)%	(11.5		)%	(1.3		)%	6.7		%	(5.8		)%	(13.6		)%	(14.3		)%	(13.7		)%	(6.3		)%



Revenue Growth from Sequential Period
Technology, Data and Analytics:
Technology	9.4	%	3.1	%	3.2	%	4.5	%	—	%	3.1	%	2.4	%	0.9	%	(1.9	)%
Servicing Technology	5.4	%	3.3	%	0.3	%	2.7	%	1.2	%	(0.2	)%	3.5	%	0.4	%	2	%
Default Technology	17.6	%	0.4	%	6.2	%	7.8	%	(6.4	)%	19.8	%	(3.5	)%	0.2	%	(12	)%
Origination Technology	18.9	%	6.3	%	13.2	%	8.5	%	4.7	%	(2.7	)%	5.8	%	5.4	%	(4.8	)%
Data and Analytics	0.9	%	(6.8	)%	2.2	%	4.4	%	(1	)%	1.8	%	(6.6	)%	3.4	%	(12.3	)%
Total	8.6	%	2	%	3.1	%	4.5	%	(0.1	)%	3	%	1.5	%	1.2	%	(3.1	)%
Transaction Services:
Origination Services	22.7	%	(13.7	)%	2.2	%	2.7	%	(3.2	)%	13.8	%	25.7	%	(17.9	)%	(28.1	)%
Default Services	(19.8	)%	(18.6	)%	(15.2	)%	7.5	%	(10.9	)%	(4.5	)%	(4.3	)%	(6.8	)%	(9.6	)%
Total	(4.9	)%	(16.9	)%	(7.7	)%	5.4	%	(7.6	)%	2.5	%	5.3	%	(10.7	)%	(17.1	)%
Corporate	n/m		n/m		n/m		n/m		n/m		n/m		n/m		n/m		n/m
Total Revenues	(0.3	)%	(11.5	)%	(3.9	)%	5.4	%	(5.2	)%	2.8	%	4.0	%	(7.0	)%	(13.1	)%

Notes:

(1) 2011 revenues have been reclassified to conform to the current year presentation.

Exhibit E

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)



		YEAR-TO-DATE									QUARTER																		YEAR ENDED
		Q3-2012			Q3-2011			Q3-2012			Q2-2012			Q1-2012			Q4-2011			Q3- 2011			Q2-2011			Q1 - 2011			12/31/2011
1.	Operating Results - Continuing Operations
	Consolidated
	Revenues	$	1,551,904		$	1,556,280		$	512,676		$	533,207		$	506,021		$	533,832		$	519,437		$	499,660		$	537,183		$	2,090,112
	Operating Income (Loss), as reported	183,985			285,256			112,444			(22,760		)	94,301			4,926			94,192			80,666			110,398			290,182
	Adjustments:
	Legal and Regulatory Charge (1)	144,476			—			—			144,476			—			78,484			—			—			—			78,484
	Exit costs, Impairments and Other Charges (2)	—			29,198			—			—			—			27,714			—			9,887			19,311			56,912
	Operating Income, as adjusted	328,461			314,454			112,444			121,716			94,301			111,124			94,192			90,553			129,709			425,578
	Depreciation and Amortization	72,538			66,445			24,516			23,778			24,244			23,931			20,822			22,627			22,996			90,376
	EBITDA, as adjusted	$	400,999		$	380,899		$	136,960		$	145,494		$	118,545		$	135,055		$	115,014		$	113,180		$	152,705		$	515,954
	Operating Margin, as adjusted	21.2		%	20.2		%	21.9		%	22.8		%	18.6		%	20.8		%	18.1		%	18.1		%	24.1		%	20.4		%
	EBITDA Margin, as adjusted	25.8		%	24.5		%	26.7		%	27.3		%	23.4		%	25.3		%	22.1		%	22.7		%	28.4		%	24.7		%
	Technology, Data and Analytics
	Revenues	$	556,204		$	512,259		$	191,956		$	186,105		$	178,143		$	178,271		$	173,138		$	170,573		$	168,548		$	690,530
	Operating Income, as reported	172,244			162,563			60,377			57,901			53,966			51,341			58,715			49,526			54,322			213,904
	Adjustments:
	Exit costs, Impairments and Other Charges (2)	—			8,887			—			—			—			7,971			—			6,585			2,302			16,858
	Operating Income, as adjusted	172,244			171,450			60,377			57,901			53,966			59,312			58,715			56,111			56,624			230,762
	Depreciation and Amortization	55,385			49,234			18,765			18,036			18,584			18,105			15,120			16,881			17,233			67,339
	EBITDA, as adjusted	$	227,629		$	220,684		$	79,142		$	75,937		$	72,550		$	77,417		$	73,835		$	72,992		$	73,857		$	298,101
	Operating Margin, as adjusted	31.0		%	33.5		%	31.5		%	31.1		%	30.3		%	33.3		%	33.9		%	32.9		%	33.6		%	33.4		%
	EBITDA Margin, as adjusted	40.9		%	43.1		%	41.2		%	40.8		%	40.7		%	43.4		%	42.6		%	42.8		%	43.8		%	43.2		%
	Transaction Services
	Revenues	$	997,692		$	1,048,800		$	320,714		$	347,366		$	329,612		$	356,853		$	348,095		$	330,600		$	370,105		$	1,405,653
	Operating Income, as reported	191,641			189,567			64,177			76,010			51,454			70,752			55,824			52,610			81,133			260,319



	Adjustments:
	Exit costs, Impairments and Other Charges (2)	—			4,052			—			—			—			(236		)	—			1,074			2,978			3,816
	Operating Income, as adjusted	191,641			193,619			64,177			76,010			51,454			70,516			55,824			53,684			84,111			264,135
	Depreciation and Amortization	14,153			13,984			4,767			4,694			4,692			4,850			4,726			4,650			4,608			18,834
	EBITDA, as adjusted	$	205,794		$	207,603		$	68,944		$	80,704		$	56,146		$	75,366		$	60,550		$	58,334		$	88,719		$	282,969
	Operating Margin, as adjusted	19.2		%	18.5		%	20.0		%	21.9		%	15.6		%	19.8		%	16.0		%	16.2		%	22.7		%	18.8		%
	EBITDA Margin, as adjusted	20.6		%	19.8		%	21.5		%	23.2		%	17.0		%	21.1		%	17.4		%	17.6		%	24.0		%	20.1		%
	Corporate and Other
	Revenues	$	(1,992	)	$	(4,779	)	$	6		$	(264	)	$	(1,734	)	$	(1,292	)	$	(1,796	)	$	(1,513	)	$	(1,470	)	$	(6,071	)
	Operating Loss, as reported	(179,900		)	(66,874		)	(12,110		)	(156,671		)	(11,119		)	(117,167		)	(20,347		)	(21,470		)	(25,057		)	(184,041		)
	Adjustments:
	Legal and Regulatory Charge (1)	144,476			—			—			144,476			—			78,484			—			—			—			78,484
	Exit costs, Impairments and Other Charges (2)	—			16,259			—			—			—			19,979			—			2,228			14,031			36,238
	Operating Loss, as adjusted	(35,424		)	(50,615		)	(12,110		)	(12,195		)	(11,119		)	(18,704		)	(20,347		)	(19,242		)	(11,026		)	(69,319		)
	Depreciation and Amortization	3,000			3,227			984			1,048			968			976			976			1,096			1,155			4,203
	EBITDA, as adjusted	$	(32,424	)	$	(47,388	)	$	(11,126	)	$	(11,147	)	$	(10,151	)	$	(17,728	)	$	(19,371	)	$	(18,146	)	$	(9,871	)	$	(65,116	)
2.	Net Earnings - Reconciliation
	Net Earnings (Loss)	$	67,545		$	117,744		$	58,304		$	(37,880	)	$	47,121		$	(21,201	)	$	40,450		$	21,365		$	55,929		$	96,543
	Adjustments - Continuing Operations:
	Legal and Regulatory Charge (1)	100,624			—			—			100,624			—			53,086			—			—			—			53,086
	Exit costs, Impairments and Other Charges (2)	—			18,177			—			—			—			16,822			—			6,204			11,973			34,999
	Total EBIT Adjustments to Continuing Operations	100,624			18,177			—			100,624			—			69,908			—			6,204			11,973			88,085
	Adjustments - Discontinued Operations:
	Impairment and Restructuring Charges, net	—			17,797			—			—			—			16,454			—			17,759			38			34,251
	(Gain)/Loss on Disposal of Operations, net	—			1,486			—			—			—			(928		)	1,486			—			—			558
	Total Adjustments to Discontinued Operations	—			19,283			—			—			—			15,526			1,486			17,759			38			34,809
	Adjustments - Non-operating:
	Write-off of Debt Issuance Costs, net (3)	—			4,978			—			—			—			—			4,978			—			—			4,978
	Prior Year Tax Benefit	—			—			—			—			—			(6,458		)	—			—			—			(6,458		)
	Total Non-operating Adjustments	—			4,978			—			—			—			(6,458		)	4,978			—			—			(1,480		)
	Net Earnings, as adjusted	168,169			160,182			58,304			62,744			47,121			57,775			46,914			45,328			67,940			217,957



	Purchase Price Amortization, net (4)	5,866			8,297			1,712			1,733			2,421			2,655			2,495			2,674			3,128			10,952
	Adjusted Net Earnings	$	174,035		$	168,479		$	60,016		$	64,477		$	49,542		$	60,430		$	49,409		$	48,002		$	71,068		$	228,909
	Adjusted Net Earnings Per Diluted Share	$	2.06		$	1.96		$	0.71		$	0.76		$	0.59		$	0.72		$	0.59		$	0.56		$	0.81		$	2.68
	Diluted Weighted Average Shares	84,774			86,108			84,948			84,578			84,567			84,430			84,415			85,812			88,134			85,685

3.	Cash Flow - Reconciliation
	Cash Flows from Operating Activities:
	Net Earnings (Loss)	$	67,545		$	117,744		$	58,304		$	(37,880	)	$	47,121		$	(21,201	)	$	40,450		$	21,365		$	55,929		$	96,543
	Adjustments:
	Cash Related Restructuring Costs, net	21,434			11,479			5,746			13,335			2,353			(3,302		)	2,107			5,220			4,152			8,177
	Net Earnings (Loss), as adjusted	88,979			129,223			64,050			(24,545		)	49,474			(24,503		)	42,557			26,585			60,081			104,720
	Adjustments to reconcile net earnings to net cash provided by operating activities:
	Non-cash adjustments	93,650			156,747			49,196			7,022			37,432			62,763			50,508			61,260			44,979			219,510
	Working capital adjustments	142,375			55,110			(21,816		)	158,693			5,498			106,696			11,756			23,822			19,532			161,806
	Net cash provided by operating activities	325,004			341,080			91,430			141,170			92,404			144,956			104,821			111,667			124,592			486,036
	Capital expenditures included in investing activities	(72,197		)	(81,471		)	(22,220		)	(26,258		)	(23,719		)	(23,408		)	(28,243		)	(29,907		)	(23,321		)	(104,879		)
	Adjusted Free Cash Flow	$	252,807		$	259,609		$	69,210		$	114,912		$	68,685		$	121,548		$	76,578		$	81,760		$	101,271		$	381,157
4.	Discontinued Operations - Reconciliation
	Net Loss, as reported	$	(8,036	)	$	(29,246	)	$	(2,395	)	$	(3,585	)	$	(2,056	)	$	(17,017	)	$	(4,194	)	$	(21,101	)	$	(3,951	)	$	(46,263	)
	Adjustments:
	Impairment and Restructuring Charges, net (5)	—			17,797			—			—			—			16,454			—			17,759			38			34,251
	(Gain)/Loss on Disposal of Operations, net (6)	—			1,486			—			—			—			(928		)	1,486			—			—			558
	Net Loss, as adjusted	(8,036		)	(9,963		)	(2,395		)	(3,585		)	(2,056		)	(1,491		)	(2,708		)	(3,342		)	(3,913		)	(11,454		)
	Purchase Price Amortization, net (4)	152			656			—			38			114			201			122			272			262			857
	Adjusted Net Loss	$	(7,884	)	$	(9,307	)	$	(2,395	)	$	(3,547	)	$	(1,942	)	$	(1,290	)	$	(2,586	)	$	(3,070	)	$	(3,651	)	$	(10,597	)
	Adjusted Net Loss Per Diluted Share	$	(0.08	)	$	(0.11	)	$	(0.02	)	$	(0.04	)	$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.04	)	$	(0.04	)	$	(0.13	)
	Diluted Weighted Average Shares	84,774			86,108			84,948			84,578			84,567			84,430			84,415			85,812			88,134			85,685

Notes:

(1) During Q4-2011 and Q2-2012, we recognized pre-tax legal and regulatory contingency accruals of $78.5 million and $144.5 million ($53.1 million and $100.6 million, net of tax), respectively, for estimated settlement and third-party legal expenses related to various ongoing legal and regulatory matters.

(2) Includes the impact of various severance, asset impairment and restructuring charges. Severance charges reflect the departure of certain executives including our former chief executive officer and former co-chief operating officer, as well as the impact of other personnel restructuring programs. In connection with these initiatives, during 2011, we recorded severance charges, including equity acceleration, of $33.4 million ($20.6 million net of tax). Asset impairment and restructuring charges, which totaled $23.5 million during 2011 ($14.4 million net of tax) primarily reflects the write-down of various assets as well as provisions for operating lease impairments.

(3) During 2011, we recorded a charge totaling $8.0 million ($5.0 million net of tax) related to the write-off of certain debt issuance costs in connection with the refinancing of our senior credit facilities.

(4) Purchase price amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.

(5) Fiscal 2011 reflects 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.

(6) Fiscal 2011 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 shutdown.

Black Knight InfoServ, LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 29, 2012

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Black Knight InfoServ, LLC Reports