##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to
 Commission File No. 001-34005
 Lender Processing Services, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    26-1547801(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)601 Riverside AvenueJacksonville, Florida
    
    32204(Address of principal executive offices)
    
    (Zip Code)
 (904) 854-5100  (Registrants telephone number, including area code)
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




---



##### 



PagePart I: FINANCIAL INFORMATIONItem 1. Consolidated and Combined Financial Statements (Unaudited)Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    3Consolidated and Combined Statements of Earnings for the three months ended March 31,
2009 and 2008
    
    
    4Consolidated and Combined Statements of Comprehensive Earnings for the three months
ended March 31, 2009 and 2008
    
    
    5Consolidated Statement of Equity for the three months ended March 31, 2009
    
    
    6Consolidated and Combined Statements of Cash Flows for the three months ended March 31,
2009 and 2008
    
    
    7Notes to Consolidated and Combined Financial Statements (Unaudited)
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosure About Market Risks
    
    
    35Item 4T. Controls and Procedures
    
    
    36Part II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    36Item 6. Exhibits
    
    
    37EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



Part I: FINANCIAL INFORMATION
 
 Item 1. Consolidated and Combined Financial Statements (Unaudited)
 LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 Consolidated Balance Sheets
 (Unaudited)
 March
    
    
    December31, 2009
    
    
    31, 2008 (1)(In thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    57,035
    
    
    $
    125,966Trade receivables, net of allowance for doubtful accounts of
$31.1 million and $27.2 million, respectively
    
    
    376,643
    
    
    
    344,848Other receivables
    
    
    12,784
    
    
    
    17,393Due from affiliates
    
    
    
    
    
    
    2,713Prepaid expenses and other current assets
    
    
    23,481
    
    
    
    22,030Deferred income taxes, net
    
    
    40,757
    
    
    
    40,757Total current assets
    
    
    510,700
    
    
    
    553,707Property and equipment, net of accumulated depreciation of
$129.1 million and $142.4 million, respectively
    
    
    104,398
    
    
    
    95,542Computer software, net of accumulated amortization of $96.1
million and $87.8 million, respectively
    
    
    163,393
    
    
    
    157,539Other intangible assets, net of accumulated amortization of
$281.8 million and $273.7 million, respectively
    
    
    86,706
    
    
    
    83,489Goodwill
    
    
    1,111,126
    
    
    
    1,091,056Other non-current assets
    
    
    106,968
    
    
    
    122,300Total assets
    
    $
    2,083,291
    
    
    $
    2,103,633LIABILITIES AND EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    107,896
    
    
    $
    145,101Trade accounts payable
    
    
    43,625
    
    
    
    31,720Accrued salaries and benefits
    
    
    27,595
    
    
    
    36,492Recording and transfer tax liabilities
    
    
    14,466
    
    
    
    14,639Due to affiliates
    
    
    1,509
    
    
    
    1,573Other accrued liabilities
    
    
    112,924
    
    
    
    101,612Deferred revenues
    
    
    49,060
    
    
    
    51,628Total current liabilities
    
    
    357,075
    
    
    
    382,765Deferred revenues
    
    
    43,428
    
    
    
    40,343Deferred income taxes, net
    
    
    25,217
    
    
    
    36,557Long-term debt, net of current portion
    
    
    1,367,439
    
    
    
    1,402,350Other non-current liabilities
    
    
    37,705
    
    
    
    39,217Total liabilities
    
    
    1,830,864
    
    
    
    1,901,232Commitments and contingencies (note 7)Equity:Lender Processing Services, Inc. stockholders equity:Preferred stock $0.0001 par value; 50 million shares
authorized, none issued at March 31, 2009 and December 31,
2008, respectively
    
    
    
    
    
    
    Common stock $0.0001 par value; 500 million shares
authorized, 95.7 million and 95.3 million shares issued at
March 31, 2009 and December 31, 2008, respectively
    
    
    10
    
    
    
    9Additional paid-in capital
    
    
    125,345
    
    
    
    111,849Retained earnings
    
    
    134,105
    
    
    
    93,540Accumulated other comprehensive loss
    
    
    (12,935
    )
    
    
    (13,667
    )Treasury stock $0.0001 par value; 202,557 and 19,870 shares
at March 31, 2009 and December 31, 2008, respectively
    
    
    (5,734
    )
    
    
    (582
    )Total Lender Processing Services, Inc. stockholders equity
    
    
    240,791
    
    
    
    191,149Noncontrolling minority interest
    
    
    11,636
    
    
    
    11,252Total equity
    
    
    252,427
    
    
    
    202,401Total liabilities and equity
    
    $
    2,083,291
    
    
    $
    2,103,633
 
 (1)
    
    Derived from audited consolidated and combined financial statements.  3




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 Consolidated and Combined Statements of Earnings
 (Unaudited)
 Three months ended March 31,2009
    
    
    2008(In thousands, except per share data)Processing and services revenues, including revenues from related
parties of $91.6 million and $49.9 million, respectively
    
    $
    529,817
    
    
    $
    443,560Cost of revenues, including related party expenses of $4.1
million and $2.6 million, respectively
    
    
    354,702
    
    
    
    288,386Gross profit
    
    
    175,115
    
    
    
    155,174Selling, general, and administrative expenses, including related
party expenses, net of expense reimbursements, of $2.3 million
and $13.2 million, respectively
    
    
    71,178
    
    
    
    55,098Operating income
    
    
    103,937
    
    
    
    100,076Other income (expense):Interest income
    
    
    524
    
    
    
    260Interest expense
    
    
    (21,914
    )
    
    
    (18
    )Other expense, net
    
    
    (1
    )
    
    
    Total other income (expense)
    
    
    (21,391
    )
    
    
    242Earnings from continuing operations before income taxes and
equity in losses of unconsolidated entity
    
    
    82,546
    
    
    
    100,318Provision for income taxes
    
    
    31,575
    
    
    
    38,923Earnings from continuing operations before equity in losses of
unconsolidated entity
    
    
    50,971
    
    
    
    61,395Equity in losses of unconsolidated entity
    
    
    (37
    )
    
    
    (1,957
    )Earnings from continuing operations
    
    
    50,934
    
    
    
    59,438Discontinued operation, net of tax
    
    
    (504
    )
    
    
    2,606Net earnings
    
    
    50,430
    
    
    
    62,044Noncontrolling minority interest
    
    
    (384
    )
    
    
    (312
    )Net earnings attributable to Lender Processing Services, Inc.
    
    $
    50,046
    
    
    $
    61,732Amounts attributable to Lender Processing Services, Inc.:Earnings from continuing operations, net of tax
    
    $
    50,550
    
    
    $
    59,126Discontinued operation, net of tax
    
    
    (504
    )
    
    
    2,606Net earnings
    
    $
    50,046
    
    
    $
    61,732Net earnings per share  basic from continuing operations
    
    $
    0.53
    
    
    $
    0.61Net earnings per share  basic from discontinued operation
    
    
    
    
    
    
    0.02Net earnings per share  basic
    
    $
    0.53
    
    
    $
    0.63Weighted average shares outstanding  basic (1)
    
    
    94,847
    
    
    
    97,376Net earnings per share  diluted from continuing operations
    
    $
    0.53
    
    
    $
    0.60Net earnings per share  diluted from discontinued operation
    
    
    
    
    
    
    0.03Net earnings per share  diluted
    
    $
    0.53
    
    
    $
    0.63Weighted average shares outstanding  diluted (1)
    
    
    95,284
    
    
    
    97,597
 
 (1)
    
    Weighted average shares outstanding data for the three months ended March 31, 2008 is
reflected on a pro forma basis (discussed in note 3).  4




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 Consolidated and Combined Statements of Comprehensive Earnings
 (Unaudited)
 Three months ended March 31,2009
    
    
    2008(In thousands)Net earnings attributable to Lender Processing Services, Inc.
    
    $
    50,046
    
    
    $
    61,732Other comprehensive earnings:Unrealized gain on other investments, net of tax
    
    
    47
    
    
    
    Unrealized gain on interest rate swaps, net of tax
    
    
    685
    
    
    
    Other comprehensive earnings
    
    
    732
    
    
    
    Comprehensive earnings attributable to Lender Processing Services, Inc.
    
    $
    50,778
    
    
    $
    61,732
  5




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 Consolidated Statement of Equity
 (Unaudited)
 Lender Processing Services, Inc. Stockholders EquityAdditional
    
    
    
    
    
    
    Accumulated Other
    
    
    
    
    
    
    
    
    
    
    NoncontrollingCommon
    
    
    Common
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Treasury
    
    
    Minority
    
    
    TotalShares
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Earnings (Loss)
    
    
    Shares
    
    
    Stock
    
    
    Interest
    
    
    EquityBalances,
December 31, 2008
    
    
    95,284
    
    
    $
    9
    
    
    $
    111,849
    
    
    $
    93,540
    
    
    $
    (13,667
    )
    
    
    (20
    )
    
    $
    (582
    )
    
    $
    11,252
    
    
    $
    202,401Net distribution to FIS
    
    
    
    
    
    
    
    
    
    
    (434
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (434
    )Net earnings
attributable to Lender
Processing Services,
Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,046
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,046Net earnings
attributable to
noncontrolling minority
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384
    
    
    
    384Cash dividends paid(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,481
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,481
    )Exercise of stock
options and restricted
stock vesting
    
    
    424
    
    
    
    1
    
    
    
    5,865
    
    
    
    
    
    
    
    
    
    
    
    (183
    )
    
    
    (5,152
    )
    
    
    
    
    
    
    714Tax benefit associated
with exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    1,222
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,222Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    6,843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,843Unrealized gain on
investments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47Unrealized gain on
interest rate swaps,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    685Balances,
March 31, 2009
    
    
    95,708
    
    
    $
    10
    
    
    $
    125,345
    
    
    $
    134,105
    
    
    $
    (12,935
    )
    
    
    (203
    )
    
    $
    (5,734
    )
    
    $
    11,636
    
    
    $
    252,427
 
 (1)
    
    Dividends were paid at $0.10 per common share.  6




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 Consolidated and Combined Statements of Cash Flows
 (Unaudited)
 Three months ended March 31,2009
    
    
    2008(In thousands)Cash flows from operating activities:Net earnings attributable to Lender Processing Services, Inc.
    
    $
    50,046
    
    
    $
    61,732Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation and amortization
    
    
    23,991
    
    
    
    23,696Amortization of debt issuance costs
    
    
    1,282
    
    
    
    Gain on sale of discontinued operation
    
    
    (2,574
    )
    
    
    Deferred income taxes, net
    
    
    (651
    )
    
    
    11,843Stock-based compensation cost
    
    
    6,843
    
    
    
    4,687Income tax benefit from exercise of stock options
    
    
    (1,222
    )
    
    
    Equity in losses of unconsolidated entity
    
    
    37
    
    
    
    1,957Noncontrolling minority interest
    
    
    384
    
    
    
    312Changes in assets and liabilities, net of effects of acquisitions:Trade receivables
    
    
    (25,871
    )
    
    
    (30,515
    )Other receivables
    
    
    4,622
    
    
    
    (6,001
    )Prepaid expenses and other assets
    
    
    (6,347
    )
    
    
    3,228Deferred revenues
    
    
    (479
    )
    
    
    (346
    )Accounts payable, accrued liabilities and other liabilities
    
    
    25,312
    
    
    
    75,756Net cash provided by operating activities
    
    
    75,373
    
    
    
    146,349Cash flows from investing activities:Additions to property and equipment
    
    
    (11,659
    )
    
    
    (5,345
    )Additions to capitalized software
    
    
    (10,912
    )
    
    
    (5,448
    )Acquisition of title plants
    
    
    (5,764
    )
    
    
    Acquisitions, net of cash acquired
    
    
    490
    
    
    
    Proceeds from sale of discontinued operation, net of cash distributed
    
    
    (32,638
    )
    
    
    Net cash used in investing activities
    
    
    (60,483
    )
    
    
    (10,793
    )Cash flows from financing activities:Debt service payments
    
    
    (76,276
    )
    
    
    Stock options exercised
    
    
    714
    
    
    
    Income tax benefit from exercise of stock options
    
    
    1,222
    
    
    
    Dividends paid
    
    
    (9,481
    )
    
    
    Net distributions to FIS
    
    
    
    
    
    
    (72,144
    )Net cash used in financing activities
    
    
    (83,821
    )
    
    
    (72,144
    )Net (decrease) increase in cash and cash equivalents
    
    
    (68,931
    )
    
    
    63,412Cash and cash equivalents, beginning of period
    
    
    125,966
    
    
    
    39,566Cash and cash equivalents, end of period
    
    $
    57,035
    
    
    $
    102,978Cash paid for interest
    
    $
    28,763
    
    
    $
    Cash paid for taxes
    
    $
    7,746
    
    
    $
    Non-cash contribution of stock compensation by FIS
    
    $
    
    
    
    $
    4,687Non-cash redistribution of assets to FIS
    
    $
    434
    
    
    $
    Non-cash consideration received from sale of discontinued operation
    
    $
    40,310
    
    
    $
    Non-cash consideration issued in acquisition of business
    
    $
    (5,162
    )
    
    $
    
  7




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
 
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)
 Except as otherwise indicated or unless the context otherwise requires, all references to
LPS, we, the Company, or the registrant are to Lender Processing Services, Inc., a Delaware
corporation that was incorporated in December 2007 as a wholly-owned subsidiary of FIS, and its
subsidiaries; all references to FIS, the former parent, or the holding company are to
Fidelity National Information Services, Inc., a Georgia corporation formerly known as Certegy Inc.,
and its subsidiaries, that owned all of LPSs shares until July 2, 2008; all references to former
FIS are to Fidelity National Information Services, Inc., a Delaware corporation, and its
subsidiaries, prior to the Certegy merger described below; all references to old FNF are to
Fidelity National Financial, Inc., a Delaware corporation that owned a majority of former FISs
shares through November 9, 2006; and all references to FNF are to Fidelity National Financial,
Inc. (formerly known as Fidelity National Title Group, Inc.), formerly a subsidiary of old FNF but
now a stand-alone company.
 (1) Basis of Presentation
  Lender Processing Services, Inc. Spin-off Transaction
    8




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
 Principles of Consolidation and Combination
    Reporting Segments
   
    
    our mortgage processing services, which we conduct using our mortgage servicing platform
and our team of experienced support personnel based primarily at our Jacksonville, Florida
data center;
    
    our Desktop application, a workflow system that assists our customers in managing business
processes, which today is primarily used in connection with mortgage loan default management,
but which has broader applications;
    
    our other software and related service offerings, including our mortgage origination
software, our real estate closing and title insurance production software and our middleware
application which provides collaborative network connectivity among mortgage industry
participants; and
    
    our data and analytics businesses, the most significant of which are our alternative
property valuations business, which provides a range of valuations other than traditional
appraisals, our aggregated property and loan data services, and our advanced analytic
services, which assist our customers in their loan marketing or loss mitigation efforts.
   
    
    settlement services, which consist of title agency services, in which we act as an agent
for title insurers, closing services, in which we assist in the closing of real estate
transactions, and lien recording and release services;
    
    appraisal services, which consist of traditional appraisal and appraisal management
services; and
    
    other origination services, which consist of flood zone information, which assists lenders
in determining
 9




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
 whether a property is in a federally designated flood zone, and real estate tax services, which
provide lenders with information about the tax status of a property.
  
    
    foreclosure management services, including access to a nationwide network of independent
attorneys, mandatory title searches, document preparation and recording and other services;
    
    property inspection and preservation services, designed to preserve the value of properties
securing defaulted loans; and
    
    asset management services, providing disposition services for our customers real estate
owned properties through a network of independent real estate brokers, attorneys and other
vendors to facilitate the transaction.
  (2) Related Party Transactions
   
    
    Agreements to provide title agency services.  These agreements allow us to provide services
to existing customers through loan facilitation transactions, primarily with large national
lenders. The arrangement involves providing title agency services which result in the
issuance of title policies on behalf of title insurance underwriters owned by FNF and its
subsidiaries. Subject to certain early termination provisions for cause, each of these
agreements may be terminated upon five years prior written notice, which notice may not be
given until after the fifth anniversary of the effective date of each agreement, which ranges
from July 2004 through September 2006 (thus effectively resulting in a minimum ten year term
and a rolling one-year term thereafter). Under these agreements, we earn commissions which,
in aggregate, are equal to approximately 88% of the total title premium from title policies
that we place with subsidiaries of FNF. We also perform similar functions in connection with
trustee sale guarantees, a form of title insurance that subsidiaries of FNF issue as part of
the foreclosure process on a defaulted loan.
    
    Agreements to provide software development and services.  Under these agreements, we are
paid for providing software development and services to FNF which consist of developing
software for use in the title operations of FNF.
    
    Arrangements to provide other data services.  Under these arrangements, we are paid for
providing other data services to FNF, primarily consisting of data services required by the
FNF title insurance operations.
 10




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  2009
    
    
    2008Title agency commissions
    
    $
    74.8
    
    
    $
    32.6Software development revenue
    
    
    13.4
    
    
    
    13.8Other data related services
    
    
    3.4
    
    
    
    3.5Total revenues
    
    $
    91.6
    
    
    $
    49.9
 
    
    Title plant access and title production services.  Under these agreements, we obtain access
to FNFs title plants for real property located in various states, including access to their
online databases, physical access to title records, use of space, image system use, and use
of special software, as well as other title production services. For the title plant access,
we pay monthly fees (subject to certain minimum charges) based on the number of title reports
or products ordered and other services received. For the title production services, we pay
for services based on the number of properties searched, subject to certain minimum use. The
title plant access agreement has a term of 3 years beginning in November 2006 and is
automatically renewable for successive 3 year terms unless either party gives 30 days prior
written notice. The title production services agreement can be terminated by either party
upon 30 days prior written notice.
    
    Agreements to provide administrative corporate support services to and from FIS and from
FNF.  Historically, FNF has provided to FIS certain administrative corporate support services
relating to general management, statutory accounting, claims administration, and other
administrative support services. Prior to the spin-off, as a part of FIS, we also received
these administrative corporate support services from FNF. In connection with the spin-off, we
entered into a separate agreement with FNF for the provision of certain of these
administrative corporate support services by FNF. In addition, prior to the spin-off, FIS
provided general management, accounting, treasury, payroll, human resources, internal audit,
and other corporate administrative support services to us. In connection with the spin-off,
we entered into corporate services agreements with FIS under which we receive from FIS, and
we provide to FIS, certain transitional corporate support services. The pricing for all of
these services, both from FNF and FIS, and to FIS, is on an at-cost basis. The term of the
corporate services agreements is two years, subject to early termination because the services
are no longer required by the party receiving the services or upon mutual agreement of the
parties and subject to extension in certain circumstances. Management believes the methods
used to allocate the amounts included in these financial statements for corporate services
are reasonable.
    
    Corporate aircraft use agreements.  Historically the Company has had access to certain
corporate aircraft owned or leased by FNF and by FIS. Pursuant to an aircraft interchange
agreement, LPS is included as an additional permitted user of corporate aircraft leased by
FNF and FIS. FNF and FIS also continue to be permitted users of any aircraft leased by LPS.
LPS was also added as a party to the aircraft cost sharing agreement that was previously
signed between FNF and FIS. Under this agreement, the Company and FIS share the costs of one
of FNFs aircraft that is used by all of the entities. The cost for use of each aircraft
under the aircraft interchange agreement is calculated on the same basis and reflects the
costs attributable to the time the aircraft is in use by the user. The aircraft interchange
agreement is terminable by any party on 30 days prior notice. The costs under the aircraft
cost sharing agreement are shared equally among FNF, FIS and the Company, and the agreement
remains in effect so long as FNF has possession or use of the aircraft (or any replacement)
but may be terminated at any time with the consent of FNF, FIS and the Company.
    
    Real estate management, real estate lease and equipment lease agreements.  In connection
with the spin-off and the transfer of the real property located at the Companys corporate
headquarters campus from FIS to LPS, the Company entered into new leases with FNF and FIS, as
tenants, as well as a new sublease with FNF, as sub landlord, for office space in the
building known as Building V located on the Companys corporate headquarters campus which
we lease to FNF. The Company also entered into a new property management agreement with FNF
with respect to Building V. Included in the Companys expenses are amounts paid to FNF for
the lease of certain equipment and the sublease of office space in Building V, together with
furniture and furnishings. In addition, the Companys revenues include amounts paid by FNF
and FIS for the lease of office space located at the Companys corporate headquarters and
business operations as well as revenues for property management services for FNF for Building
V.
    
    Licensing, cost sharing, business processing and other agreements.  These agreements
provide for the reimbursement of certain amounts from FNF and FIS related to various
licensing and cost sharing agreements,
 11




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
 as well as the payment of certain amounts by the Company to FNF or its subsidiaries in
connection with our use of certain intellectual property or other assets of or services by FNF.
  2009
    
    
    2008Title plant information expense
    
    $
    4.1
    
    
    $
    2.6Corporate services
    
    
    3.5
    
    
    
    13.7Licensing, leasing and cost sharing agreements
    
    
    (1.2
    )
    
    
    (0.5
    )Total expenses
    
    $
    6.4
    
    
    $
    15.8
  Other related party transactions:
 FNRES Holdings, Inc. and Investment Property Exchange Services, Inc.
  (3) Unaudited Net Earnings Per Share
 Earnings Per Share
 12




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  2009
    
    
    2008Amounts attributable to Lender Processing Services, Inc.:Earnings from continuing operations
    
    $
    50,550
    
    
    $
    59,126Discontinued operation
    
    
    (504
    )
    
    
    2,606Net earnings
    
    $
    50,046
    
    
    $
    61,732Weighted average shares outstanding  basic (1)
    
    
    94,847
    
    
    
    97,376Plus: Common stock equivalent shares
    
    
    437
    
    
    
    221Weighted average shares outstanding  diluted (1)
    
    
    95,284
    
    
    
    97,597Net earnings per share  basic from continuing operations
    
    $
    0.53
    
    
    $
    0.61Net earnings per share  basic from discontinued operation
    
    
    
    
    
    
    0.02Net earnings per share  basic
    
    $
    0.53
    
    
    $
    0.63Net earnings per share  diluted from continuing operations
    
    $
    0.53
    
    
    $
    0.60Net earnings per share  diluted from discontinued operation
    
    
    
    
    
    
    0.03Net earnings per share  diluted
    
    $
    0.53
    
    
    $
    0.63
 
 (1)
    
    Due to the nature and timing of the spin-off, the number of outstanding shares issued in the
initial formation and capitalization of the Company were the only shares outstanding prior to
the spin-off. As such, weighted average shares outstanding  basic for the three months ended
March 31, 2008 was calculated using one-half the number of the outstanding shares of FIS as of
March 31, 2008 because we expected to issue one-half of a share of our common stock for each
outstanding share of FIS common stock outstanding at the spin-off. Weighted average shares
outstanding  diluted for the three months ended March 31, 2008 was calculated using one-half
the number of dilutive common stock equivalents as of March 31, 2008 because we expected to
convert one-half of the outstanding stock options and awards of FIS into stock options and
awards of our common stock at the spin-off.  (4) Acquisitions and Dispositions
  FNRES Holdings, Inc.
  Accounting for the Impairment or Disposal of Long-Lived Assets
 13




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  Fair Value Measurements
  McDash Analytics, LLC
  (5) Long-Term Debt
  March 31,
    
    
    December 31,2009
    
    

2008Term A Loan, secured, interest payable at LIBOR plus 2.50%
(3.00% at March 31, 2009), quarterly principal amortization,
maturing July 2013
    
    $
    590,000
    
    
    $
    665,000Term B Loan, secured, interest payable at LIBOR plus 2.50%
(3.00% at March 31, 2009), quarterly principal amortization,
maturing July 2014
    
    
    506,175
    
    
    
    507,450Revolving Loan, secured, interest payable at LIBOR plus 2.50%
(Eurocurrency Borrowings), Fed-funds plus 2.50% (Swingline
Borrowings) or Prime plus 1.50% (Base Rate Borrowings) (3.00%,
2.66% or 4.75%, respectively, at March 31, 2009), maturing July
2013. Total of $139.1 million unused (net of outstanding letters
of credit) as of March 31, 2009
    
    
    
    
    
    
    Senior unsecured notes, issued at par, interest payable
semiannually at 8.125%, due July 2016
    
    
    375,000
    
    
    
    375,000Other promissory notes with various interest rates and maturities
    
    
    4,160
    
    
    
    11,475,335
    
    
    
    1,547,451Less current portion
    
    
    (107,896
    )
    
    
    (145,101
    )Long-term debt, excluding current portion
    
    $
    1,367,439
    
    
    $
    1,402,350
 
  14




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
          15




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
    Interest Rate Swaps
  Notional Amount
    
    Bank Pays
    
    LPS paysAmortization Period
    
    (in millions)
    
    Variable Rate of(1)
    
    Fixed Rate of(2)March 31, 2009 to June 30, 2009
    
    $
    385.0
    
    
    1 Month LIBOR
    
    
    3.275
    %June 30, 2009 to September 30, 2009
    
    $
    365.0
    
    
    1 Month LIBOR
    
    
    3.275
    %September 30, 2009 to December 31, 2009
    
    $
    345.0
    
    
    1 Month LIBOR
    
    
    3.275
    %December 31, 2009 to March 31, 2010
    
    $
    330.0
    
    
    1 Month LIBOR
    
    
    3.275
    %March 31, 2010 to June 30, 2010
    
    $
    310.0
    
    
    1 Month LIBOR
    
    
    3.275
    %June 30, 2010 to July 31, 2010
    
    $
    290.0
    
    
    1 Month LIBOR
    
    
    3.275
    %
  Notional Amount
    
    Bank Pays
    
    LPS PaysEffective Date
    
    Termination Date
    
    (in millions)
    
    Variable Rate of(1)
    
    Fixed Rate of(2)October 31, 2008
    
    December 31, 2010
    
    $350.0
    
    1 Month LIBOR
    
    
    2.780
    %
 
 (1)
    
    0.50% as of March 31, 2009.(2)
    
    In addition to the fixed rate paid under the swaps, we pay an applicable margin to our bank
lenders on the Term A Loan, Term B Loan and Revolving Loan equal to 2.50% as of March 31,
2009. Accounting for Derivative
Instruments and Hedging Activities
 16




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  Three Months Ended
    
    
    
    Three Months EndedMarch 31, 2009
    
    
    
    March 31, 2009Location of Loss
    
    Amount of Loss ReclassifiedDerivatives in SFAS 133
    
    Amount of Gain Recognized
    
    Reclassified from Accumulated
    
    from AccumulatedCash Flow Hedging Relationships
    
    in OCE on Derivative
    
    OCE into Income
    
    OCE into IncomeInterest rate swap contract
    
    $
    3.9
    
    
    Interest expense
    
    $
    (4.9
    )
  Principal Maturities of Debt
  (6) Income Taxes
 Accounting for Uncertainty in Income Taxes .
 (7) Commitments and Contingencies
 Litigation
  
    
    These matters raise difficult and complicated factual and legal issues and are subject to
many uncertainties and complexities.
    
    In these matters, plaintiffs seek a variety of remedies including equitable relief in the
form of injunctive and other remedies and monetary relief in the form of compensatory
damages. In some cases, the monetary damages sought include punitive or treble damages. None
of the cases described below includes a specific statement as to the dollar amount of damages
demanded. Instead, each of the cases includes a demand in an amount to be proved at trial.
    
    For the reasons specified above, it is not possible to make meaningful estimates of the
amount or range of loss that could result from these matters at this time. We review these
matters on an ongoing basis and follow the provisions of Statement of Financial Accounting
Standards No. 5, Accounting for Contingencies, when making accrual and disclosure decisions.
When assessing reasonably possible and probable outcomes, we base our decision on our
assessment of the ultimate outcome following all appeals.
    
    We intend to vigorously defend each of these matters, and we do not believe that the
ultimate disposition of these lawsuits will have a material adverse impact on our financial
position.
 17




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
 National Title Insurance of New York, Inc. Litigation
  Regulatory Matters
  Off-Balance Sheet Arrangements
  Escrow Arrangements
   (8) Stock Option Plans
 Prior to spin-off
   18




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  Post spin-off
     Options
  Weighted AverageNumber of Shares
    
    
    Exercise PriceOutstanding as of December 31, 2008
    
    
    6,761,115
    
    
    $
    31.16Exercised during the first quarter of 2009 (1)
    
    
    (423,504
    )
    
    
    13.85Cancelled during the first quarter of 2009
    
    
    (558,735
    )
    
    
    35.47Outstanding as of March 31, 2009
    
    
    5,778,876
    
    
    $
    32.02
 
 (1)
    
    The total intrinsic value of stock options exercised during the three months ended March 31,
2009 was $6.0 million.  19




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
  Options Outstanding
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    Weighted
    
    
    
    
    
    
    
    
    
    Average
    
    WeightedRemaining
    
    Average
    
    Intrinsic Value at
    
    
    
    
    
    Remaining
    
    Average
    
    Intrinsic Value atRange of
    
    Number of
    
    Contractual
    
    Exercise
    
    March  31,
    
    Number of
    
    Contractual
    
    Exercise
    
    March  31,Exercise Prices
    
    Options
    
    Life
    
    Price
    
    2009
    
    Options
    
    Life
    
    Price
    
    2009(In thousands)
    
    
    
    
    
    
    
    
    
    
    
    
    
    (In thousands)$
    0.00
    
    
    $
    13.67
    
    
    
    621,226
    
    
    
    5.28
    
    
    $
    12.40
    
    
    $
    9,392
    
    
    
    483,662
    
    
    
    5.09
    
    
    $
    12.04
    
    
    $
    7,48613.68
    
    
    
    20.00
    
    
    
    168,744
    
    
    
    2.78
    
    
    
    18.31
    
    
    
    1,553
    
    
    
    168,744
    
    
    
    2.78
    
    
    
    18.31
    
    
    
    1,55320.01
    
    
    
    25.00
    
    
    
    13,590
    
    
    
    2.63
    
    
    
    22.78
    
    
    
    64
    
    
    
    13,590
    
    
    
    2.63
    
    
    
    22.78
    
    
    
    6425.01
    
    
    
    27.52
    
    
    
    333,294
    
    
    
    4.42
    
    
    
    26.09
    
    
    
    478
    
    
    
    333,294
    
    
    
    4.42
    
    
    
    26.09
    
    
    
    47827.53
    
    
    
    33.00
    
    
    
    119,866
    
    
    
    3.99
    
    
    
    29.42
    
    
    
    
    
    
    
    109,489
    
    
    
    3.99
    
    
    
    29.14
    
    
    
    33.01
    
    
    
    35.00
    
    
    
    1,918,860
    
    
    
    5.76
    
    
    
    34.57
    
    
    
    
    
    
    
    358,560
    
    
    
    5.76
    
    
    
    34.52
    
    
    
    35.01
    
    
    
    36.00
    
    
    
    543,399
    
    
    
    5.73
    
    
    
    35.17
    
    
    
    
    
    
    
    300,300
    
    
    
    5.73
    
    
    
    35.17
    
    
    
    36.01
    
    
    
    37.00
    
    
    
    373,072
    
    
    
    4.71
    
    
    
    36.20
    
    
    
    
    
    
    
    315,619
    
    
    
    4.71
    
    
    
    36.17
    
    
    
    37.01
    
    
    
    38.00
    
    
    
    1,686,825
    
    
    
    5.72
    
    
    
    37.20
    
    
    
    
    
    
    
    625,592
    
    
    
    5.72
    
    
    
    37.20
    
    
    
    $
    0.00
    
    
    $
    38.00
    
    
    
    5,778,876
    
    
    
    5.42
    
    
    $
    32.02
    
    
    $
    11,487
    
    
    
    2,708,850
    
    
    
    5.07
    
    
    $
    29.07
    
    
    $
    9,581
  Restricted Stock
  (9) Segment Information
   Technology,
    
    
    LoanData and
    
    
    Transaction
    
    
    CorporateAnalytics
    
    
    Services
    
    
    and Other
    
    
    TotalResults from continuing operations:Processing and services revenues
    
    $
    159,879
    
    
    $
    374,523
    
    
    $
    (4,585
    )
    
    $
    529,817Cost of revenues
    
    
    90,463
    
    
    
    268,936
    
    
    
    (4,697
    )
    
    
    354,702Gross profit
    
    
    69,416
    
    
    
    105,587
    
    
    
    112
    
    
    
    175,115Selling, general and administrative expenses
    
    
    16,066
    
    
    
    27,359
    
    
    
    27,753
    
    
    
    71,178Operating income
    
    $
    53,350
    
    
    $
    78,228
    
    
    $
    (27,641
    )
    
    $
    103,937Depreciation and amortization
    
    $
    17,375
    
    
    $
    4,608
    
    
    $
    2,003
    
    
    $
    23,986Balance sheet data:Total assets
    
    $
    1,115,028
    
    
    $
    788,151
    
    
    $
    180,112
    
    
    $
    2,083,291Goodwill
    
    $
    734,054
    
    
    $
    377,072
    
    
    $
    
    
    
    $
    1,111,126
  Technology,
    
    
    LoanData and
    
    
    Transaction
    
    
    CorporateAnalytics
    
    
    Services
    
    
    and Other
    
    
    TotalResults from continuing operations:Processing and services revenues
    
    $
    135,824
    
    
    $
    311,064
    
    
    $
    (3,328
    )
    
    $
    443,560Cost of revenues
    
    
    74,110
    
    
    
    217,668
    
    
    
    (3,392
    )
    
    
    288,386Gross profit
    
    
    61,714
    
    
    
    93,396
    
    
    
    64
    
    
    
    155,174Selling, general and administrative expenses
    
    
    16,258
    
    
    
    25,344
    
    
    
    13,496
    
    
    
    55,098Operating income
    
    $
    45,456
    
    
    $
    68,052
    
    
    $
    (13,432
    )
    
    $
    100,076Depreciation and amortization
    
    $
    16,015
    
    
    $
    6,163
    
    
    $
    1,495
    
    
    $
    23,673Balance sheet data (including discontinued operation):Total assets
    
    $
    1,042,256
    
    
    $
    815,654
    
    
    $
    172,148
    
    
    $
    2,030,058Goodwill
    
    $
    686,654
    
    
    $
    391,500
    
    
    $
    
    
    
    $
    1,078,154
 20




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Unaudited)  Continued
 (10) Subsequent Events
 Election of Director
  21




---



##### Table of Contents



Except as otherwise indicated or unless the context otherwise requires, all references to
LPS, we, the Company, or the registrant are to Lender Processing Services, Inc., a Delaware
corporation that was incorporated in December 2007 as a wholly-owned subsidiary of FIS, and its
subsidiaries; all references to FIS, the former parent, or the holding company are to
Fidelity National Information Services, Inc., a Georgia corporation formerly known as Certegy Inc.,
and its subsidiaries, that owned all of LPSs shares until July 2, 2008; all references to former
FIS are to Fidelity National Information Services, Inc., a Delaware corporation, and its
subsidiaries, prior to the Certegy merger described below; all references to old FNF are to
Fidelity National Financial, Inc., a Delaware corporation that owned a majority of former FISs
shares through November 9, 2006; and all references to FNF are to Fidelity National Financial,
Inc. (formerly known as Fidelity National Title Group, Inc.), formerly a subsidiary of old FNF but
now a stand-alone company.
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    
    
    our mortgage processing services, which we conduct using our mortgage servicing platform
and our team of
 22




---



##### Table of Contents



experienced support personnel based primarily at our Jacksonville, Florida data center;
 
    
    our Desktop application, a workflow system that assists our customers in managing business
processes, which today is primarily used in connection with mortgage loan default management,
but which has broader applications;
    
    our other software and related service offerings, including our mortgage origination
software, our real estate closing and title insurance production software and our middleware
application which provides collaborative network connectivity among mortgage industry
participants; and
    
    our data and analytics businesses, the most significant of which are our alternative
property valuations business, which provides a range of valuations other than traditional
appraisals, our aggregated property and loan data services, and our advanced analytic
services, which assist our customers in their loan marketing or loss mitigation efforts.
   
    
    settlement services, which consist of title agency services, in which we act as an agent
for title insurers, closing services, in which we assist in the closing of real estate
transactions, and lien recording and release services;
    
    appraisal services, which consist of traditional appraisal and appraisal management
services; and
    
    other origination services, which consist of flood zone information, which assists lenders
in determining whether a property is in a federally designated flood zone, and real estate
tax services, which provide lenders with information about the tax status of a property.
  
    
    foreclosure management services, including access to a nationwide network of independent
attorneys, mandatory title searches, document preparation and recording and other services;
    
    property inspection and preservation services, designed to preserve the value of properties
securing defaulted loans; and
    
    asset management services, providing disposition services for our customers real estate
owned properties through a network of independent real estate brokers, attorneys and other
vendors to facilitate the transaction.
   Recent Trends and Developments
  23




---



##### Table of Contents



24




---



##### Table of Contents



Critical Accounting Policies
  Recent Accounting Pronouncements
 Interim Disclosures about Fair Value of Financial Instruments Disclosures about Fair Value of Financial Instruments Interim Financial Reporting
 Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities
 The Hierarchy of Generally Accepted Accounting
Principles
 25




---



##### Table of Contents



Disclosures about Derivative Instruments and
Hedging Activities-an amendment of FASB Statement No. 133.
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value Measurements Effective Date of FASB Statement No. 157
 Transactions with Related Parties
  26




---



##### Table of Contents



Factors Affecting Comparability
  
    
    On July 2, 2008, we borrowed $1,235.7 million under bank credit facilities, including
$25.7 million on a revolving credit facility. We also issued senior notes in an aggregate
principal amount of $375.0 million. Prior to July 2, 2008 we had no debt on the balance sheet
and an insignificant amount of interest expense on the income statement.
  Comparisons of three months ended March 31, 2009 and 2008
 Consolidated and Combined Results of Operations  Unaudited
  As a % of Revenue
    
    
    Variance 2009 vs. 2008Three months ended March 31,(in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    $
    
    
    %Processing and services revenues
    
    $
    529.8
    
    
    $
    443.6
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    $
    86.2
    
    
    
    19.4
    %Cost of revenues
    
    
    354.7
    
    
    
    288.4
    
    
    
    66.9
    %
    
    
    65.0
    %
    
    
    (66.3
    )
    
    
    (23.0
    %)Gross profit
    
    
    175.1
    
    
    
    155.2
    
    
    
    33.1
    %
    
    
    35.0
    %
    
    
    19.9
    
    
    
    12.8
    %Gross margin
    
    
    33.1
    %
    
    
    35.0
    %Selling, general and administrative expenses
    
    
    71.2
    
    
    
    55.1
    
    
    
    13.5
    %
    
    
    12.4
    %
    
    
    (16.1
    )
    
    
    (29.2
    %)Operating income
    
    
    103.9
    
    
    
    100.1
    
    
    
    19.6
    %
    
    
    22.6
    %
    
    $
    3.8
    
    
    
    3.8
    %Operating margin
    
    
    19.6
    %
    
    
    22.6
    %Other income (expense):Interest income
    
    
    0.5
    
    
    
    0.2
    
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmInterest expense
    
    
    (21.9
    )
    
    
    
    
    
    
    4.1
    %
    
    nm
    
    
    
    (21.9
    )
    
    nmOther expense, net
    
    
    
    
    
    
    
    
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmOther income (expense)
    
    
    (21.4
    )
    
    
    0.2Earnings from continuing operations before income
taxes and equity in losses of unconsolidated entity
    
    
    82.5
    
    
    
    100.3
    
    
    
    15.6
    %
    
    
    22.6
    %
    
    
    (17.8
    )
    
    
    (17.7
    %)Provision for income taxes
    
    
    31.6
    
    
    
    38.9
    
    
    
    6.0
    %
    
    
    8.8
    %
    
    
    7.3
    
    
    
    18.8
    %Earnings from continuing operations before equity in
losses of unconsolidated entity
    
    
    50.9
    
    
    
    61.4
    
    
    
    9.6
    %
    
    
    13.8
    %
    
    
    (10.5
    )
    
    
    (17.1
    %)Equity in losses of unconsolidated entity
    
    
    
    
    
    
    (2.0
    )
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmEarnings from continuing operations
    
    
    50.9
    
    
    
    59.4
    
    
    
    9.6
    %
    
    
    13.4
    %
    
    
    (8.5
    )
    
    
    (14.3
    %)Discontinued operation, net of tax
    
    
    (0.5
    )
    
    
    2.6
    
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmNet earnings
    
    
    50.4
    
    
    
    62.0
    
    
    
    9.5
    %
    
    
    14.0
    %
    
    
    (11.6
    )
    
    
    (18.7
    %)Noncontrolling minority interest
    
    
    (0.4
    )
    
    
    (0.3
    )
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmNet earnings attributable to LPS
    
    $
    50.0
    
    
    $
    61.7
    
    
    
    9.4
    %
    
    
    13.9
    %
    
    
    (11.7
    )
    
    
    (19.0
    %)Amounts attributable to LPS:Earnings from continuing operations, net of tax
    
    $
    50.5
    
    
    $
    59.1
    
    
    
    9.5
    %
    
    
    13.3
    %
    
    
    (8.6
    )
    
    
    (14.6
    %)Discontinued operation, net of tax
    
    
    (0.5
    )
    
    
    2.6
    
    
    nm
    
    
    nm
    
    
    nm
    
    
    nmNet earnings
    
    $
    50.0
    
    
    $
    61.7
    
    
    
    9.4
    %
    
    
    13.9
    %
    
    
    (11.7
    )
    
    
    (19.0
    %)Net earnings per share  basic from continuing
operations
    
    $
    0.53
    
    
    $
    0.61Net earnings per share  basic from discontinued
operation
    
    
    
    
    
    
    0.02Net earnings per share  basic
    
    $
    0.53
    
    
    $
    0.63Weighted average shares outstanding  basic
    
    
    94.8
    
    
    
    97.4Net earnings per share  diluted from continuing
operations
    
    $
    0.53
    
    
    $
    0.60Net earnings per share  diluted from discontinued
operation
    
    
    
    
    
    
    0.03Net earnings per share  diluted
    
    $
    0.53
    
    
    $
    0.63Weighted average shares outstanding  diluted
    
    
    95.3
    
    
    
    97.6
 27




---



##### Table of Contents



Processing and Services Revenues
  Cost of Revenues
  Gross Profit
  Selling General and Administrative Expenses
  Operating Income
  Other Income (Expense)
  Income Taxes
  28




---



##### Table of Contents



Equity in Losses of Unconsolidated Entity
  Net Earnings and Earnings Per Share Attributable to LPS
  Segment Results of Operations  Technology, Data and Analytics  Unaudited
 As a % of Revenue
    
    
    Variance 2009 vs. 2008Three months ended March 31,(in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    $
    
    
    %Processing and services revenues
    
    $
    159.9
    
    
    $
    135.8
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    $
    24.1
    
    
    
    17.7
    %Cost of revenues
    
    
    90.5
    
    
    
    74.1
    
    
    
    56.6
    %
    
    
    54.6
    %
    
    
    (16.4
    )
    
    
    (22.1
    %)Gross profit
    
    
    69.4
    
    
    
    61.7
    
    
    
    43.4
    %
    
    
    45.4
    %
    
    
    7.7
    
    
    
    12.5
    %Gross margin
    
    
    43.4
    %
    
    
    45.4
    %Selling, general and administrative expenses
    
    
    16.1
    
    
    
    16.3
    
    
    
    10.1
    %
    
    
    12.0
    %
    
    
    0.2
    
    
    
    (1.2
    %)Operating income
    
    $
    53.3
    
    
    $
    45.4
    
    
    
    33.3
    %
    
    
    33.4
    %
    
    $
    7.9
    
    
    
    17.4
    %Operating margin
    
    
    33.3
    %
    
    
    33.4
    %
 Processing and Services Revenues
  Cost of Revenues
  Gross Profit
  29




---



##### Table of Contents



Selling General and Administrative Expenses
  Operating Income
  Segment Results of Operations  Loan Transaction Services  Unaudited
 Three months ended March 31,
    
    
    
    
    
    
    
    
    
    As a % of Revenue
    
    
    Variance 2009 vs. 2008(in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    $
    
    
    %Processing and services revenues
    
    $
    374.5
    
    
    $
    311.1
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    $
    63.4
    
    
    
    20.4
    %Cost of revenues
    
    
    268.9
    
    
    
    217.7
    
    
    
    71.8
    %
    
    
    70.0
    %
    
    
    (51.2
    )
    
    
    (23.5
    %)Gross profit
    
    
    105.6
    
    
    
    93.4
    
    
    
    28.2
    %
    
    
    30.0
    %
    
    
    12.2
    
    
    
    13.1
    %Gross margin
    
    
    28.2
    %
    
    
    30.0
    %Selling, general and administrative expenses
    
    
    27.4
    
    
    
    25.3
    
    
    
    7.3
    %
    
    
    8.1
    %
    
    
    (2.1
    )
    
    
    (8.3
    %)Operating income
    
    $
    78.2
    
    
    $
    68.1
    
    
    
    20.9
    %
    
    
    21.9
    %
    
    $
    10.1
    
    
    
    14.8
    %Operating margin
    
    
    20.9
    %
    
    
    21.9
    %
 Processing and Services Revenues
  Cost of Revenues
  Gross Profit
  Selling General and Administrative Expenses
  Operating Income
  30




---



##### Table of Contents



Segment Results of Operations  Corporate and Other  Unaudited
  Liquidity and Capital Resources
 Cash Requirements
    Operating Activities
  Investing Activities
   31




---



##### Table of Contents



Financing Activities
   Financing
     32




---



##### Table of Contents



33




---



##### Table of Contents



Interest Rate Swaps
  Bank Pays
    
    LPS PaysAmortization Period
    
    Notional Amount
    
    Variable Rate of(1)
    
    Fixed Rate of(2)(In millions)March 31, 2009 to June 30, 2009
    
    
    385.0
    
    
    1 Month LIBOR
    
    
    3.275June 30, 2009 to September 30, 2009
    
    
    365.0
    
    
    1 Month LIBOR
    
    
    3.275September 30, 2009 to December 31, 2009
    
    
    345.0
    
    
    1 Month LIBOR
    
    
    3.275December 31, 2009 to March 31, 2010
    
    
    330.0
    
    
    1 Month LIBOR
    
    
    3.275March 31, 2010 to June 30, 2010
    
    
    310.0
    
    
    1 Month LIBOR
    
    
    3.275June 30, 2010 to July 31, 2010
    
    
    290.0
    
    
    1 Month LIBOR
    
    
    3.275
  Notional Amount
    
    Bank Pays
    
    LPS PaysEffective Date
    
    Termination Date
    
    (in millions)
    
    Variable Rate of(1)
    
    Fixed Rate of(2)October 31, 2008
    
    December 31, 2010
    
    $
    350.0
    
    
    1 Month LIBOR
    
    
    2.780
    %
 
 (1)
    
    0.50% as of March 31, 2009.(2)
    
    In addition to the fixed rate paid under the swaps, we pay an applicable margin to our bank
lenders on the Term A Loan, Term B Loan and Revolving Loan equal to 2.50% as of March 31,
2009.  Contractual Obligations
  Off-Balance Sheet Arrangements
  Escrow Arrangements
   
 Item 3. Quantitative and Qualitative Disclosure About Market Risks
  34




---



##### Table of Contents



Item 4T. Controls and Procedures
   
 Part II: OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Litigation
  
    
    These matters raise difficult and complicated factual and legal issues and are subject to
many uncertainties and complexities.
    
    In these matters, plaintiffs seek a variety of remedies including equitable relief in the
form of injunctive and other remedies and monetary relief in the form of compensatory
damages. In some cases, the monetary damages sought include punitive or treble damages. None
of the cases described below includes a specific statement as to the dollar amount of damages
demanded. Instead, each of the cases includes a demand in an amount to be proved at trial.
    
    For the reasons specified above, it is not possible to make meaningful estimates of the
amount or range of loss that could result from these matters at this time. We review these
matters on an ongoing basis and follow the provisions of Statement of Financial Accounting
Standards No. 5, Accounting for Contingencies, when making accrual and disclosure decisions.
When assessing reasonably possible and probable outcomes, we base our decision on our
assessment of the ultimate outcome following all appeals.
 35




---



##### Table of Contents




    
    We intend to vigorously defend each of these matters, and we do not believe that the
ultimate disposition of these lawsuits will have a material adverse impact on our financial
position.
 National Title Insurance of New York, Inc. Litigation
 Barton v. National Title Insurance of New York, Inc. et
al. Gentilcore v. National Title Insurance of New York, Inc. et al. Martinez v. National Title Insurance of
New York, Inc. et al. Swick v. National Title Insurance of New York, Inc. et al. Davis v. National
Title Insurance of New York, Inc. et al. Pepe v. National Title Insurance of New York,
Inc. et al. Kornbluth v. National Title Insurance of New York, Inc. et al. Lamb v. National Title Insurance of New York,
Inc. et al. Blackwell v. National Title Insurance of New York, Inc. et al. Magana v. National Title Insurance of
New York, Inc. et al. Moynihan v. National Title Insurance of New York, Inc. et al. Romero v. National
Title Insurance of New York, Inc. et al. Doolittle, Susan v. National Insurance of New York,
Inc. et al.
 Regulatory Matters
  
 Item 6. Exhibits
  31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    Certification by Chief Executive Officer of Periodic Financial Reports pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.32.2
    
    Certification by Chief Financial Officer of Periodic Financial Reports pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
 36




---



##### Table of Contents



SIGNATURES
  Date: May 13, 2009
    
    Lender Processing Services, Inc.By:
    
    /s/ FRANCIS K. CHAN

Francis K. ChanExecutive Vice President and Chief Financial Officer
 37




---



##### Table of Contents



LENDER PROCESSING SERVICES, INC.
FORM 10-Q
INDEX TO EXHIBITS
  ExhibitNo.
    
    Description31.1
    
    Certification of Jeffrey S. Carbiener, Chief Executive Officer of
Lender Processing Services, Inc., pursuant to rule 13a-14(a) or
15d-14(a) of the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Francis K. Chan, Chief Financial Officer of
Lender Processing Services, Inc., pursuant to rule 13a-14(a) or
15d-14(a) of the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Jeffrey S. Carbiener, Chief Executive Officer of
Lender Processing Services, Inc., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.32.2
    
    Certification of Francis K. Chan, Chief Financial Officer of
Lender Processing Services, Inc., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 38