Altisource Portfolio Solutions S.a. · NASDAQ:ASPS

Altisource Portfolio Solutions — Debt Investor Presentation (November 2013)

30 slides from Altisource Portfolio Solutions's debt investor presentation, Nov 25, 2013

1. Slide 1: Lenders Presentation

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. November 25, 2013 Lenders Presentation

2. Slide 2: Forward Looking Statements/Non-GAAP Measures

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 1 Forward Looking Statements/Non-GAAP Measures This presentation contains forward-looking statements. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,”

3. Slide 3: Summary Term Sheet

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 2 Summary Term Sheet Borrower: Altisource Solutions S.a r.l. (the “Borrower”) Facility: Senior Secured Term Loan B Maturity: November 27, 2020 (extend by one year from existing) Guarantors: Parent and each material direct a

4. Slide 4: Pro Forma Capitalization

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 3 Pro Forma Capitalization .Altisource has delevered significantly since the incremental term loan offering in May 2013 .The refinancing will lower cash interest expense and further enhance the Company’s free cash flow prof

5. Slide 5: Timeline

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 4 Timeline November 2013 December 2013 November 25th December 4th December 9th Lender call Post Loan Documents for lenders Commitments due from lenders Comments due on loan documents Closing and Funding

6. Slide 6: Management Presenters

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 5 Management Presenters .William B. Shepro, Chief Executive Officer .Michelle D. Esterman, Chief Financial Officer

7. Slide 7: Company Overview

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 6 Altisource, the Altisource logo, the “REAL” family of trademarks and service marks, and certain other marks identified herein are trademarks or service marks of Altisource Solutions S.à r.l. or its subsidiaries. These mar

8. Slide 8: Altisource

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 7 Altisource Chairman: William C. Erbey CEO: William B. Shepro Employees: ~7,600 NASDAQ: ASPS Market Cap: (Oct. 31, 2013) $3.6 Billion Performance since August 2009 Separation from Ocwen® CAGR Market Capitalization: (Throug

9. Slide 9: Marketplaces

   © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 8 Marketplaces .Home Sales .Home Rentals .Home Maintenance .Mortgage Originations .Mortgage Servicing Real Estate Marketplace Mortgage Marketplace Vision To be the premier real estate and mortgage marketplace offering both

10. Slide 10: Market Sizes

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 9 Real Estate Marketplace Mortgage Marketplace Market Sizes 1 Source: National Association of Realtors® 2 Source: U.S. Census Bureau 3 Represents housing with 1 – 4 units 4 Source: Mortgage Bankers Association (September 20

11. Slide 11: Business Overview

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 10 Business Overview (1) Excludes 624 employees in our corporate segment (2) Excludes Corporate Items and Eliminations of ($22.7mm) revenue and ($38.1mm) operating income (3) As of September 30, 2013. Customers overlap betw

12. Slide 12: Mortgage Services – Summary

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 11 Mortgage Services – Summary Revenue growth principally from continued growth of Ocwen, services expansion and growth of services provided to Lenders OneTM members Operating margins have generally expanded due to scale be

13. Slide 13: Mortgage Services – Overview

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 12 Mortgage Services – Overview A full range of solutions from valuation and back-office administrative support to real estate sales .Valuation .Due Diligence and Quality Control .Underwriting .Settlement Services .Title In

14. Slide 14: Financial Services – Summary

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 13 (1) Operating margin is calculated using Service revenue, which we define as revenue less revenue from expense reimbursement and non-controlling interest (2) Operating income and margin exclude $2.8mm of goodwill impairm

15. Slide 15: Technology Services – Summary

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 14 Technology Services – Summary Revenue growth primarily from Ocwen’s portfolio growth Operating margins have recently declined as we invest in personnel to accelerate our next generation technology development to support

16. Slide 16: Key Investment Highlights

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 15 Key Investment Highlights Successful Service Development Track Record Strong Recurring Cash Flows Seasoned Management Team Next Generation Technology Strong Revenue Growth altiso 1 2 3 4 5

17. Slide 17: Strong Recurring Cash Flows

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 16 Strong Recurring Cash Flows Altisource is a fee-based transactional business with strong cash flows 2008 – 9/30/13 LTM CAGR: 42% 1 (1) Free Cash Flow Conversion defined as EBITDA minus capital expenditures as a percentag

18. Slide 18: Strong Revenue Growth: Affinity Relationships

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 17 .Service agreement with Ocwen through August 31, 2025: continued growth at Ocwen drives growth at Altisource .Manager of the Lenders One mortgage cooperative: 12.5% of the U.S. residential mortgage market Strong Revenue

19. Slide 19: Strong Revenue Growth: Growth Initiatives

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 18 Strong Revenue Growth: Growth Initiatives 2 .Expanding Hubzu to other institutions and the non-distressed home sale market .Providing asset management services to the single family rental market .Supporting Ocwen’s growt

20. Slide 20: Strong Revenue Growth: Equator Transaction

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 19 .Key terms – Acquired Equator, LLC for $70 million at closing and up to $80 million in earn out – Earn out may be achieved based on Equator’s financial performance over the next three years .Proven core business – Strong

21. Slide 21: Next Generation Technology

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 20 .Next generation technology supports the essence of what Altisource does: – Manages a distributed network of vendors – Processes the work – Delivers the product to our clients – Pays the vendors – Collects receivables .A

22. Slide 22: Successful Service Development Track Record

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 21 48.1 62.7 81.3 114.4 122.9 23.6 57.5 89.4 129.4 174.5 15.4 29.2 48.7 52.6 25.0 58.9 78.3 0.6 13.1 1.1 71.7 135.7 224.9 351.9 442.6 $0 $100 $200 $300 $400 $500 2009 2010 2011 2012 LTM 9/30/2013 Mortgage Services Service R

23. Slide 23: Seasoned Management Team

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 22 Seasoned Management Team 5 Strong management team with significant industry experience Name Title Industry Experience Relevant Experience William B. Shepro Chief Executive Officer and Director 18 Previously served as Pre

24. Slide 24: Financial Performance

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 23 Altisource, the Altisource logo, the “REAL” family of trademarks and service marks, and certain other marks identified herein are trademarks or service marks of Altisource Solutions S.à r.l. or its subsidiaries. These ma

25. Slide 25: Financial Metrics

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 24 Financial Metrics 2008 – 9/30/13 LTM CAGR: 36% (1) EBITDA defined as net income attributable to Altisource plus interest expense, income taxes, depreciation and amortization Altisource has experienced significant growth

26. Slide 26: Financial Metrics (cont’d)

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 25 Financial Metrics (cont’d)

27. Slide 27: Service Revenue Scenarios: Assumptions

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 27 Service Revenue Scenarios: Assumptions Portfolio acquisition assumptions Scenario 1 Scenario 2 Annual non-GSE portfolio acquisitions by Ocwen in 2014, 2015 and 2016 (no non-GSE portfolio acquisitions in 2017) None $100 b

28. Slide 28: Key Investment Highlights

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 28 Key Investment Highlights Successful Service Development Track Record Strong Recurring Cash Flows Seasoned Management Team Next Generation Technology Strong Revenue Growth altiso 1 2 3 4 5

29. Slide 29: Appendix

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 29 Altisource, the Altisource logo, the “REAL” family of trademarks and service marks, and certain other marks identified herein are trademarks or service marks of Altisource Solutions S.à r.l. or its subsidiaries. These ma

30. Slide 30: Historical Financial Information – EBITDA Reconciliation and Capital Expenditures

    © 2013 Altisource. All rights reserved. Proprietary and Confidential. Page | 30 Historical Financial Information – EBITDA Reconciliation and Capital Expenditures Year Ended December 31, LTM ($ mm) 2008 2009 2010 2011 2012 9/30/13 Net Income attributable to Altisource $9.2 $26.0 $49.3 $71.1 $110.6 $1

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