Canada Dividend Investor: DH - D + H Reports Third Quarter 2012 Results (CAD 0.31)

Company: Davis Henderson Corporation
Stock Name: DH
Amount: CAD 0.31
Announcement Date: 06/11/2012
Record Date: 28/11/2012

Dividend Detail:

Stock Exchange Symbol: DH

Website: www.dhltd.com

TORONTO, Nov. 6, 2012 /CNW/ - Davis + Henderson Corporation ("D+H" or
the "Corporation" or the "Company") today reported financial results
for the three and nine months ended September 30, 2012 that were
consistent with the Company's strategic agenda and reflected
year-over-year growth in revenues, EBITDA¹ and Adjusted EBITDA¹.�� The increase in revenues and EBITDA was primarily from the U.S.
Segment driven by the strong growth in Mortgagebot LLC ("Mortgagebot")
and the inclusion of Avista Solutions, Inc. ("Avista") from the date of
its acquisition of May 3, 2012.

"This was another period of solid performance for D+H, punctuated by new
customer wins and the ongoing realization of value from our broader
financial technology capabilities," said Gerrard Schmid, Chief
Executive Officer. "Our ability to deliver diverse solutions to more
banks and credit unions in North America creates growth opportunities
and helps to offset near-term challenges associated with economic and
market volatility."

"Strong cash generation also enabled us to continue to repay debt and
strengthen our balance sheet to support future organic growth and
growth by acquisition strategies," said Brian Kyle, Chief Financial
Officer. "We have also used that cash flow strength to increase our
dividend, effective with the next payment, raising it from $1.24 per
share to $1.28 per share annualized.�� This is our second increase since
we converted to a corporation in January 2011."

With the aim of continuously improving Canadian operations, during the
first nine months of 2012, D+H incurred $5.6 million of charges related
to cost-realignment initiatives that are expected to benefit its
Canadian platform in both current and future periods.�� Annualized
savings are expected to be realized going forward, and will be used to
offset an increase in expenses to support future growth.�� These
cost-realignment initiatives were made possible by the recent
completion of a successful business integration project that began in
late 2010.

Third Quarter Highlights

Revenue was $191.8 million, an increase of $5.5 million, or 3.0%,
compared to $186.3 million for the same quarter in 2011.

EBITDA of $48.0 million (25.0% margin), increased by $1.8 million, or
3.8%, from $46.2 million (24.8% margin) in the same quarter in 2011,
due to continued strong growth in the Mortgagebot business and the
inclusion of Avista in the U.S. Segment. EBITDA in the Canadian Segment
reflected modest revenue growth and savings realized from integration
and transformation initiatives, offset by charges related to
cost-realignment initiatives to benefit future periods.

Adjusted EBITDA was $51.3 million (26.7% margin) for the third quarter
of 2012, an increase of $4.4 million, or 9.5%, compared to $46.8
million (25.1% margin) for the same period in 2011.�� Adjusted EBITDA
for the third quarter of 2012 excluded $3.3 million of
acquisition-related costs as well as other charges related to
cost-realignment initiatives. These expenses consisted of $2.4 million
of cost-realignment charges in the Canadian Segment that are not
considered to be in the normal course of operations, and $0.9 million
related to transaction costs and certain retention expenses associated
with the acquisitions of Mortgagebot and Avista in the U.S. Segment.
Acquisition-related and other charges for the same period in 2011 were
$0.6 million related to the Mortgagebot acquisition. These items were
excluded as management believes they are not indicative of underlying
business performance and excluding these adjustments is more reflective
of ongoing operating results.

Net income increased to $19.6 million ($0.3310 per share) from $15.1
million ($0.2542 per share) for the same quarter in 2011. Net income
for the third quarter of 2012 included a non-cash income tax recovery
of $1.2 million related to the Mortgagebot acquisition.�� Net income for
the third quarter of 2011 was reduced by $4.0 million of an unrealized
mark-to-market loss on interest-rate swaps.�� Fair value adjustments
related to these interest-rate swaps are recognized in net income as
these swaps are not designated as hedges for hedge accounting purposes.

Adjusted net income¹ increased to $28.1 million ($0.4752 per share) from $26.2 million
($0.4429 per share) for the third quarter of 2011.

During the third quarter of 2012, D+H paid a dividend of $0.31 per share
to its shareholders of record on August 31, 2012. During the same
period in 2011, D+H paid $0.31 per share to its shareholders of record
on August 31, 2011. D+H increased its target annual dividend from $1.24
per share to $1.28 per share annualized, for shareholders of record as
of November 30, 2012, to be paid on December 31, 2012.

The Company also made net repayments of $17.8 million on its credit
facilities during the third quarter of 2012.

American Banker, Bank Technology News and IDC Financial Insights once
again named D+H��as one of the��world's top��financial��technology
("FinTech") firms in��the international��FinTech 100 with a��2012 ranking
of 35th, up 6 places since 2011.��D+H is the highest ranked Canadian
headquartered company on the FinTech 100 listing. �� This recognition is
a reflection of the steps D+H has taken to provide a broad spectrum of
financial technology products and services to its customers and as it
continues to innovate and grow to better serve the financial services
industry.

Effective October 15, 2012, William W. Neville resigned from the D+H
Board of Directors, a role that he had held since 2009, to assume a new
executive role within the Company as the President of D+H USA, with
overall responsibility for the Company's U.S. operations and for
broadening D+H's presence in the United States.

Nine-Month Highlights

Revenue was $570.5 million, an increase of $29.5 million, or 5.5%,
compared to $540.9 million for the same nine-month period in 2011.

EBITDA was $141.9 million (24.9% margin), an increase of $10.1 million,
or 7.7%, compared to $131.8 million (24.4% margin) for the same period
in 2011.

Adjusted EBITDA was $150.3 million (26.3% margin) for the first nine
months of�� 2012, an increase of $15.4 million, or 11.4%, compared to
$134.9 million (24.9% margin) for the same period of 2011. Adjusted
EBITDA for the first nine months of 2012 excluded impacts of
acquisition-related and other charges of $8.4 million, which consisted
of $5.6 million related to cost-realignment initiatives to benefit
future periods within the Canadian Segment and $2.8 million related to
transaction costs and certain retention expenses related to the
acquisition of Mortgagebot and Avista within the U.S. Segment.��
Acquisition-related and other charges for the same period in 2011 were
$3.1 million incurred primarily in connection with the Mortgagebot
acquisition.

Net income was $55.4 million ($0.9357 per share), a year-over-year
decrease of $19.1 million, or 25.7%, compared to $74.6 million ($1.3077
per share) for the same period in 2011.�� Net income for the nine-month
period in 2011 benefited from the inclusion of non-cash tax recoveries
of $22.8 million attributable to D+H's conversion to a corporation in
the first quarter of 2011 and a non-cash tax recovery relating to
losses within certain U.S. subsidiaries that were not previously
recognized in connection with the acquisition of Mortgagebot in the
second quarter of 2011, partially offset by $3.5 million of an
unrealized mark-to-market loss on interest-rate swaps.�� Net income for
the first nine months of 2012 was impacted by $8.4 million of
acquisition-related and other charges as described above.

Adjusted net income was $82.5 million ($1.3926 per share) for the first
nine months of 2012, an increase of $4.4 million, or 5.6%, compared to
$78.1 million ($1.3698 per share) for the same period in 2011.

On May 3, 2012, D+H acquired a 100% equity interest in Avista, a leading
provider of Software as a Service ("SaaS") mortgage loan origination
software, for a purchase price of US$ 40 million.

Additionally, on April 24, 2012, D+H made a strategic minority
investment in Compushare, Inc. ("Compushare"), based in Santa Ana,
California, a technology management and cloud computing provider to
financial institutions, for US$ 9.8 million.

During the first nine months of 2012, dividends of $0.93 per share were
paid to shareholders, up from $0.9133 per share in the same period of
2011.

____________________________________________

¹ D+H's financial results are prepared in accordance with IFRS. D+H
reports several non-IFRS financial measures, including EBITDA, Adjusted
EBITDA and Adjusted net income used above. Adjusted EBITDA is
calculated as EBITDA, adjusted to remove acquisition-related and other
charges, including expenses associated with cost-realignment
initiatives which are not considered to be part of normal course of
operations.�� Adjusted net income is calculated as net income, adjusted
to remove certain non-cash items and certain items of note such as
acquisition-related and other charges, including expenses associated
with cost-realignment initiatives as described above, discontinued
operations and the related tax effects of these adjustments including
tax effects of corporate conversions. These items are excluded in
calculating Adjusted EBITDA and Adjusted net income as they are not
considered indicative of the underlying business performance for the
period being reviewed and management believes that excluding these
adjustments is more reflective of ongoing operating results. Any
non-IFRS financial measures should be considered in context with the
IFRS financial statement presentation and should not be considered in
isolation or as a substitute for IFRS net income or cash flows.
Further, D+H's measures may be calculated differently from similarly
titled measures of other companies. See Non-IFRS Financial Measures for
a more complete description of these terms.

D+H's unaudited condensed interim consolidated financial statements for
the third quarter of 2012, accompanying notes to the financial
statements and management's discussion & analysis ("MD&A") along with
the supplementary financial information will be available today at��www.dhltd.com��and tomorrow on��www.sedar.com.

For a more detailed discussion of the results and management's outlook,
please see the MD&A below.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains certain statements that constitute
forward-looking information within the meaning of applicable securities
laws ("forward-looking statements"). Statements concerning D+H's
objectives, goals, strategies, intentions, plans, beliefs, expectations
and estimates, and the business, operations, financial performance and
condition of D+H are forward-looking statements.�� The words "believe",
"expect", "anticipate", "estimate", "intend", "may", "will", "would"
and similar expressions and the negative of such expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.�� These
forward-looking statements are subject to important assumptions,
including the following specific assumptions: the ability of D+H to
meet its revenue, "EBITDA", "Adjusted EBITDA" and "Adjusted net income"
targets (see Non-IFRS Financial Measures for a more complete
description of the terms EBITDA, Adjusted EBITDA and Adjusted net
income); general industry and economic conditions; changes in D+H's
relationship with its customers and suppliers; pricing pressures and
other competitive factors; the anticipated effect of acquisitions on
the financial performance of D+H; and the expected benefits arising as
a result of acquisitions. D+H has also made certain macroeconomic and
general industry assumptions in the preparation of such forward-looking
statements.�� While D+H considers these factors and assumptions to be
reasonable based on information currently available, there can be no
assurance that actual results will be consistent with these
forward-looking statements.

Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Business, or developments in D+H's
industry, to differ materially from the anticipated results,
performance, achievements or developments expressed or implied by such
forward-looking statements.

Risks related to forward-looking statements include, among other things,
challenges presented by declines in the use of personal and business
cheques; the Company's dependence on a limited number of large
financial institution customers and dependence on their acceptance of
new programs; strategic initiatives being undertaken to meet the
Company's financial objective; stability and growth in the real estate,
mortgage and lending markets; as well as general market conditions,
including economic and interest rate dynamics. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements.�� The documents incorporated by
reference herein also identify additional factors that could affect the
operating results and performance of the Company. Forward-looking
statements are based on management's current plans, estimates,
projections, beliefs and opinions, and D+H does not undertake any
obligation to update forward-looking statements should assumptions
related to these plans, estimates, projections, beliefs and opinions
change except as required by applicable securities laws.

All of the forward-looking statements made in this press release and the
documents incorporated by reference herein are qualified by these
cautionary statements and other cautionary statements or factors
contained herein, and there can be no assurance that the actual results
or developments will be realized or, even if substantially realized,
that they will have the expected consequences to, or effects on, the
Company.

CONFERENCE CALL

Davis + Henderson will discuss its financial results for the three and
nine months ended September 30, 2012 via conference call at 10:00 a.m.
EST (Toronto time) on Wednesday, November 7, 2012. The number to use
for this call is 647-427-7450 for Local / International callers or
1-888-231-8191 for US / Canada callers. The conference call will be
hosted by Gerrard Schmid, Chief Executive Officer and by Brian Kyle,
Chief Financial Officer. The conference call will also be available on
the web by accessing CNW Group's website http://www.newswire.ca/en/webcast/detail/1052963/1144399. For anyone unable to listen to the scheduled call, the rebroadcast
number will be: 416-849-0833 for Toronto area callers, or 1-855-859-2056 for all other callers, with
Encore Password 46733496. The rebroadcast will be available until
Wednesday November 21, 2012.�� An archive recording of the conference
call will also be available at the above noted web address for one
month following the call and a text version of the call will be
available at www.dhltd.com.

ADDITIONAL INFORMATION

Additional information relating to the Company, including the Company's
most recently filed Annual Information Form, is available on SEDAR at www.sedar.com.

MANAGEMENT'S DISCUSSION AND ANALYSIS

This Management's Discussion and Analysis ("MD&A") for Davis + Henderson
Corporation (the "Company" or the "Corporation" or the "Business" or
"Davis + Henderson" or "D+H" or "we" or "our"), which was formerly
known as Davis + Henderson Income Fund (the "Fund"), has been prepared
with an effective date of November 6, 2012 and should be read in
conjunction with the MD&A in the Annual Report for the year ended
December 31, 2011, dated March 6, 2012, and the unaudited condensed
interim consolidated financial statements for the three and nine months
ended September 30, 2012. External economic and industry factors remain
substantially unchanged from those described in the annual MD&A and the
Corporation's most recently filed Annual Information Form, except as
described herein.

NON-IFRS FINANCIAL MEASURES

The information presented within the tables in this MD&A include certain
adjusted financial measures such as "EBITDA" (Earnings before interest,
taxes, depreciation and amortization; EBITDA also excludes fair value
adjustments of interest-rate swaps which are directly related to
interest expense), "Adjusted EBITDA" (EBITDA adjusted to remove
acquisition-related and other charges, including expenses incurred in
connection with cost-realignment initiatives which are not considered
to be incurred in the normal course of operations and are not
indicative of the underlying business performance), "Adjusted net
income" (net income before certain non-cash charges such as
amortization of intangibles from acquisitions and fair value
adjustments of interest-rate swaps and certain items of note such as
acquisition-related and other charges and discontinued operations), and
"Adjusted net income per share", all of which are not defined terms
under IFRS.

These non-IFRS financial measures should be read in conjunction with the
Consolidated Statements of Income.�� See the reconciliation of EBITDA,
Adjusted EBITDA and Adjusted net income to the most directly comparable
IFRS measure, "net income", in the "Operating Results" section of this
MD&A.

Management believes these supplementary measures provide useful
additional information related to the operating results of the
Corporation.�� Management uses these subtotals as measures of financial
performance and as a supplement to the Consolidated Statements of
Income.�� Investors are cautioned that these measures should not be
construed as an alternative to using net income as a measure of
profitability or as an alternative to the IFRS Consolidated Statements
of Income or other IFRS statements.

Further, these measures do not have any standardized meaning and D+H's
method of calculating each balance may not be comparable to
calculations used by other companies bearing the same description.

EBITDA

In addition to its use by management as an internal measure of financial
performance, EBITDA (with adjustments) is used to measure compliance
with certain financial covenants under the Company's credit facility
and bonds. EBITDA is also used by D+H as a factor in assessing the
performance and the value of a business. EBITDA has limitations as an
analytical tool, and the reader should not consider it in isolation or
as a substitute for analysis of results as reported under IFRS.

Adjusted EBITDA��

Adjusted EBITDA is also used by D+H in assessing the performance of its
businesses.�� Adjusted EBITDA excludes: (i) acquisition-related expenses
such as transaction costs, and certain retention and incentive costs
incurred as part of acquisitions; and (ii) other charges incurred in
connection with cost-realignment initiatives which are not considered
to be part of the normal course of operations.�� These items are
excluded in calculating Adjusted EBITDA as they are not considered
indicative of the underlying business performance for the period being
reviewed and management believes that excluding these adjustments is
more reflective of ongoing operating results.

Similar to EBITDA, Adjusted EBITDA also has limitations as an analytical
tool, and the reader should not consider it in isolation or as a
substitute for analysis of results as reported under IFRS.

Adjusted Net Income and Adjusted Net Income per Share

Effective January 1, 2011, as a result of the conversion from an income
trust structure to a corporate structure, the Business introduced
Adjusted net income and Adjusted net income per share as measures for
evaluating results.�� Periods prior to January 1, 2011, do not have
comparable measures.

Adjusted net income is used as a measure of internal performance similar
to net income, but is calculated after removing the impacts of certain
items such as acquisition-related expenses, discontinued operations and
certain non-cash items such as amortization of intangibles from
acquisitions and fair value adjustments of interest-rate swaps. Also
excluded from Adjusted net income are the tax effects of corporate
conversion and acquisitions. These items are excluded in calculating
Adjusted net income as they are not considered indicative of the
financial performance of the Business for the period being reviewed.

STRATEGY

D+H's goal is to be a leading financial technology ("FinTech") provider
to the North American financial services marketplace. Today our
solutions include several market-leading service offerings.�� Within the
Canadian market they include payment solutions; the provision of
collateral management services; the servicing of student loans;
mortgage technology solutions and several specialty servicing
businesses including credit card and insurance processing.�� In the
United States, D+H is a market-leading provider of
Software-as-a-Service ("SaaS") Point-of-Sale ("POS") mortgage and
consumer loan solutions to over 1,100 community banks and credit
unions; and more recently through the acquisition of Avista Solutions,
Inc. ("Avista"), a leading provider of SaaS Loan Origination System
("LOS") to over 150 community banks and credit unions. Across North
America, we offer leading commercial lending, small business lending
and leasing technology solutions to mid-size and large financial
institutions.

D+H's strategy is to establish market-leading positions within
well-defined and growing service areas in the financial services
marketplace, and to reinforce these market-leading positions with
technology solutions that deliver increasing value to our customers and
shareholders. We expect to advance this strategy through organic
initiatives, through partnering with third parties and by way of
selective acquisitions. D+H's long-term financial objective is to
deliver sustainable and growing earnings through continued organic
revenue growth and by way of strategic acquisitions.

Over the past several years, D+H has executed this strategy by evolving
payment solutions, completing several acquisitions including ASSET Inc.
("ASSET") and Mortgagebot LLC ("Mortgagebot") in 2011 and Avista in
2012, and by further enhancing our services and capabilities within all
service areas.

As announced recently, D+H's improved ranking in the FinTech 100 is a
testament to D+H's increasing technological capabilities, as the
FinTech 100 ranks companies according to their global financial
technology revenues. Through a series of strategic acquisitions,
including the most recent acquisitions of Mortgagebot and Avista, D+H
has extended its reach and capabilities as a company that offers a
range of technology solutions to the financial services market.�� This
recognition is a reflection of the steps D+H has taken to provide a
broad spectrum of financial technology products and services to its
customers and as it continues to innovate and grow to better serve the
financial services industry.

Within our U.S. Segment, our strategic focus revolves around building a
range of technology offerings, with an emphasis on cloud computing
solutions or SaaS offerings, to better serve the regional banks,
community banks and credit unions in the U.S.�� We expect to advance
this strategy organically through adjacent offerings, such as our
recent expansion into consumer loans, and through further U.S.
acquisitions that will allow us to broaden our technology capabilities
to this customer segment.

On a go-forward basis, consistent with its strategy, management is
working to: (i) continue our organic growth initiatives in the U.S.;
(ii) evolve our payment solutions programs; (iii) enhance customer
value and extend our technology supported services related to
mortgages, auto, personal, student, commercial and leasing markets; and
(iv) identify appropriate acquisition targets to support the strategic
direction of D+H.

For a detailed discussion of the results for the three and nine months
ended September 30, 2012 and management's outlook, please see below.
For a detailed discussion of risk factors, please refer to the most
recent Annual Information Form and the 2011 Annual Report filed on
SEDAR.

ACCOUNTING PRINCIPLES AND FINANCIAL INFORMATION PRESENTATION

The Company's consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS"),
as issued by the International Accounting Standards Board ("IASB").��
Prior to January 1, 2011, the consolidated financial statements were
reported in accordance with Canadian generally accepted accounting
principles ("Canadian GAAP").

Results from continuing operations include the performance of acquired
businesses from the respective dates of acquisition and exclude results
from businesses classified as discontinued operations.

Comparative information presented for periods prior to January 1, 2011
relate to those of the Fund, and the results for the periods subsequent
to January 1, 2011 are those of the Corporation. Consequently,
throughout this MD&A, any references to distributions, unitholders and
per unit amounts relate to periods prior to January 1, 2011, and any
references to dividends, shareholders and per share amounts relate to
periods subsequent to January 1, 2011.

All amounts are in Canadian dollars, unless otherwise specified.

Segment Reporting

D+H began reporting its results by its reportable segments in the first
quarter of 2012, based on its two strategic business units, the
"Canadian Segment" and the "U.S. Segment".�� Comparatives have been
presented to conform to the current period disclosure.

The Canadian Segment includes results from payment solutions (reported
as programs to chequing accounts in prior years), loan registration and
recovery services, loan servicing, technology solutions in the
commercial lending, small business lending and leasing areas, lending
technology services to the Canadian mortgage market and other business
service solutions.�� The U.S. Segment consists of lending technology
services to the U.S. mortgage market, including results from
Mortgagebot, Avista and D+H's share of profit from the investment in
Compushare, Inc. ("Compushare").

The results reported under each of these segments do not include items
such as interest expense, income taxes and fair value adjustments
related to derivative instruments, as these items are considered to be
of a corporate nature.

OPERATING RESULTS - THIRD QUARTER AND YEAR-TO-DATE 2012

The following tables are derived from, and should be read in conjunction
with, the Consolidated Statements of Income for the three and nine
months ended September 30, 2012 and 2011 and include non-IFRS financial
measures. Management believes this supplementary disclosure provides
useful additional information. See Non-IFRS Financial Measures section
for a description of non-IFRS terms used.

The consolidated results include those of Avista, effective from the
acquisition date of May 3, 2012, reported as part of the U.S. segment.

(in thousands of Canadian dollars,�� unaudited)

��

�� Quarter ended September 30,

��

Nine months ended September 30,

��

2012

��

2011

��

2012

2011

Revenue

��$

191,807

��$

186,275

��

��$

570,488

��$

540,943

Expenses��

��

143,811

��

140,050

��

428,553

��

409,118

��

EBITDA¹

��

47,996

��

46,225

��

141,935

��

131,825

EBITDA Margin

��

25.0%

��

24.8%

��

24.9%

��

24.4%

��

Adjustments:

��

Acquisition-related and other charges ²

��

3,265

��

610

��

8,380

��

3,116

��

Adjusted EBITDA ¹

��$

51,261

��$

46,835

��

��$

150,315

��$

134,941

Adjusted EBITDA Margin

��

26.7%

��

25.1%

��

26.3%

��

24.9%

��

¹EBITDA and Adjusted EBITDA are non-IFRS terms. See Non-IFRS Financial
Measures for a more complete description of these terms.

²Acquisition-related and other charges for the third quarter of 2012
include expenses related to cost-realignment initiatives as well as
acquisition related costs pertaining to certain retention and incentive
costs in connection with the acquisitions of Mortgagebot and Avista.��
Acquisition-related and other charges for the same period in 2011
included certain retention and incentive costs related to the
acquisition of Mortgagebot.

��	��	��	��	��Quarter ended September 30,��	��	��	��Nine months ended September 30,��
��	��	��	��	2012 vs. 2011	��	��	2012 vs. 2011
��	��	��	��	��% change	��	��	��% change
Revenue			��	3.0%	��	��	5.5%
EBITDA ¹			��	3.8%	��	��	7.7%
Adjusted EBITDA ¹			��	9.5%	��	��	11.4%

¹EBITDA and Adjusted EBITDA are non-IFRS terms. See Non-IFRS Financial
Measures for a more complete description of these terms.

(in thousands of Canadian dollars, except per share amounts, unaudited)

��			��	�� Quarter ended September 30,			��	Nine months ended September 30,
��			��	�� 2012	��	2011	��	��	2012	��	2011
��			��	��	��	��	��	��	��	��	��
Revenue			��$	191,807	��$	186,275	��	��$	570,488	��$	540,943
Expenses��			��	143,811	��	140,050	��	��	428,553	��	409,118
��	��	��	��	��	��	��	��	��	��	��	��
EBITDA¹			��	47,996	��	46,225	��	��	141,935	��	131,825
Depreciation of capital assets and amortization of non-acquisition intangibles			��	7,030	��	5,820	��	��	21,227	��	17,151
Amortization of intangibles from acquisitions			��	10,930	��	11,040	��	��	33,119	��	29,722
Interest expense			��	4,943	��	4,792	��	��	14,585	��	14,053
Income from investment in an associate, net of tax ²			��	(53)	��	-	��	��	(91)	��	-
Amortization and fair value adjustment of derivative instruments ³			��	(445)	��	3,991	��	��	(1,474)	��	3,531
Income tax expense (recovery)��			��	5,986	��	5,522	��	��	19,143	��	(7,051)
��	��	��	��	��	��	��	��	��	��	��	��
Income from continuing operations			��	19,605	��	15,060	��	��	55,426	��	74,419
Income from discontinued operations, net of tax ⁴			��	-	��	-	��	��	-	��	140
��	��	��	��	��	��	��	��	��	��	��	��
Net income			��$	19,605	��$	15,060	��	��$	55,426	��$	74,559
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��
Income from continuing operations per share, basic and diluted^{5, 6}			��$	0.3310	��$	0.2542	��	��$	0.9357	��$	1.3053
Net income per share, basic and diluted ^{5, 6}			��$	0.3310	��$	0.2542	��	��$	0.9357	��$	1.3077
��	��	��	��	��	��	��	��	��

¹	EBITDA and Adjusted EBITDA are non-IFRS terms. See Non-IFRS Financial Measures for a more complete description of these terms.
²	D+H's share of profit from Compushare, the minority investment purchased on April 24, 2012, reported as part of the U.S. Segment.
³	Includes: (i) mark-to-market adjustments of interest-rate swaps that are not designated as hedges for hedge accounting purposes, and for which any change in the fair value of these contracts is recorded through the Consolidated Statement of Income; and (ii) amortization of the mark-to-market adjustment of interest-rate swaps relating to cumulative net gains and losses that were deferred prior to January 1, 2007 when hedge accounting was discontinued for these swaps.
⁴	D+H sold a non-strategic component of its contact centre business in October 2010 and entered into a transition agreement with the buyer which ended on April 1, 2011. The results of these operations are presented as discontinued operations in the comparative periods presented.��
⁵	Diluted net income per share reflects impacts of outstanding options.�� If the average market price during the period is below the option price plus the fair market value of the option, then the options are not included in the dilution calculation.
⁶	Weighted average number of shares outstanding during the third quarter and the first nine months of 2012 was 59,233,373 shares (Q3 2011 - 59,233,373 shares; Nine months ended September 30, 2011 - 57,013,593 shares).

(in thousands of Canadian dollars, except per share amounts, unaudited)

��	��	��	��	Quarter ended September 30,			��	Nine months ended September 30,
��	��	��	��	2012	��	2011	��	��	2012	��	2011
Net income			��$	19,605	��$	15,060	��	��$	55,426	��$	74,559
Adjustments:			��	��	��	��	��	��	��	��	��
��	Non-cash items:		��	��	��	��	��	��	��	��	��
��	��	Amortization of intangibles from acquisitions	��	10,930	��	11,040	��	��	33,119	��	29,722
��	��	Amortization and fair value adjustment of derivative instruments ²	��	(445)	��	3,991	��	��	(1,474)	��	3,531
��	Other items of note:		��	��	��	��	��	��	��	��	��
��	��	Acquisition-related and other charges ³	��	3,265	��	610	��	��	8,380	��	3,116
��	��	Discontinued operations, net of tax ⁴	��	-	��	-	��	��	-	��	(140)
��	Tax effect of above adjustments (excluding discontinued operations) ⁵		��	(4,051)	��	(4,465)	��	��	(11,807)	��	(9,854)
��	Tax effect of corporate conversion and acquisitions ⁶		��	(1,156)	��	-	��	��	(1,156)	��	(22,837)
��	��	��	��	��	��	��	��	��	��	��	��
Adjusted net income ¹			��$	28,148	��$	26,236	��	��$	82,488	��$	78,097
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��
Adjusted net income per share, basic and diluted ^{1, 7, 8}			��$	0.4752	��$	0.4429	��	��$	1.3926	��$	1.3698

��

��	��	��	��	��Quarter ended September 30,��	��	��	��Nine months ended September 30,��
��	��	��	��	2012 vs. 2011	��	��	2012 vs. 2011
��	��	��	��	��% change	��	��	��% change
Adjusted net income per share ^{1, 7, 8}			��	7.3%	��	��	1.7%

��

¹	Adjusted net income and Adjusted net income per share are non-IFRS terms. See Non-IFRS Financial Measures for a more complete description of these terms.
²	^��Includes: (i) mark-to-market adjustments of interest-rate swaps that are not designated as hedges for hedge accounting purposes, and for which any change in the fair value of these contracts is recorded through the Consolidated Statement of Income; and (ii) amortization of the mark-to-market adjustment of interest-rate swaps relating to cumulative net gains and losses that were deferred prior to January 1, 2007 when hedge accounting was discontinued for these swaps.
³	Acquisition-related and other charges for the third quarter of 2012 include expenses related to cost-realignment initiatives as well as acquisition related costs pertaining to certain retention and incentive costs in connection with the acquisitions of Mortgagebot and Avista.�� Acquisition-related and other charges for the same period in 2011 included certain retention and incentive costs related to the acquisition of Mortgagebot.
⁴	D+H sold a non-strategic component of its contact centre business in October 2010 and entered into a transition agreement with the buyer which ended on April 1, 2011. The results of these operations are presented as discontinued operations in the comparative periods presented.��
⁵	The following adjustments to net income are tax effected at their respective tax rates: (i) amortization of acquisition intangibles; (ii) amortization and fair value adjustment of derivative instruments; and (iii) acquisition-related and other charges.
⁶	Adjustment for the third quarter of 2012 consisted of a non-cash tax recovery related to liabilities recognized in connection with the acquisition of Mortgagebot.�� Adjustments for the first nine months of 2011 consisted of a non-cash income tax recovery attributable to losses within certain U.S. subsidiaries that had not been previously recognized, and a non-cash income tax recovery recognized in connection with the conversion to a Corporation.
⁷	Diluted net income per share and Diluted Adjusted net income per share (non-IFRS term) reflect impacts of outstanding options.�� If the average market price during the period is below the option price plus the fair market value of the option, then the options are not included in the dilution calculation.
^8��	Weighted average number of shares outstanding during the third quarter and the first nine months of 2012 was 59,233,373 shares (Q3 2011 - 59,233,373 shares; Nine months ended September 30, 2011 - 57,013,593 shares).

Overview - Consolidated

Growth in consolidated revenues in the third quarter of 2012, compared
to the same period in 2011, was driven by both Canadian and U.S.
Segments while growth in consolidated EBITDA was attributable to the
U.S. Segment.�� The U.S. Segment contributed to the increase in revenues
from the acquisition of Avista, and to a lesser extent, through growth
in Mortgagebot.�� For the nine months ended September 30, 2012, both
segments contributed to the increase in revenues with the U.S. Segment
contributing to EBITDA growth.

Consolidated EBITDA for both the third quarter of 2012 and the first
nine months of 2012 were impacted by expenses incurred in relation to
cost-realignment initiatives in the Canadian Segment and
acquisition-related charges in connection with the acquisitions of
Mortgagebot and Avista in the U.S. Segment. Consolidated Adjusted
EBITDA, which excludes these charges, was higher in both segments for
both the third quarter, and the first nine months of 2012, compared to
the same periods in 2011.

Consolidated net income for the three months ended September 30, 2012
was higher compared to the same period in 2011, mainly attributable to
EBITDA growth in the U.S. Segment and fair value changes related to the
interest-rate swaps combined with a non-cash tax recovery in Corporate.
Net income during the third quarter of 2011 was impacted by unrealized
losses related to the interest-rate swaps recorded as part of
Corporate.�� Consolidated net income was lower for the first nine months
of 2012 compared to the same nine-month period in 2011. The first nine
months of 2011 benefited from non-cash income tax recoveries recorded
in relation to acquisitions and in connection with the conversion from
an income trust to a corporation.��

Consolidated Adjusted net income for the third quarter and the first
nine months of 2012 was higher compared to the same periods in 2011.��
Consolidated Adjusted net income excludes the following: (i) impacts of
non-cash items such as amortization of intangibles from acquisitions
and gains and losses related to fair value adjustment of derivative
instruments; (ii) other items of note such as acquisition-related and
other charges described earlier and discontinued operations; and (iii)
tax recoveries related to the changes in the tax status of D+H as a
result of the conversion from an income trust to a corporation, and
non-cash tax recoveries relating to acquisitions.�� Net income was also
adjusted for the tax impact of these items to arrive at Adjusted net
income.

(in thousands of Canadian dollars, unaudited)

��

Quarter ended September 30,

��

Canadian Segment

��

U.S. Segment

��

Corporate

��

Consolidated

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

Revenue

��$

176,075

��$

�� 175,728

��

��$

�� 15,732

��$

10,547

��

��$

��$

��

��$

�� 191,807

��$

�� 186,275

Expenses��

��

135,948

��

134,153

��

7,863

��

5,897

��

143,811

��

140,050

��

EBITDA¹

��

40,127

��

41,575

��

7,869

��

4,650

��

47,996

��

46,225

EBITDA Margin

��

22.8%

��

23.7%

��

50.0%

��

44.1%

��

25.0%

��

24.8%

��

Adjustments:

��

Acquisition-related and other charges ²

��

2,401

��

864

��

610

��

3,265

��

610

��

Adjusted EBITDA ¹

��$

42,528

��$

41,575

��

��$

8,733

��$

5,260

��

��$

��$

��

��$

51,261

��$

46,835

Adjusted EBITDA Margin

��

24.2%

��

23.7%

��

55.5%

��

49.9%

��

26.7%

��

25.1%

��

��	��	��	��	Quarter ended September 30,
��	��	��	��	��Canadian��	��	��U.S.��	��
��	��	��	��	��Segment��	��	��Segment��	��Consolidated��
��	��	��	��	2012 vs. 2011	��	2012 vs. 2011	2012 vs. 2011
��	��	��	��	��% change	��	��% change	��% change
��			��	��	��	��	��
Revenue			��	0.2%	��	49.2%	3.0%
EBITDA ¹			��	(3.5%)	��	69.2%	3.8%
Adjusted EBITDA ¹			��	2.3%	��	66.0%	9.5%

��

Nine months ended September 30,

��

Canadian Segment

��

U.S. Segment

��

Corporate

��

Consolidated

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

Revenue

��$

529,230

��$

�� 522,732

��

��$

�� 41,258

��$

18,211

��

��$

��$

��

��$

�� 570,488

��$

�� 540,943

Expenses��

��

406,346

��

396,890

��

22,207

��

12,228

��

428,553

��

409,118

��

EBITDA¹

��

122,884

��

125,842

��

19,051

��

5,983

��

141,935

��

131,825

EBITDA Margin

��

23.2%

��

24.1%

��

46.2%

��

32.9%

��

24.9%

��

24.4%

��

Adjustments:

��

Acquisition-related and other charges ²

��

5,576

��

199

��

2,804

��

2,917

��

8,380

��

3,116

��

Adjusted EBITDA ¹

��$

128,460

��$

�� 126,041

��

��$

�� 21,855

��$

8,900

��

��$

��$

��

��$

�� 150,315

��$

�� 134,941

Adjusted EBITDA Margin

��

24.3%

��

24.1%

��

53.0%

��

48.9%

��

26.3%

��

24.9%

��

��	�� Nine months ended September 30,
��	��Canadian��	��	��U.S.��	��
��	��Segment��	��	��Segment��	��Consolidated��
��	2012 vs. 2011	��	2012 vs. 2011	2012 vs. 2011
��	��% change	��	��% change	��% change
��	��	��	��	��
Revenue	1.2%	��	126.6%	5.5%
EBITDA ¹	(2.4%)	��	218.4%	7.7%
Adjusted EBITDA ¹	1.9%	��	145.6%	11.4%

��

EBITDA and Adjusted EBITDA are non-IFRS terms. See Non-IFRS Financial
Measures for a more complete description of these terms.

Acquisition-related and other charges for the third quarter and the
first nine months of 2012 include expenses related to cost-realignment
initiatives in the Canadian Segment and acquisition-related costs
pertaining to certain retention and incentive costs in connection with
the acquisitions of Mortgagebot and Avista in the U.S. Segment.��
Acquisition-related and other charges for the same period in 2011
included certain retention and incentive costs related to the
acquisition of Mortgagebot in the U.S. Segment and transaction costs
related to the ASSET acquisition in the Canadian Segment.

Overview - Canadian Segment

Operating results from the following service areas are included in the
Canadian Segment:�� (i) payment solutions; (ii) loan registration and
recovery services; (iii) loan servicing; (iv) lending technology
services in Canada; and (v) business service solutions.

Revenues in the Canadian Segment for the three and nine month periods in
2012 increased compared to the same periods in 2011 with increases in
some service areas and decreases in others.�� See the "Revenue" section
for further discussion by service area.

EBITDA in the Canadian Segment for both the three and nine months ended
September 30, 2012 decreased compared to the prior year as the increase
in revenues was offset by expenses related to cost-realignment
initiatives incurred to benefit future periods of $2.4 million and $5.6
million respectively. Adjusted EBITDA, which excludes these
cost-realignment charges, was higher for both the three and nine-month
periods in 2012 compared to prior year.

Overview - U.S. Segment

The U.S. Segment consists of the operating results of Mortgagebot and
Avista since their respective acquisition dates of April 12, 2011 and
May 3, 2012.�� Mortgagebot is a leading SaaS provider of mortgage POS
offerings in the United States and a provider of a range of consumer
direct, loan officer, branch and call centre mortgage and consumer loan
origination solutions for over 1,100 community banks and credit
unions.�� Avista is a leading provider of SaaS mortgage loan origination
software for over 150 community and regional banks, credit unions and
mortgage bankers in the United States.�� D+H's share of profit from the
investment in an associate, Compushare, is also recorded as part the
U.S. Segment, from the date of purchase of the minority investment of
April 24, 2012.

Revenues for the U.S. Segment for the three and nine months ended
September 30, 2012 were higher compared to the same periods in 2011 due
to the inclusion of Avista since May 2012 and organic growth in
Mortgagebot primarily from strong refinancing activity.

EBITDA in the U.S. Segment for the third quarter and the first nine
months of 2012 was higher compared to the prior year, mainly due to
growth in Mortgagebot and the inclusion of Avista results. Adjusted
EBITDA, which excludes acquisition-related and other charges in
connection with the Mortgagebot and Avista acquisitions, also increased
in the U.S. Segment for both the three and nine-month periods in 2012.

REVENUE

Revenue - Consolidated

(in thousands of Canadian dollars, unaudited)

��

Quarter ended September 30,

��

��Nine months ended September 30,��

��

2012

��

2011

��

2012

��

2011

Revenue^��

��

Payment solutions¹

��

��$

73,751

��$

74,095

��$

225,319

��$

222,564

��

Loan registration and recovery services

��

43,778

��

42,002

��

126,802

��

121,417

��

Loan servicing��

��

31,407

��

32,426

��

98,907

��

97,771

��

Lending technology services ²

��

35,717

��

29,026

��

95,478

��

70,883

��

Business service solutions ³

��

7,154

��

8,726

��

23,982

��

28,308

��

��$

191,807

��$

186,275

��$

570,488

��$

540,943

¹Reported as Programs to chequing account in prior years.

²Includes revenue reported as part of the U.S. segment.

³Reported as Other in prior years.

Consolidated revenue for the third quarter of 2012 was $191.8 million,
an increase of $5.5 million, or 3.0%, compared to the same period in
2011. For the first nine months of 2012, consolidated revenue of $570.5
million, increased by $29.5 million, or 5.5%, compared to the same
period in 2011.�� These increases were primarily due to growth within
the U.S. Segment, and the inclusion of Avista acquired on May 3, 2012.��
Services delivered by D+H are subject to seasonality, including fees
earned in connection with mortgage origination services and automobile
loan registration services, which are typically stronger in the second
and third quarters than in the first and fourth quarters.

The following table reflects the relative size of each of the major
service areas as a percentage of consolidated revenue based on a
rolling twelve-month period:

��		��	�� Rolling twelve-months ended September 30,
��		��	��	��	��	��	2012	2011
Revenue - Consolidated		��	��	��	��	��	��	��
��	Payment solutions¹	��	��	��	��	��	40%	42%
��	Loan registration and recovery services	��	��	��	��	��	22%	21%
��	Loan servicing	��	��	��	��	��	18%	19%
��	Lending technology services ²	��	��	��	��	��	16%	13%
��	Business service solutions ³	��	��	��	��	��	4%	5%
��		��	��	��	��	��	��	��
��		��	��	��	��	��	100%	100%��

¹Reported as Programs to chequing account in prior years.

²Includes revenues reported as part of the U.S. segment.

³Reported as Other in prior years.

Payment solutions include: (i) the cheque supply program which serves
the personal and small business account holders of our financial
services customers; and (ii) various other subscription fee based
enhancement services and other service offerings directed towards
account opening activities and other service offerings directed towards
chequing and credit card programs. These service offerings (excluding
the component of enhancement and identity protection services that are
integrated in the cheque order) currently represent a small component
of revenues within this revenue category. In general, cheque order
volumes in this area have historically been declining as consumers and
small businesses choose other payment methods.�� These volume declines
have been partially offset by increased average order values for
cheques and growth in service enhancements to the chequing and credit
card programs. Revenue from payment solutions is reported as part of
the Canadian Segment.

Loan registration and recovery services support the personal and
commercial lending activities of our financial services customers.
Services include the registration and management of data related to
secured lending for both personal and real property loans as well as
recovery services related to both secured and unsecured lending
activities. The largest contributors within this revenue category are
search and registration services, which currently account for
approximately 50% to 60% of revenue, and recovery services accounting
for approximately 25% to 35%. In both instances, loans relating to
vehicle purchases are a significant driver of activity and as such can
be variable. In general, registration services are impacted by both
economic cyclicality and seasonality, while recovery services are, in
general, counter-cyclical. Other services within this revenue category
include mortgage discharge services and various search-related
services, both of which we deliver on behalf of our financial
institution customers.�� Revenues from loan registration and recovery
services are reported as part of the Canadian Segment.

Loan servicing programs include student loans administration services
offered to financial institutions and governments and credit card
servicing offered to card issuers.�� The student loans administration
services currently account for approximately 70% to 80% of revenues
within this revenue category.�� In general, student loan servicing
volumes have been stable and modestly growing as student loans balances
have been increasing and the term of the loans extended.�� Recent
integration of two lending portfolios into a single managed portfolio
will reduce the fees we earn on a net basis. Volumes related to credit
card servicing can be more variable and are primarily impacted by
customer initiatives.�� Revenues from loan servicing programs are
reported as part of the Canadian Segment.

Lending technology services include services directed towards mortgage
markets in both Canada and, recently with the acquisitions of Avista in
May 2012 and Mortgagebot in April 2011, the United States. As well, we
offer technology products and services in both countries directed
towards leasing, commercial lending and small business lending.
Revenues related to mortgage markets currently represent approximately
85% to 95% of revenues within this category, with approximately 50% to
60% attributable to transaction-based fees earned in connection with
Canadian mortgage originations and 40% to 50% representing fees related
to the U.S. SaaS loan origination services.�� Mortgage origination fees
can be variable and are impacted by many factors including the economy,
the housing market and interest rates, among others.�� For segment
reporting purposes, revenues from the lending technology services to
the Canadian mortgage markets and the products and technology solutions
for leasing, commercial lending and small business lending offered in
both Canada and U.S. are reported as part of the Canadian Segment.
Revenues from the U.S. SaaS loan origination services related to
Mortgagebot and Avista are reported as part of the U.S. Segment.

Business service solutions include a number of smaller service offerings
that are primarily outsourced activities D+H performs on behalf of a
variety of customers including non-financial services customers.
Revenues from these activities are reported as part of the Canadian
Segment.��

Revenue - Canadian Segment

Total revenues in the Canadian Segment for the third quarter of 2012 of
$176.1 million, increased by $0.3 million, or 0.2%, compared to the
same quarter in 2011.�� For the nine-month period in 2012, total
revenues were $529.2 million, an increase of $6.5 million, or 1.2%,
compared to the same period in 2011.

(in thousands of Canadian dollars, unaudited)

��		�� Quarter ended September 30,				�� Nine months ended September 30,��
��		��	2012	��	2011	��	2012	��	2011
Revenue - Canadian Segment		��	��	��	��	��	��	��	��
��	Payment solutions ¹	��$	73,751	��$	74,095	��$	225,319	��$	222,564
��	Loan registration and recovery services��	��	43,778	��	42,002	��	126,802	��	121,417
��	Loan servicing��	��	31,407	��	32,426	��	98,907	��	97,771
��	Lending technology services ²	��	19,985	��	18,479	��	54,220	��	52,672
��	Business service solutions ³	��	7,154	��	8,726	��	23,982	��	28,308
��		��	��	��	��	��	��	��	��
��		��$	176,075	��$	175,728	��$	529,230	��$	522,732

¹Reported as Programs to chequing account in prior years.

²Excludes revenues from Mortgagebot and Avista.

³Reported as Other in prior years.^{��}

Revenue from payment solutions for the third quarter of 2012 was $73.8
million, a decrease of $0.3 million, or 0.5%, compared to the same
quarter in 2011. For the nine months ended September 30, 2012, revenue
was $225.3 million, an increase of $2.8 million, or 1.2%, compared to
the same period in 2011.�� Revenue for the third quarter of 2012 was
impacted by volume declines in cheque orders, which were partially
offset by the positive impact of higher average order values and
product and service enhancements in the chequing and credit card
programs. Revenue for the third quarter of 2011 benefited from a
recovery in order volumes previously impacted by the postal strike that
occurred in the latter part of the second quarter of 2011.�� For the
nine-month period in 2012, the positive impact of higher average order
values overcame a decline in cheque order volumes. Management believes
that the long-term downward trend in cheque order volumes is relatively
unchanged and continues to be in the low single digit range.�� D+H
continues to develop service enhancements to offset this impact and to
generate future growth within this category. In recent periods, there
has been greater volatility in order volumes, especially among personal
orders.

Loan registration and recovery services revenue for the third quarter of
2012 was $43.8 million, an increase of $1.8 million, or 4.2%, compared
to the same quarter in 2011.�� For the first nine months of�� 2012,
revenue was $126.8 million, an increase of $5.4 million, or 4.4%,
compared to the same period in 2011.�� This increase was mainly due to
higher transaction volumes in registration services reflecting a
continuing recovery within the auto and auto lending markets.�� Volumes
in this area can be variable due to changes in the economy, changes in
the auto and auto lending markets and seasonality. Typically, this
service area experiences stronger volumes during the second and third
quarters as compared to the first and fourth quarters as consumers more
frequently purchase and finance cars in the spring and summer.�� For the
third quarter of 2012, a modest increase in recovery services was
attributable to higher volumes and increased average order values
partially offset by customer repatriation.�� For the first nine months
of 2012, the increase in revenue attributable to higher volumes in
registration services was partially offset by an expected decline in
the ASSET automotive lending recovery services, which are
counter-cyclical.

Loan servicing programs revenue for the third quarter was $31.4 million,
a decrease of $1.0 million, or 3.1%, compared to the same quarter in
2011. For the first nine months of 2012, revenue of $98.9 million
increased by $1.1 million, or 1.2%, compared to the same period in
2011.�� Loan servicing programs consist of student loan administration
services, the largest portion of revenues within this service area, and
credit card servicing. Modestly higher volumes in the third quarter of
2012 were offset by contractual price declines and an expected
reduction in fees from a previously announced consolidation and
integration between two customers within the student loans program. The
increase in revenue for the nine-month period in 2012 was due to higher
volumes and higher professional fees, partially offset by contractual
price declines and the customer consolidation and integration described
above. Volumes in the student loan administration service area are
expected to be relatively stable and modestly growing in the
short-term. Activities related to cost management and improving
delivery efficiency are being directed towards lowering the impact of
reduced pricing and fees related to the recent customer consolidation.
During the third quarter of 2012, D+H successfully extended our largest
student loan servicing contract for a multi-year term with opportunity
for further extensions.�� D+H services student loan portfolios under
long-term contracts to governments and financial institutions and
successfully extending this contract was imperative and provides
greater certainty around revenue streams within the student loan
administration services component.

A decline in revenues in the credit card servicing component within the
loan servicing programs compared to the prior year was attributable to
specific customer initiatives in prior periods that contributed to
higher revenues in those periods.

Revenue from lending technology services related to the Canadian Segment
for the third quarter of 2012 was $20.0 million, an increase of $1.5
million, or 8.1%, compared to the same quarter in 2011.�� Revenue was
$54.2 million for the first nine months of 2012, an increase of $1.5
million, or 2.9%, compared to the same period in 2011. Third quarter
2012 revenue benefited from higher mortgage origination fees due to
strong Canadian housing and mortgage market activity compared to the
same quarter in 2011. For the first nine months of 2012, the increase
due to market activity was partially offset by the decrease in
origination fees driven by customer repatriation of certain services we
historically performed for them as previously announced.�� In general,
due to the continued tightening of mortgage rules announced by the
Department of Finance on June 21, 2012 that became effective in July
2012, industry analysts expect the recently��observed reduction
in��Canadian housing market prices��and sales volumes to continue in
major urban areas for the remainder of 2012 and into 2013.

Revenues from business service solutions in the third quarter of 2012
were $7.2 million, compared to $8.7 million for the same period in 2011
due to program repatriations by certain customers in prior periods.�� We
expect the effects of these repatriated businesses to stabilize in
upcoming periods.�� On October 7, 2010, the Business sold a
non-strategic component of its contact centre business and entered into
a transition agreement with the buyer, which expired on April 1, 2011.��
The results of these operations were previously reported in this
revenue category and have been presented as discontinued operations for
the comparative periods presented.

Revenue - U.S. Segment

U.S. Segment revenue related to online mortgage origination from
Mortgagebot and Avista for the third quarter of 2012 was $15.7 million,
an increase of $5.2 million, or 49.2%, compared to $10.5 million for
the same period in 2011. This reflected the inclusion of Avista since
its acquisition in May 2012 combined with strong ongoing organic growth
in Mortgagebot as a result of higher volumes driven by continued low
interest-rate environment in the U.S.�� Revenue for the first nine
months of 2012 was $41.3 million, compared to $18.2 million for the
same period in 2011.�� The increase in the nine-month period for 2012
was primarily attributable to the inclusion of Mortgagebot and Avista
effective from their respective dates of acquisition, April 2011 and
May 2012.

EXPENSES

Expenses - Consolidated^��

(in thousands of Canadian dollars, unaudited)

��		��	��	��Quarter ended September 30,��			��	��	��Nine months ended September 30,��
��	��	��	��	2012	��	2011	��	��	2012	��	2011
��	��	��	��	��	��	��	��	��	��	��	��
Employee compensation and benefits ¹		��	��$	56,805	��$	55,648	��	��$	170,144	��$	159,207
Non-compensation direct expenses²		��	��	60,587	��	59,290	��	��	179,629	��	174,805
Other operating expenses ³		��	��	26,419	��	25,112	��	��	78,780	��	75,106
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��$	143,811	��$	140,050	��	��$	428,553	��$	409,118

¹	Employee compensation and benefits on a consolidated basis includes retention and incentive expenses related to acquisitions of businesses and are net of apprenticeship tax credits and amounts capitalized related to software product development. Employee compensation expenses for the third quarter of 2012 included $2.4 million of expenses related to cost-realignment initiatives in the Canadian Segment.�� For the nine months ended September 30, 2012, $5.6 million was recorded as cost-realignment charges in the Canadian Segment.
²	Non-compensation direct expenses include materials, shipping, selling expenses and third party direct disbursements.
³	Other operating expenses include occupancy costs, communication costs, licensing fees, professional fees, contractor fees, transaction costs related to acquisitions of businesses and expenses not included in other categories.

Consolidated expenses of $143.8 million for the third quarter of 2012
increased by $3.8 million, or 2.7%, compared to the same quarter in
2011.�� For the first nine months of 2012, consolidated expenses were
$428.6 million, an increase of $19.4 million, or 4.8%, compared to the
same period in 2011. Consolidated expenses for the third quarter of
2012 included acquisition-related and other charges of $3.3 million
consisting of $2.4 million incurred in connection with cost-realignment
initiatives in the Canadian Segment, as well as acquisition-related
expenses attributable to the acquisitions of Mortgagebot and Avista of
$0.9 million, in the U.S. Segment. For the same period in 2011, $0.6
million was recognized as acquisition-related and other charges in
connection with the acquisition of Mortgagebot in the U.S. Segment.��
For the nine months ended September 30, 2012, on a consolidated basis,
acquisition-related and other charges were $8.4 million related to the
cost-realignment charges in the Canadian Segment and Mortgagebot and
Avista acquisitions in the U.S Segment, compared to $3.1 million for
the same period in 2011 recorded in connection with the acquisitions of
ASSET and Mortgagebot.

Expenses - Canadian Segment

Total expenses for the Canadian Segment for the third quarter of 2012
were $135.9 million, an increase of $1.8 million, or 1.3%, compared to
the same quarter in 2011.�� Expenses for the first nine months of 2012
were $406.3 million, an increase of $9.5 million, or 2.4%, compared to
the same period in 2011.

Expenses for the third quarter 2012 for the Canadian Segment included
$2.4 million of expenses related to cost-realignment initiatives that
are not considered to be part of normal-course operations. For the nine
months ended September 30, 2012, $5.6 million was recorded as charges
related to cost-realignment initiatives in the Canadian Segment. These
charges are expected to benefit the Canadian Segment in both current
and future periods.�� Annualized savings are expected to be realized
going forward, and will be used to offset an increase in expenses to
support future growth. These cost-realignment initiatives were made
possible by the recent completion of a successful business integration
project that began in late 2010.

Excluding these cost-realignment charges, total expenses in the Canadian
Segment for the third quarter of 2012 decreased by $0.6 million, or
0.4%, compared to the third quarter of 2011, and for the first nine
months of 2012 increased by $4.1 million, or 1.0%.�� The first nine
months of 2011 included $0.2 million of acquisition-related charges in
connection with the acquisition of ASSET in the Canadian Segment.

(in thousands of Canadian dollars, unaudited)

��	��	��	��	��Quarter ended September 30,��			��	��	��Nine months ended September 30,��
��	��	��	��	��2012��	��	��2011��	��	��	��2012��	��	��2011��
��	��	��	��	��	��	��	��	��	��	��	��
Employee compensation and benefits ¹			��$	51,839	��$	51,948	��	��$	156,749	��$	152,635
Non-compensation direct expenses²			��	60,330	��	59,030	��	��	178,836	��	174,290
Other operating expenses ³			��	23,779	��	23,175	��	��	70,761	��	69,965
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��$	135,948	��$	134,153	��	��$	406,346	��$	396,890

¹	Employee compensation and benefits are net of apprenticeship tax credits and amounts capitalized related to software product development. Employee compensation expenses for the third quarter of 2012 included $2.4 million of expenses related to cost-realignment initiatives in the Canadian Segment ($5.6 million for the nine-month period).
²	Non-compensation direct expenses include materials, shipping, selling expenses and third party direct disbursements.
³	Other operating expenses include occupancy costs, communication costs, licensing fees, professional fees, contractor fees, transaction costs related to acquisitions of businesses and expenses not included in other categories. Other operating expenses are net of inter-segment management fees received from the U.S. segment.

Employee compensation and benefits costs of $51.8 million for the third
quarter of 2012 for the Canadian Segment were lower by $0.1 million, or
0.2%, compared to the same quarter in 2011, and for the first nine
months of 2012, costs of $156.7 million, increased by $4.1 million, or
2.7%, compared to the same period in 2011. Expenses for the third
quarter of 2012 benefited from savings realized as a result of
cost-realignment initiatives executed in prior periods, partially
offset by $2.4 million of expenses in relation to cost-realignment
initiatives to benefit future periods, replacement of contract labour
(recorded as other operating expenses) with full-time staff and an
increase in share-based compensation expense. For the nine-month
period, the increase was primarily due to $5.6 million of expenses
related to cost-realignment initiatives as described above and an
increase in share-based compensation expense, partially offset by
savings realized as a result of cost-realignment initiatives executed
in prior periods and apprenticeship tax credits.�� Replacement of
contract labour with full-time staff also contributed to the increase
in expenses in the first nine months of 2012 compared to the same
period in 2011.

Non-compensation direct expenses for the Canadian Segment were $60.3
million for the third quarter of 2012, an increase of $1.3 million, or
2.2%, compared to the same quarter in 2011.�� For the first nine months
of 2012, non-compensation direct expenses of $178.8 million, increased
by $0.3 million, or 0.2%, compared to the same period in 2011.�� In
general, these expenses directionally change with revenue changes.�� An
increase in direct costs associated with the loan registration
services, consistent with the increase in revenues in this service
area, was partially offset by a decrease in direct costs in other
service areas.

Other operating expenses of $23.8 million for the third quarter of 2012
were higher by $0.6 million, or 2.6%, compared to the same quarter in
2011, primarily due to a decrease in capitalization of development
costs and the impact of foreign exchange loss on certain intercompany
balances, partially offset by savings realized from transformation and
integration initiatives. For the first nine months of the current year,
other operating expenses of $70.8 million, increased by $0.8 million,
or 1.1%, compared to the same period in 2011, primarily attributable to
costs associated with technology transformation and integration
activities. The increases were partially offset by the replacement of
contract labour with full-time staff as discussed above and
inter-segment management fees charged to the U.S. Segment for shared
services.

Expenses - U.S. Segment

Total expenses for the U.S. Segment for the third quarter of 2012 were
$7.9 million, an increase of $2.0 million, or 33.3%, compared to the
same quarter in 2011. This increase was primarily due to the inclusion
of the Avista cost base and expense growth in Mortgagebot consistent
with revenue growth.�� Expenses for the third quarter of 2012 were also
impacted by $0.9 million of acquisition-related charges in connection
with the Avista and Mortgagebot acquisitions, and for the same period
in 2011, were impacted by $0.6 million of costs related to the
Mortgagebot acquisition.�� For the first nine months of 2012, expenses
were $22.2 million, an increase of $10.0 million, compared to the same
period in 2011.�� The increase during the nine-month period was
attributable to the inclusion of the Avista cost base, effective from
the date of acquisition of May 3, 2012 and the timing of the
Mortgagebot acquisition. Expenses for the first nine months of 2012
also included acquisition-related costs of $2.8 million in connection
with the Avista and Mortgagebot acquisitions, consistent with the
acquisition related expenses for the nine-month period in 2011.

(in thousands of Canadian dollars, unaudited)

��	��	��	��	��Quarter ended September 30,��			��	��	��Nine months ended September 30,��
��	��	��	��	��2012��	��	��2011��	��	��	��2012��	��	��2011��
��	��	��	��	��	��	��	��	��	��	��	��
Employee compensation and benefits ¹			��$	4,966	��$	3,700	��	��$	13,395	��$	6,572
Non-compensation direct expenses^��			��	257	��	260	��	��	793	��	515
Other operating expenses ²			��	2,640	��	1,937	��	��	8,019	��	5,141
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��$	7,863	��$	5,897	��	��$	22,207	��$	12,228

¹	Employee compensation and benefits expenses include retention and incentive costs related to the acquisitions of Avista and Mortgagebot.
²	Other operating expenses include inter-segment management fees, occupancy costs, transaction costs related to acquisitions of businesses and expenses not included in other categories. Amounts reported for 2012 and 2011 include transaction costs incurred in connection with the acquisitions of Avista and Mortgagebot respectively.

Employee compensation and benefits costs of $5.0 million for the third
quarter of 2012 for the U.S. Segment were higher by $1.3 million, or
34.2%, compared to the same quarter in 2011, and for the first nine
months of 2012, costs of $13.4 million, increased by $6.8 million, or
103.8%, compared to the same period in 2011. The increase in the third
quarter of 2012 was primarily due to the inclusion of the Avista cost
base including retention payments in connection with the acquisition of
Avista. The increase during the nine-month period is attributable to
the timing of both the Avista and Mortgagebot acquisitions.

Non-compensation direct expenses for the U.S. Segment of $0.3 million
for the third quarter of 2012 remained relatively consistent to the
same quarter in 2011.�� For the first nine months of 2012,
non-compensation direct expenses of $0.8 million, increased by $0.3
million, or 54.0%, compared to the same period in 2011 due to the
inclusion of Avista and timing of the Mortgagebot acquisition.�� In
general, these expenses directionally change with revenue changes.

Other operating expenses of $2.6 million for the third quarter of 2012
were higher by $0.7 million, or 36.3%, compared to the same quarter in
2011 and for the first nine months of the current year, other operating
expenses of $8.0 million, increased by $2.9 million, or 56.0%, compared
to the same period in 2011, primarily attributable to the inclusion of
Avista and transaction costs related to acquisitions. For the three and
nine-month periods in 2012, other expenses included transaction costs
of $0.1 million and $0.7 million respectively, incurred in connection
with the acquisition of Avista.�� For the nine-month period in 2011,
other expenses included transaction costs of $1.8 million, related to
the Mortgagebot acquisition.�� Also included in other expenses for the
periods presented is the inter-segment management fees charged by the
Canadian Segment for shared services.

EBITDA AND EBITDA MARGIN

EBITDA and EBITDA Margin - Consolidated

Consolidated EBITDA during the third quarter of 2012 was $48.0 million,
an increase of $1.8 million, or 3.8%, compared to $46.2 million for the
same quarter in 2011. For the first nine months of 2012, consolidated
EBITDA of $141.9 million, increased by $10.1 million, or 7.7%, compared
to $131.8 million for the same period in 2011. EBITDA margin of 25.0%
on a consolidated basis for the third quarter of 2012 increased from
24.8% for the same period in 2011. For the nine-month period of 2012,
consolidated EBITDA margin of 24.9% increased from 24.4% for the same
period in 2011. Growth in EBITDA in 2012 was mainly driven by the U.S
Segment. In the Canadian Segment, strong market activity in the lending
technology and loan registration service areas and savings realized
from transformation and integration initiatives, was offset by a
decline in revenue in other service areas and expenses related to
cost-realignment initiatives to benefit future periods.

EBITDA and EBITDA Margin - Canadian Segment

Canadian Segment EBITDA for the third quarter of 2012 was $40.1 million,
a decrease of $1.5 million, or 3.5%, compared to the same quarter in
2011, primarily due to a decline in revenues in the payment solutions
and loan servicing service areas and expenses related to
cost-realignment initiatives to benefit future periods.�� This decrease
was partially offset by the contribution made by strong volumes in the
lending technology and loan registration and recovery service areas and
savings realized from integration and transformation initiatives.��
EBITDA for the first nine months of 2012 of $122.9 million was lower by
2.4% compared to EBITDA of $125.8 million for the same period in 2011
due to expenses related to cost-realignment initiatives as well as the
impact of integration and program repatriation by customers as
previously described. Cost management activities are being directed
towards lowering the impact of reduced pricing and fees as a result of
the integration and repatriation by the customers as described above.
EBITDA for the third quarter of 2012 was impacted by $2.4 million of
charges in relation to cost-realignment initiatives as described
earlier (for the nine months ended September 30, 2012 - $5.6 million).

EBITDA margin for the third quarter and the first nine months of 2012
was 22.8% and 23.2% respectively, compared to 23.7% and 24.1% for the
same periods in 2011.�� Lower EBITDA margins in both the current quarter
and the nine-month period in 2012 primarily related to the
cost-realignment initiatives as described above.

EBITDA and EBITDA Margin - U.S. Segment

U.S. Segment EBITDA for the third quarter of 2012 was $7.9 million, an
increase of $3.2 million, compared to the same quarter in 2011,
attributable to strong growth in the Mortgagebot business as well as
the inclusion of Avista results effective from the date of acquisition
of May 3, 2012.�� EBITDA for the third quarter of 2012 included
acquisition-related costs of $0.9 million, consisting of retention and
incentive costs related to the Mortgagebot acquisition as well as
transaction costs and retention expenses related to the Avista
acquisition.�� EBITDA for the first nine months of 2012 in the U.S.
Segment was $19.1 million, compared to $6.0 million for the same period
in 2011 for the same reasons above.

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

Adjusted EBITDA and Adjusted EBITDA Margin - Consolidated

Consolidated Adjusted EBITDA during the third quarter of 2012 was $51.3
million, an increase of $4.4 million, or 9.5%, compared to the same
quarter in 2011. For the first nine months of 2012, consolidated
Adjusted EBITDA of $150.3 million, increased by $15.4 million, or
11.4%, compared to the same period in 2011.�� Consolidated Adjusted
EBITDA excluded acquisition-related and other charges of $3.3 million
for the third quarter of 2012, consisting of $2.4 million in the
Canadian Segment and $0.9 million in the U.S. Segment and for the nine
months ended September 30, 2012, excluded acquisition-related and other
charges of $8.4 million, consisting of $5.6 million in the Canadian
Segment and $2.8 million in the U.S. Segment.�� On a consolidated
basis, Adjusted EBITDA margin for the third quarter of 2012 was 26.7%,
up from 25.1% a year ago.�� For the first nine months of 2012,
consolidated Adjusted EBITDA margin was 26.3%, compared to 24.9% for
the same period in 2011.

Adjusted EBITDA and Adjusted EBITDA Margin - Canadian Segment

Adjusted EBITDA reported in the Canadian Segment excludes: (i)
acquisition-related expenses such as transaction costs, and certain
retention and incentive costs incurred as part of the acquisitions; and
(ii) other charges incurred in connection with cost-realignment
initiatives which are not considered to be part of the normal course of
operations.�� These items are excluded from the calculation of Adjusted
EBITDA as they are not considered indicative of the underlying business
performance for the period being reviewed and management believes that
excluding these adjustments is more reflective of ongoing operating
results.

Adjusted EBITDA of $42.5 million in the Canadian Segment for the third
quarter of 2012 increased by 2.3%, compared to $41.6 million for the
same quarter in 2011 and excluded $2.4 million of charges incurred in
connection with the cost-realignment initiatives.�� Adjusted EBITDA
margin for the third quarter of 2012 was 24.2%, compared to 23.7% a
year ago.

For the nine-month period ended September 30, 2012, Adjusted EBITDA of
$128.5 million, was higher by 1.9%, compared to $126.0 million for the
same period in 2011. Adjusted EBITDA for the first nine months of 2012
excluded acquisition-related charges of $5.6 million in connection with
the cost-realignment initiatives.�� Adjusted EBITDA for the first nine
months of 2011 excluded $0.2 million of acquisition-related charges
incurred in connection with the ASSET acquisition.�� Adjusted EBITDA
margin of 24.3% for the first nine months of 2012 increased moderately
from 24.1% for the first nine months of 2011.

Adjusted EBITDA and Adjusted EBITDA Margin - U.S. Segment

U.S. Segment Adjusted EBITDA increased by 66.0% to $8.7 million for the
third quarter of 2012, compared to $5.3 million in the third quarter of
2011.�� Adjusted EBITDA in the most recent third quarter excluded
acquisition-related expenses of $0.9 million related to retention and
incentive expenses in connection with the Mortgagebot and Avista
acquisitions.�� For the same quarter in 2011, $0.6 million of
transaction costs and retention expenses related to the acquisition of
Mortgagebot were excluded from EBITDA, to arrive at Adjusted EBITDA of
$5.3 million.�� Adjusted EBITDA for the first nine months of 2012 of
$21.9 million excluded $2.8 million of acquisition-related costs and
compared favourably to an Adjusted EBITDA of $8.9 million for the same
period in 2011, which excluded acquisition-related charges of $2.9
million related to transaction costs and retention and incentive costs
incurred as a result of the Mortgagebot acquisition.

(in thousands of Canadian dollars, unaudited)

��

Quarter ended September 30,

��

Canadian Segment

��

U.S. Segment

��

Corporate

��

Consolidated

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

Revenue

��$

176,075

��$

�� 175,728

��

��$

�� 15,732

��$

10,547

��

��$

��$

��

��$

�� 191,807

��$

�� 186,275

Expenses��

��

135,948

��

134,153

��

7,863

��

5,897

��

143,811

��

140,050

��

EBITDA¹

��

40,127

��

41,575

��

7,869

��

4,650

��

47,996

��

46,225

Depreciation of capital assets and

non-acquisition intangibles

��

6,623

��

5,649

��

407

��

171

��

7,030

��

5,820

Amortization of intangibles from acquisitions

��

7,920

��

8,256

��

3,010

��

2,784

��

10,930

��

11,040

Interest expense

��

4,943

��

4,792

��

4,943

��

4,792

Income from investment in an associate, net of tax ²

��

(53)

��

(53)

��

Amortization and fair value adjustment

of derivative instruments ³

��

(445)

��

3,991

��

(445)

��

3,991

Income tax expense��

��

5,986

��

5,522

��

5,986

��

5,522

��

Income (loss) from continuing operations

��

25,584

��

27,670

��

4,505

��

1,695

��

(10,484)

��

(14,305)

��

19,605

��

15,060

Income from discontinued

operations, net of tax ⁴

��

Net income (loss)

��$

25,584

��$

27,670

��

��$

4,505

��$

1,695

��

��$

(10,484)

��$

(14,305)

��

��$

19,605

��$

15,060

��

Nine months ended September 30,

��

Canadian Segment

��

U.S. Segment

��

Corporate

��

Consolidated

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

��

2012

��

2011

Revenue

��$

529,230

��$

�� 522,732

��

��$

�� 41,258

��$

18,211

��

��$

��$

��

��$

�� 570,488

��$

�� 540,943

Expenses

��

406,346

��

396,890

��

22,207

��

12,228

��

428,553

��

409,118

��

EBITDA¹

��

122,884

��

125,842

��

19,051

��

5,983

��

141,935

��

131,825

Depreciation of capital assets and

non-acquisition intangibles

��

20,087

��

16,750

��

1,140

��

401

��

21,227

��

17,151

Amortization of intangibles from acquisitions

��

24,182

��

24,529

��

8,937

��

5,193

��

33,119

��

29,722

Interest expense

��

14,585

��

14,053

��

14,585

��

14,053

Income from investment in an associate, net of tax ²

��

(91)

��

(91)

��

Amortization and fair value adjustment

of derivative instruments ³

��

(1,474)

��

3,531

��

(1,474)

��

3,531

Income tax expense (recovery)��

��

19,143

��

(7,051)

��

19,143

��

(7,051)

��

Income (loss) from continuing operations

��

78,615

��

84,563

��

9,065

��

389

��

(32,254)

��

(10,533)

��

55,426

��

74,419

Income from discontinued

operations, net of tax ⁴

��

140

��

140

��

Net income (loss)

��$

78,615

��$

84,703

��

��$

9,065

��$

389

��

��$

(32,254)

��$

(10,533)

��

��$

55,426

��$

74,559

��

¹	EBITDA is a non-IFRS term.�� See Non-IFRS Financial Measures for a complete description of this term.
²	D+H's share of profit from Compushare, the minority investment purchased on April 24, 2012, reported as part of the U.S. Segment.
³	Includes: (i) mark-to-market adjustments of interest-rate swaps that are not designated as hedges for hedge accounting purposes, and for which any change in the fair value of these contracts is recorded through the Consolidated Statement of Income; and (ii) amortization of the mark-to-market adjustment of interest-rate swaps relating to cumulative net gains and losses that were deferred prior to January 1, 2007 when hedge accounting was discontinued for these swaps.
⁴	D+H sold a non-strategic component of its contact centre business in October 2010 and entered into a transition agreement with the buyer which ended on April 1, 2011. The results of these operations are presented as discontinued operations for the comparative periods.

DEPRECIATION OF CAPITAL ASSETS AND AMORTIZATION OF NON-ACQUISITION
INTANGIBLES

Depreciation of Capital Assets and Amortization of Non-acquisition
Intangibles - Canadian Segment

Depreciation of capital assets and amortization of non-acquisition
intangible assets of $6.6 million during the third quarter of 2012 for
the Canadian Segment increased by $1.0 million, or 17.2%, compared to
$5.6 million in the third quarter of 2011.�� For the first nine months
of 2012, depreciation and amortization was $20.1 million, compared to
$16.8 million for the same period in 2011. The increases in both
periods were related to higher capital expenditures in the current
year.

Depreciation of Capital Assets and Amortization of Non-acquisition
Intangibles - U.S. Segment

Depreciation of capital assets and amortization of non-acquisition
intangible assets during the third quarter of 2012 for the U.S. Segment
was $0.4 million, and for the first nine months of 2012 was $1.1
million, compared to $0.2 million for the third quarter and $0.4
million for the first nine months of 2011.�� The increase in the
three-month period in 2012 was due to higher capital expenditures to
support growth in Mortgagebot and related to the integration of
Mortgagebot and Avista. The increase during the first nine months of
2012 was due to the timing of the Mortgagebot acquisition in April
2011, higher capital expenditures in 2012 and to a lesser extent,
inclusion of Avista.

AMORTIZATION OF INTANGIBLES FROM ACQUISITIONS

Amortization of Intangibles from Acquisitions - Canadian Segment

In the Canadian Segment, amortization of acquisition-related intangibles
for the third quarter of 2012 was $7.9 million, compared to $8.3
million for the same period in 2011. For the first nine months of 2012,
amortization was $24.2 million, compared to $24.5 million for the same
period in 2011.�� The decreases in amortization for both the three and
nine-month periods in 2012 compared to the same periods in 2011 were
attributable to the completion of amortization of certain intangibles
during the current year.

Amortization of Intangibles from Acquisitions - U.S. Segment

Amortization of intangibles from acquisitions for the third quarter of
2012 for the U.S. Segment was $3.0 million, which includes amortization
related to the intangibles from the Mortgagebot and Avista
acquisitions, compared to $2.8 million for the same quarter in 2011.��
For the nine months ended September 30, 2012, amortization was $8.9
million, compared to $5.2 million for the same period in 2011.

INCOME FROM INVESTMENT IN AN ASSOCIATE

Consolidated net income for the third quarter and the first nine months
of 2012 included D+H's share of income of $0.1 million related to the
investment in an associate, Compushare, effective from April 24, 2012.��
D+H's portion of the income from Compushare is reported as part of the
U.S. Segment for segment reporting purposes.

The investment in Compushare is accounted for using the equity method of
accounting and is recognized initially at cost.�� The cost of the
investment includes transaction costs.

CORPORATE

D+H reports the following as part of Corporate as they are not allocated
to the segments for reporting purposes: (i) interest expense; (ii)
amortization and fair value adjustments of derivative instruments; and
(iii) income tax expense (recovery).

Interest Expense

Interest expense for the third quarter of 2012 increased by $0.2 million
compared to the same quarter in 2011 due to increased long-term, fixed
rate borrowings related to the acquisition of Avista and a minority
investment in Compushare.�� The increase in interest expense in the
third quarter of 2012 was partially offset by favourable pricing on the
credit facility. For the first nine months of 2012, interest expense
was higher by $0.5 million, compared to the same period in 2011, due to
lower average debt balances in 2011 due to the timing of the various
acquisitions in 2011 and 2012.

Amortization and Fair Value Adjustment of Derivative Instruments

Interest-rate swaps

Compared to a net unrealized loss of $4.0 million in the third quarter
of 2011, a net unrealized gain of $0.4 million on interest-rate swaps
was recognized in the third quarter of 2012 reflecting fair value
adjustments related to changes in market interest rates at September
30, 2012 compared to June 30, 2012.�� For the first nine months of
2012, the net unrealized gain related to the interest-rate swaps was
$1.5 million, compared to a net unrealized loss of $3.5 million for the
same period in 2011.

These unrealized gains and losses are recognized in income because these
interest-rate swaps are not designated as hedges for accounting
purposes.�� In general, a loss on interest-rate swaps is recorded when
interest rates decrease as compared to certain previous periods and a
gain is recorded when interest rates increase.�� Provided the Company
does not cancel its interest-rate swaps, the unrealized amounts
represent a non-cash unrealized gain or loss that will subsequently
reverse through the statement of income as the related swaps mature.��
D+H has historically held its derivative contracts to maturity.

Income Tax Expense (Recovery)

An income tax expense of $6.0 million was recorded in the third quarter
of 2012, compared to a tax expense of��$5.5 million for the third
quarter of 2011 and included tax expenses related to the utilization of
loss carry-forwards and book income not taxable until a future period.��
The income tax expense in the third quarter of 2012 was partially
offset by a tax recovery related to liabilities recognized in
connection with the acquisition of Mortgagebot.

Tax expense for the first nine months of 2012 was $19.1 million,
attributable to the utilization of loss carry-forwards and book income
not taxable until a future period and a tax recovery related to
liabilities recognized in connection with the acquisition of
Mortgagebot.�� Tax recoveries for the first nine months of 2011 of $7.1
million included the recognition of previously unrecognized deferred
tax assets related to intangible assets which are expected to be
realized as a consequence of the corporate conversion as well as
certain losses within the U.S. subsidiaries that were recognized in
connection with the acquisition of Mortgagebot.

Due to the corporate structure and certain available tax losses, the
Company does not expect to pay any significant cash taxes until after
2013.

Net Income - Consolidated

Consolidated net income of $19.6 million for the third quarter of 2012
was higher by $4.5 million, or 30.2%, compared to consolidated net
income of $15.1 million for the same quarter in 2011. Consolidated net
income for the third quarter of 2012 was impacted by
acquisition-related and other charges of $3.3 million, which included
expenses related to cost-realignment initiatives incurred to achieve
operational effectiveness, reported as part of the Canadian Segment.
Consolidated net income for the three months ended September 30, 2012
also included a $1.2 million tax recovery related to liabilities
recognized in connection with the acquisition of Mortgagebot. For the
nine-month period ended September 30, 2012, consolidated net income of
$55.4 million, was lower by $19.1 million, or 25.7%, compared to $74.6
million for the same period in 2011. Consolidated net income for the
first nine months of 2011 benefited from tax recoveries of $22.8
million related to changes in the tax status of the Company as a result
of the conversion from an income trust to a corporation��as well as the
recognition of a deferred tax asset attributable to losses of certain
U.S. subsidiaries that were recognized as a consequence of the
acquisition of Mortgagebot.

As described earlier, consolidated net income for the third quarter and
the first nine months of 2012 also included D+H's share of income from
investment in an associate, Compushare, effective from April 24, 2012.

Adjusted Net Income - Consolidated

For the third quarter of 2012, consolidated Adjusted net income was
$28.1 million ($0.4752 per share), an increase of $1.9 million, or
7.3%, compared to $26.2 million ($0.4429 per share) for the same period
in 2011.�� Consolidated Adjusted net income for the third quarter of
2012 excluded a $1.2 million non-cash tax recovery related to
liabilities recognized in connection with the acquisition of
Mortgagebot.

Consolidated Adjusted net income for the first nine months of 2012 was
$82.5 million, an increase of $4.4 million, or 5.6%, compared to $78.1
million for the same period in 2011.�� Consolidated Adjusted net income
for the first nine months of 2011 excluded non-cash tax recoveries of
$22.8 million related to (i) the changes in the tax status of D+H as a
result of the conversion from an income trust to a corporation and (ii)
the acquisition of Mortgagebot in relation to losses within certain
U.S. subsidiaries that were not previously recognized.

EIGHT QUARTER CONSOLIDATED STATEMENT OF INCOME - SUMMARY¹

(in thousands of Canadian dollars, except per share amounts, unaudited)

��

��2012��

��2011��

��2010��

��

��Q3��

��

��Q2��

��

��Q1��

��

��Q4��

��

��Q3��

��

��Q2��

��

��Q1��

��

��Q4��

��

Revenue

��$

191,807

��$

197,068

��$

181,613

��$

183,777

��$

186,275

��$

185,120

��$

169,548

��$

162,474

Expenses²

��

143,811

��

143,962

��

140,780

��

138,202

��

140,050

��

137,023

��

132,045

��

133,018

��

EBITDA^{2, 3}

��

47,996

��

53,106

��

40,833

��

45,575

��

46,225

��

48,097

��

37,503

��

29,456

Adjustments:

��

Acquisition-related and other charges ²

��

3,265

��

4,378

��

737

��

637

��

610

��

707

��

1,799

��

6,268

Adjusted EBITDA ³

��$

51,261

��$

57,484

��$

41,570

��$

46,212

��$

46,835

��$

48,804

��$

39,302

��$

35,724

��

EBITDA^{2, 3}

��$

47,996

��$

53,106

��$

40,833

��$

45,575

��$

46,225

��$

48,097

��$

37,503

��$

29,456

Depreciation of capital assets and amortization

��

of non-acquisition intangibles

��

7,030

��

7,360

��

6,837

��

6,749

��

5,820

��

5,827

��

5,504

��

5,643

Amortization of intangibles from acquisitions

��

10,930

��

11,250

��

10,939

��

11,009

��

11,040

��

10,590

��

8,092

��

7,108

Interest expense

��

4,943

��

4,821

��

4,821

��

4,909

��

4,792

��

5,272

��

3,989

��

3,405

Income from investment in an associate, net of tax

��

(53)

��

(38)

��

Amortization and fair value adjustment of

��

derivative instruments⁴

��

(445)

��

616

��

(1,645)

��

(145)

��

3,991

��

1,227

��

(1,687)

��

(2,796)

Income tax expense (recovery)

��

5,986

��

8,210

��

4,947

��

7,684

��

5,522

��

1,717

��

(14,290)

��

3,448

��

Income from continuing operations

��

19,605

��

20,887

��

14,934

��

15,369

��

15,060

��

23,464

��

35,895

��

12,648

Income (loss) from discontinued operations, net of tax ⁵

��

140

��

(620)

��

Net income

��$

19,605

��$

20,887

��$

14,934

��$

15,369

��$

15,060

��$

23,464

��$

36,035

��$

12,028

��

Adjustments:

��

Non-cash items:

��

Amortization of intangibles from acquisitions

��$

10,930

��$

11,250

��$

10,939

��$

11,009

��$

11,040

��$

10,590

��$

8,092

��

Amortization and fair value adjustment of

derivative instruments ⁴

��

(445)

��$

616

��

(1,645)

��

(145)

��

3,991

��

1,227

��

(1,687)

��

Other items of note:

��

Acquisition-related and other charges ²

��

3,265

��$

4,378

��

737

��

637

��

610

��

707

��

1,799

��

Discontinued operations, net of tax ⁵

��

��$

��

(140)

��

Tax effect of above adjustments (excluding

discontinued operations) ⁶

��

(4,051)

��$

(4,758)

��

(2,998)

��

(3,391)

��

(4,465)

��

(3,256)

��

(2,133)

��

Tax effect of corporate conversion and acquisitions ⁷

��

(1,156)

��$

��

2,080

��

(3,628)

��

(19,209)

��

Adjusted net income³

��$

28,148

��$

32,373

��$

21,967

��$

25,559

��$

26,236

��$

29,104

��$

22,757

��

Adjusted net income per share, basic and diluted ^{3, 8}

��$

0.4752

��$

0.5465

��$

0.3709

��$

0.4315

��$

0.4429

��$

0.4974

��$

0.4275

��

��n/m��

Income from continuing operations per share,

basic and diluted ⁸

��$

0.3310

��$

0.3526

��$

0.2521

��$

0.2595

��$

0.2542

��$

0.4010

��$

0.6743

��$

0.2376

Net income per share, basic and diluted ⁸

��$

0.3310

��$

0.3526

��$

0.2521

��$

0.2595

��$

0.2542

��$

0.4010

��$

0.6769

��$

0.2260

��

n/m = not measurable
¹	Results include those of Avista, effective from the date of acquisition of May 3, 2012, Mortgagebot effective from the date of acquisition of April 12, 2011 and ASSET, effective from the date of acquisition of January 18, 2011.
²	Expenses include acquisition-related and other charges including transaction costs incurred in connection with acquisition of businesses as well as certain retention and incentive costs related to the Avista and Mortgagebot acquisitions. For the second and third quarters of 2012, acquisition-related and other charges also included expense related to cost-realignment initiatives.
³	EBITDA, Adjusted EBITDA and Adjusted net income are non-IFRS terms.�� See Non-IFRS Financial Measures for a more complete description of these terms.�� Periods prior to January 1, 2011 do not have a comparable measure for Adjusted net income due to the differences in taxation for D+H as an income trust prior to January 1, 2011 and as a corporation subsequent to that date.
^4��	^��Includes: (i) mark-to-market adjustments of interest-rate swaps that are not designated as hedges for hedge accounting purposes, and for which any change in the fair value of these contracts is recorded through the Consolidated Statement of Income; and (ii) amortization of the mark-to-market adjustment of interest-rate swaps relating to cumulative net gains and losses that were deferred prior to January 1, 2007 when hedge accounting was discontinued for these swaps.
⁵	D+H sold a non-strategic component of its contact centre business in October 2010 and entered into a transition agreement with the buyer, which expired on April 1, 2011.�� The results of these operations are presented as discontinued operations.
⁶	The following adjustments to net income are tax effected at their respective tax rates: (i) amortization of acquisition intangibles; (ii) amortization and fair value adjustment on derivative instruments; and (iii) acquisition-related and other charges.
⁷	Adjustments for the third quarter of 2012 included a non-cash tax recovery of $1.2 million related to liabilities recognized in connection with the acquisition of Mortgagebot.�� Adjustments for the first and second quarters of 2011 included non-cash income tax recoveries recorded in connection with the conversion to a corporation and acquisitions.�� Adjustments for the fourth quarter of 2011 related to de-recognition of previously recognized tax attributes.
⁸	Diluted net income per share and Diluted Adjusted net income per share (non-IFRS term) reflect impacts of outstanding options.�� If the average market price during the period is below the option price plus the fair market value of the option, then the options are not included in the dilution calculat

D+H has generally reported quarterly revenues that are relatively stable
and growing when measured on a year-over-year basis, however more
recent changes in the economic environment, specifically the housing
and mortgage markets and the auto lending markets, have increased
volatility. Measured on a sequential quarter-to-quarter basis, revenues
can also vary due to seasonality and are generally stronger in the
second and third quarters. EBITDA is impacted by acquisition-related
and other charges during the quarters, including transaction and
retention costs related to acquisitions as well as other charges
attributable to cost-realignment initiatives not considered to be
incurred in the normal course of operations. Adjusted EBITDA removes
the impacts of these charges as these are not indicative of the
underlying business performance and management believes that excluding
these items is more reflective of ongoing operating results.

The acquisitions of ASSET on January 18, 2011, Mortgagebot on April 12,
2011, and Avista on May 3, 2012 have increased revenues and expenses.
Per share amounts were also impacted by the issuance of 6,000,000
additional shares of Davis + Henderson Corporation in April 2011 to
partially fund the acquisition of Mortgagebot.

Effective January 1, 2011, as a result of the conversion from an income
trust structure to a corporate structure, D+H began using Adjusted net
income as a measure for evaluating its results.�� Adjusted net income is
a non-IFRS financial measure.�� See Non-IFRS Financial Measures for a
more complete description of this term.�� Periods prior to January 1,
2011, do not have a comparable measure for Adjusted net income.

Net income has been more variable as it has been affected by non-cash
items such as fair value adjustments of interest-rate swaps,
amortization of intangibles from acquisitions, acquisition-related and
other charges and changes in other non-cash tax items.

CONSOLIDATED CASH FLOW AND LIQUIDITY

The following table is derived from, and should be read in conjunction
with, the Consolidated Statements of Cash Flows. Management believes
this disclosure provides useful additional information related to the
cash flows of the Corporation, repayment of debt and other investing
activities.

Consolidated Summary of Cash Flows��

(in thousands of Canadian dollars, unaudited)

��

��Quarter ended September 30,��

��

��Nine months ended September 30,��

��

��2012��

��

��2011��

��

��2012��

��

��2011��

��

��Cash and cash equivalents provided by (used in):��

��

��OPERATING ACTIVITIES��

��

��Income from continuing operations��

��

��$

19,605

��$

15,060

��

��$

55,426

��$

74,419

��Depreciation and amortization of assets��

��

17,960

��

16,860

��

54,346

��

46,873

��Amortization and fair value adjustment of derivative instruments

��

(445)

��

3,991

��

(1,474)

��

3,531

��Share of profit of investment in associate, net of tax��

��

(53)

��

(91)

��

��Difference in interest expense and cash interest paid��

��

780

��

282

��

1,715

��

1,015

��Non-cash income tax and options expenses��

��

5,899

��

5,627

��

20,871

��

(6,897)

��

43,746

��

41,820

��

130,793

��

118,941

��Decrease (increase) in non-cash working capital items��

��

(2,282)

��

1,036

��

(29,591)

��

(29,767)

��Changes in other operating assets and liabilities and

discontinued operations��

��

1,817

��

1,130

��

2,848

��

2,467

��

��Net cash from operating activities��

��

43,281

��

43,986

��

104,050

��

91,641

��

��FINANCING ACTIVITIES��

��

��Net change in long-term indebtedness��

��

(17,789)

��

(15,000)

��

22,772

��

169,505

��Issuance costs, equity and debt��

��

(791)

��

(103)

��

(902)

��

(9,900)

��Proceeds from the issuance of shares��

��

121,800

��Distributions and dividends paid during the period��

��

(18,362)

��

(18,362)

��

(55,086)

��

(52,278)

��Net cash from (used in) financing activities��

��

(36,942)

��

(33,465)

��

(33,216)

��

229,127

��

��INVESTING ACTIVITIES��

��

��Capital expenditures

��

(6,934)

��

(7,073)

��

(23,600)

��

(24,724)

��Acquisition of investment in an associate

��

(10,058)

��

��Acquisition of subsidiaries

��

(37,946)

��

(292,993)

��Net cash used in investing activities��

��

(6,934)

��

(7,073)

��

(71,604)

��

(317,717)

��

��Increase (decrease) in cash and cash equivalents for the period��

��

(595)

��

3,448

��

(770)

��

3,051

��Cash and cash equivalents, beginning of period��

��

2,038

��

747

��

2,213

��

1,144

��Cash and cash equivalents, end of period��

��

��$

1,443

��$

4,195

��

��$

1,443

��$

4,195

��

As at September 30, 2012, cash and cash equivalents totalled $1.4
million, compared to $2.2 million at December 31, 2011.

Operating Activities

Operating activities provided $43.3 million during the three months
ended September 30, 2012, compared to $44.0 million for the same period
in 2011. For the first nine months of 2012, operating activities
provided $104.1 million, compared to $91.6 million during the same
period in 2011.�� The changes in net cash from operating activities for
the three and nine-month periods ended September 30, 2012 compared to
the same quarter in 2011 was mainly due to the timing of the working
capital inflows and outflows as described below.�� The increase in net
cash from operating activities during the nine-month period in 2012 was
due to a strong growth in EBITDA compared to the same period in 2011.

Changes in Non-Cash Working Capital and Other Items

(in thousands of Canadian dollars, unaudited)

��	��	��	��Quarter ended September 30,��			��	��Nine months ended September 30,��
��	��	��	2012	��	2011	��	2012	��	2011
��	��	��	��	��	��	��	��	��	��
��Decrease (increase) in non-cash working capital items��		��$	(2,282)	��$	1,036	��$	(29,591)	��$	(29,767)
��Change in other operating assets and��liabilities and discontinued operations��		��	1,817	��	1,130	��	2,848	��	2,467
��	��	��	��	��	��	��	��	��	��
Decrease (increase) in non-cash working capital and other items��		��$	(465)	��$	2,166	��$	(26,743)	��$	(27,300)
��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��

The net increase in non-cash working capital in the third quarter of
2012 primarily related to an increase in trade receivables, partially
offset by an increase in accrued payables, both due to normal course
timing differences. The net decrease in the third quarter in 2011 was
additionally impacted by lower receivables as a result of increased
collections related to the effect on payments from the postal strike
which occurred during the second quarter of 2011.�� The net increase in
non-cash working capital for the first nine months of 2012 related to
an increase in trade receivables combined with a reduction in accrued
payables reflecting payments during the period.

The Company expects to experience continued variability of non-cash
working capital due to the nature and timing of services rendered in
connection with the businesses recently acquired.

Financing Activities

Net cash used in financing activities was $36.9 million during the three
months ended September 30, 2012, compared to $33.5 million used in the
same period in 2011. The net change during the quarter was primarily
due to debt repayments net of drawings within our credit facilities and
a dividend payment. D+H made net repayments of $17.8 million during the
third quarter of 2012.

For the first nine months of 2012, net cash used in financing activities
was $33.2 million compared to $229.1 million provided by financing
activities for the same period in 2011. Net cash provided by financing
activities during the nine-month period in 2011 reflected net proceeds
from the issuance of equity and debt to fund the Mortgagebot and ASSET
acquisitions in 2011.

Financing activities during the nine-month period ended September 30,
2012 primarily related to drawings on the credit facilities to fund the
Compushare investment and the Avista acquisition in April and May 2012,
respectively and dividend payments.�� The Business drew a net of $22.8
million during the first nine months of 2012.

Dividends

During the third quarter of 2012, D+H paid a dividend of $0.31 per share
to its shareholders.�� For the same quarter in 2011, $0.31 per share was
paid to shareholders.�� During the first nine months of 2012, D+H paid
$0.93 per share to its shareholders, and for the same period in 2011,
$0.9133 per share was paid.�� Dividends paid during the nine-month
period in 2011 comprised of a $0.1533 per unit distribution that was
paid on January 31, 2011 (declared on December 31, 2010 when D+H was an
income trust), a $0.15 per share special dividend paid on March 31,
2011, a $0.30 per share dividend paid on June 30, 2011 and a $0.31 per
share paid on September 30, 2011.

D+H increased its target annual dividend from $1.24 per share to $1.28
per share annualized, for shareholders of record as of November 30,
2012, to be paid on December 31, 2012.

Investing Activities

During the third quarter of 2012, $6.9 million was used by investing
activities compared to $7.1 million during the same period in 2011.��
For the nine-month period ended September 30, 2012, investing
activities used $71.6 million compared to $317.7 million during the
same period in 2011.�� Amounts for the nine-month period in 2012 reflect
the Avista acquisition in May 2012 and the acquisition of a minority
investment in Compushare in April 2012, and amounts for the nine-month
period in 2011 reflect the ASSET and Mortgagebot acquisitions in
January and April 2011 respectively.

Capital Expenditures

Consolidated capital expenditures were $6.9 million for the third
quarter of 2012, $0.1 million lower compared to the same period of
2011. For the nine months ended September 30, 2012, capital
expenditures were $23.6 million, a decrease of $1.1 million, compared
to the same period in 2011. Higher capital expenditures in 2011
reflected timing of expenditures as well as integration and upgrade
activities, and investing in the development of technology products and
capability.

Long-Term Indebtedness

As at September 30, 2012, the Company had $ 527.9 million of committed
funds and $278.3 million of additional uncommitted arrangements
available subject to prior approval of the relevant lenders with any
fees, spreads and other additional terms to be negotiated at that time.
Total committed funds consisted of $355.0 million under the credit
facility and $172.9 million, which was drawn from bonds, as described
below.�� Total uncommitted funds consisted of $150.0 million under the
credit facility and $128.3 million from the bonds, also as described
below.

The long-term indebtedness is recorded on the Consolidated Statement of
Financial Position, net of unamortized deferred financing fees. The
long-term indebtedness as at September 30, 2012, before deducting
unamortized deferred finance fees of $6.1 million, was $371.3 million,
compared to $352.1 million at December 31, 2011.

Credit Facility

The long-term indebtedness as at September 30, 2012 included drawings
under a Seventh Amended and Restated Credit Agreement ("Credit
Agreement") dated April 12, 2011 of $198.4 million.��Total committed
senior secured credit facilities under this Credit Agreement as at
September 30, 2012 were $355.0 million, consisting of a revolving
credit facility.�� Effective July 5, 2012, the Credit Agreement was
amended in accordance with the First Amending Agreement to the Seventh
Amended and Restated Credit Agreement ("Credit Agreement Amendment") to
extend the maturity date by one year to April 12, 2017 and include more
favourable pricing as well as amendments to certain covenants. The
Business is permitted to draw on the revolving facility's available
balance of $156.6 million to fund capital expenditures or for other
general purposes.�� The Credit Agreement contains a number of covenants
and restrictions, including the requirement to meet certain financial
ratios and financial condition tests.�� The financial covenants include
a leverage test, a fixed charge coverage ratio test and a limit on the
maximum amount of distributions by D+H to its shareholders during each
rolling four-quarter period.�� The Company was in compliance with all of
its financial covenants and financial condition tests as of the end of
its latest quarterly period.

As at September 30, 2012, the Credit Agreement provides for an
additional uncommitted credit arrangement of up to $150.0 million with
the use of the funds subject to the prior approval of the relevant
lenders with any fees, spreads and other additional terms to be
negotiated at that time.

Bonds

As at September 30, 2012, committed funds of $172.9 million were drawn
and $128.3 million of uncommitted funds were available from bonds.

The bonds consisted of the following:�� (i) fixed-rate bonds of $80.0
million issued under a Second Amended and Restated Note Purchase and
Private Shelf Agreement ("Note Purchase Agreement") dated April 12,
2011, which included a $50.0 million bond issued under the senior
secured Note Purchase Agreement at a fixed-interest rate of 5.99% and a
$30.0 million bond at 5.17%, both maturing on June 30, 2017; (ii) a
Note Purchase and Private Shelf Agreement ("Prudential Note Purchase
Agreement") pursuant to which the Company issued US$ 63.0 million of
senior secured guaranteed notes at 5.59%, maturing on April 12, 2021 to
partially fund the acquisition of Mortgagebot.�� Effective July 5, 2012,
this Note Purchase Agreement was amended in accordance with the First
Amendment to Second Amended and Restated Note Purchase and Private
Shelf Agreement ("Amendment to Note Purchase Agreement") to make
consequential changes to certain covenants. Also effective July 5,
2012,�� the Prudential Note Purchase Agreement was amended in accordance
with the First Amendment to Note Purchase and Private Shelf Agreement
("Amendment to Prudential Note Purchase Agreement") to increase the
uncommitted shelf per the Prudential Note Purchase Agreement by US$
50.0 million (from US$ 37.0 million to US$ 87.0 million), including
amendments to certain covenants.�� In addition, D+H issued US$ 16.5
million of senior secured guaranteed notes at 3.94%, maturing on June
30, 2022 reducing the available shelf to US$ 70.5 million.

Effective July 5, 2012, the Company also entered into a new Note
Purchase and Private Shelf Agreement ("NY Life Note Purchase
Agreement"), ranking equally in all material respects with the Credit
Agreement and Prudential Note Purchase Agreement, pursuant to which the
Company issued US$ 15.0 million of senior secured guaranteed notes at
3.94% maturing June 30, 2022 leaving an additional uncommitted shelf of
up to US$ 60.0 million with the use of the shelf subject to the prior
approval of the relevant lenders with any fees, spreads and other
additional items to be negotiated at that time.

During the third quarter of 2012, the aggregate proceeds from the US$
31.5 million of senior secured guaranteed notes issued pursuant to the
Amendment to Prudential Note Purchase Agreement and NY Life Note
Purchase Agreement were used to refinance amounts drawn under the
Credit Agreement in the second quarter of 2012, to fund the Avista
acquisition and for the Compushare investment.

The Credit Agreement, Credit Agreement Amendment, Note Purchase
Agreement, Amendment to Note Purchase Agreement, Prudential Note
Purchase Agreement, Amendment to Prudential Note Purchase Agreement and
NY Life Note Purchase Agreement are available at www.sedar.com.

The Company has historically hedged against increases in market interest
rates on certain of its debt by utilizing interest-rate swaps and by
issuing fixed rate long-term bonds as described above.�� As at September
30, 2012, the average effective interest rate on the Corporation's
total indebtedness was approximately 4.4%.

Common Shares Outstanding

As at September 30, 2012, and November 6, 2012, common shares
outstanding were 59,233,373, the same as at September 30, 2011 and
December 31, 2011.

Normal Course Issuer Bid ("NCIB")

On September 10, 2012, D+H announced that it received regulatory
approval from the Toronto Stock Exchange ("TSX") to carry out a normal
course issuer bid ("NCIB"), pursuant to which the Corporation, during
the period from September 12, 2012 to September 11, 2013, would be
authorized to purchase up to 1,777,000 common shares, representing
approximately 3% of the Corporation's issued and outstanding common
shares as at September 4, 2012. Daily purchases will be limited to
37,491 common shares, other than block purchase exemptions.

Purchases will be made by the Company in accordance with the
requirements of the TSX and the price which the Company will pay for
any such common shares will be the market price of any such common
shares at the time of acquisition, or such other price as may be
permitted by the TSX. Any tendered shares taken up and paid for by the
Company will be cancelled.

The Company intends to fund these purchases through available cash. D+H
believes that the market price of its common shares, from time to time,
may not reflect their underlying value based on the Company's business
and strong financial position. As a result, D+H believes that an
investment in its outstanding common shares represents an attractive
investment and a desirable use of a portion of its corporate funds.

Automatic Share Purchase Plan

D+H also announced that it entered into an automatic share purchase plan
with a broker in order to facilitate repurchases of its common shares
under its normal course issuer bid, and under which the broker may
repurchase common shares under the NCIB at any time including without
limitation when D+H would ordinarily not be permitted to due to
regulatory restrictions or self-imposed blackout periods, based upon
the parameters prescribed by the TSX and the terms of the parties'
agreement.�� The automatic share purchase plan has been reviewed and
approved by the TSX.

As of November 6, 2012, no shares were purchased under the NCIB.

Financial Instruments

The Company utilizes cash-flow hedges to hedge foreign currency
transactions and interest rate fluctuations.

Interest-rate swaps

In respect of interest-rate swap contracts with its lenders, as of
September 30, 2012, the Company's borrowing rates on 47.9%��of
outstanding long-term indebtedness under the Credit Agreement are
effectively fixed at the interest rates and for the time periods ending
as outlined in the following table:

(in thousands of Canadian dollars, unaudited)

��	��		Fair value of interest-rate swaps				��
��Maturity Date��	Notional amount		Asset		Liability		Interest Rate ��
December 18, 2014	��$	25,000	��$	-	��$	763	2.720%
March 18, 2015	��	25,000	��	-	��	963	2.940%
March 18, 2017	��	25,000	��	-	��	1,938	3.350%
March 20, 2017	��	20,000	��	-	��	1,564	3.366%
��	��$	95,000	��$	-	��$	5,228	��

��

The listed interest rates exclude bankers' acceptance fees and
prime-rate spreads currently in effect.�� Such fees and spreads could
increase or decrease depending on the Company's financial leverage
compared to certain levels specified in the Credit Agreement.�� Based on
the financial leverage as at September 30, 2012, the Company's
long-term bank indebtedness will be subject to bankers' acceptance fees
of 1.50% over the applicable BA rate and prime rate spreads of 0.50%
over the prime rate.

As at September 30, 2012, the Company would have to pay the fair value
of $5.2 million if it were to close out all of its interest-rate swap
contracts as set out in the Consolidated Statement of Financial
Position.�� It is not the present intention of management to close out
these contracts and the Company has historically held its derivative
contracts to maturity.

Foreign exchange forward contracts

The Company enters into foreign exchange contracts to fix foreign
exchange rates on its foreign currency transactions.�� Under these
contracts, the Company is required to deliver the agreed US dollar
amount and in return receive the contracted Canadian dollar amount set
forth in each contract.�� The Company has historically held its
derivative contracts to maturity.

The foreign exchange forward contracts that were in place as of June 30,
2012 expired during the third quarter of 2012.�� Therefore, the Company
had no foreign exchange forward contracts in place as at September 30,
2012. These foreign exchange contracts were designated as hedges in
accordance with IFRS for hedge accounting purposes to hedge a set
amount of forecasted cash inflows.�� The Company accounted for these
hedges as cash flow hedges as per IAS��39. The change in fair value of
the hedging instrument (foreign exchange forward contracts), to the
extent it is effective, was recorded in Other Comprehensive Income
("OCI"). The ineffective portion of the gain or loss on the hedging
instrument was recognized in profit or loss.�� The fair value changes
were recorded in OCI, as the hedging relationship was considered to be
effective both at inception of these hedges and at the reporting date.

BUSINESS RISKS��

A comprehensive discussion of the risks that impact the Business can be
found on the Corporation's most recently filed Annual Information Form
and the most recently filed annual MD&A, available on SEDAR at www.sedar.com.�� Risks and uncertainties related to the Corporation have not changed
since the filing of the 2011 annual MD&A and the 2011 Annual
Information Form.

OUTLOOK

D+H's long-term financial objective is to deliver sustainable and
growing earnings through continued organic revenue growth and by way of
strategic acquisitions. In January and April 2011, respectively, the
Company completed the acquisitions of ASSET and Mortgagebot. In April
and May 2012, respectively, D+H acquired a minority interest investment
in Compushare, and acquired Avista.�� These acquisitions continue to:
(i) strengthen our ability to deliver on our goal of being a leading
FinTech provider to the North American financial services industry;
(ii) provide revenue diversification; and (iii) support our long-term
strategy.

Going forward, we will focus on executing our organic growth initiatives
and continuing to diligently identify efficiency opportunities to
better serve customers as our businesses evolve.�� Cost-realignment
initiatives executed year-to-date are expected to result in annualized
savings benefitting both current and future periods, and will be used
to offset an increase in expenses to support future growth. Beyond the
immediate term, we believe that our market leadership and combined
capabilities will solidly position D+H in the markets we serve and
allow us to grow consistent with our long-term objectives.

As set out in our statement of strategy, we look to grow through a
combination of organic initiatives, partnering with third parties and
by way of selective acquisitions. Our organic initiatives include: (i)
continuing to expand our customer base of SaaS mortgage POS and LOS
offerings in the U.S.; (ii) expansion into adjacent cloud computer
based offerings in the U.S. market; (iii) the ongoing advancement of
payment solutions through growth in value-added consumer and business
services to financial institution customers; (iv) the expansion of our
current technology enabled offerings within the mortgage, auto,
personal, student lending, commercial and leasing markets; and (v)
selling and delivering our lending technology solutions to new
customers.

Our acquisition strategy focuses on acquiring companies that extend or
add to the services that we provide within the financial services
marketplace, with a bias for companies that have strong SaaS cloud
capabilities, defensible business models, growing revenues, and capable
management and offer an extension to our existing businesses.

With the inclusion of several new service areas over the last several
years, we expect to continue to experience some increase in variability
in year-over-year quarterly revenues, earnings and cash flows, due to,
among other items: (i) volume variances within the lien registration
and mortgage origination markets; (ii) timing differences and
variability in professional services work; and (iii) fees and expenses
associated with acquisitions and related integration activities.��
Within the Canadian Segment, the Company believes that revenues from
lending technology solutions in the remainder of 2012 will be impacted
by more moderate housing prices and lower real estate activity compared
to the previous years.�� In the U.S. Segment, a slight recovery in the
U.S. housing market is expected to somewhat offset a reduction in
refinancing activity in the remainder of 2012 and into 2013.

For each of 2012 and 2013, we anticipate that our capital spending will
be approximately $35 million, which may vary based on spending in
support of new growth opportunities if and as they arise.

As described earlier, the Corporation does not expect to pay any
significant cash taxes until after 2013.

ADDITIONAL INFORMATION

Additional information relating to the Company, including the Company's
most recently filed Annual Information Form, is available on SEDAR at www.sedar.com.

Consolidated Statements of Financial Position

(in thousands of Canadian dollars, unaudited)��

��

��	��	��	��	September 30, 2012	��	��	December 31, 2011
��	��	��	��	��	��	��	��
��ASSETS��		��	��	��	��	��	��
��Cash and cash equivalents		��	$	1,443	��	$	2,213
��Trade and other receivables		��	��	96,501	��	��	79,753
��Prepayments��		��	��	13,997	��	��	12,821
��Inventories		��	��	4,227	��	��	4,946
��Derivative assets held for risk management		��	��	-	��	��	126
��	��	��	��	��	��	��	��
��Total current assets��		��	��	116,168	��	��	99,859
��	��	��	��	��	��	��	��
��Deferred tax assets		��	��	28,942	��	��	39,987
��Property, plant and equipment		��	��	30,645	��	��	32,169
��Investment in an associate		��	��	10,159	��	��	-
��Intangible assets		��	��	429,593	��	��	444,575
��Goodwill		��	��	688,444	��	��	666,735
��	��	��	��	��	��	��	��
��Total non-current assets��		��	��	1,187,783	��	��	1,183,466
��Total assets��		��	$	1,303,951	��	$	�� 1,283,325
��	��	��	��	��	��	��	��
��LIABILITIES��		��	��	��	��	��	��
��Trade payables and accrued liabilities		��	$	86,508	��	$	93,131
��Deferred revenue		��	��	12,007	��	��	10,216
��Provisions		��	��	425	��	��	3,480
��Current tax liabilities		��	��	970	��	��	-
��	��	��	��	��	��	��	��
��Total current liabilities��		��	��	99,910	��	��	106,827
��	��	��	��	��	��	��	��
��Deferred revenue��		��	��	9,501	��	��	9,492
��Derivative liabilities held for risk management		��	��	5,228	��	��	6,703
��Loans and borrowings		��	��	365,268	��	��	345,921
��Deferred tax liabilities		��	��	109,822	��	��	97,350
��Other long-term liabilities		��	��	9,210	��	��	7,334
��	��	��	��	��	��	��	��
��Total non-current liabilities��		��	��	499,029	��	��	466,800
��Total liabilities��		��	��	598,939	��	��	573,627
��	��	��	��	��	��	��	��
��EQUITY��		��	��	��	��	��	��
��Capital		��	��	673,691	��	��	673,163
��Retained earnings		��	��	27,789	��	��	27,449
��Accumulated other comprehensive income		��	��	3,532	��	��	9,086
��Total equity		��	��	705,012	��	��	709,698
��	��	��	��	��	��	��	��
��Total liabilities and equity��		��	$	1,303,951	��	$	�� 1,283,325
��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��

Consolidated Statements of Income

(in thousands of Canadian dollars, except per share amounts, unaudited)

��

��

Three months ended

��

Nine months ended

��

September 30, 2012

��

September 30, 2011

��

September 30, 2012

��

September 30, 2011

��Revenue

��$

191,807

��

186,275

��

��$

570,488

��

��$

540,943

��Employee compensation and��benefits

��

56,805

��

55,648

��

170,144

��

159,207

��Other expenses

��

87,006

��

84,402

��

258,409

��

249,911

��Income from operating activities before depreciation and amortization��

��

47,996

��

46,225

��

141,935

��

131,825

��Depreciation of property, plant and equipment

��

2,533

��

2,570

��

7,484

��

7,504

��Amortization of intangible assets

��

15,427

��

14,290

��

46,862��

��

39,369

��Income from operating activities��

��

30,036

��

29,365

��

87,589

��

84,952

��

��Finance expenses:��

��

Amortization and fair value adjustment��of derivative instruments��

��

(445)

��

3,991

��

(1,474)

��

3,531

��

Interest expense��

��

4,943

��

4,792

��

14,585

��

14,053

��Income from investment in an associate, net of income tax

��

(53)

��

(91)

��

��Income from continuing operations before income tax��

��

25,591��

��

20,582

��

74,569��

��

67,368

��Income tax expense (recovery)

��

5,986

��

5,522

��

19,143

��

(7,051)

��Income from continuing operations��

��

19,605

��

15,060

��

55,426

��

74,419

��

��Income from discontinued operations, net of income tax��

��

140

��Net income

��$

19,605

��

15,060

��

��$

55,426

��

��$

74,559

��

��Net income per share from continuing operations, basic and diluted��

��$

0.3310

��

0.2542

��

��$

0.9357

��

��$

1.3053

��Net income per share from discontinued operations, basic and diluted��

��$

��

��$

��

��$

0.0025

��Net income per share, basic and diluted��

��$

0.3310

��

0.2542

��

��$

0.9357

��

��$

1.3077

��

Consolidated Statements of Comprehensive Income

(in thousands of Canadian dollars, unaudited

��

�� Three months ended

��

�� Nine months ended

��

�� September 30, 2012

��

�� September 30, 2011

��

�� September 30, 2012

��

�� September 30, 2011

��

��Net income��

19,605

��

15,060

��

55,426

��

74,559

��

��Cash flow hedges:��

��

Amortization of mark-to-market adjustment of derivative instruments��

��

Effective portion of changes in fair value��

��

(52)

��

(169)

��

(126)

��

(169)

��

Net amount transferred to profit or loss��

��

(82)

��

(167)

��

��Foreign currency translation��

��

(5,380)

��

13,662

��

(5,261)

��

14,329

��Total comprehensive income

14,091

��

28,553

��

49,872

��

88,805

��

Consolidated Statements of Changes in Equity

(in thousands of Canadian dollars, unaudited)��

Three months ended September 30, 2012
��	��	��	Accumulated other comprehensive income (loss)				��	��	��	��
��	��	Share capital	��	Foreign currency translation reserve	��	Hedging reserve	��	Retained earnings / (deficit)	��	Total equity
��	��	��	��	��	��	��	��	��	��	��
Balance at July 1, 2012	$	673,515	$	9,445	$	(399)	$	26,546	$	709,107
Net income for the period	��	-	��	-	��	-	��	19,605	��	19,605
Cash flow hedges	��	-	��	-	��	(134)	��	-	��	(134)
Foreign currency translation	��	-	��	(5,380)	��	-	��	-	��	(5,380)
Dividends	��	-	��	-	��	-	��	(18,362)	��	(18,362)
Options��	��	176	��	-	��	-	��	-	��	176
Balance at September 30, 2012	$	673,691	$	4,065	$	(533)	$	27,789	$	705,012
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
(in thousands of Canadian dollars, unaudited)			��Three months ended September 30, 2011
��	��		Accumulated other comprehensive income (loss)				��	��	��	��
��	Share capital		Foreign currency translation reserve		Hedging reserve		Retained earnings / (deficit)		Total equity
��	��	��	��	��	��	��	��	��	��	��
Balance at July 1, 2011	��$	672,902	��$	667	��$	-	��$	33,744	��$	707,313
Net income for the period	��	-	��	-	��	-	��	15,060	��	15,060
Cash flow hedges	��	-	��	-	��	(169)	��	-	��	(169)
Foreign currency translation	��	-	��	13,662	��	-	��	-	��	13,662
Dividends	��	-	��	-	��	-	��	(18,362)	��	(18,362)
Options��	��	105	��	-	��	-	��	-	��	105
Balance at September 30, 2011	��$	673,007	��$	14,329	��$	(169)	��$	30,442	��$	717,609
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
(in thousands of Canadian dollars, unaudited)			Nine months ended September 30, 2012
��	��		Accumulated other comprehensive income (loss)				��	��	��	��
��	Share capital		Foreign currency translation reserve		Hedging reserve		Retained earnings / (deficit)		Total equity
��	��	��	��	��	��	��	��	��	��	��
Balance at January 1, 2012	��$	673,163	��$	9,326	��$	(240)	��$	27,449	��$	709,698
Net income for the period	��	-	��	-	��	-	��	55,426	��	55,426
Cash flow hedges	��	-	��	-	��	(293)	��	-	��	(293)
Foreign currency translation	��	-	��	(5,261)	��	-	��	-	��	(5,261)
Dividends	��	-	��	-	��	-	��	(55,086)	��	(55,086)
Options	��	528	��	-	��	-	��	-	��	528
Balance at September 30, 2012	��$	673,691	��$	4,065	��$	(533)	��$	27,789	��$	705,012
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
(in thousands of Canadian dollars, unaudited)			��Nine months ended September 30, 2011
��	��		Accumulated other comprehensive income (loss)				��	��	��	��
��	Share capital		Foreign currency translation reserve		Hedging reserve		Retained earnings / (deficit)		Total equity
��	��	��	��	��	��	��	��	��	��	��
Balance at January 1, 2011	��$	595,859	��$	-	��$	(86)	��$	(40,623)	��$	555,150
Net income for the period	��	-	��	-	��	-	��	74,559	��	74,559
Cash flow hedges	��	-	��	-	��	(83)	��	-	��	(83)
Foreign currency translation	��	-	��	14,329	��	-	��	-	��	14,329
Capital reduction pursuant	��	��	��	��	��	��	��	��	��	��
to the Arrangement	��	(40,623)	��	-	��	-	��	40,623	��	-
Share issuance	��	117,617	��	-	��	-	��	-	��	117,617
Dividends	��	-	��	-	��	-	��	(44,117)	��	(44,117)
Options��	��	154	��	-	��	-	��	-	��	154
Balance at September 30, 2011	��$	673,007	��$	14,329	��$	(169)	��$	30,442	��$	717,609��

Consolidated Statements of Cash Flows

(in thousands of Canadian dollars, unaudited)��

��

Three months ended

��

Nine months ended

��

September 30, 2012

��

September 30, 2011

��

September 30, 2012

��

September 30, 2011

��

��Cash and cash equivalents provided by (used in):��

��

��OPERATING ACTIVITIES��

��

��Income from continuing operations��

��

��$

19,605

��

��$

15,060

��

55,426

��

74,419

��Adjustments for:��

��

��Depreciation of property, plant�� and equipment��

��

2,533

��

2,570

��

7,484

��

7,504

��

��Amortization of intangible assets

��

15,427

��

14,290

��

46,862

��

39,369

��

��Amortization of mark-to-market adjustment of derivative instruments��

��

��Fair value adjustment of derivative instruments��

��

(445)

��

3,991

��

(1,474)

��

3,445

��

��Interest expense��

��

4,943

��

4,792

��

14,585

��

14,053

��

��Deferred taxes��

��

6,177

��

5,522

��

19,373

��

(7,051)

��

��Current taxes��

��

(454)

��

970

��

��Options expense��

��

176

��

105

��

528

��

154

��

��Changes in non-cash working capital items

��

(2,282)

��

1,036

��

(29,591)

��

(29,767)

��

��Changes in other operating assets and liabilities

��

1,817

��

1,130

��

2,848

��

2,278

��

��Share of profit of investment in an associate net of income tax

��

(53)

��

(91)

��

��Cash generated from operating activities��

��

47,444

��

48,496

��

116,920

��

104,490

��

��Interest paid��

��

(4,163)

��

(4,510)

��

(12,870)

��

(13,038)

��

��Cash flows from discontinued operations��

��

189

��Net cash from operating activities��

��

43,281

��

43,986

��

104,050

��

91,641

��

��FINANCING ACTIVITIES��

��

��Repayment of long-term indebtedness��

��

(50,280)

��

(15,000)

��

(80,280)

��

(232,000)

��Proceeds from long-term indebtedness��

��

32,491

��

103,052

��

401,505

��Payment of issuance costs of long-term indebtedness��

��

(791)

��

(103)

��

(902)

��

(4,439)

��Proceeds from issuance of shares��

��

121,800

��Payment of issuance costs of shares��

��

(5,461)

��Dividends paid��

��

(18,362)

��

(18,362)

��

(55,086)

��

(52,278)

��Net cash from (used in) financing activities��

��

(36,942)

��

(33,465)

��

(33,216)

��

229,127

��

��INVESTING ACTIVITIES��

��

��Acquisition of property, plant and equipment��

��

(1,355)

��

(1,912)

��

(5,552)

��

(5,859)

��Acquisition of intangible assets��

��

(5,579)

��

(5,161)

��

(18,048)

��

(18,865)

��Acquisition of subsidiaries

��

(37,946)

��

(292,993)

��Acquisition of investment in an associate

��

(10,058)

��

��Net cash used in investing activities��

��

(6,934)

��

��(7,073)

��

(71,604)

��

(317,717)

��

��Increase / (decrease) in cash and cash equivalents for the period��

��

(595)

��

3,448

��

(770)

��

3,051

��Cash and cash equivalents, beginning of period��

��

2,038

��

��747

��

2,213

��

1,144

��Cash and cash equivalents, end of period��

��

��$

1,443

��

4,195

��

1,443

��

4,195��

��

About D+H

D+H is a leading solutions provider to the North American financial
services marketplace, providing innovative technology-based programs,
products and business services tailored to our customers' needs. A
deeply rooted tradition of developing and nurturing valued customer
relationships and a broad set of integrated solutions position D+H for
ongoing growth in our chosen markets. In 2012, D+H rose to 35^th on the FinTech 100, a ranking of the top technology providers to the
global financial services industry.

Davis + Henderson Corporation is listed on the Toronto Stock Exchange
under the symbol DH. Further information can be found in the disclosure
documents filed by Davis + Henderson Corporation with the securities
regulatory authorities, available at www.sedar.com.

��

SOURCE: Davis + Henderson Corporation

For further information:

Brian Kyle, Executive Vice President and Chief Financial Officer, Davis + Henderson Corporation, (416) 696-7700,��investorrelations@dhltd.com or visit our website at��www.dhltd.com.

Canada Dividend Investor

Tuesday, November 6, 2012

DH - D + H Reports Third Quarter 2012 Results (CAD 0.31)

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