Lender Processing Services -...

Lender Processing Services

June 2008

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Forward-Looking StatementsThis presentation will contain forward-looking statements that involve a number of risks and uncertainties.Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptionsmade by, and information currently available to, management. Because such statements are based onexpectations as to future economic performance and are not statements of fact, actual results may differmaterially from those projected. We undertake no obligation to update any forward-looking statements, whetheras a result of new information, future events or otherwise. The risks and uncertainties which forward-lookingstatements are subject to include, but are not limited to: general political, economic, and business conditions,including the possibility of intensified international hostilities, acts of terrorism, and general volatility in capitalmarkets; failures to adapt our services to changes in technology or in the marketplace; consolidation in themortgage lending or banking industry; security breaches of our systems and computer viruses affecting oursoftware; a decrease in the volume of real estate transactions such as real estate sales and mortgagerefinancings, which can be caused by high or increasing interest rates, a shortage of mortgage funding, or aweak United States economy; the impact of competitive services and pricing; the ability to identify suitableacquisition candidates and the ability to finance such acquisitions, which depends upon the availability ofadequate cash reserves from operations or of acceptable financing terms and the variability of our stock price;our ability to integrate any acquired business’ operations, services, customers, personnel; the effect of oursubstantial leverage, which may limit the funds available to make acquisitions and invest in our business;changes in, or the failure to comply with, government regulations, including regulatory changes or reform relatedto RESPA, appraisal practices and privacy obligations; and other risks detailed in the Risk Factor section in theForm 10.

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Agenda

• Transaction Overview• LPS Overview• Business Review• Financial Review• Summary

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Transaction Overview• FIS and LPS have unique and distinct businesses

– Different customers, markets, management

• Current joint structure may not maximize full potential of both businesses

– limits ability to leverage operations, technology and product development

– leads to internal competition for investments and resources

– hinders strategic flexibility

• Spin-off from FIS creates an independent publicly traded company

– Market leading mortgage processor

– Over 1,000 financial institution clients, including 39 of the 50 largest banks in the US

• Pure play reduces complexity for investors

LPS is Well Positioned to Succeed as a Stand-Alone Public Company

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LPS OverviewInvestment Highlights

• One of the largest providers of technology, processing, data and outsourced services to mortgage lenders

• Leading market positions in technology based solutions:– #1 U.S. provider of Mortgage Processing Services– #1 U.S. provider of Centralized Settlement Services– #1 U.S. provider of Mortgage Default Solutions

• Industry’s most comprehensive range of integrated applications and services• Deep and long term relationships with nations top lenders

– On average, LPS top 10 customers have been with us for 18 years and utilize 17 of 29 services

• Strong organic growth and Free Cash Flow• Significant scale with 2007 pro forma revenue and EBITDA of $1,690.6 million and $526.7

million, respectively

Industry Leader with Growing Market Share

Enhanced flood and tax servicesEnhanced flood and tax services

Automated title decisioning tool– Streamlined Title

Automated title decisioning tool– Streamlined Title

Loan origination platform– Empower

Loan origination platform– Empower

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LPS OverviewEvolution of LPS

Electronic delivery of settlement services – ELSElectronic delivery of settlement services – ELS

Automated end-to-end servicing and loan boarding– MSP and ELI

Automated end-to-end servicing and loan boarding– MSP and ELI

Appraisal, property valuation and title and closing – LSIAppraisal, property valuation and title and closing – LSIProcess, invoice and imaging management– Mortgage Desktop

Process, invoice and imaging management– Mortgage Desktop

Data delivery at POS technology– DecisionStream

Data delivery at POS technology– DecisionStream

Web services Web services

Web-based closing technology– ClosingStream

Web-based closing technology– ClosingStream

Lien release – DOCXLien release – DOCX

Analytics expertise – AFTAnalytics expertise – AFT

Comprehensive industry databases – McDash

Comprehensive industry databases – McDash

2001 2002 2003 2004 2005 2006 2007 2008

AcquireAcquire

BuildBuild

Strong Competitive Position & High Barriers to Entry

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LPS OverviewMarket Metrics

Originations(in millions)

Foreclosures(in thousands)

Mortgage Volume –Loans Outstanding

(in millions)


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LPS OverviewGrowth Drivers

Leveraging Comprehensive Solutions

Leveraging Comprehensive Solutions

• Drive market share gains

• Extend product penetration

• Expand usage

Expanding Current Service Offerings

Expanding Current Service Offerings

• Capital markets

• Data and analytics

• Fraud solutions

Extending TechnologyLeadership Position

Extending TechnologyLeadership Position

Pursuing SelectedAcquisitions

Pursuing SelectedAcquisitions

• Desktop expansion

• DecisionStream and ClosingStream

• RealEC

• Watterson Prime

• Applied Financial Technology

• McDash

Focused on Strong Profitable Growth

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LPS OverviewFinancial Performance


Strong, consistent revenue and EBITDA growth

Revenue Growth EBITDA Growth

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LPS OverviewOrganization

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Business Review

66%

34%

53%47%

Revenue: $1,690.6mm EBITDA: $526.7mm

Technology, Data and Analytics

Loan Transaction Services

TD&A segment overview• Mortgage processing services – automates all areas

including loan setup, ongoing processing, servicing, accounting and reporting

• Desktop System – workflow information system used primarily in connection with default management

• Other software applications – includes mortgage origination, real estate, and title insurance software

• Data and analytics businesses – includes alternative property valuations, property records business and advanced analytic services

LTS segment overview• Loan facilitation services – Settlement services

including title agency and closing services, traditional appraisal and appraisal management services, and other origination services such as real estate tax services and flood zone information

• Default management services – property preservation services, foreclosure services, and real estate owned (REO) services

RefinanceSale

Default

CollectionsLoss Mitigation

CollectionsLoss Mitigation ForeclosureForeclosure BankruptcyBankruptcy REO

ManagementREO

Management

ServicingQuality ControlLoan BoardingQuality ControlLoan Boarding

CustomerService

CustomerService

CashManagement

CashManagement

EscrowManagement

EscrowManagement

Origination

Lead ManagementLoan Sales

Lead ManagementLoan Sales

LoanProcessing

LoanProcessing

LoanUnderwriting

LoanUnderwriting

LoanClosingLoan

Closing

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Business ReviewEnd-to-End Mortgage Process


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Business ReviewBalanced Business Model


Technology, Data and Analytics

Cyclical Counter CyclicalNon-Cyclical

Origination Services

Property ValuationTitle

Closing Services

Origination Services

Property ValuationTitle

Closing Services

Default Services

Field ServicesForeclosure/Bankruptcy

REO ManagementTitle

Default Services

Field ServicesForeclosure/Bankruptcy

REO ManagementTitle

Mortgage Servicing PlatformLoan Origination Software

Process, Invoice and Imaging ManagementProperty / Loan Data and Analytics

LPS business mix results in balanced revenue stream across volatile mortgage markets.

Segment EBITDA margin

Technology, Data & Analytics 45.7%

Loan Transaction Services 26.1%

Business ReviewHighly Diversified Revenue

Segment EBITDA margin

Technology, Data & Analytics 44.3%

Loan Transaction Services 29.7%

Revenue: $1,382.5 million

EBITDA: $ 430.6 million

EBITDA Margin: 31.1%

Revenue: $1,690.6 million

EBITDA: $ 526.7 million

EBITDA Margin: 31.2%

Loan Facilitation Services

Mortgage Processing

Other TD&A

Default Services


44.9% 15.7%

23.3%16.1%

Loan Facilitation Services

Mortgage Processing

Other TD&A

Default Services

13.6%38.5%

27.9% 20.0%

Strong revenue growth, robust margins

FY2005 Revenue Mix FY2007 Revenue Mix

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Business ReviewCompetitive Landscape – Data and Services


LPS FirstAmerican LandAM Fiserv Credit

Bureaus

Tax Data

Flood Services

Appraisal/Property Valuation

Title and Closing Services

Lien Release

AVM

Field Services

REO

Data Services

Title Underwriting

Default Management Outsource

Portfolio Analytics/ Due Diligence

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Business ReviewCompetitive Landscape – Technology


LPS FirstAmerican LandAM Fiserv Credit

Bureaus

Loan Origination Technology

Automated End-to-End Loan Process

Web-Based Closing Solution

Data Delivery at Point of Sale

Automated Title Decisioning Tool

Electronic Delivery Technology

Automated Order, Track and Delivery

Mortgage Servicing Technology

Automated End-to-End Servicing

Electronic Loan Boarding

Web Services

Default Management Technology

Automated End-to-End Servicing

Process Invoice and Imaging Management

17Lender Processing Services

2007

138

$554mm

170

$692mm

2006

100

$463mm 2005

# of services

Revenue ($)

Breadth

Dep

th

Business ReviewKey client relationships

Bank of America

Barclays/HomEq CitiGroup Countrywide JPMorgan

ChaseJPMorgan

Chase/EMC

HSBC

Wilbur Ross/ Option

One

Washington Mutual

WellsFargo TOTAL

YE 2007Total LPS Services

(Out of 29)23 13 15 16 15 16 19 16 19 18 170

YE 2006Total LPS Services

(Out of 29)23 10 8 10 10 8 18 16 18 17 138

• No single customer accounted for more than 10% of FY2007 revenue

• Average length of relationship is 18 years

• Average number of LPS services utilized is 17

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Business ReviewMarket Size*

TD & A Loan Facilitation Default

19%

81%

25%

75%

Total Market = $2.2B Total Market = $2.4B


83%

17%

* 2007 data; Source: company and industry estimates

LPS Market Share

Attractive growth opportunities in all areas

DefaultLoan FacilitationTD & A

Total Market = $2.7B

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Business ReviewFavorable Market Dynamics

Centralized Lending• Large banks are gaining market share• Increased direct lending versus wholesale

and correspondent channels

Low-Cost Provider• Scale• Domain expertise• Integrated data, technology and

services (MSP and Desktop)


Need to Reduce Internal Costs• Focus on reducing servicing costs• Increase efficiency through technology

and integrated solutions

Increased Market Share• Trend to centralize and outsource

operations• Drives higher volumes to LPS

Flight to Quality• Changing credit market conditions are

driving lenders to focus on higher quality borrowers

• More stringent underwriting controls• Increased demand for better tools to mitigate

long-term risk

Streamlined Product Solutions• Good fit for automated solutions

in a centralized environment• Valuations, Streamlined Title,

Web-based closings• Development of predictive models and

indicators of future loan performance

Financial ReviewTechnology, Data & Analytics

• Mortgage processing services –automates all areas of loan servicing, including loan setup and ongoing processing, customer service, accounting and reporting.

• Desktop System – workflow information system that assists customers in managing business processes and connectivity used primarily in connection with default management.

• Other software applications – include mortgage origination, real estate, and title insurance software.

• Data and analytics businesses – includes alternative property valuations, property records business and advanced analytic services, which assists customers in their loan marketing or loss mitigation efforts.

• Mortgage processing services – Typically fee per month per loan on file. Recurring revenue, long-term contracts, high switching costs.

• Desktop System – Activity fees per foreclosure. To be expanded to other mortgage servicing business processes. High switching costs; clients typically use LPS exclusively.

• Other software applications – License, maintenance and professional service fees.

• Data and analytics businesses –Transaction, activity and subscription fees.


Segment Overview Revenue Drivers

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Financial ReviewTechnology, Data & Analytics

($MM)($MM)

Historical Revenue Historical EBITDA

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$525 $547$570

Mortgage Processing Other TD&A

Financial ReviewLoan Transaction Services


Loan facilitation services:• Settlement services – title agency and

closing services• Appraisal services – traditional appraisal

and appraisal management services• Other origination services – real estate

tax services and flood zone information

Default management services:• Property preservation services – designed

to preserve value of properties securing defaulted loans

• Foreclosure services – includes access to a nationwide network of independent attorneys, document preparation and recording and other services

• REO services – covering real estate to which our customers take title and seek to sell following default

Loan facilitation services:• Transaction driven• Origination services paid by lender and

ultimately, primarily borne by customer

Default management services:• Transaction driven• Various services related to defaulted and

foreclosed properties, paid by lender or vendor

Segment Overview Revenue Drivers

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$820$901

$1,126

Loan Facilitation Services Default Services

($MM)($MM)


Historical Revenue Historical EBITDA

Financial ReviewLoan Transaction Services

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Revenue ($ millions)

Financial ReviewKey Statistics

$1,382.5 $1,485.0$1,690.6

2005 2006 2007

$180.3

$271.7$212.4

2005 2006 2007

* Net income plus depreciation and amortization less capital expenditures and changes in working capital and other assets & liabilities. As presented in Form 10; includes pro-forma after-tax interest expense of $55.8 million in 2007.

EBITDA ($ millions)

Free cash flow* ($ millions) Capital expenditures ($ millions)

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Revenue ($ millions)

Financial ReviewHistorical pro forma quarterly data

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2006 2007 2008

Financial Review 2008 Adjusted Guidance


2007 2008(amounts in millions except per share data) Carveout Guidance (1)

Revenue $1,690.6 7% – 9%

EBIT 424.1 6% – 8%

Net Earnings per Diluted Share $2.06 $2.10 – $2.22

Adjusted Earnings per Diluted Share $2.32 $2.34 – $2.46

Free Cashflow $156.6 $193 – $228

Diluted Shares (2) 97.7 97.0

Capital Expenditures $70.6 $65 – $75

Depreciation & Amortization $102.6 $95

Solid start as a stand-alone public company

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Financial ReviewLong Term Outlook

• Grow revenue 6–9% annually 2009–2011

• Expand operating margin on average by 50 bps per year

• Target $400–$500 million in debt reduction through 2011

• Indicated dividend of 40 cents/share

• Repurchase shares opportunistically

• Selectively pursue acquisitions


Grow EPS by 12–15% annually 2009–2011

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Summary

• Leading market positions in:– Technology, Data and Analytics– Loan Transaction Services

• Revenue growth faster than market• Expanding margins• Attractive dividend• Strong free cash flow


Focused on delivering above average returns to shareholders

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Appendix

GAAP to Non-GAAP Reconciliations

A. EBITDA

Consolidated TD&A LTS

Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year

2007 2006 2005 2007 2006 2005 2007 2006 2005

Operating Income 424,062 327,520 317,925 191,629 179,533 162,142 265,573 206,356 210,798

Depreciation and Amortization 102,607 111,858 112,648 68,720 69,581 70,545 28,752 32,177 33,030

EBITDA 526,669 439,378 430,573 260,349 249,114 232,687 294,325 238,533 243,828

B. FREE CASH FLOW

Consolidated

Full Year Full Year Full Year

2007 2006 2005

Net Income 256,805 201,055 195,705

Add: Depreciation and Amortization 102,607 111,858 112,648

Less: Capital Expenditures (70,552) (70,248) (92,458)

(Decrease) Increase in Working Capital (76,418) 29,037 (35,561)

Free Cash Flow 212,442 271,702 180,334

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