CoreLogic Reports Third Quarter 2010 Net Loss of $93.4 Million, or $0.80 Per Share, on Revenue of $484.3 Million

RESULTS INCLUDE NON-CASH IMPAIRMENT CHARGE OF $174.0 MILLION ON THE CARRYING VALUE OF EMPLOYER AND LITIGATION SERVICES BUSINESSES

PRE-TAX LOSS OF $123.2 MILLION; ADJUSTED PRE-TAX INCOME(1) OF $78.2 MILLION; ADJUSTED EBITDA(1) OF $116.0 MILLION

-- Third quarter revenues totaled $484.3 million, compared to $468.3 million in the second quarter of 2010 and $469.8 million in the third quarter of 2009.

-- Third quarter adjusted revenues(1) totaled $506.7 million, compared to $479.1 million in the second quarter of 2010 and $490.8 million in the third quarter of 2009.

-- Growth in flood data services led revenue gains and improved profitability in the Business and Information Services segment.

-- Growth in mortgage credit reporting volumes and risk and fraud analytical products led revenue gains and improved profitability in the Data and Analytics segment.

-- Subsequent to September 30, 2010, CoreLogic entered into a definitive agreement to acquire a controlling interest in RealtyBid International, LLC, a leading online REO auction site.

-- CoreLogic announces its intent to repurchase up to $100 million in common stock between November 4, 2010 and December 31, 2011.

News provided by

CoreLogic

Nov 04, 2010, 04:15 ET

 

SANTA ANA, Calif., Nov. 4, 2010 /PRNewswire-FirstCall/ -- CoreLogic (NYSE: CLGX) today announced a net loss of $93.4 million for the quarter ended September 30, 2010 compared with net income of $24.4 million in the second quarter of 2010 and net income of $55.4 million in the third quarter of 2009.  Diluted earnings per share was a loss of $0.80, compared with income of $0.22 in the second quarter of 2010 and income of $0.59 in the third quarter of 2009.

(Logo:  http://photos.prnewswire.com/prnh/20100609/CLLOGO)

(Logo:  http://www.newscom.com/cgi-bin/prnh/20100609/CLLOGO)

As part of the previously announced marketing process for our employer and litigation services businesses, the company concluded that the goodwill of the employer and litigation services businesses

(1) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 8 and following.

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was impaired as of September 30, 2010.  Accordingly, the company recorded an impairment charge of $174.0 million for the third quarter.

Anand Nallathambi, President and Chief Executive Officer, commented on the quarter: "In our first full quarter as an independent company, CoreLogic delivered significant revenue and EBITDA growth, improved our business mix and profitability, and announced our intent to repurchase up to $100 million of common stock."

Continuing on, Nallathambi added:  "we believe that continued investment in new products, expansion of our capabilities through targeted acquisitions and growing demand for our analytical and advisory services should enable us to deliver significant value to our shareholders over the next several years."

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FINANCIAL SUMMARY


($ millions)

3Q10

2Q10

3Q09

Total revenue (excludes equity in earnings of affiliates)

$484.3

$468.3

$469.8

    Business and Information Services

229.6

228.1

227.7

    Data and Analytics

183.4

178.3

166.9

    Employer, Legal and Marketing

77.9

66.1

69.7

    Corporate and Eliminations

(6.6)

(4.2)

5.6

Total operating expenses

$600.6

$442.8

$439.4

    Business and Information Services

192.2

189.3

199.4

    Data and Analytics

144.6

144.2

135.7

    Employer, Legal and Marketing

246.7

69.6

65.2

    Corporate and Eliminations

17.0

39.7

39.2

Total pretax income / margin (%)

($123.2)   /       NM

$10.8         /        2%

$23.4        /        5%

    Business and Information Services

 55.9      /      24%

 51.8         /       23%

48.0       /      21%

    Data and Analytics

  42.4       /       23%

  35.2        /       20%

 34.5        /       21%

    Employer, Legal and Marketing

(170.5)     /       NM

  (3.6)       /       NM

 4.7          /        7%

    Corporate and Eliminations

 (51.1)      /      NM

  (72.6)     /       NM

(63.8)       /       NM

Adjusted pretax income / margin (%)(2)

$78.2       /      15%

$69.3       /     14%

$73.8      /        15%

    Business and Information Services

57.0       /      23%

53.3       /     22%

  48.6      /       20%

    Data and Analytics

42.7       /      23%

  35.3        /     20%

 35.2      /       21%

    Employer, Legal and Marketing

  5.1       /        7%

  1.3       /      2%

  4.9      /          7%

    Corporate and Eliminations

(26.6)      /       NM

 (20.5)      /      NM

(14.9)    /         NM

Cash on balance sheet

$327

$395

Intentionally left blank

Total debt outstanding

$531

$617

Intentionally left blank

(2) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 8 and following.

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BUSINESS SEGMENT RESULTS (3)


($ millions)

3Q10

2Q10

3Q09

Total adjusted revenue(4)

$506.7

$479.1

$490.8

    Business and Information Services

247.9

242.4

245.6

    Data and Analytics

187.5

179.8

169.5

    Employer, Legal and Marketing

77.8

66.0

69.7

    Corporate and Eliminations

(6.5)

(9.1)

6.1

Total adjusted EBITDA / margin (%)(4)

$116.0       /     23%

$102.8    /      21%

$108.1    /    22%

    Business and Information Services

   62.2      /     25%

  58.6     /      24%

   53.4    /     22%

    Data and Analytics

  56.1      /     30%

  49.0     /      27%

  48.9    /     29%

    Employer, Legal and Marketing

   10.7      /     14%

    6.9     /      10%

  10.8    /     15%

    Corporate and Eliminations

  (13.1)      /     NM

  (11.6)    /        NM

     (4.9)    /     NM

(3) The discussion of segment financial results reflects the comparison of third quarter 2010 to the prior quarter's results.  

(4) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 8 and following.

Buddy Piszel, Chief Financial Officer, commented on the quarter: "Our third quarter 2010 results demonstrate the earnings power and resiliency of our current business mix.  As expected, the majority of our businesses performed very well, with flood, geospatial and tax servicing volumes showing good follow-through from the second quarter and risk and fraud analytics products continuing to gain customer adoption.  While the outlook for mortgage originations in 2011 suggests some softening in refinancing volumes, targeted cost savings and our announced share repurchase program should help us defend EBITDA margins and per share results from our continuing businesses."  

BUSINESS AND INFORMATION SERVICES

Adjusted EBITDA was $62.2 million, up 6.1% compared with the prior quarter, driven by significant growth in adjusted revenues and lower operating expenses in the mortgage origination services group.  

Adjusted revenues from the mortgage origination services group increased by 5.6% to $137.7 million, as continued growth in flood and geospatial services and improved results from the company's national joint ventures more than offset adjusted revenue declines in the appraisal and tax servicing businesses.  During the third quarter, adjusted revenues from the flood and geospatial

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solutions businesses increased due to the continued high level of mortgage loan refinancing volumes, the closing of several large geospatial solutions contracts and increased activity in federal projects.  Adjusted revenues from the national joint ventures also increased due to higher loan application and origination volumes.  Adjusted revenues in the default and technology services group declined by 1.5% to $110.2 million, due to a lower volume of broker price opinions and default technology services compared to the previous quarter.

Adjusted EBITDA margin was 25%, up from 24% in the prior quarter.  Margin growth in the third quarter reflected higher revenues, continued cost containment efforts, and improved business mix that was more heavily weighted towards relatively high margin flood, geospatial and national joint venture businesses.  

DATA AND ANALYTICS

Adjusted EBITDA was $56.1 million, up 14.5% compared with the prior quarter, driven by higher adjusted revenues from fraud and income verification products in the risk and fraud group and significant growth in adjusted revenues associated with mortgage loan credit reports in the specialty finance group.  

Adjusted revenue was $187.5 million, compared with $179.8 million in the prior quarter.  Risk and fraud analytics adjusted revenues increased by 1.3% to $103.5 million, as continued high level of mortgage loan applications and originations increased demand for the company's fraud and income verification services.  Specialty finance adjusted revenues increased by 8.1% to $84.0 million, led by higher mortgage-related credit report volumes.

Adjusted EBITDA margin was 30%, up from 27% in the prior quarter.  Adjusted EBITDA margin in the risk and fraud analytics group increased to 34% from 32% reflecting improved product mix, resulting from an increased proportion of relatively high-margin fraud and income verification products.  Adjusted EBITDA margin in the specialty finance group improved to 25% from 21% in the prior quarter, reflecting significant growth in mortgage-related credit report volumes.

EMPLOYER, LEGAL AND MARKETING SERVICES

Adjusted EBITDA was $10.7 million, up 55.1% compared with the prior quarter.  Improvements were driven by higher adjusted revenues in the employer and litigation services businesses.

Adjusted revenue was $77.8 million, compared with $66.0 million in the prior quarter.  Employer services revenues increased by 10.1% to $54.6 million, driven by continued growth in international employment

Page 6

screening activity.  Litigation and investigation support adjusted revenues increased compared to the prior quarter, reflecting an improvement in adjusted revenues tied to increased legal services for new clients.

Adjusted EBITDA margin was 14%, up from 10% in the prior quarter.  Significantly, all of this improvement resulted from improved adjusted revenues in the employer and litigation services businesses.  

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2010, CoreLogic had cash on balance sheet of $327.3 million, and total debt outstanding of $530.9 million.  During the quarter, CoreLogic paid down $85 million on its credit line, leaving the full $500 million available under the company's credit facility at quarter end.  

Teleconference/Webcast

The CoreLogic management team will host a live webcast and conference call on Thursday, November 4, 2010, at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss third quarter 2010 financial results. All interested parties are invited to listen to the live event via webcast on the CoreLogic website at http://investor.corelogic.com. The discussion is also available through dial-in number 1-866-804-6923 for U.S./Canada participants or 857-350-1669 for international participants using Conference ID 84254064.

A replay of the webcast will be available on the CoreLogic investor website for 30 days and also through the conference call number 1-888-286-8010 for U.S./Canada participants or 617-801-6888 for international participants using Conference ID 47397448.

Additional detail on the company's third quarter financial results is included in the quarterly supplement, available on the Investor Relations page at http://investor.corelogic.com.

About CoreLogic

CoreLogic (NYSE:CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive and decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest U.S. real estate, mortgage application, fraud, and loan performance databases and is a leading provider of mortgage and automotive credit reporting, property tax information, valuation, flood determination and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support

Page 7

underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. Formerly the information solutions group of The First American Corporation, CoreLogic began trading under the ticker CLGX on the NYSE on June 2, 2010. The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2009 revenues of $2 billion. For more information visit www.corelogic.com.

Web Site Disclosure

CoreLogic posts information of interest to investors at http://investor.corelogic.com.

Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those related to the company's outlook, performance and strategy for 2010, the company's intended share repurchases and the impact thereof, the potential sale of the employer, investigative and litigation services businesses and the impact thereof, and the company's intended acquisition strategy. These forward-looking statements may contain the words "believe," "anticipate," "expect," "plan," "predict," "estimate," "project," "will be," "will continue," "will likely result," or other similar words and phrases. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in our Current Report on Form 8-K filed on June 1, 2010 and Part I, Item 1A of our most recent Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q, including but not limited to:

  • limitations on access to data from external sources, including government and public record sources;
  • changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of  public records and consumer data;
  • compromises in the security of our data transmissions, including the transmission of confidential information or systems interruptions;
  • difficult conditions in the mortgage and consumer credit industry, the state of the securitization market, increased unemployment,  and conditions in the economy generally;
  • our ability to bring new products to market and to protect proprietary technology rights;
  • our ability to identify purchasers and complete the sale of certain businesses on satisfactory terms or identify suitable acquisition targets, obtain necessary capital and complete such transactions on satisfactory terms;
  • our ability to realize the benefits of our off-shore strategy;
  • consolidation among our significant customers and competitors;
  • impairments in our goodwill or other intangible assets; and
  • the inability to realize the benefits of the spin-off transaction as a result of the factors described immediately above, as well as, among other factors, increased borrowing costs, competition between the resulting companies, increased operating or other expenses or the triggering of rights and obligations by the transaction or any litigation arising out of or related to the separation.

The forward-looking statements speak only as of the date they are made. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Page 8

Use of Non-GAAP Financial Measures

This press release contains certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including adjusted revenue which includes equity in earnings of affiliates; adjusted EBITDA and adjusted EBITDA margin which is adjusted to exclude historical corporate expense and other adjustments, and adjusted pretax margin, which is adjusted to exclude net realized investment losses, employee separation costs and lease termination costs.  Although these exclusions represent actual losses or expenses to the company, they may mask the periodic income and financial and operating trends associated with the company's business. To compensate for the inherent limitations of these non-GAAP measures, the company uses them in conjunction with the corresponding GAAP measures.  

The company is presenting these non-GAAP financial measures because the company believes that they provide the company's management and investors with additional insight into the operational performance of the company relative to earlier periods. The company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this press release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.

(Additional Financial Data Follows)

Page 9

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.


($ thousands)

3Q10

as adjusted

2Q10

as adjusted

3Q09

as adjusted

Net Income

($93,415)

$24,410

$55,361

Less:  Discontinued Operations

0

(24,709)

(37,620)

Plus:  Noncontrolling Interests

10,372

9,035

13,832

         Income Tax Provision*

(17,811)

16,168

11,832

         Interest Expense, Net

7,430

9,120

6,827

         Depreciation & Amortization

30,317

31,864

44,979

         Impairment Loss

174,000

0

0

         Other Legacy FAC Corporate Costs

0

29,699

10,647

         Other Adjustments

5,062

7,255

2,245




Adjusted EBITDA

$115,956

$102,841

$108,104

*Includes income tax provision associated with equity in earnings of affiliates.

Page 10

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.


($ thousands)

3Q10 as

reported

3Q10 Adjustments*

3Q10 Reclass. of Equity in

Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$484,304

$0

$22,382

$506,686

Salaries and Benefits

171,638

(1,741)

0

169,898

Other Operating

224,601

(1,697)

0

222,905

Depr. and Amort.

30,317

0

0

30,317

Impairment Loss

174,000

(174,000)

0

0

Total Operating exp.

$600,557

($177,438)

$0

$423,120

Interest Expense, Net

7,430

0

0

7,430

Other Income

447

1,625

0

2,071

Pre-tax Income

($123,236)

$179,062

$22,382

$78,208

Provision for Income Taxes

26,764

0

(8,953)

17,811

Equity in Earnings of Affiliates, Net of Tax

13,429

0

(13,429)

0

Income from Continuing Operations

($83,043)

$179,062

$0

$96,019

Pre-tax margin

NM

15%

  + Adj. Interest Exp.




7,430

  + Adj. Depr. and Amort.




30,317

  = Adj. EBITDA




$115,956

  Adj. EBITDA Margin




23%

* Includes severance of $1,741, net realized investment losses, including investment impairment, of $1,625, spin-related costs of $1,697 and goodwill impairment charge totaling $174,000.

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RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.


($ thousands)

3Q09 as

Reported

3Q09 Historical

Corporate Exp. and

Other Adjustments*

3Q09 Reclass. of Equity in

Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$469,796

$1,001

$20,002

$490,799

Salaries and Benefits

166,582

(4,890)

0

161,692

Other Operating

227,851

(7,670)

0

220,181

Depr. and Amort.

44,979

(13,127)

0

31,852

Total Operating Exp.

$439,412

($25,687)

$0

$413,725

Interest Expense, Net

6,827

(4,329)

0

2,498

Other Income

(154)

(669)

0

(822)

Pre-tax Income

$23,403

$30,348

$20,002

$73,754

Provision for Income Taxes

(3,832)

0

(8,001)

(11,832)

Equity in Earnings of Affiliates, Net of Tax

12,001

0

(12,001)

0

Income from Continuing Operations

$31,573

$30,348

$0

$61,921

Pre-tax Margin

5%

15%

  + Adj. Interest Exp.




2,498

  + Adj. Depr. and Amort.




31,852

  = Adj. EBITDA




$108,104

  Adj. EBITDA Margin




22%

* Includes severance of $1,301, software impairment and facility restructuring of $2,944, net realized gains of $1,032 and legacy First American Corp. costs of $27,135.

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RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

($ thousands)

2Q10 as

Reported

2Q10 Historical

Corporate Exp. and

Other Adjustments*

2Q10 Reclass. of Equity in

Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$468,279

($3,315)

$14,097

$479,061

Salaries and Benefits

165,537

(3,174)

0

162,363

Other Operating

245,433

(30,850)

0

214,583

Depr. and Amort.

31,864

(2,228)

0

29,636

Total Operating Exp.

$442,833

($36,252)

$0

$406,582

Interest Expense, Net

9,120

(5,188)

0

3,932

Other Income

(5,520)

6,245

0

725

Pre-tax Income

$10,806

$44,370

$14,097

$69,273

Provision for Income Taxes

(10,530)

0

(5,639)

(16,168)

Equity in Earnings of Affiliates, Net of Tax

8,458

0

(8,458)

0

Income from Continuing Operations

$8,735

$44,370

$0

$53,105

Pre-tax Margin

2%

14%

  + Adj. Interest Exp.




3,932

  + Adj. Depr. and Amort.




29,636

  = Adj. EBITDA




$102,841

  Adj. EBITDA Margin




21%

* Includes severance of $1,105, an adjustment related to sales tax exposure of $4,750, loss related to closure of a national joint venture of $1,400  and legacy First American Corp. costs of $37,115.

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RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR BUSINESS AND INFORMATION SERVICES


($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$229,602

$0

$18,304

$247,906

Salaries and Benefits

52,050

(1,100)

0

50,951

Other Operating

134,784

0

0

134,784

Depr. and Amort.

5,352

0

0

5,352

Total Operating Exp.

$192,186

($1,100)

$0

$191,087

Interest Expense, Net

(175)

0

0

(175)

Other Income

18,336

0

(18,304)

32

Pre-tax Income

$55,926

$1,100

$0

$57,026

Pre-tax Margin

24%

23%

  + Adj. interest exp.




(175)

  + Adj. depr. and amort.




5,352

  = Adj. EBITDA




$62,203

  Adj. EBITDA Margin




25%

* Includes severance of $1,100.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$227,666

$0

$17,905

$245,571

Salaries and Benefits

53,866

(376)

0

53,490

Other Operating

138,885

(60)

0

138,825

Depr. and Amort.

6,601

0

0

6,601

Total Operating Exp.

$199,353

($436)

$0

$198,917

Interest Expense, Net

(1,814)

0

0

(1,814)

Other Income

17,905

128

(17,905)

128

Pre-tax Income

$48,032

$564

$0

$48,596

Pre-tax Margin

21%

20%

  + Adj. interest exp.




(1,814)

  + Adj. depr. and amort.




6,601

  = Adj. EBITDA




$53,384

  Adj. EBITDA Margin




22%

* Includes severance of $376, asset impairment of $60 and net realized losses of $128.

Page 14

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR BUSINESS AND INFORMATION SERVICES

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$228,064

$0

$14,305

$242,369

Salaries and Benefits

52,647

(29)

0

52,617

Other Operating

131,360

0

0

131,360

Depr. and Amort.

5,303

0

0

5,303

Total Operating Exp.

$189,309

($29)

$0

$189,280

Interest Expense, Net

22

0

0

22

Other Income

13,090

1,400

(14,305)

185

Pre-tax Income

$51,822

$1,429

$0

$53,252

Pre-tax Margin

23%

22%

  + Adj. interest exp.




22

  + Adj. depr. and amort.




5,303

  = Adj. EBITDA




$58,576

  Adj. EBITDA Margin




24%

* Includes severance of $29 and loss related to closure of a national joint venture of $1,400.

Page 15

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DATA AND ANALYTICS


($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$183,440

$0

$4,068

$187,508

Salaries and Benefits

53,128

(218)

0

52,910

Other Operating

78,122

0

0

78,122

Depr. and Amort.

13,386

0

0

13,386

Total Operating Exp.

$144,635

($218)

$0

$144,418

Interest Expense, Net

46

0

0

46

Other Income

3,686

0

(4,068)

(382)

Pre-tax Income

$42,445

$218

$0

$42,662

Pre-tax Margin

23%

23%

  + Adj. interest exp.




46

  + Adj. depr. and amort.




13,386

  = Adj. EBITDA




$56,094

  Adj. EBITDA Margin




30%

* Includes severance of $218.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$166,909

$0

$2,552

$169,461

Salaries and Benefits

53,862

(685)

0

53,177

Other Operating

67,758

(316)

0

67,442

Depr. and Amort.

14,065

(968)

0

13,097

Total Operating Exp.

$135,685

($1,969)

$0

$133,716

Interest Expense, Net

576

0

0

576

Other Income

3,825

(1,210)

(2,552)

64

Pre-tax Income

$34,473

$759

$0

$35,233

Pre-tax Margin

21%

21%

  + Adj. interest exp.




576

  + Adj. depr. and amort.




13,097

  = Adj. EBITDA




$48,906

  Adj. EBITDA Margin




29%

* Includes severance of $685, software impairments of $1,284 and net realized gains of $1,210.

Page 16

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DATA AND ANALYTICS

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$178,331

$0

$1,496

$179,827

Salaries and Benefits

53,239

(134)

0

53,105

Other Operating

77,753

0

0

77,753

Depr. and Amort.

13,249

0

0

13,249

Total Operating Exp.

$144,242

($134)

$0

$144,108

Interest Expense, Net

404

0

0

404

Other Income

1,496

0

(1,496)

0

Pre-tax Income

$35,181

$134

$0

$35,316

Pre-tax Margin

20%

20%

  + Adj. interest exp.




404

  + Adj. depr. and amort.




13,249

  = Adj. EBITDA




$48,969

  Adj. EBITDA Margin




27%

* Includes severance of $134.

Page 17

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR EMPLOYER, LEGAL AND MARKETING SERVICES

($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$77,857

$0

($78)

$77,779

Salaries and Benefits

26,510

(3)

0

26,507

Other Operating

40,537

0

0

40,537

Depr. and Amort.

5,688

0

0

5,688

Impairment Loss

174,000

(174,000)

0

0

Total Operating Exp.

$246,735

($174,003)

$0

$72,732

Interest Expense, Net

(43)

0

0

(43)

Other Income

(1,703)

1,625

78

0

Pre-tax Income

($170,538)

$175,628

$0

$5,090

Pre-tax Margin

NM

7%

  + Adj. interest exp.




(43)

  + Adj. depr. and amort.




5,688

  = Adj. EBITDA




$10,735

  Adj. EBITDA Margin




14%

* Includes severance of $3, net realized investment losses, including investment impairment, of $1,625 and goodwill impairment charge totaling $174,000.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$69,666

$0

$0

$69,666

Salaries and Benefits

24,355

(156)

0

24,199

Other Operating

34,763

0

0

34,763

Depr. and Amort.

6,044

0

0

6,044

Total Operating Exp.

$65,162

($156)

$0

$65,007

Interest Expense, Net

(157)

0

0

(157)

Other Income

0

49

0

49

Pre-tax Income

$4,661

$205

$0

$4,866

Pre-tax Margin

7%

7%

  + Adj. interest exp.




(157)

  + Adj. depr. and amort.




6,044

  = Adj. EBITDA




$10,754

  Adj. EBITDA Margin




15%

* Includes severance of $156 and net realized losses of $49.

Page 18

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR EMPLOYER, LEGAL AND MARKETING SERVICES

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$66,113

$0

($104)

$66,009

Salaries and Benefits

24,524

(76)

0

24,448

Other Operating

39,385

(4,750)

0

34,635

Depr. and Amort.

5,689

0

0

5,689

Total Operating Exp.

$69,597

($4,826)

$0

$64,772

Interest Expense, Net

(14)

0

0

(14)

Other Income

(104)

0

104

0

Pre-tax Income

($3,574)

$4,826

$0

$1,252

Pre-tax Margin

NM

2%

  + Adj. interest exp.




(14)

  + Adj. depr. and amort.




5,689

  = Adj. EBITDA




$6,926

  Adj. EBITDA Margin




10%

* Includes severance of $76 and historical sales tax exposure of $4,750.

Page 19

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE


($ thousands)

3Q10 as

Reported

3Q10
Adjustments*

3Q10 Reclass. of

Equity in Earnings

of Affiliates**

3Q10 as

Adjusted

Revenue

($6,595)

$0

$89

($6,506)

Salaries and Benefits

39,950

(421)

0

39,530

Other Operating

(28,842)

(1,697)

0

(30,538)

Depr. and Amort.

5,891

0

0

5,891

Total Operating Exp.

$17,000

($2,117)

$0

$14,883

Interest Expense, Net

7,602

0

0

7,602

Other Income

(19,872)

0

22,293

2,421

Pre-tax Income

($51,069)

$2,117

$22,382

($26,570)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.




7,602

  + Adj. depr. and amort.




5,891

  = Adj. EBITDA




($13,076)

  Adj. EBITDA Margin




N/M

* Includes severance of $421 and spin-related costs of $1,697.

** Includes reclassification of equity in earnings.


($ thousands)

3Q09 as

Reported

3Q09 Historical
Corp. Expense

and Other

Adjustments*

3Q09 Reclass.

of Equity

in Earnings

of Affiliates**

3Q09 as

Adjusted

Revenue

$5,554

$1,001

($454)

$6,101

Salaries and Benefits

34,499

(3,673)

0

30,826

Other Operating

(13,555)

(7,294)

0

(20,849)

Depr. and Amort.

18,269

(12,159)

0

6,109

Total Operating Exp.

$39,212

($23,127)

$0

$16,086

Interest Expense, Net

8,222

(4,329)

0

3,893

Other Income

(21,884)

364

20,456

(1,064)

Pre-tax Income

($63,764)

$28,820

$20,002

($14,941)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.




3,893

  + Adj. depr. and amort.




6,109

  = Adj. EBITDA




($4,939)

  Adj. EBITDA Margin




N/M

* Includes severance of $84, facility restructuring of $1,600 and legacy First American Corp. costs of $27,135.

** Includes reclassification of equity in earnings.

Page 20

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE

($ thousands)

2Q10 as

Reported

2Q10 Historical
Corp. Expense
and Other

Adjustments*

2Q10 Reclass.
of Equity
in Earnings

of Affiliates**

2Q10 as

Adjusted

Revenue

($4,229)

($3,315)

($1,600)

($9,144)

Salaries and Benefits

35,127

(2,934)

0

32,192

Other Operating

(3,065)

(26,100)

0

(29,165)

Depr. and Amort.

7,623

(2,228)

0

5,395

Total Operating Exp.

$39,685

($31,262)

$0

$8,423

Interest Expense, Net

8,708

(5,188)

0

3,520

Other Income

(20,001)

4,845

15,697

541

Pre-tax Income

($72,623)

$37,980

$14,097

($20,546)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.




3,520

  + Adj. depr. and amort.




5,395

  = Adj. EBITDA




($11,631)

  Adj. EBITDA Margin




N/M

* Includes severance of $865 and legacy First American Corp. costs of $37,115.

** Includes reclassification of equity in earnings.

Page 21

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR MORTGAGE ORIGINATION SERVICES GROUP

($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$119,511

$0

$18,183

$137,694

Salaries and Benefits

37,461

(998)

0

36,463

Other Operating

59,773

0

0

59,773

Depr. and Amort.

3,793

0

0

3,793

Total Operating Exp.

$101,027

($998)

$0

$100,029

Interest Expense, Net

(174)

0

0

(174)

Other Income

18,215

0

(18,183)

32

Pre-tax Income

$36,874

$998

$0

$37,871

Pre-tax Margin

31%

28%

  + Adj. interest exp.




(174)

  + Adj. depr. and amort.




3,793

  = Adj. EBITDA




$41,490

  Adj. EBITDA Margin




30%

* Includes severance of $998.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of affiliates

3Q09 as

Adjusted

Revenue

$119,770

$0

$17,796

$137,566

Salaries and Benefits

39,402

(258)

0

39,144

Other Operating

63,286

(60)

0

63,226

Depr. and Amort.

4,686

0

0

4,686

Total Operating Exp.

$107,374

($318)

$0

$107,056

Interest Expense, Net

(1,817)

0

0

(1,817)

Other Income

17,796

118

(17,796)

118

Pre-tax Income

$32,010

$436

$0

$32,445

Pre-tax Margin

27%

24%

  + Adj. interest exp.




(1,817)

  + Adj. depr. and amort.




4,686

  = Adj. EBITDA




$35,314

  Adj. EBITDA Margin




26%

* Includes severance of $258, asset write-offs of $60 and net realized losses of $118.

Page 22

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR MORTGAGE ORIGINATION SERVICES GROUP

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$116,473

$0

$13,971

$130,444

Salaries and Benefits

39,626

(11)

0

39,615

Other Operating

58,772

0

0

58,772

Depr. and Amort.

3,692

0

0

3,692

Total Operating Exp.

$102,090

($11)

$0

$102,079

Interest Expense, Net

23

0

0

23

Other Income

12,756

1,400

(13,971)

185

Pre-tax Income

$27,116

$1,411

$0

$28,527

Pre-tax Margin

23%

22%

  + Adj. interest exp.




23

  + Adj. depr. and amort.




3,692

  = Adj. EBITDA




$32,242

  Adj. EBITDA Margin




25%

* Includes severance of $11 and loss related to closure of national joint venture of $1,400.

Page 23

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DEFAULT AND TECHNOLOGY SERVICES GROUP

($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$110,091

$0

$120

$110,211

Salaries and Benefits

14,589

(102)

0

14,487

Other Operating

75,011

0

0

75,011

Depr. and Amort.

1,559

0

0

1,559

Total Operating Exp.

$91,159

($102)

$0

$91,057

Interest Expense, Net

0

0

0

0

Other Income

120

0

(120)

0

Pre-tax Income

$19,052

$102

$0

$19,154

Pre-tax Margin

17%

17%

  + Adj. interest exp.




0

  + Adj. depr. and amort.




1,559

  = Adj. EBITDA




$20,713

  Adj. EBITDA Margin




19%

* Includes severance of $102.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$107,896

$0

$109

$108,005

Salaries and Benefits

14,465

(118)

0

14,346

Other Operating

75,599

0

0

75,599

Depr. and Amort.

1,915

0

0

1,915

Total Operating Exp.

$91,979

($118)

$0

$91,861

Interest Expense, Net

3

0

0

3

Other Income

109

10

(109)

10

Pre-tax Income

$16,023

$128

$0

$16,151

Pre-tax Margin

15%

15%

  + Adj. interest exp.




3

  + Adj. depr. and amort.




1,915

  = Adj. EBITDA




$18,069

  Adj. EBITDA Margin




17%

* Includes severance of $118 and net realized losses of $10.

Page 24

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR DEFAULT AND TECHNOLOGY SERVICES GROUP

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$111,590

$0

$334

$111,924

Salaries and Benefits

13,021

(18)

0

13,002

Other Operating

72,588

0

0

72,588

Depr. and Amort.

1,610

0

0

1,610

Total Operating Exp.

$87,219

($18)

$0

$87,200

Interest Expense, Net

0

0

0

0

Other Income

334

0

(334)

0

Pre-tax Income

$24,706

$18

$0

$24,725

Pre-tax Margin

22%

22%

  + Adj. interest exp.




0

  + Adj. depr. and amort.




1,610

  = Adj. EBITDA




$26,334

  Adj. EBITDA Margin




24%

* Includes severance of $18.

Page 25

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR RISK AND FRAUD ANALYTICS GROUP

($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$101,270

$0

$2,200

$103,470

Salaries and Benefits

35,117

(18)

0

35,099

Other Operating

32,969

0

0

32,969

Depr. and Amort.

10,310

0

0

10,310

Total Operating Exp.

$78,396

($18)

$0

$78,378

Interest Expense, Net

29

0

0

29

Other Income

1,818

0

(2,200)

(382)

Pre-tax Income

$24,662

$18

$0

$24,680

Pre-tax Margin

24%

24%

  + Adj. interest exp.




29

  + Adj. depr. and amort.




10,310

  = Adj. EBITDA




$35,020

  Adj. EBITDA Margin




34%

* Includes severance of $18.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$95,414

$0

$373

$95,786

Salaries and Benefits

34,478

(3)

0

34,475

Other Operating

31,984

(316)

0

31,668

Depr. and Amort.

10,892

(968)

0

9,924

Total Operating Exp.

$77,354

($1,287)

$0

$76,067

Interest Expense, Net

576

0

0

576

Other Income

2,385

(1,949)

(373)

63

Pre-tax Income

$19,869

($662)

$0

$19,207

Pre-tax Margin

21%

20%

  + Adj. interest exp.




576

  + Adj. depr. and amort.




9,924

  = Adj. EBITDA




$29,706

  Adj. EBITDA Margin




31%

* Includes severance of $3, software impairment of $1,284 and net realized gains of $1,949.

Page 26

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR RISK AND FRAUD ANALYTICS GROUP

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$101,292

$0

$869

$102,161

Salaries and Benefits

35,216

(7)

0

35,209

Other Operating

34,141

0

0

34,141

Depr. and Amort.

10,253

0

0

10,253

Total Operating Exp.

$79,610

($7)

$0

$79,604

Interest Expense, Net

382

0

0

382

Other Income

869

0

(869)

0

Pre-tax Income

$22,169

$7

$0

$22,175

Pre-tax Margin

22%

22%

  + Adj. interest exp.




382

  + Adj. depr. and amort.




10,253

  = Adj. EBITDA




$32,811

  Adj. EBITDA Margin




32%

* Includes severance of $7.

Page 27

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR SPECIALTY FINANCE SOLUTIONS GROUP

($ thousands)

3Q10 as

Reported

3Q10 Adjustments*

3Q10 Reclass. of Equity

in Earnings of Affiliates

3Q10 as

Adjusted

Revenue

$82,171

$0

$1,867

$84,038

Salaries and Benefits

18,011

(199)

0

17,811

Other Operating

45,153

0

0

45,153

Depr. and Amort.

3,075

0

0

3,075

Total Operating Exp.

$66,239

($199)

$0

$66,040

Interest Expense, Net

16

0

0

16

Other Income

1,867

0

(1,867)

0

Pre-tax Income

$17,782

$199

$0

$17,982

Pre-tax Margin

22%

21%

  + Adj. interest exp.




16

  + Adj. depr. and amort.




3,075

  = Adj. EBITDA




$21,073

  Adj. EBITDA Margin




25%

* Includes severance of $199.


($ thousands)

3Q09 as

Reported

3Q09 Adjustments*

3Q09 Reclass. of Equity

in Earnings of Affiliates

3Q09 as

Adjusted

Revenue

$71,495

$0

$2,179

$73,674

Salaries and Benefits

19,384

(682)

0

18,702

Other Operating

35,774

0

0

35,774

Depr. and Amort.

3,173

0

0

3,173

Total Operating Exp.

$58,331

($682)

$0

$57,649

Interest Expense, Net

0

0

0

0

Other Income

1,440

740

(2,179)

1

Pre-tax Income

$14,605

$1,422

$0

$16,026

Pre-tax Margin

20%

22%

  + Adj. interest exp.




0

  + Adj. depr. and amort.




3,173

  = Adj. EBITDA




$19,200

  Adj. EBITDA Margin




26%

* Includes severance of $682 and net realized investment losses of $740.

Page 28

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR SPECIALTY FINANCE SOLUTIONS GROUP

($ thousands)

2Q10 as

Reported

2Q10 Adjustments*

2Q10 Reclass. of Equity

in Earnings of Affiliates

2Q10 as

Adjusted

Revenue

$77,039

$0

$627

$77,666

Salaries and Benefits

18,024

(128)

0

17,896

Other Operating

43,612

0

0

43,612

Depr. and Amort.

2,996

0

0

2,996

Total Operating Exp.

$64,632

($128)

$0

$64,504

Interest Expense, Net

22

0

0

22

Other Income

627

0

(627)

0

Pre-tax Income

$13,012

$128

$0

$13,140

Pre-tax Margin

17%

17%

  + Adj. interest exp.




22

  + Adj. depr. and amort.




2,996

  = Adj. EBITDA




$16,158

  Adj. EBITDA Margin




21%

* Includes severance of $128.

SOURCE CoreLogic

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