lps sum zero 05.27

8/6/2019 LPS Sum Zero 05.27

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8/6/2019 LPS Sum Zero 05.27


Agenda

• Snapshot of Business

• Industry / End Market Analysis

• Analysis of Operating Performance

• Perspectives on Valuation (Legal Liabilities, Returns, Comps)

8/6/2019 LPS Sum Zero 05.27


Historical Revenue Trends and Business Mix

• Default Services revenues (driven by foreclosure starts) have more than doubled since 2007, while Loan Facilitation revoriginations) are flat vs. 2007.• While the transaction side of the business generates ~70% of revenues, it only accounts for ~55% of profits due to the histructure in TD&A or software solutions (+40% margins vs. 25% margins in LTS).

Business MixHistorical Revenues

$601$432

$547 $641

$473 $852

$1,137 $1,061$340

$334

$388 $403

$230

$231

$320$360

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2007 2008 2009 2010

Other TD&A Revenues (incl Desktop)Mortgage Processing Revenue s

Default Services RevenuesLoan Facilit ation Services Revenues

Loan FacilitationServices, $641

Default Services,$1,061

Mortgage

Processing (MSP),$403

Desktop, $88

Other TD&A,$271

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Revenues

8/6/2019 LPS Sum Zero 05.27


8/6/2019 LPS Sum Zero 05.27


Agenda





8/6/2019 LPS Sum Zero 05.27


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2010 2

LPS Competi

MortgageOriginations

(Purchase)

MortgageOriginations(Purchase)

Refis -Centralized

Refis -Centralized

Refis -Decentralized

Refis -Decentralized

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015

Market Share Analysis

• LPS holds 25-50% market share across its

various end markets.• The underwriting case assumes modest share gain.• The rise in the mix of centralized refinancing volumes will cause the share of LPS’ market to increase.

Originations – Channel Share

Originations Foreclosure

Addressablemarket

Addressable Originations Foreclosure Starts

2010 2015 2010LPS 916 931 589

5-Year CAGR 0.3% LPS Market Share 19.9% 20.0% 27.1% 30

Competitors 3,677 3,723 1,583Addressable Market 4,593 4,654 2,172

5-Year CAGR 0.3%

8/6/2019 LPS Sum Zero 05.27


-

5,000

10,000

15,000

20,000

25,000

Refinanc

Mortgage

End Market Analysis – Originations

• Purchase originations are forecasted to grow ~6%+ over the next five years (population growth + moving + % of homesmortgages), while we assume draconian volumes in the refinancing market (-17.5% CAGR).• On a blended basis, end market volumes are effectively flat over the next five years.

Note: Historicals based on MBA data

8/6/2019 LPS Sum Zero 05.27


-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500Starts Inventory

End Market Analysis – Foreclosures

• Reflecting the current moratorium, foreclosure starts are projected to fall at one point per annum over the next five years

Note: Historicals based on MBA data

8/6/2019 LPS Sum Zero 05.27


Recent Modification Attempts in Foreclosures

• 55% of the modification attempts in 2008 have failed – this bodes well for one of LPS’ key end markets.

Source: OCC Data (only represents data for national banks and lenders--does not represent the whole market)

Modification Data Total Current30-60 DaysDelinquent

SeriouslyDelinquent

Foreclosuresin Process

CompletedForeclosures

2008 421,322 26% 8% 30% 15% 102009 587,500 44% 10% 28% 11% 3

2010 (1H) 497,203 69% 13% 14% 3% 0Total 1,506,025 47% 10% 24% 9% 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009

Current 30-60 Days Delinquent Seriously Delinquent Foreclosures in Process Completed Foreclosures No L

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Agenda





8/6/2019 LPS Sum Zero 05.27


Loan Transaction Services – Revenue Drivers

Loan FacilitatioDefault Services Revenues

• Revenues from foreclosures and originations closely follow industry trends.

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Q 1_ 2 0 0 6

Q 2_ 2 0 0 6

Q 3_ 2 0 0 6

Q 4_ 2 0 0 6

Q 1_ 2 0 0 7

Q 2_ 2 0 0 7

Q 3_ 2 0 0 7

Q 4_ 2 0 0 7

Q 1_ 2 0 0 8

Q 2_ 2 0 0 8

Q 3_ 2 0 0 8

Q 4_ 2 0 0 8

Q 1_ 2 0 0 9

Q 2_ 2 0 0 9

Q 3_ 2 0 0 9

Q 4_ 2 0 0 9

Q 1_ 2 0 1 0

Q 2_ 2 0 1 0

Q 3_ 2 0 1 0

$-

$50

$100

$150

$200

$250

$300

$350

Foreclosure Starts

DS Revs

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Q 1_ 2 0 0 7

Q 2_ 2 0 0 7

Q 3_ 2 0 0 7

Q 4_ 2 0 0 7

Q 1_ 2 0 0 8

Q 2_ 2 0 0 8

Q 3_ 2 0 0 8

Q 4_ 2 0 0 8

Q 1_ 2

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OriginationRevenue per Transaction 700$

Volume Mix 60.8%

Cost of Revenue per Transaction 439$ % of revenues 62.8%

Gross Profit per Transaction 261$ margin 37.2%

Loan Transaction Services – Cost Structure

Unit Level Economics (2010)

• While foreclosures have a lower margin structure, gross profit dollars earned are 2x that of originations.

Foreclosures,$1,800

Foreclosures,$499

Originations,$700

Originations,$261

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Revenue per Transaction Gross Profit per Transaction

8/6/2019 LPS Sum Zero 05.27


Transaction, Data & Analytics (Software Solutions)

Cost StruRevenue Model

• The TD&A economic model is highly cash generative—with a significant mix of fixed costs like other software compan

2010Loans on Files 28.6 Revenue per Loan 14.10$Revenue Contribution 402.7$

Foreclosure Fil ings 0.589 Fee per Referral 150$Revenue Contribution 88.5$

Total Transactions (or iginations + foreclosures ) 1.505 Other TD&A Revenue per Transaction 180$Revenue Contribution 271.5$

Total TD&A Revenues 762.6$

Total TD&A Revenues

Fixed Costs% of total

Variable Costs

% of TDA Revenues

Cash Costs% of TDA Revenues

EBITDA Contributionmargin

15,000

25,000

35,000

45,000

55,000Mortgage Stock (before HELOCs)

8/6/2019 LPS Sum Zero 05.27


Credit Analysis

• Robust free cash flow generation will continue to help the Company de-lever.

Fiscal Year Ending December 2009 2010 2011 2012

Consolidated EBITDA 639.1 652.7 634.3 645.8Less: Cash Interest (80.6) (71.0) (51.7) (51.3)Less: Cash Taxes (160.0) (164.6) (159.7) (161.9)Less: Capex (98.8) (107.5) (112.9) (118.5)Less: Increase in NWC 49.5 0.0 0.0 0.0

FCF 349.2 309.6 310.0 314.2Legal Liabilities (50.0) Term Loan Maturities / Amortization (145.1) (145.1)Revolver Paydown - -Dividend (35.47) (34.30)FCF Used for Share Repurchase (129.4) (84.8)

Revolver / Future Term Loan Refi - - -Term Loan A (July 2013) 364.8 219.7 74.6Term Loan B (July 2014) 482.0 482.0 482.0Snr Uns Notes (July 2016) 367.0 367.0 367.0Total Debt 1,213.8 1,068.7 923.6Debt / EBITDA 1.9 x 1.7 x 1.4 xTotal Interest Expense 51.6 51.1EBITDA / Interest 12.3 x 12.6 x

8/6/2019 LPS Sum Zero 05.27


Agenda





8/6/2019 LPS Sum Zero 05.27


Normalized Earnings Power

• Based on our analysis of thenormalized earnings power of the business, we are purchasingLPS for ~6x mid-cycle earnings.

• As the earnings of LPS flex uptowards mid-cycle earnings, weshould see significant flow-through from the attachment revenues of the TD&A Segment.

Avg. Since 1990All-In Ex '00-'0

Current Housing Stock 131,000 131,0

Purchase Originations - % of stock 4.5% 3.9%

Refi Organizations - % of stock 4.3% 2.9%Total Originations - % of stock 8.7% 6.8%

LPS Market Share 12.7% 12.7Revenue per Origination 700$ 7$

Origination Revenues 1,020$ 7$ Origination Gross Margin 37.2% 37.2%Origination Profits 380$ 2$

Avg. Since 1980All-In Ex '07-'1

Current Housing Stock 131,000 131,0

Seriously Delinquent % 2.5% 1.8Delinquencies Entering Foreclosure % 67.2% 67.6%

LPS Market Share 27.1% 27.1

Revenue per Foreclosure 1,800$ 1,8$

Foreclosure Revenues 1,075$ 7$ Foreclosure Gross Margin 27.7% 27.7%Foreclosure Profi ts 298$ 2$

SG&A (94)$ $

LTS Revenues 2,094$ 1,5$ LTS EBITDA 584$ 4$

TD&A Revenue per Transaction (Orig+Fore)Total TransactionsTD&A Revenues

Fixed CostsVariable Costs - % of TD&A RevenuesVariable Costs

TD&A EBITDA

Corporate

Normal ized EBITDALess: D&ALess: Interest

PBTLess: Taxes @ 34%

Net IncomeShare Count

Normal ized EPS

L o a n T r a n s a c t i o n S e r v i c e s

T r a n s a c t i o n

, D a t a &

A n a

l y t i c s

8/6/2019 LPS Sum Zero 05.27


Legal Liabilities Analysis

Case Complaint Summary StatusPotential$ Impact

Base/ Downside

Probability Elizabeth Foster, et al vs. MERS,GMAC, LPS, et al.

Challenges to the securitization of loans, assignment of mortgages, andother actions not generally related toLPS’s business

Dismissed02/03/2011

$0 0%/0%

Knippel vs. Saxon Mortgage Services, LPS, et al.

Unspecified violations of the Fair DebtCollection Practices Act, deceptivetrade practices, and unlawful feesplitting

Dismissed withprejudice 01/2011

$0 0%/0%

Thorne vs.Prommis Solutions

HoldingCorporation, LPS,et al.

Class action alleging that LPS engagedin unlawful fee splitting with theattorneys representing the creditor inthe bankruptcy matter

Filed a motion forsummary judgmentseeking to dismissthe complaint

$50M 10%/30%

Securities Class Action Litigation(St. Clair Shores

Retirement Systemet al vs. LPS

Seeks damages for alleged violationsof federal securities laws in connectionwith LPS’s disclosure relating to itsdefault operations

Still pending; similarsuit has been filedand LPS’s withpending court requestto consolidated them

$400M 5%/10 % $

Shareholder Derivative Litigation (Int‘l Brotherhood of ElectricalWorkers)

The complaint seeks recovery onbehalf of the Company for damagesfrom certain directors for purportedviolations of fiduciary duties andbreaches of good faith in connectionwith LPS’s default operations.

Still pending; LPShas filed a motion todismiss the case on02/08/2011

$100M 10%/20% $

FDIC vs. LPS 1 The FDIC, as Recevier for WashingtonMutual Bank, alleging losses as aresult of LPS’s alleged breach of contract and gross negligence withrespect to certain services.

Still pending; LPSbelieves there is nobasis in the claim andis defending itself.

$150M 10%/25% $

Total $5

• Our base case assumes $50mm of legal liabilities that need to be funded.

8/6/2019 LPS Sum Zero 05.27


Returns Scenario Fan – LPS offers asymmetric risk-reward

Assume Exit at Dec-2015 Downside Base

Target Stock Price @ 2015 Exit 24.33$ 57.96$ Cumulative Dividends 1.90$ $1.90

Total Value 26.23$ 59.86$ IRR @ 2015 Exit 0.7% 20.2%

Exit Multiple 8.0 x 10.0 x

Legal/Regulatory I mpactLegal Liability / Settlement Costs 210$ 50$

Operating Assumptions (10-15 CAGR)Origination Volumes (3.6%) 0.3%Origination Pricing 3.3% 3.3%

Foreclosure Volumes (9.7%) 0.7%Foreclosure Pricing 0.5% 0.5%

Revenue Growth (2.6%) 3.3%EBITDA Growth (3.5%) 5.5%

EPS 2.87$ 5.40$ 5-year CAGR (3.4%) 9.7%

Components of ReturnUnlevered FCF Yield 10.0% 10.0%Profit Growth (5.4%) 5.8%Multiple Expansion (0.6%) 1.1%Unlevered IRR 4.0% 16.8%

Impact of Leverage, Dividend and Buybacks (3.8%) 3.4%IRR 0.2% 20.2%

Probability Tree / Likelihood of Event 20.0% 60.0%

Expected Value $64.59

Present Value at 15% Discount Rate and 4.5 years $34.44Discount to Intrinsic Value 24.5%

8/6/2019 LPS Sum Zero 05.27


Historical Multiple Performance

Source: Capital IQ

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

TEV/LTM EBITDA

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

4Q08 1Q09 2Q09 3Q09 4Q09 1

P/LTM

Avg = 6.9x

8/6/2019 LPS Sum Zero 05.27


(5/26/2011) Stock Market TEV Multiples

Payment Processing / Financial Outsourcing Ticker Price Cap TEV LTM EBITDA NTM EBITDA NTM PE

Visa, Inc. V 79.29$ 55,851$ 52,182$ 9.9 x 8.4 x 15.0 x

Ma stercard Incorporated MA 282.10$ 35,895$ 31,988$ 10.3 x 8.6 x 15.4 x

Western Union Co. WU 20.40$ 12,898$ 14,253$ 9.1 x 8.7 x 13.2 x

Fi del ity Na ti ona l I nfor ma ti on Ser vi ces , I nc . FI S 3 1.4 3$ 9,611$ 14,457$ 9.5 x 8.0 x 13.0 x

Fiserv, Inc. FISV 63.00$ 9,047$ 11,885$ 9.1 x 8.3 x 13.5 x

Al li ance Da ta Sys tems Corpora ti on ADS 92.01$ 4,695$ 10,593$ 13.2 x 10.9 x 12.5 x

VeriFone Sys tems , Inc PAY 47.23$ 4,220$ 4,218$ 26.8 x 16.5 x 24.8 x

Global Payments Inc. GPN 51.84$ 4,151$ 3,661$ 9.4 x 7.6 x 16.7 x

Total Sys tem Servi ces , I nc. TSS 18.32$ 3,529$ 3,565$ 8.1 x 7.0 x 16.2 xJack Henry & As soci ates Inc. JKHY 30.60$ 2,642$ 2,831$ 9.5 x 8.7 x 18.2 x

DST Systems Inc. DST 46.98$ 2,183$ 2,875$ 5.7 x 5.4 x 10.8 x

Wright Express Corp. WXS 52.50$ 2,028$ 2,405$ 13.5 x 8.9 x 15.3 x

Moneygram International Inc. MGI 3.60$ 1,434$ 2,698$ 10.7 x 9.8 x 34.0 x

ACI Worldwide, Inc. ACIW 31.84$ 1,064$ 970$ 10.9 x 9.3 x 19.7 x

Euronet Worl dwi de Inc. EEFT 16.64$ 852$ 933$ 6.9 x 6.3 x 11.3 x

Hea rtl an d Pa yment Sys tems , I nc. HPY 19.22$ 741$ 807$ 9.5 x 8.7 x 18.9 x

Average 10.8 x 8.8 x 16.8 x

Median 9.5 x 8.7 x 15.4 x

V, MA, FIS 9.9 x 8.3 x 14.5

Public Comps

Source: CapitalIQ

8/6/2019 LPS Sum Zero 05.27


Due Diligence Road Map

Conducted To Date Plan Moving Forward (Conviction Building)

• Analysis of industry data (MBA, OCC, Amherst Associates,Realty Track)

• Objective: Assess management quality anfuture capital allocation decisions (repurchacquisitions)

• Meet with Management

• Court Dockets from Kentucky state court and Federalbankruptcy court of Mississippi

• Objective: Refine legal liability costs

• Interview board members / private equity iGreat Hill Partners, the owner of Prommis

• John Walsh’s (OCC) congressional testimony to the FinancialServices Committee within the House of Representatives

• Objective: Understand class action strateg

• Interview lawyers and paralegals at particimeet with Lieff Cabraser to understand int

• Conversation with Keith Hennessy, current member of theFinancial Crisis Inquiry Commission and former SeniorEconomic Advisor to President George W. Bush

• Objective: Validate customer value propothrough legal woes (i.e. looking forward)

• Interview key decision makers at Wells Fa

• Conversation with Deborah Hensler, SLS Professor andexpert on dispute resolution, litigation, class actions andmass tort liability (also a former political scientist and publicpolicy analyst)

• Continue to build contacts with regulators

• Conversation with an LPS Product Manager of Desktop(business line directly referenced in class action claims)

8/6/2019 LPS Sum Zero 05.27


Origination Projections (Purchase + Refis)

Projections

2007 2008 2009 2010 2011 2012 2013 2014 2015US Population 301,123 304,047 307,000 310,070 313,171 316,302 319,465 322,660 325, Population Growth - Number 2,896 2,924 2,953 3,070 3,101 3,132 3,163 3,195 3 Population Growth - % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1

People per Household 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.7New House Sales Absorption 1,053 1,063 1,074 1,116 1,128 1,139 1,150 1,162 1

Existing Home Sales 5,652 4,913 5,156 4,860 4,725 4,716 4,711 4,827 4 New Home Sales 776 485 375 318 363 418 474 545 Total Home Purchases 6,428 5,398 5,531 5,178 5,088 5,135 5,185 5,372 5

% of New Home Sales 12.1% 9.0% 6.8% 6.1% 7.1% 8.1% 9.1% 10.1% 11.1%

mplied Purchases from Churn (Moving)* 5,375 4,335 4,457 4,062 3,961 3,996 4,035 4,210 4 Churn Rate 4.2% 3.4% 3.4% 3.1% 3.0% 3.0% 3.0% 3.1% 3.2%

Housing Stock 128,203 129,158 130,112 131,000 132,025 133,190 134,499 135,820 137, YoY Growth 1.5% 0.7% 0.7% 0.7% 0.8% 0.9% 1.0% 1.0% 1.0%

Mortgage Originations (Purchase) 5,236 3,508 3,338 2,861 2,812 2,837 3,124 3,506 3 % of Home Purchases with Mortgage 81.5% 65.0% 60.4% 55.3% 55.3% 55.3% 60.3% 65.3% 70.3%YoY Growth (20.2%) (33.0%) (4.8%) (14.3%) (1.7%) 0.9% 10.1% 12.2% 11.5%

Refinancing Originations 5,123 3,584 6,054 4,329 2,087 1,410 1,121 1,390 1 YoY Growth (11.1%) (30.0%) 68.9% (28.5%) (51.8%) (32.4%) (20.5%) 23.9% 19.3%

Total Originations 10,359 7,092 9,393 7,190 4,898 4,247 4,246 4,895 5

YoY Growth (16.0%) (31.5%) 32.4% (23.5%) (31.9%) (13.3%) (0.0%) 15.3% 13.7%

Refis - Centralized 2,329 1,732 856 592 482 612 % of total 38.5% 40.0% 41.0% 42.0% 43.0% 44.0% 45.0

Refis - Decentralized 3,726 2,597 1,231 818 639 778 % of total 61.5% 60.0% 59.0% 58.0% 57.0% 56.0% 55.0

Total Addressable Originations 5,667 4,593 3,667 3,429 3,607 4,117 4 YoY Growth (19.0%) (20.2%) (6.5%) 5.2% 14.2% 13.0%

LPS Originations 842 916 732 685 720 823 YoY Growth 8.7% (20.1%) (6.4%) 5.2% 14.2% 13.1%Market Share 9.0% 12.7% 14.9% 16.1% 17.0% 16.8% 16.7%% of Addressable Market 14.9% 19.9% 19.9% 20.0% 20.0% 20.0% 20.0%

LPS LFS Revenues 601$ 432$ 547$ 641$ 530$ 513$ 558$ 658$ $YoY Growth (28.2%) 26.8% 17.1% (17.2%) (3.2%) 8.7% 17.9% 16.6%

Revenue per Origination 650$ 700$ 725$ 750$ 775$ 800$ $YoY Growth 7.7% 3.6% 3.4% 3.3% 3.2% 3.1%

*Ignores second home purchases for projection purposes

Page 1 of 7

8/6/2019 LPS Sum Zero 05.27


Foreclosure Projections

Projections

Mortgage Stock 2007 2008 2009 2010e 2011e 2012e 2013e 2014e 2015eBoP 43,482 45,988 45,396 44,426 43,427 42,227 41,098 40,039 39,1 New Home Sales 776 485 375 318 363 418 474 545 6 Existing Home Sales 5,652 4,913 5,156 4,860 4,725 4,716 4,711 4,827 4,9 Subtractions* (3,922) (5,990) (6,501) (6,177) (6,288) (6,264) (6,244) (6,233) (6,2 EoP 45,988 45,396 44,426 43,427 42,227 41,098 40,039 39,177 38,5

Y/Y% 5.8% (1.3%) (2.1%) (2.2%) (2.8%) (2.7%) (2.6%) (2.2%) (1.7%

Non FC Exits 3,064 4,625 4,646 4,500 4,500 4,500 4,500 4,500 4,5

Delinquency AttributionGood Standing 43,086 41,478 39,788 39,839 38,999 38,165 37,344 36,676 36,1 Non-Serious Delinquent 1,237 1,058 342 (237) (231) (225) (219) (214) (2 Seriously Delinquent 1,665 2,860 4,296 3,825 3,458 3,157 2,913 2,716 2,5 Total Mortgage Stock, EoP 45,988 45,396 44,426 43,427 42,227 41,098 40,039 39,177 38,5

Non-Serious Delinquent % 2.7% 2.3% 0.8% (0.5%) (0.5%) (0.5%) (0.5%) (0.5%) (0.5Seriously Delinquent % 3.6% 6.3% 9.7% 8.8% 8.2% 7.7% 7.3% 6.9% 6.6%

New Delinquencies 1,983 3,119 3,828 1,701 1,737 1,774 1,808 1,842 1,8 % of Prior Period Mortgage Stock 4.6% 6.8% 8.4% 3.8% 4.0% 4.2% 4.4% 4.6% 4.8Foreclosures (1,279) (1,924) (2,392) (2,172) (2,104) (2,075) (2,052) (2,039) (2,0

YoY Growth 61.6% 50.4% 24.3% (9.2%) (3.1%) (1.4%) (1.1%) (0.6%) (0.1%)% or Prior Year Ser Del 133.1% 115.6% 83.6% 50.6% 55.0% 60.0% 65.0% 70.0% 75.0%Net Delinquencies 704 1,195 1,436 (471) (367) (302) (244) (197) (

Foreclosure StockBoP 517 938 1,498 2,035 2,420 2,736 3,047 3,355 3,6 Starts 1,279 1,924 2,392 2,172 2,104 2,075 2,052 2,039 2,0 Exits (858) (1,364) (1,855) (1,786) (1,788) (1,764) (1,744) (1,733) (1,7 EoP 938 1,498 2,035 2,420 2,736 3,047 3,355 3,661 3,9

Exits % of Starts 67.1% 70.9% 77.6% 82.2% 85.0% 85.0% 85.0% 85.0% 85.0Starts YoY Growth 61.6% 50.4% 24.3% (9.2%) (3.1%) (1.4%) (1.1%) (0.6%) (0.1%)

LPS Foreclosure Starts 632 589 583 587 592 600 6 Market Share 26.4% 27.1% 27.7% 28.3% 28.9% 29.4% 30.0%

LPS DS Revenues 473$ 852$ 1,137$ 1,061$ 1,055$ 1,068$ 1,083$ 1,104$ 1,1$YoY Growth 80.1% 33.5% (6.7%) (0.5%) 1.2% 1.4% 1.9% 2.4%

Revenue per Foreclosure Pre-Regulatory Impact 1,800$ 1,800$ 1,810$ 1,820$ 1,830$ 1,840$ 1,8$Regulatory Impact / Reduction 0.0% 0.0% 0.0% 0.0

Pro Forma Revenue per Foreclosure 1,800$ 1,800$ 1,810$ 1,820$ 1,830$ 1,840$ 1,8$YoY Growth 0.0% 0.6% 0.6% 0.5% 0.5% 0.5

*Foreclosures + Existing Sales with Mortgages+Mortgage Payoffs+People paid in cash

Page 2 of 7

8/6/2019 LPS Sum Zero 05.27


Loan Transaction Services

Projections

iscal Year Ending December 2007 2008 2009 2010 2011 2012 2013 2014 2015 07-10 10-15

Originations (Refis + Purchase) 0.842 0.916 0.732 0.685 0.720 0.823 0.931 0.3%y/y% 8.7% (20.1%) (6.4%) 5.2% 14.2% 13.1%

Revenue per Origination 650$ 700$ 725$ 750$ 775$ 800$ 825$ 3.3%y/y% 7.7% 3.6% 3.4% 3.3% 3.2% 3.1%oan Facilitation Services Revenues 600.9 431.7 547.3 640.9 530.4 513.4 558.3 658.3 767.9 2.2% 3.7%y/y% (28.2%) 26.8% 17.1% (17.2%) (3.2%) 8.7% 17.9% 16.6%

oreclosure Filings 0.632 0.589 0.583 0.587 0.592 0.600 0.611 0.7%

y/y% (6.7%) (1.1%) 0.7% 0.9% 1.4% 1.8%Revenue per Foreclosure Start 1,800$ 1,800$ 1,810$ 1,820$ 1,830$ 1,840$ 1,850$ 0.5%y/y% 0.0% 0.6% 0.6% 0.5% 0.5% 0.5%

Default Services Revenues 473.0 851.8 1,137.3 1,060.6 1,055.0 1,068.0 1,083.4 1,104.1 1,130.4 30.9% 1.3%y/y% 80.1% 33.5% (6.7%) (0.5%) 1.2% 1.4% 1.9% 2.4%

TS Revenues 1,073.9 1,283.5 1,684.6 1,701.5 1,585.3 1,581.4 1,641.7 1,762.5 1,898.3 16.6% 2.2%y/y% 19.5% 31.3% 1.0% (6.8%) (0.3%) 3.8% 7.4% 7.7%

Volume AnalysisOriginations 0.842 0.916 0.732 0.685 0.720 0.823 0.931 0.3%

% of total 57.1% 60.8% 55.7% 53.8% 54.9% 57.8% 60.4%oreclosures 0.632 0.589 0.583 0.587 0.592 0.600 0.611 0.7%% of total 42.9% 39.2% 44.3% 46.2% 45.1% 42.2% 39.6%otal Transactions 1.474 1.505 1.314 1.271 1.312 1.423 1.542 0.5%Revenue per Transaction 1,143$ 1,131$ 1,206$ 1,244$ 1,251$ 1,239$ 1,231$ 1.7%

ost Structure (excluding D&A)Origination COGs 355.7 402.2 341.2 327.2 353.0 413.3 479.2 3.6%

% of revenues 65.0% 62.8% 64.3% 63.7% 63.2% 62.8% 62.4%Cost of Revenues per Origination 423$ 439$ 466$ 478$ 490$ 502$ 515$ 3.2%

y/y% 4.0% 6.2% 2.5% 2.5% 2.5% 2.5%oreclosure COGs 814.2 766.4 750.0 755.1 761.8 772.1 786.3 0.5%% of revenues 71.6% 72.3% 71.1% 70.7% 70.3% 69.9% 69.6%

Cost of Revenues per Foreclosure 1,289$ 1,301$ 1,287$ 1,287$ 1,287$ 1,287$ 1,287$ (0.2%)y/y% 0.9% (1.1%) 0.0% 0.0% 0.0% 0.0%otal Clean COGs (Primarily Variable) 713.1 853.9 1,169.9 1,168.6 1,091.2 1,082.3 1,114.8 1,185.4 1,265.4 17.9% 1.6%% of revenues 69.4% 68.7% 68.8% 68.4% 67.9% 67.3% 66.7%

Cost of Revenue per Transaction 794$ 777$ 830$ 851$ 849$ 833$ 821$ 1.1%y/y% (2.2%) 6.9% 3.2% 3.6% (1.5%) (1.1%)

Origination Gross Profit 191.6 238.7 189.2 186.2 205.3 245.0 288.7 3.9%margin 35.0% 37.2% 35.7% 36.3% 36.8% 37.2% 37.6%GP per Origination 228$ 261$ 259$ 272$ 285$ 298$ 310$ 3.5%

y/y% 14.6% (0.8%) 5.2% 10.2% 15.1% 19.9%oreclosure Gross Profit 323.1 294.2 305.0 312.9 321.6 332.0 344.2 3.2%margin 28.4% 27.7% 28.9% 29.3% 29.7% 30.1% 30.4%

GP per Foreclosure 511$ 499$ 523$ 533$ 543$ 553$ 563$ 2.4%y/y% (2.4%) 4.8% (0.5%) (0.6%) 13.4% 7.6%otal Gross Profit 360.8 429.6 514.7 532.9 494.2 499.1 526.9 577.0 632.9 13.9% 3.5%margin 30.6% 31.3% 31.2% 31.6% 32.1% 32.7% 33.3%

GP per Transaction 349$ 354$ 376$ 393$ 401$ 405$ 410$ 3.0%y/y% 1.4% 6.2% 2.9% 4.0% 12.6% 9.2%

G&A (Primariliy Fixed Costs) 94.9 105.3 107.8 94.2 94.2 96.6 99.0 101.5 104.0 (0.2%) 2.0%y/y% 11.0% 2.3% (12.6%) 0.0% 2.5% 2.5% 2.5% 2.5%

BITDA Contribution 265.9 324.3 406.9 417.5 400.0 402.5 428.0 475.6 528.9 16.2% 4.8%margin 24.8% 25.3% 24.2% 24.5% 25.2% 25.5% 26.1% 27.0% 27.9%y/y% 22.0% 25.5% 2.6% (4.2%) 0.6% 6.3% 11.1% 11.2%

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Transaction, Data & Analytics

Projections

Fiscal Year Ending December 2007 2008 2009 2010 2011 2012 2013 2014 2015 07-10 10-15

Mortgage Stock, EoP 46.0 45.4 44.4 43.4 42.2 41.1 40.0 39.2 38.5 (2.4%HELOCs, EoP 26.0 25.4 24.7 24.1 23.4 22.9 22.5 (2.4%

% of Mortgage Stock 58.5% 58.5% 58.5% 58.5% 58.5% 58.5% 58.5%

LPS Loans on File, EoP 26.6 29.6 26.9 27.0 27.1 27.2 27.4 27.7 0.6%LPS Market Share 58.6% 66.6% 62.0% 64.0% 66.0% 68.0% 70.0% 72.0%

LPS HELOCs on File, EoP - - 2.0 2.4 2.9 3.3 3.7 3.6 12.5%

LPS Market Share 7.9% 9.9% 12.0% 14.0% 16.0% 16.0%Total Library 26.6 29.6 28.9 29.5 30.0 30.5 31.1 31.3 1.6%Average Balance 28.1 28.6 29.3 29.7 30.3 30.8 31.2 1.8%

Revenue per Loan 13.79$ 14.10$ 14.38$ 14.75$ 15.00$ 15.25$ 15.50$ 1.9%y/y% 2.3% 2.0% 2.6% 1.7% 1.7% 1.6%

Mortgage Processing Revenues 339.7 334.2 387.9 402.7 420.9 438.6 453.9 469.7 483.8 5.8% 3.7%y/y% (1.6%) 16.1% 3.8% 4.5% 4.2% 3.5% 3.5% 3.0%

Foreclosure Filings 0.632 0.589 0.583 0.587 0.592 0.600 0.611 0.7%Fee per Referral 150$ 150$ 150$ 150$ 150$ 150$ 150$ (0.0%

Desktop Revenues 94.8 88.5 87.4 88.0 88.8 90.0 91.7 0.7%

Regulatory Impact (0=Yes, 1=No) 0% 0% 0% 0%

Pro Forma Desktop Revenues 94.8 88.5 87.4 88.0 88.8 90.0 91.7 0.7%y/y% (6.7%) (1.2%) 0.7% 0.9% 1.4% 1.8%

Other Non Desktop Revenues 224.8 271.5 277.7 295.5 327.9 373.3 424.7 9.4%y/y% 20.7% 2.3% 6.4% 11.0% 13.8% 13.8%

Revenue per Transaction 153$ 180$ 211$ 232$ 250$ 262$ 275$ 8.8%y/y% 18.3% 17.1% 10.0% 7.5% 5.0% 5.0%

Total Transactions (originations + foreclosures) 1.474 1.505 1.314 1.271 1.312 1.423 1.542 0.5%y/y% 2.1% (12.7%) (3.3%) 3.2% 8.4% 8.4%

Other TD&A Revenues (incl Desktop) 230.5 231.5 319.6 359.9 365.1 383.5 416.7 463.3 516.4 16.0% 7.5%y/y% 0.4% 38.1% 12.6% 1.4% 5.0% 8.7% 11.2% 11.5%

TD&A Revenues 570.1 565.7 707.5 762.6 786.0 822.1 870.6 933.0 1,000.2 10.2% 5.6%y/y% (0.8%) 25.1% 7.8% 3.1% 4.6% 5.9% 7.2% 7.2%

Cost Structure (excluding D&A)Fixed Costs 226.1 228.2 299.8 335.7 352.5 370.1 388.6 408.1 428.5 5.0%

% of total 73.0% 73.3% 74.3% 75.0% 75.3% 75.4% 75.3% 74.9% 74.5%y/y% 0.9% 31.4% 12.0% 5.0% 5.0% 5.0% 5.0% 5.0%

Variable Costs 83.7 83.0 103.8 111.9 115.3 120.6 127.8 136.9 146.8 5.6%% of TDA Revenues 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7%

Cash Costs 309.8 311.2 403.7 447.6 467.9 490.8 516.4 545.0 575.2 13.1% 5.1%% revenues 54.3% 55.0% 57.1% 58.7% 59.5% 59.7% 59.3% 58.4% 57.5%

EBITDA Contribution 260.3 254.4 303.8 315.0 318.2 331.3 354.2 388.0 424.9 6.6% 6.2%margin 45.0% 42.9% 41.3% 40.5% 40.3% 40.7% 41.6% 42.5%y/y% (2.3%) 19.4% 3.7% 1.0% 4.1% 6.9% 9.5% 9.5%

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Returns Model GSB (26-May-20

Case Switch (1=Base, 2=DS, 3=US) 1

Projections

Valuation 2010 2011 2012 2013 2014 2015 10-1Current Stock Price 26.00$ Revenue 2,456.3 2,366.4 2,398.5 2,507.3 2,690.5 2,893.5 3.3FD Shares 90.9 y/y% 3.6% (3.7%) 1.4% 4.5% 7.3% 7.5%Market Cap 2,363.4 EBITDA 652.7 634.3 645.8 689.7 766.5 851.9 5.5

Plus: Debt 1,213.8 margin 26.6% 26.8% 26.9% 27.5% 28.5% 29.4%Less: Cash (5.0) EPS 3.40$ 3.50$ 3.66$ 3.98$ 4.55$ 5.40$ 9.7

TEV 3,572.2 y/y% 8.8% 2.8% 4.8% 8.7% 14.2% 18.7%Base Case Stock Price 57.96$ PE 7.6x 7.4x 7.1x 6.5x 5.7x 4.8x

IRR 20.2% Street EPS 3.40$ 3.55$ 3.96$ 4.26$ -- -- Downside Stock Price 24.33$ Variance vs. Street 0.0% (1.4%) (7.4%) (6.5%) -- --

IRR 0.7% FCF per Share 3.29$ 3.50$ 3.66$ 3.98$ 4.55$ 5.40$ 10.4yield 12.7% 13.4% 14.1% 15.3% 17.5% 20.8%

Operating Model

Fiscal Year Ending December 2008 2009 2010 2011 2012 2013 2014 2015 10-1

Loan Facilitation Services 431.7 547.3 640.9 530.4 513.4 558.3 658.3 767.9 3.y/y% (28.2%) 26.8% 17.1% (17.2%) (3.2%) 8.7% 17.9% 16.6%

Default Services 851.8 1,137.3 1,060.6 1,055.0 1,068.0 1,083.4 1,104.1 1,130.4 1.

y/y% 80.1% 33.5% (6.7%) (0.5%) 1.2% 1.4% 1.9% 2.4%Loan Transaction Services Revenues 1,283.5 1,684.6 1,701.5 1,585.3 1,581.4 1,641.7 1,762.5 1,898.3 2.

y/y% 19.5% 31.2% 1.0% (6.8%) (0.3%) 3.8% 7.4% 7.7%

Mortgage Processing Revenues 334.2 387.9 402.7 420.9 438.6 453.9 469.7 483.8 3.y/y% (1.6%) 16.1% 3.8% 4.5% 4.2% 3.5% 3.5% 3.0%

Other TD&A Revenues 231.5 319.6 359.9 365.1 383.5 416.7 463.3 516.4 7.y/y% 0.4% 38.1% 12.6% 1.4% 5.0% 8.7% 11.2% 11.5%

TD&A Revenues 565.7 707.5 762.6 786.0 822.1 870.6 933.0 1,000.2 5.y/y% (0.8%) 25.1% 7.8% 3.1% 4.6% 5.9% 7.2% 7.2%

Corporate & Other 12.7 (21.6) (7.8) (5.0) (5.0) (5.0) (5.0) (5.0)Consolidated Revenues 1,861.9 2,370.5 2,456.3 2,366.4 2,398.5 2,507.3 2,690.5 2,893.5 3.

y/y% 10.1% 27.3% 3.6% (3.7%) 1.4% 4.5% 7.3% 7.5%

LTS EBITDA Contribution 324.3 406.9 417.5 400.0 402.5 428.0 475.6 528.9 4.margin 25.3% 24.2% 24.5% 25.2% 25.5% 26.1% 27.0% 27.9%y/y% 22.0% 25.5% 2.6% (4.2%) 0.6% 6.3% 11.1% 11.2%

TD&A EBITDA Contribution 254.4 303.8 315.0 318.2 331.3 354.2 388.0 424.9 6.margin 45.0% 42.9% 41.3% 40.5% 40.3% 40.7% 41.6% 42.5%y/y% (2.3%) 19.4% 3.7% 1.0% 4.1% 6.9% 9.5% 9.5%

Corporate / Overhead (54.1) (71.7) (79.8) (83.8) (88.0) (92.4) (97.0) (101.9) 5.Consolidated EBITDA 524.6 639.1 652.7 634.3 645.8 689.7 766.5 851.9 5.

margin 28.2% 27.0% 26.6% 26.8% 26.9% 27.5% 28.5% 29.4%y/y% 5.3% 21.8% 2.1% (2.8%) 1.8% 6.8% 11.1% 11.1%

Less: D&A 97.9 97.5 112.9 118.5 124.4 130.7 137.2 7.EBIT 541.2 555.2 521.4 527.3 565.3 635.9 714.7 5.

Less: Net Interest 80.6 71.0 51.7 51.3 45.7 34.6 28.4 (16.EBT 460.6 484.2 469.7 476.0 519.6 601.2 686.3 7.

Less: Cash Taxes 160.0 164.6 159.7 161.9 176.7 204.4 233.3 7.Net Income 300.6 319.6 310.0 314.2 343.0 396.8 452.9 7.

y/y% 6.3% (3.0%) 1.4% 9.2% 15.7% 14.1%Memo - Cash Tax Rate 34.7% 34.0% 34.0% 34.0% 34.0% 34.0% 34.0%

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Fiscal Year Ending December 2009 2010 2011 2012 2013 2014 2015 10-1

Share CalcBasic Shares Strike Price No Opns 90.9 90.9 90.9 90.9 90.9 90.9 Existing Mgmt Options $32.93 7.8 - - 0.7 2.1 3.0 3.3 2011 Options 2.0% $28.19 1.8 - 0.1 0.4 0.7 0.9 0.9 2012 Options 2.0% $33.39 1.7 - - 0.1 0.5 0.7 0.7 2013 Options 2.0% $40.94 1.7 - - - 0.2 0.4 0.5 2014 Options 2.0% $49.73 1.7 - - - - 0.1 0.2 2015 Options 2.0% $55.97 1.7 - - - - - 0.1 Cumulative Buybacks - (4.6) (7.1) (7.1) (8.7) (16.2) Diluted Share Count 90.9 86.4 85.1 87.2 87.3 80.5 (2.Avg Share Count 96.2 94.0 88.7 85.8 86.1 87.3 83.9 (2.

Diluted EPS 3.12$ 3.40$ 3.50$ 3.66$ 3.98$ 4.55$ 5.40$ 9.y/y% 8.8% 2.8% 4.8% 8.7% 14.2% 18.7%

Forward PE 7.4 x 8.3 x 9.1 x 10.0 x 10.0 x 10.0 xStock Price $26.00 30.38$ 36.41$ 45.47$ 53.98$ 57.96$ 17.4Avg Stock Price (Share Repurchase) 28.19$ 33.39$ 40.94$ 49.73$ 55.97$Annual Share Repurchase 4.6 2.5 - 1.6 7.5

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FCF / Debt Paydown Analysis

Fiscal Year Ending December 2009 2010 2011 2012 2013 2014 2015 10-1

Consolidated EBITDA 639.1 652.7 634.3 645.8 689.7 766.5 851.9 Less: Cash Interest (80.6) (71.0) (51.7) (51.3) (45.7) (34.6) (28.4) Less: Cash Taxes (160.0) (164.6) (159.7) (161.9) (176.7) (204.4) (233.3) Less: Capex (98.8) (107.5) (112.9) (118.5) (124.4) (130.7) (137.2) Less: Increase in NWC 49.5 0.0 0.0 0.0 0.0 0.0 0.0

FCF 349.2 309.6 310.0 314.2 343.0 396.8 452.9

Legal Liabilities (50.0) Term Loan Maturities / Amortization (145.1) (145.1) (592.1) - - Revolver Paydown - - - (283.6) - Dividend (35.47) (34.30) (34.46) (34.90) (33.56) FCF Used for Share Repurchase (129.4) (84.8) - (78.3) (419.4)

LIBOR (Note: All SWAPs have rolled off) 0.50% 1.00% 1.50% 2.00% 2.50%10-Year Treasury Yield 3.20% 3.50% 4.20% 4.50% 4.50%

Revolver / Future Term Loan RefiBoP - - - 283.6 - ssuance LIBOR+ - - 283.6 - -

Paydown 2.25% - - - (283.6) -

EoP - - - 283.6 - - nterest Expense - - 5.3 6.0 -

Term Loan A (July 2013)BoP LIBOR+ 364.8 219.7 74.6 (35.5) (35.5) Paydown 2.00% (145.1) (145.1) (110.1)EoP 364.8 219.7 74.6 (35.5) (35.5) (35.5) nterest Expense 7.3 4.4 0.7 (1.4) (1.6)

Term Loan B (July 2014)BoP LIBOR+ 482.0 482.0 482.0 - - Paydown 2.50% 0.0 0.0 (482.0)EoP 482.0 482.0 482.0 - - -

nterest Expense 12.0 14.5 16.9 9.6 - - Fixed

Snr Uns Notes (July 2016) 8.125% 367.0 367.0 367.0 367.0 367.0 367.0 nterest Expense 29.8 29.8 29.8 29.8 29.8 29.8

Revolver / Future Term Loan Refi - - - 283.6 - - Term Loan A (July 2013) 364.8 219.7 74.6 (35.5) (35.5) (35.5) Term Loan B (July 2014) 482.0 482.0 482.0 - - - Snr Uns Notes (July 2016) 367.0 367.0 367.0 367.0 367.0 367.0 Total Debt 1,213.8 1,068.7 923.6 615.1 331.5 331.5 Debt / EBITDA 1.9 x 1.7 x 1.4 x 0.9 x 0.4 x 0.4 xTotal Interest Expense 51.6 51.1 45.5 34.4 28.2 EBITDA / Interest 12.3 x 12.6 x 15.2 x 22.3 x 30.2 x

Additions to Cash 0.0 0.0 0.0 0.0 0.0Cash Balance 5.0 5.0 5.0 5.0 5.0 5.0 nterest Income 0.2 0.2 0.2 0.2 0.2

Net Interest Expense 51.7 51.3 45.7 34.6 28.4

lps sum zero 05.27

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