CoreLogic Reports Second Quarter 2011 Net Income of $31.5 Million, or $0.29 Per Share, on Revenue of $396.4 Million

SECOND QUARTER PRE-TAX INCOME OF $42.8 MILLION, ADJUSTED PRE-TAX INCOME(1) OF $21.0 MILLION, ADJUSTED EBITDA(1) OF $61.1 MILLION

RESULTS INCLUDE ONE-TIME ACQUISITION-RELATED GAIN ON INITIAL INVESTMENT IN RP DATA OF $58.9 MILLION

- Second quarter revenues totaled $396.4 million, compared to $411.0 million in the second quarter of 2010.

- Data and Analytics segment benefited from the RP Data acquisition, higher capital markets project-based revenues and higher consumer services revenues.

- Business and Information Services segment experienced significant declines in appraisal and broker price opinion business reflecting client losses, changing market dynamics and general declines in industry origination and problem loan volumes.

- Company made significant progress on cost savings initiatives with estimated $20.0 million in 2011 benefits.

- Continued innovation in the Data and Analytics segment with the issuance of two patents and new product launches.

- Announced a strategic outsourcing relationship with Cognizant that will reduce the company’s global workforce by 40 percent.

- Repurchased 8.7 million shares in the quarter, for total proceeds of $161.4 million.

- Hired Frank Martell as the company’s CFO.

Aug 04, 2011, 16:15 ET from CoreLogic

SANTA ANA, Calif., Aug. 4, 2011 /PRNewswire/ -- CoreLogic (NYSE: CLGX) today reported net income of $31.5 million for the quarter ended June 30, 2011 compared with net income of $24.4 million in the same period of 2010.  Diluted earnings were $0.29 per share in the second quarter of 2011 compared with diluted earnings of $0.22 per share in the second quarter of 2010.    

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

Significant pre-tax items in the second quarter of 2011 included acquisition-related gains of $58.9 million recorded on the company's existing investment in RP Data and the write-off of deferred financing costs associated with the company's prior credit facility of $10.2 million.

Anand Nallathambi, President and Chief Executive Officer, commented on the quarter, "During the second quarter we continued to strategically reposition our company with the acquisition of RP Data and the announced partnership with Cognizant.  We also made progress on aggressive cost cutting and streamlining initiatives that will benefit the company into the future."

Continuing on, Nallathambi added:  "The Data and Analytics segment delivered another solid quarter with growth in risk and fraud services.  We also launched a web-based portal, IdentityLogic, that will be a consumer-facing credit-monitoring service.  Finally, the Business and Information Services segment expanded its flood data and geo-spatial offerings and made progress on the international expansion of its market-leading tax servicing business."

"Continued innovation and growth in our core businesses is essential in light of the uncertainty in the U.S. housing market.  Regulatory and economic concerns have constrained the volume of mortgage originations despite low interest rates and record levels of single-family home affordability.   As a result, we did not experience the typical degree of seasonality in the second quarter.  These effects, and lack of typical seasonality, negatively impacted our quarterly results on a year-over-year basis, and make us increasingly cautious in our outlook for the remainder of the year."

The following discussion compares the second quarters of 2011 and 2010 unless otherwise noted.

FINANCIAL SUMMARY

(Unaudited)

($ millions)

2Q11

1Q11

2Q10

Total revenue (excludes equity in earnings of affiliates)

$396.4

$404.0

$411.0

    Data and Analytics

200.0

203.2

188.1

    Business and Information Services

199.8

206.3

228.1

    Corporate and Eliminations

(3.4)

(5.6)

(5.2)

Total operating expenses

$391.8

$374.6

$384.2

    Data and Analytics

181.8

170.4

154.6

    Business and Information Services

180.7

181.4

189.3

    Corporate and Eliminations

29.3

22.8

40.3

Total pretax income / margin (%)

$42.8        /       11%

$52.6        /       13%

$12.0        /      3.0%

    Data and Analytics

18.3        /         9%

58.2        /       29%

33.0        /       18%

    Business and Information Services

19.8        /       10%

25.3        /       12%

37.5        /       16%

    Corporate and Eliminations

4.7        /       NM

(30.9)      /       NM

(58.6)      /       NM

Adjusted pretax income / margin (%)(2)

$21.0        /        5%

$40.7       /      10%

$65.7       /      16%

    Data and Analytics

23.2        /       11%

36.3       /      18%

33.4       /      18%

    Business and Information Services

30.5        /       15%

34.8       /      16%

53.3       /      22%

    Corporate and Eliminations

(32.6)       /        NM

(30.4)      /       NM

(20.9)      /       NM

Cash on balance sheet

$171

$150

$362

Total debt outstanding

$939

$524

$615

(2) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 11 and following.

BUSINESS SEGMENT RESULTS

(Unaudited)

($ millions)

2Q11

1Q11

2Q10

Total adjusted revenue(3)

$408.5

$414.6

$421.9

    Data and Analytics

203.3

205.7

188.3

    Business and Information Services

208.5

214.4

242.4

    Corporate and Eliminations

(3.4)

(5.5)

(8.8)

Total adjusted EBITDA / margin (%)(3)

$61.1      /      15%

$73.5      /      18%

$95.2      /      23%

    Data and Analytics

40.3      /      20%

51.0      /      25%

48.6      /      26%

    Business and Information Services

36.3      /      17%

39.0      /      18%

58.6      /      24%

    Corporate and Eliminations

(15.5)     /      NM

(16.5)      /      NM

(12.0)     /      NM

(3) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 11 and following.

DATA AND ANALYTICS

Adjusted EBITDA was $40.3 million in the second quarter, down 17 percent from $48.6 million in the year-ago period.  Second quarter results reflect the May acquisition of RP Data, higher project-based revenues in the capital markets space and improved revenues in consumer services.  Adjusted EBITDA was unfavorably impacted by deferred revenues of $6.3 million and charges of $5.0 million in our marketing services business. Additionally, higher project-related expenses and higher credit bureau-related fees impacted the segment's profitability.  

Adjusted revenues for the segment were $203.3 million, compared with $188.3 million in the year-ago period.  Risk and fraud analytics group adjusted revenues were $119.5 million, which included $10.7 million from the acquisition of RP Data.  Adjusted revenues from the risk and fraud analytics group were $102.2 million in the second quarter of 2010, an increase of 7 percent over the prior year period.  The year-over-year increase in adjusted revenue reflects higher data licensing fees and project-based revenues related to document retrieval solutions and other services.  Specialty finance group adjusted revenues decreased 3 percent to $83.8 million from $86.1 million in the year-ago period as stronger consumer services revenues from credit monitoring were offset by weaker results in marketing services.  Adjusted revenues in the specialty finance group were also impacted by lower mortgage credit reporting volumes and a lower number of active realtors.

Adjusted EBITDA margin for the segment was 20 percent, down from 26 percent in the year-ago period.  Adjusted EBITDA margin in the risk and fraud analytics group increased to 33 percent from 32 percent, reflecting higher data licensing revenues, the RP Data acquisition and cost savings related to data center consolidation.  Adjusted EBITDA margin in the specialty finance group was 1 percent, down from 18 percent in the year-ago period.  Lower adjusted EBITDA margin primarily reflects the impacts of deferred revenues and charges for certain accounts receivable balances associated with the company's marketing services business.  Higher credit bureau fees and increased technology infrastructure spending also negatively impacted the segment's profitability in the quarter.

BUSINESS AND INFORMATION SERVICES

Adjusted EBITDA was $36.3 million in the second quarter, down 38 percent from $58.6 million in the year-ago period.  These results reflect significant declines in appraisal and default-related services.  

Adjusted revenues from the mortgage origination services group decreased 20 percent to $104.4 million from $130.4 million in the year-ago period.  Appraisal services revenues declined 42 percent from the year-ago period, primarily reflecting the decision to exit certain client relationships where mutually acceptable commercial terms were not reached.  Revenues from escrow services, which include tax services and flood data, were down 6 percent compared to declines in industry mortgage originations of approximately 25 percent. In addition to volume declines, these lower revenues also reflect slower deferred revenue recognition in tax services associated with a smaller life-of-loan servicing pool.  

Adjusted revenues in the default and technology services group fell 7 percent to $104.1 million from $111.9 million in the year-ago period.  Excluding acquisitions, adjusted revenues declined 16 percent from the year-ago period.  Contributing to this decline was a 41 percent year-over-year decline in broker price opinion volumes as two major clients moved to in-source business, and changing market conditions reduced the demand for valuation services.  Partially offsetting these declines were higher revenues from field services.

Adjusted EBITDA margin for the segment was 17 percent, down from 24 percent in the year-ago period.  Adjusted EBITDA margin in the mortgage originations services group decreased to 20 percent from 25 percent primarily reflecting lower earnings in the company's national joint ventures.  Lower joint venture earnings reflect lower mortgage industry volumes and the closure by a major joint venture customer of an origination division that focused on Federal Housing Administration loans.  Partially offsetting these losses were benefits associated with cost control initiatives.  Adjusted EBITDA margin in the default and technology group decreased to 15 percent from 24 percent as a result of an unfavorable shift in product mix more heavily weighted towards lower-margin field services and default outsourcing services.

LIQUIDITY AND CAPITAL RESOURCES

During the second quarter, CoreLogic repurchased a total of 8.7 million shares of common stock for $161 million.  At August 4th, 2011 there were approximately 106 million shares of common stock outstanding.

At June 30, 2011, CoreLogic had cash on its balance sheet of $171 million.  Total debt as of June 30, 2011, was $939 million and available capacity on the credit facility was approximately $500 million.  On May 23, 2011, the company issued $400 million in senior notes and used the proceeds primarily for repayment of debt.  

ACQUISITIONS

During the second quarter of 2011, CoreLogic completed its acquisition of the remaining 60 percent interest in Australian-based RP Data Limited for $157.2 million.

Teleconference/Webcast

The CoreLogic management team will host a live webcast and conference call on Thursday, August 4, 2011, at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss these 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 1-800-510-0178 for U.S./Canada participants or 617-614-3450 for international participants using Conference ID 40337720.

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 66867510.

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

About CoreLogic

CoreLogic 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 decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations.  The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2010 revenues of $1.6 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 statements related to the company's outlook, including overall financial performance, future growth, and earnings and revenue growth performance; statements related to estimated cost savings as a result of cost savings initiatives; the anticipated completion of our sale of certain assets to Cognizant and the entry into an outsourcing agreement with them. 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 Part I, Item 1A of our most recent Annual Report on Form 10-K for the year ended December 31, 2010, 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 which may, among other things, limit the manner in which we conduct business with our customers;
  • 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, including the continued decline in mortgage applications, declines in the level of loans seriously delinquent and continued delays in the default cycle, 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 suitable acquisition targets, obtain necessary capital and complete such transactions on satisfactory terms;
  • risks related to our international operations and the anticipated outsourcing of various business process and information technology services to third parties, including potential disruptions to services and customers and inability to achieve cost savings;
  • 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.

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, adjusted EBITDA margin and adjusted pretax margin which is adjusted to exclude historical corporate expense of the spun-off businesses, net realized investment gains/losses, employee separation costs, and other adjustments. 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.

(1) This is a non-GAAP measure.  For a discussion and reconciliation of non-GAAP measures to the GAAP equivalent, see page 11 and following.

(ADDITIONAL FINANCIAL DATA FOLLOWS)

CORELOGIC, INC

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

Three Months Ended June 30,

($ in Thousands)

2011

2010

Operating Revenues

$396,402

$410,976

Operating Expenses

   External costs of revenue

122,603

126,842

   Salaries and benefits

155,313

141,125

   Other operating expenses

87,413

88,587

   Depreciation and amortization

28,463

27,632

Total operating expenses

391,792

384,186

   Interest expense, net

(21,845)

(9,275)

   Gain/ (loss) on investment and other Income

60,041

(5,520)

Income from continuing operations

42,806

11,995

Provision for income taxes

16,792

11,047

Income from continuing operations before equity in earnings of affiliates

26,014

948

Equity in earnings of affiliates, net of tax

5,719

8,562

Income from continuing operations

31,733

9,510

Income from discontinued operations, net of tax

-

23,935

Net income

31,733

33,445

   Less: Net income attributable to noncontrolling interests

248

9,035

Net income attributable to CoreLogic

$31,485

$24,410

Earnings per share:

   Basic

$0.29

$0.22

   Diluted

$0.29

$0.22

Weighted average shares:

   Basic

108.0

108.9

   Diluted

108.6

109.7

CORELOGIC, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

($ in Thousands)

June 30, 2011

December 31, 2010

Assets

Current Assets:

   Cash and cash equivalents

$170,889

$447,145

   Marketable securities

36,236

75,221

   Accounts receivable (Less Allowance)

225,770

217,351

   Prepaid expenses and other current assets

63,822

44,543

   Income tax receivable

20,320

30,587

   Deferred income tax assets, current

19,835

19,835

Total current assets

536,872

834,682

Property and equipment, net

243,596

211,450

Goodwill

1,627,583

1,444,993

Other identifiable intangible assets, net

201,514

132,689

Capitalized data and database costs, net

305,789

211,331

Investment in affiliates

142,703

165,709

Deferred income tax assets, long-term

34,544

17,000

Restricted cash

23,975

21,095

Other assets

145,176

180,883

Total assets

$3,261,752

$3,219,832

Liabilities and Equity

Current liabilities:

   Accounts payable and accrued expenses

158,316

137,578

   Accrued salaries and benefits

77,797

81,949

   Deferred revenue, current

214,468

186,558

   Noncontrolling interests

-

72,000

   Current portion of long-term debt

29,473

233,452

   Due to FAFC, net

-

18,097

Total current liabilities

480,054

729,634

Long-term debt, net of current portion

909,667

487,437

Deferred revenue, net of current portion

329,369

350,827

Deferred tax liabilities, long term

32,027

994

Other liabilities

107,194

104,245

Total liabilities

$1,858,311

$1,673,137

Total equity

$1,403,441

$1,546,695

Total liabilities and equity

$3,261,752

$3,219,832

SIGNIFICANT ADJUSTMENTS BETWEEN GAAP & AS ADJUSTED RESULTS

($ in Thousands)

June 30, 2011

Description

Revenue

  Re-class of Equity in Earnings of Affiliates

$9,528

Reflects GAAP equity in earnings of affiliates before tax as a component of adjusted revenue

  Adjust Equity in Earnings of Affiliates

$2,562

Adjust RP Data equity in earnings for  pre-merger-related expenses

Expenses

  Salaries and benefits

$3,755

Restructuring related severance and retention expenses

  Professional, legal and litigation

$4,655

Litigation settlements and acquisition related professional fees

  Interest expense

$10,195

Write-off of deferred financing fees associated with the company's prior credit facility

  Non-capitalized efficiency investments

$7,488

Expenses related to announced one-time efficiency investments

Gain (Loss) on Investment and Other Income

  Acquisition of RP Data

($59,961)

Gain on initial investment in RP Data related to May acquisition

Total impact to pretax income

($21,778)

Provision for income taxes

($1,025)

Taxes on adjusted RP Data JV equity in earnings prior to acquisition

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

(Unaudited)

($ thousands)

2Q11

1Q11

2Q10

Net income (loss)

$31,485

$23,255

$24,410

Less:  Discontinued operations

-

-

23,934

Plus:   Noncontrolling interests

248

817

9,035

          Income tax provision*

20,602

39,122

16,685

          Interest expense, net

21,845

7,587

9,275

          Depreciation & amortization

28,463

25,211

27,632

          Other significant adjustments

(41,501)

(22,462)

2,429

          Legacy FAC Corporate Costs

-

-

29,700

Adjusted EBITDA

$61,142

$73,530

$95,232

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

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$396,402

$0

$12,091

$408,493

Salaries and Benefits

153,313

(3,767)

0

149,546

Other Operating

210,016

(12,131)

0

197,885

Depr. and Amort.

28,463

0

0

28,463

Impairment Loss

0

0

0

0

Total Operating exp.

$391,792

($15,898)

$0

$375,894

Interest Expense, Net

21,845

(10,195)

0

11,650

Other Income

60,041

(59,961)

0

80

Pre-tax Income

$42,806

($33,868)

$12,091

$21,029

Provision for Income Taxes

(16,792)

0

(4,835)

(21,627)

Equity in Earnings of Affiliates, Net of Tax

5,719

1,537

(7,256)

0

Income from Continuing Operations

$31,733

($32,331)

$0

($598)

Pre-tax margin

11%

5%

  + Adj. Interest Exp.

11,650

  + Adj. Depr. and Amort.

28,463

  = Adj. EBITDA

$61,142

  Adj. EBITDA Margin

15%

*Includes restructuring-related severance and retention expenses of $3,755, professional fees associated with acquisitions and litigation settlements of $4,655, costs related to non-capitalized investments of $7,488, write-off of deferred financing fees of $10,195, gain on initial investment in RP Data Limited and other net investment gains of $59,961 and adjustment of RP Data Limited equity in earnings for pre-merger-related expenses, net of tax, of $1,537.

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

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$403,994

$0

$10,557

$414,551

Salaries and Benefits

153,069

(2,764)

0

150,304

Other Operating

196,349

(4,131)

0

192,218

Depr. and Amort.

25,211

0

0

25,211

Impairment Loss

0

0

0

0

Total Operating exp.

$374,629

($6,895)

$0

$367,734

Interest Expense, Net

7,587

0

0

7,587

Other Income

30,860

(29,357)

0

1,502

Pre-tax Income

$52,638

($22,462)

$10,557

$40,732

Provision for Income Taxes

(34,899)

14,040

(4,223)

(25,082)

Equity in Earnings of Affiliates, Net of Tax

6,334

0

(6,334)

0

Income from Continuing Operations

$24,073

($8,422)

$0

$15,651

Pre-tax margin

13%

10%

  + Adj. Interest Exp.

7,587

  + Adj. Depr. and Amort.

25,211

  = Adj. EBITDA

$73,530

  Adj. EBITDA Margin

18%

*Includes severance of $2,764, fees paid to amend existing credit facility of $782, expenses associated with non-capitalized investments of $2,974, net legal expenses of $375, gain on sale of securities of $24,896, unrealized gain on foreign currency hedge of RP Data Limited purchase price of $1,302 and loss on sale of subsidiary of $488.

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

(Unaudited)

($ thousands)

2Q10

as Reported

2Q10 Historical Corporate Exp. and Other Adjustments*

2Q10 Reclass. of Equity in Earnings of Affiliates

2Q10

as Adjusted

Revenue

$410,976

($3,315)

$14,201

$421,862

Salaries and Benefits

141,125

(3,098)

0

138,027

Other Operating

215,429

(26,100)

0

189,329

Depr. and Amort.

27,632

(2,228)

0

25,404

Impairment Loss

0

0

0

0

Total Operating exp.

$384,186

($31,426)

$0

$352,761

Interest Expense, Net

9,275

(5,188)

0

4,087

Other Income

(5,520)

6,246

0

726

Pre-tax Income

$11,995

$39,544

$14,201

$65,740

Provision for Income Taxes

(11,047)

0

(5,639)

(16,685)

Equity in Earnings of Affiliates, Net of Tax

8,562

0

(8,562)

0

Income from Continuing Operations

$9,510

$39,544

$0

$49,055

Pre-tax margin

3%

16%

  + Adj. Interest Exp.

4,087

  + Adj. Depr. and Amort.

25,404

  = Adj. EBITDA

$95,232

  Adj. EBITDA Margin

23%

*Includes net Legacy FAC expenses of $37,115, severance of $1,029 and losses on closure of a national joint venture of $1,400.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$200,016

$0

$3,333

$203,348

Salaries and Benefits

58,455

(734)

0

57,721

Other Operating

106,212

(889)

0

105,323

Depr. and Amort.

17,090

0

0

17,090

Total Operating Exp.

$181,757

($1,623)

$0

$180,134

Interest Expense, Net

44

0

0

44

Other Income

82

(83)

0

(1)

Pre-tax Income

$18,297

$1,540

$3,333

$23,169

Pre-tax Margin

9%

11%

  + Adj. interest exp.

44

  + Adj. depr. and amort.

17,090

  = Adj. EBITDA

$40,303

  Adj. EBITDA Margin

20%

*Includes restructuring-related severance and retention expenses of $734, net legal settlements of $889 and gain on  sale of investment of $83.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$203,227

$0

$2,439

$205,665

Salaries and Benefits

54,297

(140)

0

54,158

Other Operating

100,816

(375)

0

100,441

Depr. and Amort.

15,299

0

0

15,299

Total Operating Exp.

$170,413

($515)

$0

$169,898

Interest Expense, Net

(618)

0

0

(618)

Other Income

24,814

(24,896)

0

(82)

Pre-tax Income

$58,247

($24,382)

$2,439

$36,303

Pre-tax Margin

29%

18%

  + Adj. interest exp.

(618)

  + Adj. depr. and amort.

15,299

  = Adj. EBITDA

$50,984

  Adj. EBITDA Margin

25%

*Includes severance of $140, net legal expenses of $375 and gain on sale of marketable securities of $24,896.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other Adjustments*

2Q10 Reclass. of Equity in Earnings of Affiliates

2Q10

as Adjusted

Revenue

$188,063

$0

$197

$188,259

Salaries and Benefits

54,661

(134)

0

54,527

Other Operating

85,087

0

0

85,087

Depr. and Amort.

14,814

0

0

14,814

Total Operating Exp.

$154,562

($134)

$0

$154,428

Interest Expense, Net

456

0

0

456

Other Income

0

0

0

0

Pre-tax Income

$33,045

$134

$197

$33,376

Pre-tax Margin

18%

18%

  + Adj. interest exp.

456

  + Adj. depr. and amort.

14,814

  = Adj. EBITDA

$48,646

  Adj. EBITDA Margin

26%

*Includes severance of $134.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$199,791

$0

$8,706

$208,497

Salaries and Benefits

51,886

(1,672)

0

50,214

Other Operating

122,209

(230)

0

121,979

Depr. and Amort.

6,603

0

0

6,603

Total Operating Exp.

$180,698

($1,902)

$0

$178,796

Interest Expense, Net

(748)

0

0

(748)

Other Income

8

0

0

8

Pre-tax Income

$19,849

$1,902

$8,706

$30,456

Pre-tax Margin

10%

15%

  + Adj. interest exp.

(748)

  + Adj. depr. and amort.

6,604

  = Adj. EBITDA

$36,312

  Adj. EBITDA Margin

17%

*Includes restructuring-related severance and retention expenses of $1,672 and costs related to non-capitalized investments of $230.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$206,322

$0

$8,051

$214,372

Salaries and Benefits

51,440

(977)

0

50,463

Other Operating

124,908

0

0

124,908

Depr. and Amort.

5,065

0

0

5,065

Total Operating Exp.

$181,412

($977)

$0

$180,435

Interest Expense, Net

(862)

0

0

(862)

Other Income

(480)

488

0

0

Pre-tax Income

$25,292

$1,465

$8,051

$34,807

Pre-tax Margin

12%

16%

  + Adj. interest exp.

(862)

  + Adj. depr. and amort.

5,065

  = Adj. EBITDA

$39,010

  Adj. EBITDA Margin

18%

*Reflects severance of $977 and loss on sale of a subsidiary of $488.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other 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

23

0

0

23

Other Income

(1,215)

1,400

0

185

Pre-tax Income

$37,517

$1,429

$14,305

$53,252

Pre-tax Margin

16%

22%

  + Adj. interest exp.

23

  + Adj. depr. and amort.

5,303

  = Adj. EBITDA

$58,576

  Adj. EBITDA Margin

24%

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

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE AND ELIMINATIONS

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

($3,405)

$0

$52

($3,353)

Salaries and Benefits

42,972

(1,361)

0

41,611

Other Operating

(18,405)

(11,012)

0

(29,417)

Depr. and Amort.

4,770

0

0

4,770

Total Operating Exp.

$29,337

($12,373)

$0

$16,963

Interest Expense, Net

22,548

(10,195)

0

12,353

Other Income

59,951

(59,878)

0

73

Pre-tax Income

$4,661

($37,310)

$52

($32,596)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.

                  12,353

  + Adj. depr. and amort.

                   4,770

  = Adj. EBITDA

($15,473)

  Adj. EBITDA Margin

N/M

*Includes restructuring-related severance and retention expenses of $1,349, professional fees associated with acquisitions of $3,766, costs related to non-capitalized investments of $7,258, write-off of deferred financing fees of $10,195 and step-up gain on initial investment in RP Data Limited and other net investment gains of $59,878.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

($5,555)

$0

$68

($5,487)

Salaries and Benefits

47,332

(1,648)

0

45,684

Other Operating

(29,375)

(3,757)

0

(33,131)

Depr. and Amort.

4,847

0

0

4,847

Total Operating Exp.

$22,805

($5,404)

$0

$17,400

Interest Expense, Net

9,067

0

0

9,067

Other Income

6,526

(4,950)

0

1,576

Pre-tax Income

($30,901)

$454

$68

($30,379)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.

9,067

  + Adj. depr. and amort.

4,847

  = Adj. EBITDA

($16,464)

  Adj. EBITDA Margin

N/M

*Includes severance of $1,648, costs related to non-capitalized investments of $3,757,  unrealized gain on foreign currency hedge of RP Data Limited purchase price of $1,302, and other realized gains of $3,648.

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CORPORATE AND ELIMINATIONS

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other Adjustments*

2Q10 Reclass. of Equity in Earnings of Affiliates

2Q10

as Adjusted

Revenue

($5,151)

($3,315)

($301)

($8,766)

Salaries and Benefits

33,817

(2,934)

0

30,883

Other Operating

(1,017)

(26,100)

0

(27,117)

Depr. and Amort.

7,515

(2,228)

0

5,287

Total Operating Exp.

$40,315

($31,262)

$0

$9,053

Interest Expense, Net

8,797

(5,188)

0

3,609

Other Income

(4,304)

4,846

0

541

Pre-tax Income

($58,567)

$37,981

($301)

($20,887)

Pre-tax Margin

N/M

N/M

  + Adj. interest exp.

3,609

  + Adj. depr. and amort.

5,287

  = Adj. EBITDA

($11,990)

  Adj. EBITDA Margin

N/M

*Includes net Legacy FAC expenses of $37,115 and severance of $865.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$117,561

$0

$1,970

$119,531

Salaries and Benefits

40,137

(224)

0

39,914

Other Operating

40,334

(153)

0

40,182

Depr. and Amort.

13,020

0

0

13,020

Total Operating Exp.

$93,491

($376)

$0

$93,115

Interest Expense, Net

129

0

0

129

Other Income

82

(83)

0

(1)

Pre-tax Income

$24,023

$294

$1,970

$26,287

Pre-tax Margin

20%

22%

  + Adj. interest exp.

129

  + Adj. depr. and amort.

13,020

  = Adj. EBITDA

$39,435

  Adj. EBITDA Margin

33%

*Includes restructuring-related severance and retention expenses of $224, net litigation settlements of $153 and gain on sale of investment of $83.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$104,949

$0

$1,276

$106,225

Salaries and Benefits

35,717

(1)

0

35,716

Other Operating

37,944

50

0

37,994

Depr. and Amort.

10,603

0

0

10,603

Total Operating Exp.

$84,265

$49

$0

$84,313

Interest Expense, Net

(535)

0

0

(535)

Other Income

(82)

0

0

(82)

Pre-tax Income

$21,137

($49)

$1,276

$22,364

Pre-tax Margin

20%

21%

  + Adj. interest exp.

(535)

  + Adj. depr. and amort.

10,603

  = Adj. EBITDA

$32,433

  Adj. EBITDA Margin

31%

*Includes severance of $1 and net release of legal expenses of $50.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other 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

0

0

0

0

Pre-tax Income

$21,300

$7

$869

$22,175

Pre-tax Margin

21%

22%

  + Adj. interest exp.

382

  + Adj. depr. and amort.

10,253

  = Adj. EBITDA

$32,811

  Adj. EBITDA Margin

32%

*Includes severance of $7.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$82,455

$0

$1,363

$83,818

Salaries and Benefits

18,318

(511)

0

17,808

Other Operating

65,878

(736)

0

65,142

Depr. and Amort.

4,070

0

0

4,070

Total Operating Exp.

$88,266

($1,247)

$0

$87,020

Interest Expense, Net

(84)

0

0

(84)

Other Income

0

0

0

0

Pre-tax Income

($5,727)

$1,247

$1,363

($3,118)

Pre-tax Margin

-7%

-4%

  + Adj. interest exp.

(84)

  + Adj. depr. and amort.

4,070

  = Adj. EBITDA

$868

  Adj. EBITDA Margin

1%

*Includes restructuring-related severance and retention expenses of $511 and litigation settlement of $736.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$98,278

$0

$1,163

$99,441

Salaries and Benefits

18,580

(138)

0

18,442

Other Operating

62,872

(425)

0

62,447

Depr. and Amort.

4,696

0

0

4,696

Total Operating Exp.

$86,148

($563)

$0

$85,585

Interest Expense, Net

(84)

0

0

(84)

Other Income

24,896

(24,896)

0

(0)

Pre-tax Income

$37,110

($24,333)

$1,163

$13,939

Pre-tax Margin

38%

14%

  + Adj. interest exp.

(84)

  + Adj. depr. and amort.

4,696

  = Adj. EBITDA

$18,552

  Adj. EBITDA Margin

19%

*Includes severance of $138, and legal expenses of $425 and gain on sale of securities of $24,896.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other Adjustments*

2Q10 Reclass. of Equity in Earnings of Affiliates

2Q10

as Adjusted

Revenue

$86,770

$0

($672)

$86,098

Salaries and Benefits

19,445

(128)

0

19,318

Other Operating

50,946

0

0

50,946

Depr. and Amort.

4,561

0

0

4,561

Total Operating Exp.

$74,952

($128)

$0

$74,824

Interest Expense, Net

74

0

0

74

Other Income

0

0

0

0

Pre-tax Income

$11,744

$128

($672)

$11,200

Pre-tax Margin

14%

13%

  + Adj. interest exp.

74

  + Adj. depr. and amort.

4,561

  = Adj. EBITDA

$15,835

  Adj. EBITDA Margin

18%

*Includes severance of $128.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$95,648

$0

$8,784

$104,432

Salaries and Benefits

31,931

(1,266)

0

30,665

Other Operating

52,999

(230)

0

52,768

Depr. and Amort.

3,476

0

0

3,476

Total Operating Exp.

$88,405

($1,496)

$0

$86,910

Interest Expense, Net

(696)

0

0

(696)

Other Income

8

0

0

8

Pre-tax Income

$7,947

$1,496

$8,784

$18,227

Pre-tax Margin

8%

17%

  + Adj. interest exp.

(696)

  + Adj. depr. and amort.

3,476

  = Adj. EBITDA

$21,006

  Adj. EBITDA Margin

20%

*Includes restructuring-related severance and retention expenses of $1,266 and costs related to non-capitalized investments of $230.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$103,671

$0

$8,068

$111,740

Salaries and Benefits

34,283

(231)

0

34,052

Other Operating

55,902

0

0

55,902

Depr. and Amort.

3,444

0

0

3,444

Total Operating Exp.

$93,629

($231)

$0

$93,398

Interest Expense, Net

(913)

0

0

(913)

Other Income

10

0

0

10

Pre-tax Income

$10,966

$231

$8,068

$19,265

Pre-tax Margin

11%

17%

  + Adj. interest exp.

(913)

  + Adj. depr. and amort.

3,444

  = Adj. EBITDA

$21,796

  Adj. EBITDA Margin

20%

*Includes severance of $231.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other 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

(1,215)

1,400

0

185

Pre-tax Income

$13,145

$1,411

$13,971

$28,527

Pre-tax Margin

11%

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 a national joint venture of $1,400.

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

(Unaudited)

($ thousands)

2Q11

as Reported

2Q11 Adjustments*

2Q11 Reclass. of Equity in Earnings of Affiliates

2Q11

as Adjusted

Revenue

$104,143

$0

($78)

$104,065

Salaries and Benefits

19,955

(406)

0

19,549

Other Operating

69,211

0

0

69,211

Depr. and Amort.

3,128

0

0

3,128

Total Operating Exp.

$92,293

($406)

$0

$91,887

Interest Expense, Net

(51)

0

0

(51)

Other Income

0

0

0

0

Pre-tax Income

$11,901

$406

($78)

$12,229

Pre-tax Margin

11%

12%

  + Adj. interest exp.

(51)

  + Adj. depr. and amort.

3,128

  = Adj. EBITDA

$15,306

  Adj. EBITDA Margin

15%

*Includes severance of $406.

(Unaudited)

($ thousands)

1Q11

as Reported

1Q11 Adjustments*

1Q11 Reclass. of Equity in Earnings of Affiliates

1Q11

as Adjusted

Revenue

$102,650

$0

($18)

$102,633

Salaries and Benefits

17,157

(746)

0

16,411

Other Operating

69,005

0

0

69,005

Depr. and Amort.

1,621

0

0

1,621

Total Operating Exp.

$87,783

($746)

$0

$87,037

Interest Expense, Net

51

0

0

51

Other Income

(491)

488

0

(2)

Pre-tax Income

$14,326

$1,234

($18)

$15,543

Pre-tax Margin

14%

15%

  + Adj. interest exp.

51

  + Adj. depr. and amort.

1,621

  = Adj. EBITDA

$17,214

  Adj. EBITDA Margin

17%

*Includes severance of $746 and loss on sale of a subsidiary of $488.

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

(Unaudited)

($ thousands)

2Q10 as Reported

2Q10 Historical Corp. Expense and Other 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

0

0

0

0

Pre-tax Income

$24,372

$18

$334

$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.

SOURCE CoreLogic



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