UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-K
x      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
o      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 001-13585
__________________
CoreLogic, Inc.
(Exact name of registrant as specified in its charter)
Delaware
95-1068610
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
40 Pacifica, Irvine, California, 92618-7471
(Address of principal executive offices) (Zip Code)
(949) 214-1000
Registrant’s telephone number, including area code
__________________
Securities registered pursuant to Section 12(b) of the Act:
Common
New York Stock Exchange
(Title of each class)
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer x
Accelerated filer o
 
Non-accelerated filer o  (Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2014, the last business day of the registrant's most recently-completed second fiscal quarter was $2,745,030,000.
On February 20, 2015 , there were 89,790,478 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement with respect to the 2015 annual meeting of the stockholders are incorporated by reference in Part III of this report. The definitive proxy statement or an amendment to this Form 10-K will be filed no later than 120 days after the close of the registrant’s fiscal year.
 




CoreLogic Inc.
Table of Contents


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PART I

Item 1. Business

The Company

Our vision is to deliver unique property-level insights that power the global real estate economy, differentiated by superior data, analytics and data-enabled solutions. Our mission is to empower our clients to make smarter decisions through data-driven insights.

We are a leading global property information, analytics and data-enabled services provider operating in North America, Western Europe and Asia Pacific. Our combined data from public, contributory and proprietary sources provides detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets we serve include real estate and mortgage finance, insurance, capital markets and the public sector. We deliver value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on us to help identify and manage growth opportunities, improve performance and mitigate risk. We are also a party to several joint ventures under which we share control of the management of the operations with the other partner.

We offer our clients among the most comprehensive national databases of public, contributory and proprietary data covering real property and mortgage information, judgments and liens, building and replacement costs, parcel and geospatial data, criminal background records, eviction information, non-prime lending records, credit information, and tax information, among other data types. Our databases include over 880 million historical property transactions, over 93 million mortgage applications and property-specific data covering approximately 99% of U.S. residential properties exceeding 148 million records. We believe the quality of the data we offer is distinguished by our broad range of data sources and our expertise in aggregating, organizing, normalizing, processing and delivering data to our clients.

With our data as a foundation, we have built strong analytics capabilities and a variety of value-added business services to meet our clients’ needs for mortgage and automotive credit reporting, property tax, property valuation, tenancy, hazard risk, property risk and replacement cost, flood plain location determination and other geospatial data and related services.

We were originally incorporated in California in 1894, and were reincorporated in Delaware on June 1, 2010. Before June 1, 2010, we operated as The First American Corporation (“First American” or “FAC”) but, in connection with a transaction in which we spun off our financial services businesses (referred to as the "Separation"), we changed our name to CoreLogic, Inc. and began trading on the New York Stock Exchange under the symbol “CLGX.” As used herein, the terms "CoreLogic," the "Company," "we," "our" and "us" refer to CoreLogic, Inc. and our consolidated subsidiaries, except where it is clear that the terms mean only CoreLogic, Inc. and not our subsidiaries. Our executive offices are located at 40 Pacifica, Irvine, California, 92618-7471, our telephone number is (949) 214-1000, and our website is www.corelogic.com .
    
Corporate Events

Acquisitions

In January 2014, we completed our acquisition of Terralink International Limited ("Terralink") for NZD $14.5 million , or $11.9 million , which is included as a component of our Data & Analytics ("D&A") reporting segment.

In March 2014, we completed the acquisition of all of the issued and outstanding equity interests of Marshall & Swift/Boeckh ("MSB") and DataQuick Information Systems ("DataQuick"). In addition, we acquired the credit, flood and automated valuation model assets of DataQuick Lending Solutions, and certain intellectual property assets of Decision Insight Information Group S.a.r.l., collectively referred to as "MSB/DataQuick." The total consideration paid in connection with the transaction referenced above was approximately $652.5 million in cash, which was funded through borrowings. The operations of MSB's and DataQuick's data licensing and analytics units are reported within our D&A segment and DataQuick's flood zone determination and credit servicing operations are reported within our Technology and Processing Solutions (“TPS”) segment.

In November 2014, we completed the acquisition of the assets of Bank of America's mortgage-related credit reporting operation for $19.6 million , which is included as a component of the TPS segment.


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Divestiture of Non-Core Businesses

As of December 31, 2013, we concluded that we would actively pursue the sale of our Asset Management and Processing Solutions ("AMPS") reporting segment, which was comprised of collateral solutions, field services, technology solutions, solutions express and outsourcing services. As a result, beginning in the fourth quarter of 2013, these businesses were reflected in our consolidated financial statements as discontinued operations.

On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment, for total consideration of $29.1 million , subject to working capital adjustments, as well as additional contingent consideration of up to $20.0 million . Further, during the third quarter of 2014, we determined to cease pursuing the sale of the remaining product lines that were previously included in our AMPS reporting segment and reflected as discontinued operations. These remaining product lines, which included our technology solutions, solutions express and outsourcing services businesses, have been reclassified to continuing operations and are included in our TPS segment reporting disclosures for all periods presented.

Our Data

Our data is the foundation of many of our products, analytics and services. Our data can generally be categorized as real property information, mortgage information and consumer information. We obtain our data from a variety of sources, including data gathered from public sources, data contributed by our clients and data obtained from data aggregators.

We gather a variety of data from public sources, including data and documents from federal, state and local governments. We enhance our public record information with the data we collect from other public and non-public sources to create comprehensive textual and geospatial views of each property within our coverage areas, including physical property characteristics, boundaries and tax values, current and historical ownership, voluntary and involuntary liens, tax assessments and delinquencies, replacement cost, property risk including environmental, flood and hazard information, criminal data, building permits, local trends, summary statistics and household demographics.

For data contributed by our clients, we generally enter into agreements with our clients that govern our use of the data they contribute. These contractual arrangements often permit our clients to use our solutions which incorporate their data. We structure our agreements with our clients to specify the particular uses of the data they contribute and to provide the levels of data privacy and protection required by the contributing party. Our contributed data includes loan performance information (from loan servicers, trustees, securitizers, issuers and others), mortgage, auto, property rental and under-banked loan applications from various loan originators, landlords and property owners.

In addition, we gather property listing and tenant/landlord rental information from Boards of Realtors®, real estate agents, brokers, landlords, and owners of multi-tenant properties. We collect appraisals and property valuations from appraisers and we license consumer credit history information from credit reporting agencies, lenders and auto dealers.

Business Segments and Solutions

We have organized our business into the following two segments: D&A and TPS. The following table sets forth the key solutions we offer in each of these two segments:

 
Business Segments
 
Solutions
 
 
 
 
 
D&A
 
Property Information, Analytics and Advisory
Insurance and Spatial Solutions
Multifamily Services
 
 
 
 
 
TPS
 
Property Tax Processing (residential and commercial)
Origination and Underwriting Services (credit, verification and flood)
Compliance and Technology Solutions


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We believe that we hold the leading market position for many of our solutions, including:

•
payment processing property tax services, based on the number of loans under service;
•
flood zone determinations, based on the number of flood zone certification reports issued;
•
credit and income verification services to the United States mortgage lending industry, based on the number of credit reports issued;
•
property information based on the number of inquiries received;
•
valuation solution to validate reconstruction estimates for personal and commercial property insurance; and
•
multiple listing services ("MLS"), based on the number of active desktops using our technology.

Financial information regarding each of the Company’s business segments is included in Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 . Financial Statements and Supplementary Data of Part II of this report. Financial information regarding the collateral solutions and field services businesses within our former AMPS reporting segment are reflected as discontinued operations for all historical periods presented herein.

Data & Analytics

Our D&A segment owns or licenses data assets including loan information, criminal and eviction records, employment verification, property sales and characteristic information, property risk and replacement cost, and information on mortgage-backed securities. We both license our data directly to our clients and provide our clients with analytical products and workflow solutions for risk management, MLS, insurance underwriting, collateral assessment, loan quality reviews and fraud assessment. We are also a provider of geospatial proprietary software and databases combining geographic mapping and our data assets. Our primary clients are commercial banks, mortgage lenders and brokers, investment banks, fixed-income investors, real estate agents, MLS companies, property and casualty insurers, title insurance companies and government agencies and sponsored enterprises.

The following provides a more detailed description of our key D&A products and services:

Property Information Analytics and Advisory . We are a leading provider of fraud detection, collateral and mortgage performance analytics and real estate and mortgage-backed securities information. We use our data to link property location and characteristics, real estate transactions and consumer and loan information to provide useful insights and analysis for our clients. Our clients span many industries, including mortgage lending, government, capital markets, property and casualty insurance, direct marketing, utilities and retail. Our products and services include:

Data licensing and query . We obtain, normalize and aggregate real estate property and loan data and make this data available to our clients with a standard format over the web or in bulk data form. Additionally, we offer tools that enable our clients to take proactive steps with respect to their mortgage-backed securities, loan and real property portfolios. Using our data and proprietary technology, we offer a number of value-added services that help our clients assess risk, determine property values and track market performance. We also provide advisory services that allow holders of mortgage-backed securities, loan and real property portfolios to gain insight on the value, quality and attributes of those assets.

Valuation and fraud analytics . We offer our clients a host of property valuation services in an effort to assist them in assessing their risk of loss with alternative forms of property valuations, depending upon their needs and regulatory requirements. These include automated valuation models ("AVMs"), collateral risk scores, appraisal review services and valuation reconciliation services. We also provide solutions designed to assist our clients in detecting and preventing mortgage fraud and managing risk through a combination of patented predictive analytics and proprietary and contributed data. We also provide verification of applicant income and identity against Internal Revenue Service and Social Security Administration databases as well as provide certain employment verification services.

Realtor Solutions . We are the leading provider of real estate listing software systems, with more than 50% of all U.S. and Canadian real estate agents having access to our products and services. Our flagship software platform is customizable to meet our clients’ needs while maintaining a single code base. We integrate client data with our robust property information, resulting in a comprehensive historical record on almost all residential properties in the U.S.


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Insurance and Spatial Solutions . We are a leading provider of property valuation and risk management solutions to the insurance, governmental and financial service markets. Our solutions are based on proprietary data, algorithms and platforms that aggregate customer property data to provide estimate replacement and repair cost, advanced analytics to quantify property hazard risks and replacement cost, natural hazard risk management and information solutions with premium locational accuracy and spatial datasets. We enable our customers to gain a comprehensive view of each property risk in their portfolio, which enables better risk selection, underwriting performance and pricing sophistication. We provide claims management solutions with advanced routing to automate the workflow in the claims estimation process. In addition to the industry's first parcel-based geocoder and a proprietary parcel database covering more than 130 million parcels across the U.S., we maintain critical, accurate and up-to-date information across multiple hazard databases including information on damaging winds and sinkholes, flood data and the location of fire stations. We also offer specialized data and analytical models including Wildfire Risk Score, Coastal Risk Score, Flood Risk Score, and Earthquake and Fire Protection Class. Our analytics and hazard data are delivered to clients through multiple methods, including the RiskMeter Online TM platform, a leading software-as-a-service platform targeted to insurance industry participants.

Multifamily Services . We are a leading provider of screening and risk management services for the multifamily housing industry. We conduct applicant screening and generate consumer reports containing information that may include landlord-tenant court records, lease and payment performance history, credit history and criminal records history primarily for residential property managers and owners throughout the U.S. We believe that we have the largest landlord-tenant court record database in the U.S. and we access criminal records databases to create client-configured, criminal background decision analytics. We provide statistically-validated applicant scoring models, developed exclusively for the multifamily housing industry, which assess the risk of payment default by a prospective renter.

Technology and Processing Solutions

We provide property tax monitoring, flood zone certification and monitoring, credit services, mortgage loan administration and production services, lending solutions, mortgage-related business process outsourcing, technology solutions and compliance-related services. The segment’s primary clients are large, national mortgage lenders and servicers, but we also serve regional mortgage lenders and brokers, credit unions, commercial banks, government agencies and casualty insurance companies. In addition, we are party to several joint ventures that provide settlement services in connection with residential mortgage loans.

Property Tax Processing . We believe that we are currently the largest provider of property tax services in the U.S. We procure and aggregate property tax information from over 20,000 taxing authorities. We use this information to advise mortgage originators and servicers of the property tax payment status on their loans and to monitor that status for the life of the loans. If a mortgage lender requires tax payments to be impounded on behalf of its borrowers, we can also monitor and oversee the transfer of these funds to the taxing authorities and provide the lender with payment confirmation.

Origination and Underwriting Services . We are a leading provider of credit and income verification services and flood zone determinations. Our clients include mortgage lenders, originators or servicers, auto lenders and under-banked consumer and specialty borrowers. Our products and services include:

Credit and Income Verification Services . We believe that we are a leading provider of credit services in the U.S. mortgage and transportation markets, providing comprehensive solutions that help our clients meet their lending, leasing and other consumer credit automation needs. We are also a leading reseller of credit information and provide merged credit reports with information from each of the three nationwide credit bureaus.

Flood Data Services . We believe that we are currently the largest provider of flood zone determinations within the U.S. Federal legislation passed in 1994 requires that most mortgage lenders obtain a determination of the current flood zone status at the time each loan is originated and obtain applicable updates during the life of the loan. We primarily provide flood zone determinations to mortgage lenders. We typically furnish a mortgage originator or servicer with a report as to whether a property lies within a governmentally delineated flood hazard area and then monitor the property for flood hazard status changes for as long as the loan is active.

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Under-Banked Credit Services . We are a leading provider of credit reports for under-banked consumer and specialty borrowers. Our clients range in size from sole proprietorships to major credit card issuers.

Compliance and Technology Solutions . We are a leading provider of electronic-based lending solutions. Our products and services include:

Compliance and Management Services . We provide a suite of compliance solutions including post-closing services and document retrieval services. In addition we provide custom fulfillment, advisory and other services that allow our clients to benefit from our specialists and their knowledge of our data to provide project-based or client-customized reports.

Mortgage Technology Solutions . We provide cloud computing-based lending solutions to the financial services market through a comprehensive suite of enterprise lending automation services. Our solutions automate lending activities, consolidate functions and connect lenders with their partners and consumers in a collaborative, real-time environment in order to help lenders price, originate, fulfill and service consumer loans.

Corporate

In addition to our two reporting segments, we also have a corporate group, which includes costs and expenses not allocated to our segments.

The following table sets forth our operating revenue for the last three years from our segments:

(in thousands)
2014
 
% of Total Operating Revenue
 
2013
 
% of Total Operating Revenue
 
2012
 
% of Total Operating Revenue
D&A
$
647,264

 
46.1
 %
 
$
572,169

 
40.7
 %
 
$
544,753

 
40.9
 %
TPS
767,567

 
54.6

 
843,887

 
60.1

 
800,890

 
60.1

Corporate
30

 
—

 
631

 
—

 
640

 
—

Eliminations
(9,821
)
 
(0.7
)
 
(12,286
)
 
(0.9
)
 
(12,804
)
 
(1.0
)
Operating revenue
$
1,405,040

 
100.0
 %
 
$
1,404,401

 
100.0
 %
 
$
1,333,479

 
100.0
 %

Clients

We focus our marketing efforts on the largest U.S. mortgage originators and servicers. We also provide our services to financial institutions, investment banks, fixed-income investors, title insurance companies, commercial banks, government agencies and government-sponsored enterprises, property and casualty insurers, credit unions, real estate agents and other real estate professionals.

Our more significant client relationships tend to be long-term in nature and we typically provide a number of different services to each client. Because of the depth of these relationships, we derive a significant portion of our aggregate revenue from our largest clients with 29.8% of our 2014 operating revenues being generated by our ten largest clients.

Competition

We offer a diverse array of specialized products and services that compete directly and indirectly with similar products and services offered by national and local providers. We believe there is no single competitor who offers the same combination of products and services that we do. Therefore, we find that we compete with a broad range of entities.

Our D&A segment competes with entities that provide access to data or data-based analytical products and services as part of their product offerings, including Black Knight Financial Services, a business of Fidelity National Financial, Inc., RealPage, Inc., Risk Management Solutions, Verisk Analytics, Inc. and Yardi Systems, Inc.

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We compete based on the breadth and quality of our data sets, the exclusive nature of some of our key data sets, the quality and effectiveness of our products and the integration of our platforms into client systems. We believe the data we offer is distinguished by quality, the broad range of our data sources, including non-public sources, the volume of records we maintain and our ability to provide data spanning a historical period of time that, we believe with respect to certain data sets, exceeds comparable data sets of most of our competitors.

Our TPS segment competes with third-party providers such as Black Knight Financial Services, which provides multiple product lines, Nationwide Title Clearing, a provider of document retrieval and post-closing services, specialty providers of tax and flood services such as Lereta LLC, as well as credit report providers such as Equifax, Inc. and Kroll Factual Data. With these services, we compete largely based on the quality of the products and services we provide, our ability to provide scalable services at competitive prices and our ability to provide integrated platforms. We also compete with departments within financial institutions that utilize internal resources to provide similar services on a captive basis. We generally compete with captive providers based on the quality of our products and services, the scalability of our services, cost efficiencies and our ability to provide some level of risk mitigation.

Sales and Marketing

Our sales strategy is primarily client-focused and resources are assigned based on client size. For our largest clients, we assign a dedicated sales executive whose sole responsibility is to manage the overall client relationship. For our remaining large and mid-sized clients, a sales executive is assigned to multiple clients, the number of which is dependent on the size of that sales executive’s portfolio. Each of our sales executives develops and maintains key relationships within each client’s business units and plays an important role in relationship management as well as prospecting for new business. Our sales executives understand the current marketplace environment and demonstrate extensive knowledge of our clients’ internal operating structure and business needs. The depth and breadth of this relationship between us and our clients allows us to develop and implement solutions that are tailored to the specific needs of each client in a prompt and efficient manner.

Smaller clients, measured by revenue or geographic coverage, are primarily managed through our telesales operations, which is responsible for working with mortgage and real estate brokers, appraisers, real estate agents, correspondents and other lenders.

Several of our business units have sales teams and subject matter experts that specialize in specific products and services. These sales teams and subject matter experts work collaboratively with our sales executives and our telesales operations to assist with client sales by combining our data, products and data-enabled services to meet the specific needs of each client. They may be assigned to assist with sales in targeted markets, for certain categories of clients or for particular service groups.

Our marketing strategy is to build trusted relationships with our clients by delivering value through superior data, analytics and data-enabled solutions. We use the most efficient methods available to successfully identify, target, educate and engage potential and existing clients to build awareness, familiarity and interest in our business solutions, demand for our products and services, and accelerate the velocity and expand the number of sales opportunities. Our marketing activities include direct marketing, advertising, public relations, events marketing, social media and other targeted activities.

  Acquisitions and Divestitures

Historically, we have accelerated our growth into new markets, products and services through acquisitions. We continually evaluate our business mix and opportunistically seek to optimize our business portfolio through acquisitions and divestitures. Further, we are party to several joint ventures under which we share control of the management of the operations with the other partner. Some joint ventures provide products used in connection with loan originations, including title insurance, appraisal services and other settlement services. Our joint ventures are reflected as investments in affiliates on our consolidated balance sheets and our share of the income is reflected as equity in earnings of affiliates in our consolidated statement of operations.

Intellectual Property

We own significant intellectual property rights, including patents, copyrights, trademarks and trade secrets. We consider our intellectual property to be proprietary and we rely on a combination of statutory (e.g., copyright, trademark, trade secret and patent) and contractual safeguards in an intellectual property enforcement program to protect our intellectual property rights.

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We have 46 issued patents in the U.S. covering business methods, software and systems patents, principally relating to automated valuation, fraud detection, data gathering, flood detection, MLS technology and property monitoring. We also have approximately 89 patent applications pending in these and other areas in the U.S. In addition, we have a number of issued patents and pending patent applications internationally, including in Canada and Australia. We believe the protection of our proprietary technology is important to our success and we intend to continue to seek to protect those intellectual property assets for which we have expended substantial research and development capital and which are material to our business.

In addition, we own more than 422 trademarks in the U.S. and foreign countries, including the names of our products and services and our logos and tag lines, many of which are registered. We believe many of our trademarks, trade names, service marks and logos are material to our business as they assist our clients in identifying our products and services and the quality that stands behind them.

We own more than 1,185 registered copyrights in the U.S., covering computer programs, reports and manuals. We also have other literary works, including marketing materials, handbooks, presentations and website contents that are protected under common law copyright. We believe our written materials are essential to our business as they provide our clients with insight into various areas of the financial and real estate markets in which we operate.

Our research and development activities focus primarily on the design and development of our analytical tools, software applications, and data sets (for example, new sources, data derived by linking across existing sources or metadata). We expect to continue our practice of investing to develop new software applications and systems in response to the market and client needs we identify through client input collected in meetings, phone calls and web surveys. We also assess opportunities to cross-link existing data sets to enhance our products' effectiveness.

In order to maintain control of our intellectual property, we enter into license agreements with our clients, granting rights to use our products and services, including our software and databases. We also audit our clients from time to time to ensure compliance with our agreements. This helps to maintain the integrity of our proprietary intellectual property and to protect the embedded information and technology contained in our solutions. As a general practice, employees, contractors and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our proprietary rights, information and technology.

Information Technology

Technology Transformation Initiative ("TTI") . In July 2012, we embarked on a technology transformation initiative designed to provide us with new functionality, increased performance and reduced application management and development costs. The TTI encompasses two phases. The first phase is designed to transform our existing technology infrastructure to run in a private, dedicated cloud computing environment hosted in Dell's technology center located in Quincy, WA. We have successfully transitioned all of the data and systems that previously operated in our own Westlake, TX data center and we expect to complete the migration of the remaining data center, based in Santa Ana, CA, by mid 2015.

The second phase of the TTI, launched in 2014, involves the creation of a next generation technology platform designed to augment and eventually replace portions of our legacy systems. We laid the foundations with the selection of Pivotal Labs' ("Pivotal") Platform as a Service ("PaaS") operating system, which will operate in our new private, dedicated cloud computing environment hosted by Dell. Additionally in 2014, we successfully completed the development of two pilot products, which are already being on-boarded by clients, using PaaS. In December 2014, we announced the formation of CoreLogic Innovation Labs in collaboration with Pivotal to develop next generation technology platforms, applications, analytical models and solutions. CoreLogic Innovation Labs will be co-located with Pivotal in Santa Monica, CA. As a result, we are well positioned to take full advantage of this next generation platform and development capability in 2015, leveraging social media, mobility, voice and other capabilities via a delivery portal driven by a common data warehouse. 

Technology . Our new private, dedicated cloud computing environment hosted by Dell will enable us to deliver secure and compliant data, analytics and services to support client needs. A secure and certified network of systems, combined with enterprise-level service operations, positions us as the leading property insights provider to the financial services market. Additionally, our platform stores, processes and delivers our data and our proprietary technologies that are the foundation of our business and the development of our solutions. We operate a computing technology environment intended to allow us to operate flexible systems at all times and enables us to deliver increased capacity as needed or when client needs demand increased speed of delivery. Additionally, our unified network architecture allows us to operate multiple systems as a single resource capable of delivering our applications, data and analytics as a solution to our clients.


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Data Centers . We currently utilize two data centers - one in Santa Ana, CA and one in Quincy, WA. As of July 2013, we transitioned full operational management of these data centers to Dell as the first step in our TTI and are in the process of completing the transition of the Santa Ana, CA data center data and systems to Dell's Quincy, WA facility. The data centers we use are designed to provide high levels of connectivity and performance to support the day-to-day workflows of the leading mortgage origination and servicing companies as well as clients in financial services, real estate, transportation, government, insurance and other industries we serve.

Security . We have deployed a wide range of physical and technology security measures, along with a formal governance program, designed to secure our information technology infrastructure, personnel and data. Our governance program is based on extensive corporate information security policies, an information security awareness training program along with an enterprise compliance program. Both our technology managers and Dell’s technology infrastructure managers are Information Technology Infrastructure Library certified. Dell is contractually obligated to comply with our information security policies and procedures. Our digital security framework provides layered protection designed to secure both active and inactive virtual machines in the data centers we use. This approach enables dedicated virtual machines to regularly scan all of our systems. These measures help to detect and prevent intrusions, monitor firewall integrity, inspect logs, catch and quarantine malware and prevent data breaches. Our physical and virtual security solutions run in tandem, enabling us to better identify suspicious activities and implement preventive measures.    

Regulation

Various aspects of our businesses are subject to federal and state regulation. Our failure to comply with any applicable laws and regulations could result in restrictions on our ability to provide certain services, as well as the possible imposition of civil fines and criminal penalties. Among the more significant areas of regulation for our business are the following:

Privacy and Protection of Consumer Data

Because our business involves the collection, processing and distribution of personal public and non-public data, certain of our solutions and services are subject to regulation under federal, state and local laws in the United States and, to a lesser extent, foreign countries. These laws impose requirements regarding the collection, protection, use and distribution of some of the data we have, and provide for sanctions and penalties in the event of violations of these requirements.

The Fair Credit Reporting Act ("FCRA") governs the practices of consumer reporting agencies that are engaged in the business of collecting and analyzing certain types of information about consumers, including credit eligibility information. The FCRA also governs the submission of information to consumer reporting agencies, the access to and use of information provided by consumer reporting agencies and the ability of consumers to access and dispute information held about them. A number of our databases and services are subject to regulation under the FCRA. The Fair and Accurate Credit Transactions Act of 2003 ("FACT Act") amended the FCRA to add a number of additional requirements. These include requirements concerning free annual credit reports, consumers' rights to include fraud alerts on their credit files, the development of procedures to combat identity theft, procedures for the accuracy and integrity of the information reported to consumer reporting agencies, notices in connection with credit pricing decisions based on credit report information and restrictions on the use of information shared among affiliates for marketing purposes. Certain of the FACT Act requirements apply to our businesses.

The Gramm-Leach-Bliley Act ("GLBA") regulates the sharing of non-public personal financial information held by financial institutions and applies indirectly to companies that provide services to financial institutions. In addition to regulating the information sharing, the GLBA requires that non-public personal financial information be safeguarded using physical, administrative and technological means. Certain of the non-public personal information we hold is subject to protection under the GLBA.

The Drivers Privacy Protection Act prohibits the public disclosure, use or resale by any state's department of motor vehicles of personal information about an individual that was obtained by the department in connection with a motor vehicle record, except for a “permissible purpose.”

Other federal and state laws also impose requirements relating to the privacy of information held by us. Certain state laws require consumer reporting agencies to implement “credit file freezes” at an individual's request, which allows those individuals - particularly victims of identity theft - to place and lift a “freeze” on access to the credit file. A number of states also have enacted security breach notification legislation, which requires companies to notify affected consumers in the event of security breaches.


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The privacy and protection of consumer information remains a developing area and we continue to monitor legislative and regulatory developments at the federal, state and local level.

Regulation of Credit Reporting Businesses
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act") gave the Consumer Financial Protection Bureau ("CFPB") supervisory authority over “larger participants” in the market for consumer financial services, as the CFPB defines by rule. In July 2012, the CFPB finalized its regulation regarding larger participants in the consumer reporting market. Under the regulation, certain of our credit businesses are considered larger participants. As a result, the CFPB has the authority to conduct examinations of the covered credit businesses, and we will be examined by the CFPB as part of this authority.
Regulation of Settlement Services

The Real Estate Settlement Procedures Act ("RESPA") is enforced by the CFPB. RESPA generally prohibits the payment or receipt of fees or any other item of value for the referral of real estate-related settlement services. RESPA also prohibits fee shares or splits or unearned fees in connection with the provision of residential real estate settlement services, such as mortgage brokerage and real estate brokerage. Notwithstanding these prohibitions, RESPA permits payments for goods furnished or for services actually performed, so long as those payments bear a reasonable relationship to the market value of the goods or services provided. Our mortgage origination-related businesses that supply credit reports, flood and tax services and AVM reports to residential mortgage lenders and, as applicable, our joint venture relationships, are structured and operated in a manner intended to comply with RESPA and related regulations.

Regulation of Property Valuation Activities

Real estate appraisals and AVMs are subject to federal and/or state regulation. The Dodd-Frank Act and implemented rules and guidance thereunder, and interagency guidance jointly issued by the federal financial institution regulators, have expanded regulation of these activities. Among the ways these activities are regulated are the following:

•
Appraisals, AVMs and other forms of home value estimates are now subject to more explicit and detailed quality control requirements, and creditors will be required to disclose to applicants information about the purpose, and provide consumers with a free copy, of any appraisal, AVM or other estimate of a home's value developed in connection with a residential real estate mortgage loan application; and
•
The increased regulation of AVMs has created opportunities for expanded use of these tools in the residential mortgage lending industry. (We have introduced new products to pursue these opportunities.)

Regulation and Potential Examination by Consumer Financial Protection Bureau and Federal Financial Institution Regulators

The CFPB now serves as the principal federal regulator of providers of consumer financial products and services. As such, the CFPB has significant rulemaking authority under existing federal statutes (including the FCRA, the GLBA, and RESPA), as well as the authority to conduct examinations of certain providers of financial products and services. As discussed above, under the CFPB's authority to supervise larger market participants of the credit reporting market, the CFPB has the authority to conduct examinations of us. The CFPB also has the authority to initiate an investigation of our other businesses if it believes that a federal consumer financial law is being violated. Additionally, in early 2013, the CFPB issued several regulations that, although not directly applicable to us, potentially could present regulatory risk to us in our role as a service provider to providers of financial products and services. These regulations include the CFPB's Ability to Repay and Qualified Mortgage Standards, Mortgage Servicing Rules, Escrow Requirements for Higher-Priced Mortgage Loans, Appraisal Requirements for Higher-Priced Mortgage Loans, Loan Originator Compensation Requirements, Disclosure and Delivery Requirements for Copies of Appraisals and Other Written Valuations, and High-Cost Mortgage and Homeownership Counseling Requirements. The CFPB issued additional regulations in December 2013 that mandate integrated mortgage disclosures under the Truth in Lending Act and RESPA beginning in August 2015. We are in the process of evaluating the impact of these regulations on the services we provide and, where necessary, adjusting our products and services to conform to the new requirements.

The Bank Service Company Act permits the regulators of federal financial institutions to examine vendors, such as us, that provide outsourced services to their regulated entities. Similarly, the CFPB can conduct examinations of service providers to institutions under the supervision of the CFPB if that service provider provides a “material service” to the institution. As a result, most of our businesses could be examined by the CFPB or a federal banking regulator as a service provider to banks and other financial institutions.

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In addition, settlement agreements entered into between the Office of the Comptroller of the Currency ("OCC") and a number of our largest clients related to mortgage servicing practices increase the likelihood that providers of certain outsourced services will be examined by the OCC. This increased level of scrutiny may cause an increase in the cost of compliance for us.

Enhanced regulation in the area of financial as well as personal data privacy is possible and could significantly impact some of our business practices because this is an area where both the FTC and the CFPB have jurisdiction. It is too early to assess the financial and operational impact to our business of this heightened regulation.

In addition to the foregoing areas of regulation, several of our other businesses are subject to regulation, including the following:

•
Our tenant screening business is subject to certain landlord-tenant laws;
•
Our loan document business must monitor state laws applicable to our clients relating to loan documents and fee limitations as well as Fannie Mae and Freddie Mac requirements to develop and maintain compliant loan documents and other instruments; and
•
Our activities in foreign jurisdictions are subject to the requirements of the Foreign Corrupt Practices Act and comparable foreign laws.

We do not believe that compliance with current and future laws and regulations related to our businesses, including consumer protection laws and regulations, will have a material adverse effect on us, but such activities will likely increase our compliance costs.

Other Regulations

The Fair Debt Collection Practices Act and similar state laws apply to loss mitigation activities and lien release statutes affect some document processing we conduct on behalf of servicers. In February 2012, 49 state attorneys general and the federal government announced a joint state-federal settlement with the country's five largest mortgage servicers known as the National Mortgage Settlement. As part of the settlement, the affected mortgage servicers agreed to a set of strict servicing standards that require, among other things, a single point of contact for delinquent consumers, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans. The CFPB has codified the majority of these standards in its Mortgage Servicing Rules issued in final form on January 17, 2013. We must comply with these rules, which became effective on January 10, 2014, when supplying certain services to our servicer clients.

Employees

As of December 31, 2014 , we had approximately 4,820 full-time employees, of which approximately 4,243 were employed in the U.S. and 577 outside the U.S.

Available Information

We are required to file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission ("SEC"). The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), are also available free of charge through the "Investors" page on our Internet site at http://www.corelogic.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC.


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Item  1A.  Risk Factors.

  Risks Related to Our Business

1.
We depend on our ability to access data from external sources to maintain and grow our businesses. If we are unable to access needed data from these sources or if the prices charged for these services increase, the quality, pricing and availability of our products and services may be adversely affected, which could have a material adverse impact on our business, financial condition and results of operations.

We rely extensively upon data from a variety of external sources to maintain our proprietary and non-proprietary databases, including data from third-party suppliers, various government and public record sources and data contributed by our clients. Our data sources could cease providing or reduce the availability of their data to us, increase the price we pay for their data, or limit our use of their data for a variety of reasons, including legislatively- or judicially-imposed restrictions on use. If a number of suppliers are no longer able or are unwilling to provide us with certain data, or if our public record sources of data become unavailable or too expensive, we may need to find alternative sources. If we are unable to identify and contract with suitable alternative data suppliers and efficiently and effectively integrate these data sources into our service offerings, we could experience service disruptions, increased costs and reduced quality of our services. Moreover, some of our suppliers compete with us in certain product offerings, which may make us vulnerable to unpredictable price increases from them. Significant price increases could have a material adverse effect on our operating margins and our financial position, in particular if we are unable to arrange for substitute sources of data on more favorable economic terms. Loss of such access or the availability of data in the future on commercially reasonable terms or at all may reduce the quality and availability of our services and products, which could have a material adverse effect on our business, financial condition and results of operations.

2.
Our clients and we are subject to various governmental regulations, and a failure to comply with government regulations or changes in these regulations could result in penalties, restrict or limit our or our clients' operations or make it more burdensome to conduct such operations, any of which could have a material adverse effect on our revenues, earnings and cash flows.

Many of our and our clients' businesses are subject to various federal, state, local and foreign laws and regulations. Our failure to comply with applicable laws and regulations could restrict our ability to provide certain services or result in the imposition of civil fines and criminal penalties, substantial regulatory and compliance costs, litigation expense, adverse publicity and loss of revenue.

In addition, our businesses are subject to an increasing degree of compliance oversight by regulators and by our clients. Specifically, the CFPB has authority to write rules affecting the business of credit reporting agencies and also to supervise, conduct examinations of, and enforce compliance as to federal consumer financial protection laws and regulations with respect to certain “non-depository covered persons” determined by the CFPB to be “larger participants” that offer consumer financial products and services. Two of our credit businesses - CoreLogic Credco and Teletrack - are subject to the CFPB non-bank supervision program. The CFPB and the prudential financial institution regulators such as the OCC also have the authority to examine us in our role as a service provider to large financial institutions, although it is yet unclear how broadly they will apply this authority going forward. In addition, several of our largest bank clients are subject to consent orders with the OCC and/or are parties to the National Mortgage Settlement, both of which require them to exercise greater oversight and perform more rigorous audits of their key vendors such as us.

These laws and regulations (as well as laws and regulations in the various states or in other countries) could limit our ability to pursue business opportunities we might otherwise consider engaging in, impose additional costs or restrictions on us, result in significant loss of revenue, impact the value of assets we hold, or otherwise significantly adversely affect our business. In addition, this increased level of scrutiny may increase our compliance costs.

Our operations could be negatively affected by changes to laws and regulations and enhanced regulatory oversight of our clients and us. These changes may compel us to increase our prices in certain situations or decrease our prices in other situations, may restrict our ability to implement price increases, and may limit the manner in which we conduct our business or otherwise may have a negative impact on our ability to generate revenues, earnings and cash flows. If we are unable to adapt our products and services to conform to the new laws and regulations, or if these laws and regulations have a negative impact on our clients, we may experience client losses or increased operating costs, and our business and results of operations could be negatively affected.


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3.
Regulatory developments with respect to use of consumer data and public records could have a material adverse effect on our business, financial condition and results of operations.

Because our databases include certain public and non-public personal information concerning consumers, we are subject to government regulation and potential adverse publicity concerning our use of consumer data. We acquire, store, use and provide many types of consumer data and related services that are subject to regulation under the FCRA, the GLBA, and the Driver's Privacy Protection Act and, to a lesser extent, various other federal, state, and local laws and regulations. These laws and regulations are designed to protect the privacy of consumers and to prevent the unauthorized access and misuse of personal information in the marketplace. Our failure to comply with these laws, or any future laws or regulations of a similar nature, could result in substantial regulatory penalties, litigation expense and loss of revenue.

In addition, some of our data suppliers face similar regulatory requirements and, consequently, they may cease to be able to provide data to us or may substantially increase the fees they charge us for this data which may make it financially burdensome or impossible for us to acquire data that is necessary to offer our products and services. Further, many consumer advocates, privacy advocates and government regulators believe that existing laws and regulations do not adequately protect privacy or ensure the accuracy of consumer-related data. As a result, they are seeking further restrictions on the dissemination or commercial use of personal information to the public and private sectors as well as contemplating requirements relative to data accuracy and the ability of consumers to opt to have their personal data removed from databases such as ours. Any future laws, regulations or other restrictions limiting the dissemination or use of personal information may reduce the quality and availability of our products and services, which could have a material adverse effect on our business, financial condition and results of operations.

4.
If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, or if we are unable to provide adequate security in the electronic transmission of sensitive data, it could have a material adverse effect on our business, financial condition and results of operations.

We are highly dependent on information technology networks and systems, including the Internet, to securely process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for business-to-business and business-to-consumer electronic commerce. Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information, including non-public personal information and consumer data. Unauthorized access, including through use of fraudulent schemes such as "phishing" schemes, could jeopardize the security of information stored in our systems. In addition, malware or viruses could jeopardize the security of information stored or used in a user's computer. If we are unable to prevent such security or privacy breaches, our operations could be disrupted, or we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive consumer data.

Likewise, our clients are increasingly imposing more stringent contractual obligations on us relating to our information security protections. If we are unable to maintain protections and processes at a level commensurate with that required by our large clients, it could negatively affect our relationships with those clients or increase our operating costs, which could harm our business or reputation.

5.
Systems interruptions may impair the delivery of our products and services, causing potential client and revenue loss.

System interruptions may impair the delivery of our products and services, resulting in a loss of clients and a corresponding loss in revenue. In August 2012, as part of our TTI, we entered into an agreement to outsource our technology infrastructure management services, including the hosting of our data centers, to Dell. Although the TTI has begun to provide new functionality, increased performance and a reduction in application management and development costs, the project is complex and longer-term in nature and we cannot be sure that we will ultimately be successful in achieving our technology and cost-savings objectives on the timeframe we set forth, or at all. In addition, we depend heavily upon the computer systems and our existing technology infrastructure located in our remaining Santa Ana, CA data center, which we expect will be moved under the Dell arrangement to Dell's Quincy, WA data center by the end of the second quarter of 2015. Certain systems interruptions or events beyond our control could interrupt or terminate the delivery of our products and services to our clients. These interruptions also may interfere with our suppliers' ability to provide necessary data to us and our employees' ability to attend to work and perform their responsibilities. Any of these possible outcomes could result in a loss of clients or a loss in revenue, which could have an adverse effect on our business or operations.


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6.
Because our revenue from clients in the mortgage, consumer lending and real estate industries is affected by the strength of the economy and the housing market generally, including the volume of real estate transactions, a negative change in any of these conditions could materially adversely affect our business and results of operations.

A significant portion of our revenue is generated from solutions we provide to the mortgage, consumer lending and real estate industries and, as a result, a weak economy or housing market may adversely affect our business. The volume of mortgage origination and residential real estate transactions is highly variable. Reductions in these transaction volumes could have a direct impact on certain portions of our revenues and may materially adversely affect our business, financial condition and results of operations. Moreover, negative economic conditions could affect the performance and financial condition of some of our clients in many of our businesses, which may lead to negative impacts on our revenue, earnings and liquidity in particular if these clients go bankrupt or otherwise exit certain businesses.

7.
We do not solely control the operations and dividend policies of our partially-owned affiliates, including our joint ventures. A decrease in earnings of or dividends from these joint ventures could have a negative impact on our earnings and cash flow.

In our joint ventures with some of our largest clients, we share control of the management of the operations of the joint venture with the other partner. As a result, we cannot solely dictate the ventures' business strategy, operations or dividend policies without the cooperation of the respective partners. These joint ventures are impacted by many of the same regulatory and economic factors that affect our business. A decrease in earnings and dividends derived from these joint ventures could have a negative impact on our earnings and cash flow. In addition, our joint venture partners could decide to exit the joint venture or otherwise terminate the operations at their discretion, which could have a material adverse effect on our business and results of operations.

8.
We rely on our top ten clients for a significant portion of our revenue and profit, which makes us susceptible to the same macro-economic and regulatory factors that our clients face. If these clients are negatively impacted by current economic or regulatory conditions or otherwise experience financial hardship or stress, or if the terms of our relationships with these clients change, our business, financial condition and results of operations could be adversely affected.

Our ten largest clients generated 29.8% of our operating revenues for the year ended December 31, 2014 . These clients face continued pressure in the current economic and regulatory climate. Many of our relationships with these clients are long-standing and are important to our future operating results, but there is no guarantee that we will be able to retain or renew existing agreements or maintain our relationships on acceptable terms or at all. Deterioration in or termination of any of these relationships, including through mergers or consolidations among our clients, could significantly reduce our revenue and could adversely affect our business, financial condition and results of operations. In addition, certain of our businesses have higher client concentration than our company as a whole. As a result, these businesses may be disproportionately affected by declining revenue from, or loss of, a significant client.

9.
We rely upon proprietary technology and information rights, and if we are unable to protect our rights, our business, financial condition and results of operations could be harmed.

Our success depends, in part, upon our intellectual property rights. We rely primarily on a combination of patents, copyrights, trade secrets, and trademark laws and nondisclosure and other contractual restrictions on copying, distribution and creation of derivative products to protect our proprietary technology and information. This protection is limited, and our intellectual property could be used by others without our consent. In addition, patents may not be issued with respect to our pending or future patent applications, and our patents may not be upheld as valid or may not prevent the development of competitive products. Any infringement, disclosure, loss, invalidity of, or failure to protect our intellectual property could negatively impact our competitive position, and ultimately, our business. Moreover, litigation may be necessary to enforce or protect our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could be time-consuming, result in substantial costs and diversion of resources and could harm our business, financial condition, results of operations and cash flows.

10.
If our products or services are found to infringe on the proprietary rights of others, we may be required to change our business practices and may also become subject to significant costs and monetary penalties.

As we continue to develop and expand our products and services, we may become increasingly subject to infringement claims from third parties such as non-practicing entities, software providers or suppliers of data. Likewise, if we are unable to

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maintain adequate controls over how third-party software and data are used we may be subject to claims of infringement. Any claims, whether with or without merit, could:

•
be expensive and time-consuming to defend;
•
cause us to cease making, licensing or using applications that incorporate the challenged intellectual property;
•
require us to redesign our applications, if feasible;
•
divert management's attention and resources; and
•
require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies.

11.
The acquisition and integration of businesses by us may involve increased expenses, and may not produce the desired financial or operating results contemplated at the time of the transaction. In addition, we may not be able to successfully consummate proposed divestitures.

We have acquired and expect to continue to acquire, on an opportunistic basis, companies, businesses, products and services. These activities may increase our expenses, and the expected benefits, synergies and growth from these initiatives may not materialize as planned. In addition, we may have difficulty integrating our completed or any future acquisitions into our operations, including implementing at the acquired companies controls, procedures and policies in line with our controls, procedures and policies. If we fail to properly integrate acquired businesses, products, technologies and personnel, it could impair relationships with employees, clients and strategic partners, distract management attention from our core businesses, result in control failures and otherwise disrupt our ongoing business and harm our results of operations. We also may not be able to retain key management and other critical employees after an acquisition. In addition, although part of our business strategy may include growth through strategic acquisitions, we may not be able to identify suitable acquisition candidates, obtain the capital necessary to pursue acquisitions or complete acquisitions on satisfactory terms.

In addition, our profitability may be impacted by gains or losses on any sales of businesses, or lost operating income or cash flows from such businesses. We also may be required to record asset impairment or restructuring charges related to divested businesses, or indemnify buyers for liabilities, which may reduce our profitability and cash flows. We may also not be able to negotiate such divestitures on terms acceptable to us. If we are not successful in divesting such businesses, our business could be harmed.

12. Our reliance on outsourcing arrangements subjects us to risk and may disrupt or adversely affect our operations. In addition, we may not realize the full benefit of our outsourcing arrangements, which may result in increased costs, or may adversely affect our service levels for our clients.

Over the last few years, we have outsourced various business process and information technology services to third parties, including the outsourcing arrangements we entered into with a subsidiary of Cognizant Technology Solutions and the technology infrastructure management services agreement we entered into with Dell. Although we have service-level arrangements with our providers, we do not ultimately control their performance, which may make our operations vulnerable to their performance failures. In addition, the failure to adequately monitor and regulate the performance of our third-party vendors could subject us to additional risk. Reliance on third parties also makes us vulnerable to changes in the vendors' business, financial condition and other matters outside of our control, including their violations of laws or regulations which could increase our exposure to liability or otherwise increase the costs associated with the operation of our business. The failure of our outsourcing partners to perform as expected or as contractually required could result in significant disruptions and costs to our operations and to the services we provide to our clients, which could materially and adversely affect our business, client relationships, financial condition, operating results and cash flow.
    
13.
Our international outsourcing service providers and our own international operations subject us to additional risks, which could have an adverse effect on our results of operations. Dependence on these operations, in particular our outsourcing arrangements, may impair our ability to operate effectively.

Over the last few years, we have reduced our costs by utilizing lower-cost labor outside the U.S. in countries such as India and the Philippines through outsourcing arrangements. These countries are subject to higher degrees of political and social instability than the U.S. and may lack the infrastructure to withstand political unrest or natural disasters. Such disruptions can impact our ability to deliver our products and services on a timely basis, if at all, and to a lesser extent can decrease efficiency and increase our costs. Weakness of the U.S. dollar in relation to the currencies used and higher inflation rates experienced in these countries may also reduce the savings we planned to achieve. Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States and, as a result, many of our clients may

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require us to use labor based in the U.S. We may not be able to pass on the increased costs of higher-priced U.S.-based labor to our clients, which ultimately could have an adverse effect on our results of operations.

In addition, the foreign countries in which we have outsourcing arrangements or operate could adopt new legislation or regulations that would adversely affect our business by making it difficult, more costly or impossible for us to continue our foreign activities as currently being conducted. In addition, in many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by laws and regulations applicable to us, such as the Foreign Corrupt Practices Act ("FCPA"). Any violations of FCPA or local anti-corruption laws by us, our subsidiaries or our local agents, could have an adverse effect on our business and reputation and result in substantial financial penalties or other sanctions.

14.
Our level of indebtedness could adversely affect our financial condition and prevent us from complying with our covenants and obligations under our outstanding debt instruments. In addition, the instruments governing our indebtedness subject us to various restrictions that could limit our operating flexibility.

As of December 31, 2014 , our total debt was approximately $1.3 billion , and we have unused commitments of approximately $465.0 million under our credit facilities.

Subject to the limitations contained in the credit agreement governing our credit facilities, the indenture governing the 7.25% senior notes and our other debt instruments, we may incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other general corporate purposes. If we do so, the risks related to our level of debt could intensify.

The indenture governing the notes and the credit agreement governing our credit facilities each impose operating and financial restrictions on our activities. These restrictions include the financial covenants in our credit facilities which require on-going compliance with certain financial tests and ratios, including a minimum interest coverage ratio and maximum leverage ratio. The operating and financial restrictions in the indenture or the credit agreement could limit or prohibit our ability to, among other things:

•
create, incur or assume additional debt;
•
create, incur or assume certain liens;
•
redeem and/or prepay certain subordinated debt we might issue in the future;
•
pay dividends on our stock or repurchase stock;
•
make certain investments and acquisitions, including joint ventures;
•
enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us;
•
enter into new lines of business;
•
engage in consolidations, mergers and acquisitions;
•
engage in specified sales of assets; and
•
enter into transactions with affiliates.

These restrictions on our ability to operate our business could impact our business by, among other things, limiting our ability to take advantage of financing, merger and acquisition or other corporate opportunities that might otherwise be beneficial to us. Our failure to comply with these restrictions could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all our debt.

15. We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our outstanding debt instruments, which may not be successful.

Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations. If we cannot make scheduled payments on our debt, we will be in default and holders of the notes or the lenders under our credit facilities could declare all outstanding principal and interest to be due and payable, and the lenders under our credit facilities could terminate their revolving commitments to loan money and foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation.


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16. We operate in a competitive business environment, and if we are unable to compete effectively our results of operations and financial condition may be adversely affected.

The markets for our products and services are intensely competitive. Our competitors vary in size and in the scope and breadth of the services they offer. We compete for existing and new clients against both third parties and the in-house capabilities of our clients. Many of our competitors have substantial resources. Some have widely-used technology platforms that they seek to use as a competitive advantage to drive sales of other products and services. In addition, we expect that the markets in which we compete will continue to attract new competitors and new technologies. These competitors and new technologies may be disruptive to our existing technology or service offerings, resulting in operating inefficiencies and increased competitive pressure. We cannot assure you that we will be able to compete successfully against current or future competitors. Any competitive pressures we face in the markets in which we operate could materially adversely affect our business, financial condition and results of operations.

17.
We may not be able to attract and retain qualified management or develop current management to assist in or lead company growth, which could have an adverse effect on our ability to maintain or expand our product and service offerings.

We rely on skilled management and our success depends on our ability to attract, train and retain a sufficient number of such individuals. If our attrition rate increases, our operating efficiency and productivity may decrease. We compete for talented individuals not only with other companies in our industry but also with companies in other industries, such as software services, engineering services and financial services companies, and there is a limited pool of individuals who have the skills and training needed to grow our company, especially in the increasingly-regulated environment in which we operate. Increased attrition or competition for qualified management could have an adverse effect on our ability to expand our business and product offerings, as well as cause us to incur greater personnel expenses and training costs.

18.
We have substantial investments in recorded goodwill as a result of prior acquisitions and an impairment of these investments would require a write-down that would reduce our net income.

Goodwill is assessed for impairment annually or sooner if circumstances indicate a possible impairment. Factors that could lead to impairment of goodwill include significant under-performance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization and negative industry or economic trends. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. In the event of significant volatility in the capital markets or a worsening of current economic conditions, we may be required to record an impairment charge, which would negatively impact our results of operations. Possible future impairment of goodwill may have a material adverse effect on our business, financial condition and results of operations.

19. We may not be able to effectively achieve our growth strategies, which could adversely affect our financial condition or results of operations.

Our growth strategies, including revenue growth and margin expansion, depend in part on maintaining our competitive advantage with current solutions in new and existing markets, as well as our ability to develop new technologies and solutions to serve such markets. There can be no assurance that we will be able to compete successfully in new markets or continue to compete effectively in our existing markets. In addition, development of new technologies and solutions may require significant investment by us. If we fail to introduce new technologies or solutions effectively or on a cost-effective or timely basis, or if we are not successful in introducing or obtaining regulatory or market acceptance for new solutions, we may lose market share and our results of operations or cash flows could be adversely affected.

20.
We share responsibility with First American Financial Corporation ("FAFC") for certain income tax liabilities for tax periods prior to and including the date of the Separation.

Under the Tax Sharing Agreement we entered into in connection with the Separation transaction, we are generally responsible for taxes attributable to our business, assets and liabilities and FAFC is generally responsible for all taxes attributable to members of the FAFC group of companies and the assets, liabilities or businesses of the FAFC group of companies. Generally, any liabilities arising from tax adjustments to consolidated tax returns for tax periods prior to and including date of Separation will be shared in proportion to each company's percentage of the tax liability for the relevant year (or partial year with respect to 2010), unless the adjustment is attributable to either party, in which case the adjustment will generally be for the account of such party. In addition to this potential liability associated with adjustments for prior periods, if FAFC were to fail to pay any tax liability it is required to pay under the Tax Sharing Agreement, we could be legally liable

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under applicable tax law for such tax liabilities and required to make additional tax payments. Accordingly, under certain circumstances, we may be obligated to pay amounts in excess of our agreed-upon share of tax liabilities.

21.
If certain transactions, including internal transactions, undertaken in anticipation of the Separation are determined to be taxable for U.S. federal income tax purposes, we, our stockholders that are subject to U.S. federal income tax and FAFC will incur significant U.S. federal income tax liabilities.

In connection with the Separation we received a private letter ruling from the Internal Revenue Service ("IRS") to the effect that, among other things, certain internal transactions undertaken in anticipation of the Separation will qualify for favorable treatment under the Internal Revenue Code, and the contribution by us of certain assets of the financial services businesses to FAFC and the pro-rata distribution to our shareholders of the common stock of FAFC will, except for cash received in lieu of fractional shares, qualify as a tax-free transaction for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code. In addition, we received opinions of tax counsel to similar effect. The ruling and opinions relied on certain facts, assumptions, representations and undertakings from us and FAFC regarding the past and future conduct of the companies' respective businesses and other matters. If any of these facts, assumptions, representations or undertakings is incorrect or not otherwise satisfied, we and our stockholders may not be able to rely on the ruling or the opinions of tax counsel and could be subject to significant tax liabilities. Notwithstanding the private letter ruling and opinions of tax counsel, the IRS could determine on audit that the Separation is taxable if it determines that any of these facts, assumptions, representations or undertakings were not correct or have been violated or if it disagrees with the conclusions in the opinions that were not covered by the private letter ruling, or for other reasons, including as a result of certain significant changes in the stock ownership of us or FAFC after the Separation. If the Separation is determined to be taxable for U.S. federal and state income tax purposes, we and our stockholders that are subject to income tax could incur significant income tax liabilities.

In addition, under the terms of the Tax Sharing Agreement, in the event a transaction were determined to be taxable and such determination were the result of actions taken after the Separation by us or FAFC, the party responsible for such failure would be responsible for all taxes imposed on us or FAFC as a result thereof.

Moreover, the Tax Sharing Agreement generally provides that each party thereto is responsible for any taxes imposed on the other party as a result of the failure of the distribution to qualify as a tax-free transaction under the Code if such failure is attributable to post-Separation actions taken by or in respect of the responsible party or its stockholders, regardless of when the actions occur after the Separation, and the other party consents to such actions or such party obtains a favorable letter ruling or opinion of tax counsel as described above.

22.
In connection with the Separation, we entered into a number of agreements with FAFC setting forth rights and obligations of the parties post-Separation. In addition, certain provisions of these agreements provide protection to FAFC in the event of a change of control of us, which could reduce the likelihood of a potential change of control that our stockholders may consider favorable.

In connection with the Separation, we and FAFC entered into a number of agreements that set forth certain rights and obligations of the parties post-Separation, including the Separation and Distribution Agreement, the Tax Sharing Agreement, the Restrictive Covenants Agreement, certain transition services agreements and leases for our data center and former headquarters facilities in Santa Ana, CA. We possess certain rights under those agreements, including without limitation indemnity rights from certain liabilities allocated to FAFC. The failure of FAFC to perform its obligations under the agreements could have an adverse effect on our financial condition, results of operations and cash flows.

In addition, the Separation and Distribution Agreement gives FAFC the right to purchase the equity or assets of our entity or entities directly or indirectly owning the real property databases that we currently own upon the occurrence of certain triggering events. The triggering events include the direct or indirect purchase of the databases by a title insurance underwriter (or its affiliate) or an entity licensed as a title insurance underwriter, including a transaction where a title insurance underwriter (or its affiliate) acquires 25% or more of us. Such a triggering event also triggers the ability of FAFC to terminate our Santa Ana, CA data center upon 30 days' notice. The purchase right expires June 1, 2020. Until the expiration of the purchase right, this provision could have the effect of limiting or discouraging an acquisition of us or preventing a change of control that our stockholders might consider favorable. Likewise, if a triggering event occurs, the loss of ownership of our real property database could have a material adverse effect on our financial condition, business and results of operations.


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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of December 31, 2014 , our real estate portfolio of 1.7 million square feet is comprised of leased property throughout 25 states in the U.S. at approximately 1.6 million square feet and 100,000 square feet in the aggregate in Australia, Canada, India, France, Mexico, New Zealand and the United Kingdom. Our properties range in size from a single property under 1,000 square feet to our large, multiple-building complex in Westlake, TX totaling 600,000 square feet. The Westlake property lease expires in March 2017. Our corporate headquarters are located in Irvine, CA, where we occupy 170,000 square feet pursuant to a lease that expires in July 2021.

All properties are primarily used as offices and have multiple expiration dates. The office facilities we occupy are, in all material respects, in good condition and adequate for their intended use.

Item 3. Legal Proceedings

For a description of our legal proceedings, see Note 15 - Litigation and Regulatory Contingencies of the Notes to Consolidated Financial Statements included in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K, which is incorporated by reference in response to this item.

Item 4. Mine Safety Disclosures.

Not applicable.


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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Stock Market Prices and Dividends

Our common stock is listed on the New York Stock Exchange and trades under the symbol "CLGX". The approximate number of record holders of our common stock on February 20, 2015 was 2,817. High and low stock prices for the last two years were as follows:

 
2014
 
2013
 
High
Low
 
High
Low
Quarter ended March 31,
$
35.96

$
29.12

 
$
29.00

$
24.48

Quarter ended June 30,
$
31.03

$
26.58

 
$
28.68

$
21.40

Quarter ended September 30,
$
31.04

$
26.47

 
$
29.05

$
23.69

Quarter ended December 31,
$
33.71

$
25.54

 
$
36.19

$
26.10


We did not declare dividends for the years ended December 31, 2014 and 2013 and have not declared dividends since we changed our name to CoreLogic on June 1, 2010 and began trading on the New York Stock Exchange under the symbol “CLGX.” We do not expect to pay regular quarterly cash dividends, and any future dividends will be dependent on future earnings, financial condition, compliance with agreements governing our outstanding debt and capital requirements. In addition, the amount of dividends we could pay may be limited by the restricted payments covenant in the indenture governing our 7.25% senior notes, as amended, and by the terms of our credit agreement.

Unregistered Sales of Equity Securities

During the quarter ended December 31, 2014 , we did not issue any unregistered shares of our common stock.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table describes purchases by us of shares of our common stock which settled during each period set forth in the table below. In December 2013, the Board of Directors canceled all prior repurchase authorizations and established a new share repurchase authorization of up to $350.0 million. As of December 31, 2014 , we have $215.3 million in value of shares that may yet be purchased under the plans or programs. The stock repurchase plan has no expiration date. Repurchases under our stock repurchase plan may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan.

Under our credit agreement, our stock repurchase capacity is restricted to $150.0 million per fiscal year, with the ability to undertake an additional amount of repurchases in such fiscal year provided that, on a pro forma basis after giving effect to the stock repurchase, our total leverage ratio does not exceed 3.50:1.0. In addition, our stock repurchase capacity is limited by the restricted payments covenant in the indenture governing our 7.25% senior notes, as amended. While we continue to preserve the capacity to execute share repurchases under our existing share repurchase authorization, going forward we will consider the repurchase of shares of our common stock and retirement of outstanding debt on an opportunistic basis.


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Issuer Purchases of Equity Securities

Period
 
Total Number of Shares Purchased
 
Average Price Paid per Share (1)
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
 
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
October 1 to October 31, 2014
 
—

 
$
—

 
—

 
$
234,003,212

November 1 to November 30, 2014
 
468,101

 
$
32.09

 
468,101

 
$
218,981,851

December 1 to December 31, 2014
 
114,500

 
$
32.08

 
114,500

 
$
215,308,691

Total
 
582,601

 
$
32.09

 
582,601

 
 
 
 
 
 
 
 
 
 
 

(1)
Calculated inclusive of commissions.

Stock Performance Graph

The following performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, each as amended, except to the extent that it is specifically incorporated by reference into such filing.

The following graph compares the yearly percentage change in the cumulative total stockholder return on our common stock with corresponding changes in the cumulative total returns of the Standard & Poor's Midcap 400 Index, the Standard & Poor's 500 Index, the Standard & Poor's Midcap 400 Data Processing Outsourced Services Index and our Peer Group index. The comparison assumes an investment of $100 at the close of business on December 31, 2009 and reinvestment of dividends. This historical performance is not indicative of future performance.

On June 1, 2010, we completed the Separation in which we spun off the financial services businesses into a new, publicly-traded, New York Stock Exchange-listed company called FAFC through a distribution (the “Distribution”) of all of the outstanding shares of FAFC to the holders of our common shares, par value $1.00 per share, as of May 26, 2010. For purposes of calculating the cumulative total return on our stock, it is assumed that each share of FAFC received in the Distribution on June 1, 2010 was immediately sold for its market value and the proceeds reinvested in additional shares of our common stock. The value of our common stock in periods subsequent to the Distribution therefore includes the value of the distributed shares but not the separate performance of those securities since June 1, 2010.

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Table of Contents


The Peer Group, which was also used by the Board's Compensation Committee for 2014 compensation decisions, consisted of: Acxiom Corporation, Alliance Data Systems Corporation, Broadridge Financial Solutions, Inc., CIBER Inc., CSG Systems International Inc., DST Systems, Inc., The Dun & Bradstreet Corporation, Equifax, Inc., Fair Isaac Corporation, Fidelity National Information Services, Inc., Fiserv, Inc., Gartner, Inc., IHS Inc., Jack Henry & Associates, Inc., Sapient Corp., Syntel, Inc., and Verisk Analytics, Inc. This peer group is the same as that used in 2013, except that Lender Processing Services has been removed due to its acquisition by Fidelity National Financial, Inc.


23
Table of Contents

Item 6. Selected Financial Data

The selected consolidated financial data for the Company for the five-year period ended December 31, 2014 has been derived from the consolidated financial statements. The selected consolidated financial data should be read in conjunction with the consolidated financial statements and notes thereto, “Item 1—Business—Corporate Events—Acquisitions” and “Item 7—Management’s Discussion and Analysis of Financial Condition and Consolidated Results of Operations.” The consolidated statements of operations data for the years ended December 31, 2011 and 2010 and the consolidated balance sheet data as of December 31, 2012 , 2011 , and 2010 have been derived from financial statements not included herein.

Before June 1, 2010, we operated as The First American Corporation. On June 1, 2010, we completed the Separation in which we spun-off the financial services businesses into a new, publicly-traded, New York Stock Exchange-listed company called FAFC. In December 2010, we sold our employer and litigation services businesses. In September 2011, we closed our marketing services business. In August 2012, we completed the disposition of American Driving Records ("ADR") within our transportation services business. In September 2012, we completed the wind down of our consumer services business and our wholly-owned appraisal management company business. In September 2014, we completed the sale of our collateral solutions and field services businesses. Therefore, these results of operations are all reflected as discontinued operations. See Note 18 – Discontinued Operations of the Notes to Consolidated Financial Statements included in Item 8 . Financial Statements and Supplementary Data of Part II of this report for additional disclosures.


24
Table of Contents

(in thousands, except per share amounts)
For the Year Ended December 31,
Income Statement Data:
2014
 
2013
 
2012
 
2011
 
2010
Operating revenue
$
1,405,040

 
$
1,404,401

 
$
1,333,479

 
$
1,100,086

 
$
1,025,868

Operating income
$
169,758

 
$
142,142

 
$
170,402

 
$
46,576

 
$
68,595

Equity in earnings of affiliates, net of tax
$
14,120

 
$
27,361

 
$
35,983

 
$
30,270

 
$
41,641

Amounts attributable to CoreLogic:
 
 
 
 
 
 
 
 
 
Income from continuing operations, net of tax
$
89,741

 
$
100,313

 
$
96,065

 
$
26,637

 
$
18,847

(Loss)/income from discontinued operations, net of tax
(16,653
)
 
14,423

 
12,387

 
(101,246
)
 
(18,985
)
Income/(loss) from sale of discontinued operations, net of tax
112

 
(7,008
)
 
3,841

 
—

 
(56,161
)
Net income/(loss)
$
73,200

 
$
107,728

 
$
112,293

 
$
(74,609
)
 
$
(56,299
)
Balance Sheet Data:
 

 
 

 
 

 
 

 
 

Assets of discontinued operations
$
4,267

 
$
38,926

 
$
50,187

 
$
106,575

 
$
321,899

Total assets
$
3,516,362

 
$
3,003,131

 
$
3,027,497

 
$
3,115,822

 
$
3,240,021

Long-term debt, excluding discontinued operations
$
1,330,563

 
$
839,930

 
$
792,426

 
$
908,287

 
$
720,875

Total equity
$
1,014,167

 
$
1,044,373

 
$
1,170,945

 
$
1,244,820

 
$
1,545,141

Dividends on common shares
$
—

 
$
—

 
$
—

 
$
—

 
$
22,657

Amounts attributable to CoreLogic:
 

 
 

 
 

 
 

 
 

Basic income/(loss) per share:
 

 
 

 
 

 
 

 
 

Income from continuing operations, net of tax
$
0.99

 
$
1.05

 
$
0.93

 
$
0.24

 
$
0.17

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

 
(0.93
)
 
(0.17
)
Income/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

 
—

 
(0.50
)
Net income/(loss)
$
0.81

 
$
1.13

 
$
1.09

 
$
(0.69
)
 
$
(0.50
)
Diluted income/(loss) per share:
 

 
 

 
 

 
 

 
 

Income from continuing operations, net of tax
$
0.97

 
$
1.03

 
$
0.92

 
$
0.24

 
$
0.17

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

 
(0.92
)
 
(0.17
)
Income/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

 
—

 
(0.50
)
Net income/(loss)
$
0.79

 
$
1.11

 
$
1.08

 
$
(0.68
)
 
$
(0.50
)
Weighted average shares outstanding
 

 
 

 
 

 
 

 
 

Basic
90,825

 
95,088

 
102,913

 
109,122

 
111,529

Diluted
92,429

 
97,109

 
104,050

 
109,712

 
112,363



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Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Consolidated Results of Operations

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and certain information incorporated herein by reference contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Annual Report, other than statements that are purely historical, are forward-looking statements. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “should,” “would,” “could,” “may,” and similar expressions also identify forward-looking statements. The forward-looking statements include, without limitation, statements regarding our future operations, financial condition and prospects,   operating results, revenues and earnings liquidity, our estimated income tax rate, unrecognized tax positions, amortization expenses, impact of recent accounting pronouncements, our TTI program, our acquisition and divestiture strategy and our growth plans, expectations regarding our recent acquisitions, share repurchases, the level of aggregate U.S. mortgage originations and inventory of delinquent mortgage loans and loans in foreclosure and the reasonableness of the carrying value related to specific financial assets and liabilities.

Our expectations, beliefs, objectives, intentions and strategies regarding future results are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from results contemplated by our forward-looking statements. These risks and uncertainties include, but are not limited to:

•
limitations on access to or increase in prices for data from external sources, including government and public record sources;
•
changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our clients 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, including cyber-based attacks, the transmission of confidential information or systems interruptions;
•
the inability to control the dividend policies of our partially-owned affiliates;
•
difficult conditions in the mortgage and consumer lending industries and the economy generally;
•
our ability to protect proprietary technology rights;
•
our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof;
•
risks related to the outsourcing of services and international operations;
•
our growth strategies and our ability to effectively and efficiently implement them;
•
the level of our indebtedness, our ability to service our indebtedness and the restrictions in our various debt agreements;
•
intense competition in the market against third parties and the in-house capabilities of our customers;
•
our ability to attract and retain qualified management;
•
impairments in our goodwill or other intangible assets; and
•
the remaining tax sharing arrangements and other obligations associated with the spin off of FAFC.

We urge you to carefully consider these risks and uncertainties and review the additional disclosures we make concerning risks and uncertainties that may materially affect the outcome of our forward-looking statements and our future business and operating results, including those made in Item 1A, “Risk Factors” in this 10-K, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of the filing of this Annual Report on Form 10-K.

Business Overview

We are a leading global property information, analytics and data-enabled services provider operating in North America, Western Europe and Asia Pacific. Our combined data from public, contributory and proprietary sources provides detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. We have more than one million users who rely on our data and predictive decision analytics to reduce risk, enhance transparency and improve the performance of their businesses.

We offer our clients among the most comprehensive national databases of public, contributory and proprietary data covering real property and mortgage information, judgments and liens, building and replacement costs, parcel and geospatial data, criminal background records, eviction information, non-prime lending records, credit information, and tax information,

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among other data types. Our databases include over 880 million historical property transactions, over 93 million mortgage applications and property-specific data covering approximately 99% of U.S. residential properties exceeding 148 million records. We believe the quality of the data we offer is distinguished by our broad range of data sources and our expertise in aggregating, organizing, normalizing, processing and delivering data to our clients.

With our data as a foundation, we have built strong analytics capabilities and a variety of value-added business services to meet our clients’ needs for mortgage and automotive credit reporting, property tax, property valuation, tenancy, hazard risk, property risk and replacement cost, flood plain location determination and other geospatial data and related services.

Overview of Business Environment and Company Developments

Business Environment

The volumes of U.S. mortgage loan originations serve as a key market driver for more than half our business. We believe the volume of real estate and mortgage transactions is primarily affected by real estate prices, the availability of funds for mortgage loans, mortgage interest rates, employment levels and the overall state of the U.S. economy. We believe mortgage originations, expressed in dollars, decreased significantly by approximately 40.0% over the course of the year in 2014 relative to the same period of 2013 primarily due to increases in interest rates, which began in the middle of 2013, and transitioned the industry from a refinancing-driven to a purchase-driven market cycle. We expect 2015 origination unit volumes will be comparable to 2014 levels.

We generate the majority of our revenues from clients with operations in the U.S. residential real estate, mortgage origination and mortgage servicing markets. Approximately 29.8% of our operating revenues for the year ended December 31, 2014 were generated from our ten largest clients which consist of the largest U.S. mortgage originators and servicers.

Recent Company Developments

Acquisitions

In January 2014, we completed our acquisition of Terralink for NZD $14.5 million , or $11.9 million , which is included as a component of our D&A reporting segment.

In March 2014, we completed the acquisition of all of the issued and outstanding equity interests of MSB/DataQuick. The total consideration paid in connection with the transaction referenced above was approximately $652.5 million in cash, which was funded through borrowings - see Liquidity and Capital Resources for further information. The operations of MSB's and DataQuick's data licensing and analytics units are reported within our D&A segment and DataQuick's flood zone determination and credit servicing operations are reported within our TPS segment.

In November 2014, we completed the acquisition of the assets of Bank of America's mortgage-related credit reporting operation for $19.6 million , which is included as a component of the TPS segment.

Divestiture of Non-Core Businesses

In December 2013, we concluded the businesses comprising the AMPS segment were not core to our long-term strategy and we would actively pursue the sale of the AMPS reporting segment. On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment for consideration of $29.1 million , subject to working capital adjustments, as well as contingent consideration of up to $20.0 million . As a result, these businesses were reflected in our consolidated financial statements as discontinued operations. Further, we concluded to cease pursuing the sale of our remaining product lines previously included in our AMPS reporting segment. These remaining product lines included our technology solutions, solutions express and outsourcing services product lines. These product lines were previously reflected as discontinued operations and are now reflected as part of continuing operations within our TPS segment reporting disclosures for all periods presented.


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Table of Contents

Technology Transformation Initiative

In July 2012, as part of our on-going cost efficiency programs, we announced the launch of our TTI, which is a major technology transformation initiative designed to provide us with new functionality, increased performance and reduced application management and development costs. The TTI encompasses two phases. The first phase is designed to transform our existing technology infrastructure to run in a private dedicated cloud environment hosted in Dell’s technology center located in Quincy, WA. The transition of our existing data and systems infrastructure to Dell’s Quincy technology center is expected to be completed in mid-2015. The second phase of the TTI involves the creation of a next-generation technology platform to leverage data monetization and analytics, social media, mobility, voice and other capabilities via a delivery portal driven by a common data repository. Progressive deployment of our next generation platform is currently expected to occur in several phases commencing in 2015. For the year ended December 31, 2014 , we incurred expenses of $15.6 million and capitalized expenditures of $8.2 million related to the TTI.

Unless otherwise indicated, the Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K relate solely to the discussion of our continuing operations.


28
Table of Contents

Consolidated Results of Operations

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Operating Revenues

Our consolidated operating revenues were $1.4 billion for the year ended December 31, 2014 , an increase of $0.6 million when compared to 2013 , and consisted of the following:

(in thousands, except percentages)
 
2014
 
2013
 
$ Change
 
% Change
D&A
 
$
647,264

 
$
572,169

 
$
75,095

 
13.1
 %
TPS
 
767,567

 
843,887

 
(76,320
)
 
(9.0
)
Corporate and eliminations
 
(9,791
)
 
(11,655
)
 
1,864

 
(16.0
)
Operating revenues
 
$
1,405,040

 
$
1,404,401

 
$
639

 
—
 %

Our D&A segment revenues increased by $75.1 million , or 13.1% , when compared to 2013 . Acquisition activity accounted for $107.0 million of the increase in 2014 . Excluding acquisition activity, the decrease of $31.9 million was primarily due to lower property information, analytics and advisory revenues of $22.1 million , which included the exit of a non-core product line and the impact of unfavorable foreign currency exchange fluctuations of $6.3 million . The decrease was also impacted by lower rental market volumes which reduced multifamily services revenues by $4.1 million , partially offset by higher insurance and spatial solutions revenues of $0.6 million .

Our TPS revenues decreased by $76.3 million , or 9.0% , when compared to 2013 . Acquisition activity accounted for $20.7 million of additional revenues in 2014 . Excluding acquisition activity, the decrease of $97.0 million is primarily due to the significant decline in mortgage loan origination volumes, which decreased our origination and underwriting services revenues by $37.9 million , our compliance and technology solutions revenues by $30.7 million and our property tax processing revenues by $28.4 million .

Our corporate and eliminations revenues were comprised of intercompany revenue eliminations between our operating segments.

Cost of Services (exclusive of depreciation and amortization below)

Our consolidated cost of services were $740.3 million for the year ended December 31, 2014 , an increase of $23.1 million , or 3.2% , when compared to 2013 . Acquisition activity accounted for $66.8 million of the increase in December 31, 2014 . Excluding acquisition activity, the decrease of $43.7 million was primarily due to the significant decline in mortgage loan origination volumes, which decreased cost of services by approximately $64.8 million, partially offset by unfavorable product mix of $21.1 million primarily in our TPS segment.

Selling, General and Administrative Expense

Our consolidated selling, general and administrative expenses were $351.6 million for the year ended December 31, 2014 , a decrease of $22.7 million , or 6.1% , when compared to 2013 . Acquisition activity contributed $25.8 million of expense in 2014 . Excluding acquisition activity, the decrease of $48.5 million was primarily due to a $13.9 million gain on sale of real estate assets and cost reductions from our ongoing cost efficiency programs, which lowered salaries and benefits by $29.8 million, facility and lease equipment costs by $9.6 million, professional fees by $4.8 million, marketing fees by $1.0 million and other expenses by $8.1 million; partially offset by lower capitalized costs of $18.7 million.

Depreciation and Amortization

Our consolidated depreciation and amortization expense was $138.4 million for the year ended December 31, 2014 , an increase of $12.1 million , or 9.5% , when compared to 2013 . Acquisition activity accounted for $22.7 million of the increase in 2014 . Excluding acquisition activity, the decrease of $10.6 million was primarily due to assets that were fully depreciated in the prior year primarily in the TPS segment.


29

Impairment Loss

Our impairment loss was $5.0 million for the year ended December 31, 2014 , a decrease of $39.5 million , or 88.8% , when compared to 2013 . The variance was primarily due to higher goodwill impairment charges related to our technology solutions, solutions express and outsourcing services businesses in the fourth quarter of the prior year.

Operating Income

Our consolidated operating income was $169.8 million for the year ended December 31, 2014 , an increase of $27.6 million , or 19.4% , when compared to 2013 , and consisted of the following:

(in thousands, except percentages)
 
2014
 
2013
 
$ Change
 
% Change
D&A
 
$
97,654

 
$
100,963

 
$
(3,309
)
 
(3.3
)%
TPS
 
139,168

 
137,225

 
1,943

 
1.4

Corporate and eliminations
 
(67,064
)
 
(96,046
)
 
28,982

 
(30.2
)
Operating income
 
$
169,758

 
$
142,142

 
$
27,616

 
19.4
 %

Our D&A segment operating income decreased by $3.3 million , or 3.3% , when compared to 2013 . Acquisition activity contributed $1.6 million of higher losses in 2014 due to higher depreciation and amortization expense and higher integration costs. Excluding acquisition activity, operating income decreased $1.7 million primarily due to lower volumes and unfavorable product mix. Operating margins increased 75 basis points due to lower costs from the impact of on-going cost efficiency programs.

Our TPS operating income increased by $1.9 million , or 1.4% , when compared to 2013 . Acquisition activity accounted for $13.9 million of the increase in 2014 . Excluding acquisition activity, operating income decreased $12.0 million primarily due to the significant decline in origination volumes; partially offset by lower goodwill impairment charges related to our technology solutions, solutions express and outsourcing services businesses recorded in the prior year. Operating margins increased 75 basis points and were also favorably impacted by lower costs from our on-going cost efficiency programs.

Corporate and eliminations operating loss decreased $29.0 million , or 30.2% , due to lower selling, general and administrative expenses from on-going cost efficiency programs.

Total Interest Expense, Net

Our consolidated total interest expense, net was $67.0 million for the year ended December 31, 2014 , an increase of $19.4 million , or 40.7% , when compared to 2013 . The increase was due to higher average outstanding debt balances and higher fees of $1.0 million related to the new borrowings in connection with our acquisition of MSB/DataQuick in March of 2014.

Gain on Investments and Other, Net

Our consolidated gain on investments and other income, net was $3.9 million for the year ended December 31, 2014 , a decrease of $8.2 million when compared to 2013 . The decrease was primarily due to a $6.6 million gain, recorded in the prior year, related to the acquisition of a controlling interest in an investment in affiliate, a $4.1 million loss from the termination of an interest rate swap agreement in connection with the refinancing of our outstanding debt, lower realized gains on investments of $3.2 million and a $0.3 million write-off of an investment in affiliate, partially offset by a $6.0 million distribution from a previously impaired investment in affiliate.

Provision for Income Taxes

Our consolidated provision for income taxes from continuing operations was $29.8 million and $33.7 million for the years ended December 31, 2014 and 2013 , respectively. Our effective income tax rate was 28.2% and 31.6% for the years ended December 31, 2014 and 2013 , respectively. The change in the income tax was primarily attributable to foreign rate differentials in jurisdictions with tax rates lower than the U.S. as well as valuation allowance released in certain foreign jurisdictions.


30

Equity in Earnings of Affiliates, Net of Tax

Our consolidated equity in earnings of affiliates, net of tax was $14.1 million for the year ended December 31, 2014 , a decrease of $13.2 million , or 48.4% , when compared to 2013 . We have equity interests in various affiliates which primarily provide settlement services in connection with residential mortgage loans. The decrease in equity in earnings was primarily due to declining mortgage loan origination volumes.

(Loss)/Income from Discontinued Operations, Net of Tax

Our consolidated loss from discontinued operations, net of tax was $16.7 million for the year ended December 31, 2014 , an unfavorable variance of $31.1 million when compared to 2013 . The variance is primarily due to legal settlements of $21.9 million, on a pre-tax basis, as well as declining default market volumes which impacted revenues and net income associated with our collateral solutions and field services businesses.

Gain/(Loss) from Sale of Discontinued Operations, Net of Tax

Our consolidated gain from sale of discontinued operations, net of tax was $0.1 million for the year ended December 31, 2014 , a favorable variance of $7.1 million when compared to 2013 . The variance was primarily related to the settlement of tax contingencies of $7.4 million from the sale of a business line within our AMPS segment in the prior year.

Net Income/(Loss) Attributable to Noncontrolling Interests

Our consolidated net income attributable to noncontrolling interests was $1.3 million for the year ended December 31, 2014 , an increase of $1.3 million , or 2,490.6% , when compared to 2013 . The variance was primarily due to the step-up acquisition of a previously held noncontrolling interest in the third quarter of 2013.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

Operating Revenues

Our consolidated operating revenues were $1.4 billion for the year ended December 31, 2013 , an increase of $70.9 million , or 5.3% , when compared to 2012 , and consisted of the following:

(in thousands, except percentages)
 
2013
 
2012
 
$ Change
 
% Change
D&A
 
$
572,169

 
$
544,753

 
$
27,416

 
5.0
 %
TPS
 
843,887

 
800,890

 
42,997

 
5.4

Corporate and eliminations
 
(11,655
)
 
(12,164
)
 
509

 
(4.2
)
Operating revenues
 
$
1,404,401

 
$
1,333,479

 
$
70,922

 
5.3
 %

Our D&A segment revenues increased by $27.4 million , or 5.0% , when compared to 2012 . Acquisition activity accounted for $27.0 million of the increase in 2013 . Excluding acquisition activity, the increase of $0.4 million was primarily due to higher property information, analytics and advisory revenues of $7.7 million due to growth in valuation and fraud analytics services and higher insurance and spatial solutions revenues of $0.5 million . This was partially offset by lower rental market volumes which reduced multifamily services revenues by $2.0 million and the impact of unfavorable foreign exchange of $5.7 million .

Our TPS revenues increased by $43.0 million , or 5.4% , when compared to 2012 . Acquisition activity accounted for $39.1 million of the increase in 2013 . Excluding acquisition activity, the increase of $3.9 million was primarily due to market share gains which increased our property tax processing revenues by $30.9 million and our origination and underwriting services revenues by $1.2 million . This was partially offset by lower compliance and technology solutions revenues of $28.3 million due to lower volumes.

Our corporate and eliminations revenues were comprised of intercompany revenue eliminations between our operating segments.


31

Cost of Services (exclusive of depreciation and amortization below)

Our consolidated cost of services was $717.2 million for the year ended December 31, 2013 , an increase of $47.7 million , or 7.1% , when compared to 2012 . Acquisition activity accounted for $30.3 million of the increase in 2013 . Excluding acquisition activity, the increase of $17.4 million was primarily due to higher revenues, which increased cost of services by approximately $2.4 million, higher credit services-related costs from credit bureau of $13.1 million and higher other expenses of $2.4 million. The increase was partially offset by favorable foreign exchange impact of $0.5 million.

Selling, General and Administrative Expense

Our consolidated selling, general and administrative expenses was $374.3 million for the year ended December 31, 2013 , an increase of $17.7 million , or 5.0% , when compared to 2012 . Acquisition activity accounted for $26.8 million of the increase in 2013 . Excluding acquisition activity, the decrease of $9.1 million was primarily due to our on-going cost efficiency programs, which lowered facility and lease equipment costs by $7.2 million and lowered software expense by $6.0 million. We also experienced higher capitalized costs of $5.7 million, the impact of favorable foreign exchange of $3.4 million and other expense of $4.5 million. The decrease was partially offset by higher external service costs of $11.6 million and higher professional fees of $6.2 million.

Depreciation and Amortization

Our consolidated depreciation and amortization expense was $126.3 million for the year ended December 31, 2013 , an increase of $9.2 million , or 7.9% , when compared to 2012 . Acquisition activity accounted for $8.1 million of the increase in 2013 . Excluding acquisition activity, the increase of $1.1 million was primarily due to the write-off of non-performing assets in the current year.

Impairment Loss

Our impairment losses was $44.4 million for the year ended December 31, 2013 , an increase of $24.6 million , or 123.5% , when compared to 2012 . The variance was primarily due to a $ 42.2 million goodwill impairment charge related to our technology solutions, solutions express and outsourcing services businesses, partially offset by higher write-offs of non-performing assets in the prior year.

Operating Income

Our consolidated operating income was $142.1 million for the year ended December 31, 2013 , a decrease of $28.3 million , or 16.6% , when compared to 2012 , and consisted of the following:

(in thousands, except percentages)
 
2013
 
2012
 
$ Change
 
% Change
D&A
 
$
100,963

 
$
96,519

 
$
4,444

 
4.6
 %
TPS
 
137,225

 
189,700

 
(52,475
)
 
(27.7
)
Corporate and eliminations
 
(96,046
)
 
(115,817
)
 
19,771

 
(17.1
)
Operating income
 
$
142,142

 
$
170,402

 
$
(28,260
)
 
(16.6
)%

Our D&A segment operating income increased by $4.4 million , or 4.6% , when compared to 2012 . Acquisition activity accounted for $6.6 million of the increase in 2013 . Excluding acquisition activity, operating income decreased $2.2 million and operating margins decreased 41 basis points as a prior year $7.0 million benefit related to the favorable litigation settlement of patent and other intellectual property rights was partially offset by favorable revenue mix in 2013.

Our TPS segment operating income decreased by $52.5 million , or 27.7% , when compared to 2012 . Acquisition activity accounted for $5.7 million of higher operating losses in 2013 . Excluding acquisition activity, operating income decreased $46.8 million and operating margins decreased 592 basis points primarily due to higher goodwill impairment charges of $42.2 million related to our technology solutions, solutions express and outsourcing services businesses incurred in 2013.

Corporate and eliminations operating loss decreased $19.8 million , or 17.1% , due to lower selling, general and administrative expenses from on-going cost efficiency programs.


32

Total Interest Expense, Net

Our consolidated total interest expense, net was $47.6 million for the year ended December 31, 2013 , a decrease of $4.9 million , or 9.3% , when compared to 2012 . The decrease was due to lower average outstanding debt balances as a result of the principal prepayments under the term loan facility of our credit agreement and lower applicable interest rates.

Gain on Investments and Other, Net

Our consolidated gain on investments and other income, net was $12.0 million for the year ended December 31, 2013 , an increase of $7.0 million when compared to 2012 . The variance was primarily due to a 2013 acquisition of a controlling interest in an investment in an affiliate, resulting in a change in equity interest and the recognition of a gain of approximately $6.6 million and higher realized gains on investments of $0.4 million.

Provision for Income Taxes

Our consolidated provision for income taxes from continuing operations was $33.7 million and $63.5 million for the years ended December 31, 2013 and 2012 , respectively. Our effective income tax rate was 31.6% and 51.4% for the years ended December 31, 2013 and 2012 , respectively. During the year ended December 31, 2013, we recorded an income tax benefit related to research and development credits, which favorably impacted our tax rate. For the year ended December, 31, 2012, we recorded out-of-period adjustments primarily for periods prior to 2010, which unfavorably impacted our tax rate. Further in 2012, we increased our valuation allowance on federal and state capital loss carryovers, state net operating loss carryovers, and foreign deferred tax assets and net operating loss carryovers principally as a result of valuation allowances provided on a foreign subsidiary.

Equity in Earnings of Affiliates, Net of Tax

Our consolidated equity in earnings of affiliates, net of tax were $27.4 million for the year ended December 31, 2013 , an decrease of $8.6 million , or 24.0% , when compared to 2012 . The decrease was primarily due to declining mortgage origination volumes, which lowered our equity in earnings of affiliates, net by $3.4 million. The remaining variance was due to the disposal and dissolution of various investments in affiliates.

Income from Discontinued Operations, Net of Tax

Our consolidated income from discontinued operations, net of tax was $14.4 million for the year ended December 31, 2013 , a favorable variance of $2.0 million when compared to 2012 . The variance is primarily due to lower losses from the wind-down of our appraisal management company of $12.4 million, partially offset by a pre-tax non-cash impairment of $9.6 million to goodwill associated with our AMPS business recorded in the fourth quarter of 2013.

(Loss)/Gain from Sale of Discontinued Operations, Net of Tax

Our consolidated loss from discontinued operations, net of tax was $7.0 million , for the year ended December 31, 2013 , an unfavorable variance of $10.8 million , when compared to 2012 . The variance was primarily related to estimated tax liabilities associated with audits of disposed subsidiaries.

Net Loss Attributable to Noncontrolling Interests

Our consolidated net loss attributable to noncontrolling interests was $0.1 million for the year ended December 31, 2013 , a decrease of $0.6 million , or 91.8% , when compared to 2012 . The variance was primarily due to the divestiture of our noncontrolling interests in 2013.

Liquidity and Capital Resources

Cash and cash equivalents totaled $104.7 million and $134.4 million as of December 31, 2014 and 2013 , respectively, representing a decrease of $29.7 million compared to 2013 . Furthermore, cash and cash equivalents decreased $15.1 million in 2013 compared to 2012 .

We hold our cash balances inside and outside of the U.S. Our cash balances held outside of the U.S. are primarily related to our international operations. At December 31, 2014 , we held $34.8 million in foreign jurisdictions. Most of the amounts held outside of the U.S. could be repatriated to the U.S. but, under current law, would be subject to U.S. federal

33

income taxes, less applicable foreign tax credits. We plan to maintain significant cash balances outside the U.S. for the foreseeable future.

Restricted cash of $12.4 million and $12.1 million at December 31, 2014 and 2013 , respectively, represents cash pledged for various letters of credit provided in the ordinary course of business to certain vendors including in connection with obtaining insurance and real property leases.

Cash Flow

Operating Activities. Cash provided by operating activities reflects net income adjusted for certain non-cash items and changes in operating assets and liabilities. Total cash provided by operating activities was $321.9 million , $353.8 million and $363.1 million for the years ended December 31, 2014 , 2013 and 2012 , respectively. The decrease in cash provided by operating activities in 2014 relative to 2013 was primarily due to lower cash provided by operating activities from our discontinued operations of $39.3 million resulting from declining default market volumes, the sale of our collateral solutions and field services businesses in September of 2014 and a legal settlement in 2014. This decrease was partially offset by higher cash provided by operating activities from our continuing operations of $7.4 million due to higher dividends received from investments in affiliates and the timing of payments for accounts payable and accrued expenses.

The decrease in cash provided by operating activities in 2013 relative to 2012 was primarily due to lower cash provided by operating activities from our continuing operations of $8.4 million related to the timing of payments for accounts payable and accrued expenses and lower dividends received from investments in affiliates.

Investing Activities. Total cash used in investing activities consists primarily of capital expenditures, acquisitions and dispositions. Cash used in investing activities was approximately $741.5 million , $186.8 million , and $147.3 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Cash used in investing activities from continuing operations during 2014 was primarily related to cash paid for acquisitions, including Bank of America's credit services operations for $19.6 million in November 2014, MSB/DataQuick for $652.5 million in March 2014, Terralink for $11.9 million in January 2014 and other acquisitions for $11.0 million, net of cash acquired, that were not significant. Further, we had investments in property and equipment and capitalized data of $52.0 million and $35.1 million , respectively; which was partially offset by proceeds from sale of discontinued operations of $25.4 million and proceeds from the sale of property and equipment of $13.9 million .

Cash used in investing activities from continuing operations during 2013 was primarily related to to cash paid for acquisitions, including Bank of America's flood zone determination and tax processing services operations for $62.5 million in July 2013, an additional 10% interest in PIQ for $2.6 million in September 2013 and EQECAT for $22.2 million in December 2013. We also acquired two other businesses for $10.0 million that were not significant. Further, we had investments in property and equipment and capitalized data of $68.7 million and $37.8 million , respectively; partially offset by favorable changes in restricted cash of $10.1 million .
    
Cash used in investing activities from continuing operations during 2012 was primarily related to cash paid for CDS Mapping of $78.8 million and investments in property and equipment and capitalized data of $51.5 million and $32.2 million , respectively, which was partially offset by net proceeds of $10.0 million from the sale of subsidiaries and proceeds of $8.0 million from the sale of our investment in Lone Wolf Real Estate Technologies.

For the year ending December 31, 2015, the Company anticipates investing in the aggregate between $85 million and $95 million in capital expenditures for property and equipment and capitalized data. Capital expenditures are expected to be funded by existing cash balances, cash generated from operations or additional borrowings.

Financing Activities. Total cash used in financing activities was approximately $390.5 million , $179.9 million and $332.5 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Net cash used in financing activities during 2014 was primarily comprised of proceeds from debt issuance of $690.0 million , partially offset by repayment of long-term debt of $200.0 million , share repurchases of $91.5 million , debt issuance costs of $14.0 million and net settlement from stock-based compensation related transactions of $6.0 million .

Net cash used in financing activities during 2013 was primarily comprised of $241.2 million in repurchases of our common stock, $10.4 million of debt issuance costs and $4.7 million of repayments of long-term debt. This was partially offset

34

by proceeds from the issuance of long-term debt of $51.6 million and net settlement from stock-based compensation related transactions of $24.7 million .

Net cash used in financing activities during 2012 was primarily comprised of $226.6 million repurchases of our common stock and $166.7 million of repayments of long-term debt, which was partially offset by proceeds from issuance of long-term debt of $50.0 million to replace our A$50.0 million borrowed under the multicurrency revolving sub-facility and net settlement from stock-based compensation related transactions of $11.0 million .

Financing and Financing Capacity

We had total debt outstanding of $1.3 billion and $839.9 million as of December 31, 2014 and 2013 , respectively. Our significant debt instruments are described below.

Senior Notes

On May 20, 2011, CoreLogic, Inc. issued $400.0 million aggregate principal amount of 7.25% senior notes due 2021 (the "Notes"). For a detailed description of the Notes, see Note 8 - Long-Term Debt of the Notes to Consolidated Financial Statements included in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
    
The indenture governing the Notes contains a financial covenant for the incurrence of additional indebtedness that requires that the interest coverage ratio be at least 2.00 to 1.00 on a pro forma basis after giving effect to any new indebtedness. There are carve-outs that permit us to incur certain indebtedness notwithstanding satisfaction of this ratio, but they are limited. Based on our EBITDA and interest charges as of December 31, 2014 , we would be able to incur additional indebtedness without breaching the limitation on indebtedness covenant contained in the indenture and we are in compliance with all of our covenants under the indenture.

Credit Agreement

For a detailed description of our senior secured credit facility (the "Credit Agreement"), see Note 8 - Long-Term Debt of the Notes to Consolidated Financial Statements included in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K. The Credit Agreement provides for an $850.0 million five-year term loan facility (the "Term Facility") and a $550.0 million revolving credit facility (the "Revolving Facility"). The Revolving Facility includes a $100.0 million multicurrency revolving sub-facility and a $50.0 million letter of credit sub-facility. The Credit Agreement also provides for the ability to increase the Term Facility and Revolving Facility by up to $500.0 million in the aggregate.
    
The Credit Agreement contains customary financial maintenance covenants, including a (i) maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 4.00 to 1.00 with a step down to 3.50 to 1.00 starting in the second quarter of 2015; and (ii) a minimum interest coverage ratio of at least 3.00 to 1.00 .
    
For the year ended December 31, 2014 , we prepaid $31.9 million of outstanding indebtedness under the Term Facility. This prepayment was applied to the most current portion of the term loan amortization schedule. At December 31, 2014 , we had additional borrowing capacity under the Revolving Facility of $465.0 million , and were in compliance with the financial and restrictive covenants of the Credit Agreement. However, if we have a significant increase in our outstanding debt or if our EBITDA decreases significantly, we may be unable to incur additional indebtedness, and the lenders under the Credit Agreement may be unwilling to permit us to amend the financial or restrictive covenants described above to provide additional flexibility.

As of December 31, 2014 and December 31, 2013 , we have recorded $9.2 million and $4.6 million , respectively, of accrued interest expense.    

Interest Rate Swaps

In May 2014, we entered into amortizing interest rate swap transactions ("Swaps"). The Swaps became effective on December 31, 2014 and terminate in March 2019. The Swaps are for an initial notional balance of $500.0 million , with a fixed interest rate of 1.57% , and amortize quarterly by $12.5 million through December 31, 2017 and $25.0 million through December 31, 2018, with a remaining notional amount of $250.0 million .


35

Liquidity and Capital Strategy

We believe that cash flow from operations and current cash balances, together with currently available lines of credit, will be sufficient to meet operating requirements through the next twelve months. Cash available from operations could be affected by any general economic downturn or any decline or adverse changes in our business such as a loss of clients, competitive pressures or other significant change in business environment.

We strive to pursue a balanced approach to capital allocation and will consider the repurchase of common shares, the retirement of outstanding debt and the pursuit of strategic acquisitions on an opportunistic basis.

During the year ended December 31, 2014 , we repurchased approximately 3.1 million shares of our common stock for $91.5 million including commission costs.

Availability of Additional Capital

Our access to additional capital fluctuates as market conditions change. There may be times when the private capital markets and the public debt or equity markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, in which case we would not be able to access capital from these sources. Based on current market conditions and our financial condition (including our ability to satisfy the conditions contained in our debt instruments that are required to be satisfied to permit us to incur additional indebtedness), we believe that we have the ability to effectively access these liquidity sources for new borrowings. However, a weakening of our financial condition, including a significant decrease in our profitability or cash flows or a material increase in our leverage, could adversely affect our ability to access these markets and/or increase our cost of borrowings.

Contractual Obligations

A summary, by due date, of our total contractual obligations at December 31, 2014 , is as follows:

(in thousands)
Less than 1 Year
 
1-3 Years
 
3-5 Years
 
More than 5 Years
 
Total
Operating leases
$
32,280

 
$
44,449

 
$
23,724

 
$
13,483

 
$
113,936

Long-term debt (1)
11,352

 
197,466

 
669,476

 
452,645

 
1,330,939

Interest payments related to debt (2)
56,436

 
108,644

 
84,944

 
81,016

 
331,040

Service agreement (3)
59,068

 
34,456

 
—

 
—

 
93,524

Total (4)
$
159,136

 
$
385,015

 
$
778,144

 
$
547,144

 
$
1,869,439

 
 
 
 
 
 
 
 
 
 

(1)
Includes the acquisition related remaining note payable of $5.0 million , which is non-interest bearing and discounted to $4.6 million .
(2)
Estimated interest payments are calculated assuming current interest rates over minimum maturity periods specified in debt agreements.
(3)
Net minimum commitment with Cognizant.
(4)
Excludes a net tax liability of $12.7 million related to uncertain tax positions and deferred compensation of $34.2 million due to uncertainty of payment period.

Critical Accounting Policies and Estimates

Our significant accounting policies are discussed in Note 2 - Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Item 8 - Financial Statements and Supplementary Data . We consider the accounting policies described below to be critical in preparing our consolidated financial statements. These policies require us to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures of contingencies. Our assumptions, estimates and judgments are based on historical experience, current trends and other factors that we believe to be relevant at the time we prepare the consolidated financial statements. Although we believe that our estimates and assumptions are reasonable, we cannot determine future events. Consequently, actual results could differ materially from our assumptions and estimates.


36

Revenue recognition. We derive our revenues principally from U.S. mortgage originators and servicers with good creditworthiness. Our product and service deliverables are generally comprised of data or other related services. Our revenue arrangements with our clients generally include a work order or written agreement specifying the data products or services to be delivered and related terms of sale including payment amounts and terms. The primary revenue recognition-related judgments we exercise are to determine when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) our price to the buyer is fixed or determinable; and (4) collectability is reasonably assured.

For products or services where delivery occurs at a point in time, we recognize revenue upon delivery. These products or services include sales of tenancy data and analytics, credit solutions for mortgage and automotive industries, under-banked credit services, flood and data services, claims management and default services.

For products or services where delivery occurs over time, we recognize revenue ratably on a subscription basis over the contractual service period once initial delivery has occurred. Generally these service periods range from one to three years. Products or services recognized on a license or subscription basis include information and analytic products, flood database licenses, realtor solutions, and lending solutions.

Tax service revenues are comprised of periodic loan fees and life-of-loan fees. For periodic loans, we generate monthly fees at a contracted fixed rate for as long as we service the loan. Loans serviced with a one-time, life-of-loan fee are billed once the loan is boarded to our tax servicing system in accordance with a client tax servicing agreement. Life-of-loan fees are then deferred and recognized ratably over the expected service period. The rates applied to recognize revenues assume a 10-year expected life and are adjusted to reflect prepayments. We review the tax service contract portfolio quarterly to determine if there have been material changes in the expected lives, deferred on-boarding costs, expected service period, and/or changes in the number and/or timing of prepayments. Accordingly, we may adjust the rates to reflect current trends.

Purchase Accounting. The purchase method of accounting requires companies to assign values to assets and liabilities acquired based upon their fair values at the acquisition date. In most instances there are not readily defined or listed market prices for individual assets and liabilities acquired in connection with a business, including intangible assets. The determination of fair value for assets and liabilities in many instances requires a high degree of estimation. The valuation of intangible assets, in particular, is very subjective. We generally obtain third-party valuations to assist us in estimating fair values. The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense.

Goodwill and other intangible assets. We perform an annual impairment test for goodwill and other indefinite-lived intangible assets for each reporting unit every fourth quarter. In addition, we periodically assess whether events or circumstances have occurred that potentially indicate the carrying amounts of these assets may not be recoverable. In assessing the overall carrying value of our goodwill and other intangibles, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Examples of such events or circumstances include the following: cost factors, financial performance, legal and regulatory factors, entity specific events, industry and market factors, macroeconomic conditions and other considerations.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not the fair value of a reporting unit is less than its carrying value, then our impairment testing process may include two additional steps. The first step (“Step 1”) compares the fair value of each reporting unit to its book value. The fair value of each reporting unit is determined by using discounted cash flow analysis and market approach valuations. If the fair value of the reporting unit exceeds its book value, then goodwill is not considered impaired and no additional analysis is required. However, if the book value is greater than the fair value, a second step (“Step 2”) must be completed to determine if the implied fair value of the goodwill exceeds the book value of the goodwill.

Step 2 involves calculating an implied fair value of goodwill for each reporting unit for which Step 1 indicated impairment. The implied fair value of goodwill is determined in a manner similar to the amount of goodwill calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit, as determined in Step 1, over the aggregate estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment loss is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. The valuation of goodwill requires assumptions and estimates of many critical factors

37

including revenue growth, cash flows, market multiples and discount rates. Forecasts of future operations are based, in part, on operating results and our expectations as to future market conditions. These types of analysis contain uncertainties because they require us to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. However, if actual results are not consistent with our estimates and assumptions, we may be exposed to an additional impairment loss that could be material.

These tests utilize a variety of valuation techniques, all of which require us to make estimates and judgments. Fair value is determined by employing an expected present value technique, which utilizes multiple cash flow scenarios that reflect a range of possible outcomes and an appropriate discount rate. The use of comparative market multiples compares the reporting unit to other comparable companies (if such comparables are present in the marketplace) based on valuation multiples to arrive at a fair value. We also use certain of these valuation techniques in accounting for business combinations, primarily in the determination of the fair value of acquired assets and liabilities. In assessing the fair value, we utilize the results of the valuations and consider the range of fair values determined under all methods and the extent to which the fair value exceeds the book value of the equity.

In December 2013, we concluded the businesses comprising the AMPS segment were not core to our long term strategy and we would actively pursue the sale of the AMPS reporting segment. On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment. Further, we determined to cease pursuing the sale of our remaining product lines, previously included in our AMPS reporting segment. These remaining product lines are comprised of our technology solutions, solutions express and outsourcing services product lines. These product lines were previously reflected as discontinued operations and are now reflected as part of continuing operations within our TPS segment.

During 2013, as part of the process of marketing the sale of these businesses, we developed long-term projections and obtained indicative fair market values from potential participants. The level of indicative values was below the net book value of the businesses being marketed; therefore, we recorded a pre-tax non-cash impairment of $42.2 million related to our retained product lines, which is currently within continuing operations, and a pre-tax non-cash impairment of $9.6 million related to the businesses sold within discontinued operations. During the second quarter of 2014, we identified and corrected an error which understated the 2013 goodwill impairment charge by $3.9 million related to the retained product lines within continuing operations. We recorded an out-of-period adjustment to correct the error in the quarter ended June 30, 2014. We assessed the materiality of this error in accordance with the SEC's Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108, and concluded the error was not material to the results of operations or financial condition for the prior annual, interim periods or the full year results for fiscal year 2014.

As of September 30, 2014, we allocated the former AMPS reporting unit goodwill between the businesses sold and the retained product lines based on their relative fair value and also evaluated the retained goodwill of $73.7 million at the TPS reporting unit level, noting no additional impairment indicators. Further, in September 2014, we transferred our under-banked credit services business from our D&A segment to our TPS segment due to changes in our management structure and internal reporting. As a result of the transfer, we revised our reporting for segment disclosure purposes and reassessed our reporting units for purposes of evaluating the carrying value of our goodwill. This assessment required us to perform a third quarter reassignment of our goodwill to each reporting unit impacted using the relative fair value approach, based on the fair values of the reporting units as of August 31, 2014. As of December 31, 2014 and December 31, 2013 , the assessment resulted in $8.7 million and $9.0 million , respectively, of goodwill allocated to our TPS reporting unit from D&A.

As of December 31, 2014 , our reporting units related to continuing operations are D&A and TPS. During the fourth quarter of 2014, we performed a Step 1 analysis on our reporting units.    Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates and future market conditions, among others. Key assumptions used to determine the fair value of our reporting units in our testing were: (a) expected cash flow for the period from 2015 to 2020; and (b) a discount rate ranging from 9.0% to 9.5% , which was based on management's best estimate of the after-tax weighted average cost of capital. We noted no indicators of impairment on our reporting units related to continuing operations through our Step 1 analysis. It is reasonably possible that changes in the facts, judgments, assumptions and estimates used in assessing the fair value of the goodwill could cause a reporting unit to become impaired.

Income taxes. We account for income taxes under the asset and liability method, whereby we recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as expected benefits of utilizing net operating loss and credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates we expect to apply in the

38

years in which we expect to recover or settle those temporary differences. We recognize in income the effect of a change in tax rates on deferred tax assets and liabilities in the period that includes the enactment date.

We recognize the effect of income tax positions only if sustaining those positions is more likely than not. We reflect changes in recognition or measurement of uncertain tax positions in the period in which a change in judgment occurs. We recognize interest and penalties, if any, related to uncertain tax positions within income tax expense. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

We evaluate the need to establish a valuation allowance based upon expected levels of taxable income, future reversals of existing temporary differences, tax planning strategies and recent financial operations. We establish a valuation allowance to reduce deferred tax assets to the extent we believe it is more likely than not that some or all of the deferred tax assets will not be realized.

Stock-based compensation. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide services in exchange for the award. We used the binomial lattice option-pricing model to estimate the fair value for any options granted after December 31, 2005 through December 31, 2009. For the options granted subsequent to December 31, 2009, we used the Black-Scholes model to estimate the fair value. We utilize the Monte-Carlo simulation to estimate the fair value for any performance-based restricted stock units (“PBRSUs”) granted. We utilize the straight-line single option method of attributing the value of stock-based compensation expense unless another expense attribution model is required. As stock-based compensation expense recognized in results of operations is based on awards ultimately expected to vest, stock-based compensation expense has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We apply the long-form method for determining the pool of windfall tax benefits.

Currently, our primary means of providing stock-based compensation is granting restricted stock units (“RSUs”), PBRSUs and stock options. The fair value of any grant is based on the market value of our shares on the date of grant and is generally recognized as compensation expense over the vesting period. Shares granted to certain key employees have graded vesting and have a service and performance requirement and are therefore expensed using the accelerated multiple-option method to record stock-based compensation expense. All other awards have graded vesting and service is the only requirement to vest in the award and are therefore generally expensed using the straight-line single option method to record stock-based compensation expense.

In addition, we have an employee stock purchase plan that allows eligible employees to purchase common stock of the Company at 85.0% of the closing price on the first or last day of each quarter, whichever is lower (which was updated for 2014 from the closing price on the last day of each quarter). We recognize an expense in the amount equal to the estimated fair value of the discount. The 2001 employee stock purchase plan expired in September 2011. Our 2012 employee stock purchase plan was approved by our stockholders at our 2012 annual meeting of stockholders and the first offering period commenced in October 2012.

Recent Accounting Pronouncements

For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Note 2 - Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K, which is incorporated by reference in response to this item.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Our primary exposure to market risk relates to interest-rate risk associated with certain financial instruments. We monitor our risk associated with fluctuations in interest rates and currently use derivative financial instruments to hedge some of these risks. Until March 2014, we had an outstanding interest rate swap that we entered into in June 2011, which partially converted the interest rate exposure of our floating rate debt from variable to fixed rate. In connection with our full repayment of the underlying debt associated with the termination of our previously-held credit facility in March 2014, that interest rate swap agreement terminated.

In May 2014, we entered into the Swaps, which became effective on December 31, 2014 and terminate in March 2019. The Swaps are for an initial notional balance of $500.0 million, with a fixed interest rate of 1.57%, and amortize quarterly by $12.5 million through December 31, 2017 and $25.0 million through December 31, 2018, with a remaining

39
Table of Contents

notional amount of $250.0 million. We entered into the Swaps in order to convert a portion of our interest rate exposure on the Term Facility floating rate borrowings from variable to fixed. We have designated the Swaps as cash flow hedges.

As of December 31, 2014 , we had approximately $1.3 billion in long-term debt outstanding, of which approximately $871.3 million was variable-interest-rate debt. A hypothetical 1% increase or decrease in interest rates could result in an approximately $0.9 million change to interest expense on a quarterly basis.

We are also subject to equity price risk related to our equity securities portfolio. At December 31, 2014 , we had equity securities with a cost and fair value of $22.3 million .

Although we are subject to foreign currency exchange rate risk as a result of our operations in certain foreign countries, the foreign exchange exposure related to these operations, in the aggregate, is not material to our financial condition or results of operations.


40
Table of Contents

Item 8. Financial Statements and Supplementary Data
 
We have one significant equity method investment. The audited financials of our significant subsidiary are included as an exhibit to this Form 10-K.

INDEX

 
Page No.
Financial Statements:
 
 
 
Financial Statement Schedule:
 

Financial statement schedules not listed are either omitted because they are not applicable or the required information is shown in the consolidated financial statements or in the notes thereto.


41
Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
CoreLogic, Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index , present fairly, in all material respects, the financial position of CoreLogic, Inc. and its subsidiaries at December 31, 2014 and December 31, 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, management has excluded Marshall & Swift/Boeckh and DataQuick Information Systems from its assessment of internal control over financial reporting as of December 31, 2014 because they were acquired by the Company in a purchase business combination during 2014. We have also excluded Marshall & Swift/Boeckh and DataQuick Information Systems from our audit of internal control over financial reporting. Marshall & Swift/Boeckh and DataQuick Information Systems are wholly-owned subsidiaries whose total assets and total revenues represent 16.0% and 4.8%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2014.


/s/ PricewaterhouseCoopers LLP

Orange County, California
February 26, 2015


42

CoreLogic, Inc.
Consolidated Balance Sheets
As of December 31, 2014 and 2013
(in thousands, except par value)
 
 
 
Assets
2014
 
2013
Current assets:
 
 
 
Cash and cash equivalents
$
104,677

 
$
134,419

Marketable securities
22,264

 
22,220

Accounts receivable (less allowance for doubtful accounts of $10,826 and $13,045 in 2014 and 2013, respectively)
214,344

 
215,020

Prepaid expenses and other current assets
51,375

 
50,829

Income tax receivable
13,357

 
13,516

Deferred income tax assets, current
90,341

 
86,487

Assets of discontinued operations
4,267

 
38,926

Total current assets
500,625

 
561,417

Property and equipment, net
368,614

 
197,542

Goodwill, net
1,780,758

 
1,468,290

Other intangible assets, net
278,270

 
175,808

Capitalized data and database costs, net
333,265

 
330,188

Investment in affiliates, net
103,598

 
95,343

Restricted cash
12,360

 
12,050

Other assets
138,872

 
162,493

Total assets
$
3,516,362

 
$
3,003,131

Liabilities and Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable and accrued expenses
$
170,418

 
$
156,937

Accrued salaries and benefits
99,786

 
104,781

Deferred revenue, current
255,330

 
223,603

Current portion of long-term debt
11,352

 
28,154

Liabilities of discontinued operations
13,704

 
20,616

Total current liabilities
550,590

 
534,091

Long-term debt, net of current
1,319,211

 
811,776

Deferred revenue, net of current
389,308

 
377,855

Deferred income tax liabilities, long-term
63,979

 
76,969

Other liabilities
161,084

 
147,865

Total liabilities
2,484,172

 
1,948,556




 


Redeemable noncontrolling interests
18,023

 
10,202


 
 
 
Equity:
 

 
 

CoreLogic, Inc.'s ("CoreLogic") stockholders' equity:
 

 
 

Preferred stock, $0.00001 par value; 500 shares authorized, no shares issued or outstanding
—

 
—

Common stock, $0.00001 par value; 180,000 shares authorized; 89,343 and 91,254 shares issued and outstanding as of December 31, 2014 and 2013, respectively
1

 
1

Additional paid-in capital
605,511

 
672,165

Retained earnings
492,441

 
425,796

Accumulated other comprehensive loss
(83,786
)
 
(53,589
)
Total CoreLogic stockholders' equity
1,014,167

 
1,044,373

Total liabilities and equity
$
3,516,362

 
$
3,003,131


The accompanying notes are an integral part of these consolidated financial statements.

43

CoreLogic, Inc.
Consolidated Statements of Operations
For the Years Ended December 31, 2014 , 2013 and 2012

(in thousands, except per share amounts)
2014
 
2013
 
2012
Operating revenue
$
1,405,040

 
$
1,404,401

 
$
1,333,479

Cost of services (exclusive of depreciation and amortization below)
740,301

 
717,205

 
669,484

Selling, general and administrative expenses
351,617

 
374,289

 
356,605

Depreciation and amortization
138,394

 
126,332

 
117,108

Impairment loss
4,970

 
44,433

 
19,880

Total operating expenses
1,235,282

 
1,262,259

 
1,163,077

Operating income
169,758

 
142,142

 
170,402

Interest expense:
 

 
 

 
 

Interest income
4,110

 
4,748

 
3,051

Interest expense
71,092

 
52,350

 
55,524

Total interest expense, net
(66,982
)
 
(47,602
)
 
(52,473
)
Gain on investments and other, net
3,882

 
12,032

 
4,996

Income from continuing operations before equity in earnings of affiliates and income taxes
106,658

 
106,572

 
122,925

Provision for income taxes
29,770

 
33,673

 
63,488

Income from continuing operations before equity in earnings of affiliates
76,888

 
72,899

 
59,437

Equity in earnings of affiliates, net of tax
14,120

 
27,361

 
35,983

Net income from continuing operations
91,008

 
100,260

 
95,420

(Loss)/income from discontinued operations, net of tax
(16,653
)
 
14,423

 
12,387

Gain/(loss) from sale of discontinued operations, net of tax
112

 
(7,008
)
 
3,841

Net income
74,467


107,675


111,648

Less: Net income/(loss) attributable to noncontrolling interests
1,267

 
(53
)
 
(645
)
Net income attributable to CoreLogic
$
73,200

 
$
107,728

 
$
112,293

Amounts attributable to CoreLogic:
 

 
 

 
 

Income from continuing operations, net of tax
$
89,741

 
$
100,313

 
$
96,065

(Loss)/income from discontinued operations, net of tax
(16,653
)
 
14,423

 
12,387

Gain/(loss) from sale of discontinued operations, net of tax
112

 
(7,008
)
 
3,841

Net income attributable to CoreLogic
$
73,200

 
$
107,728

 
$
112,293

Basic income/(loss) per share:
 

 
 

 
 

Income from continuing operations, net of tax
$
0.99

 
$
1.05

 
$
0.93

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

Gain/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

Net income attributable to CoreLogic
$
0.81

 
$
1.13

 
$
1.09

Diluted income/(loss) per share:
 

 
 

 
 

Income from continuing operations, net of tax
$
0.97

 
$
1.03

 
$
0.92

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

Gain/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

Net income attributable to CoreLogic
$
0.79

 
$
1.11

 
$
1.08

Weighted-average common shares outstanding:
 

 
 

 
 

Basic
90,825

 
95,088

 
102,913

Diluted
92,429

 
97,109

 
104,050


The accompanying notes are an integral part of these consolidated financial statements.


44

CoreLogic, Inc.
Consolidated Statements of Comprehensive Income/(Loss)
For the Years Ended December 31, 2014 , 2013 and 2012

(in thousands)
2014
 
2013
 
2012
Net income
$
74,467

 
$
107,675

 
$
111,648

Other comprehensive (loss)/income:
 

 
 

 
 

Market value adjustments to marketable securities, net of tax
27

 
32

 
742

Market value adjustments on interest rate swap, net of tax
(2,408
)
 
1,526

 
(905
)
Reclassification adjustments for gains on terminated interest rate swap included in net income
2,555

 
—

 
—

Foreign currency translation adjustments
(26,673
)
 
(43,337
)
 
5,921

Supplemental benefit plans adjustments, net of tax
(3,698
)
 
3,704

 
(956
)
Total other comprehensive (loss)/income
(30,197
)
 
(38,075
)
 
4,802

Comprehensive income
44,270

 
69,600

 
116,450

Less: Comprehensive income/(loss) attributable to the noncontrolling interests
1,267

 
(53
)
 
(645
)
Comprehensive income attributable to CoreLogic
$
43,003

 
$
69,653

 
$
117,095


The accompanying notes are an integral part of these consolidated financial statements.
 

45

CoreLogic, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended December 31, 2014 , 2013 and 2012
(in thousands)  
Common Stock Shares
Common Stock Amount
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income/(Loss)
Noncontrolling Interests
Total
Balance at January 1, 2012
106,544

$
1

$
1,053,447

$
209,389

$
(20,316
)
$
2,300

$
1,244,821

Net income
—

—

—

112,293

—

(645
)
111,648

Shares repurchased and retired
(10,029
)
—

(226,629
)
—

—

—

(226,629
)
Shares issued in connection with share-based compensation
1,183

—

13,497

—

—

—

13,497

Minimum tax withholdings related to net share settlements of restricted stock units
—

—

(3,466
)
—

—

—

(3,466
)
Share-based compensation
—

—

20,939

—

—

—

20,939

Distributions to noncontrolling interests
—

—

—

—

—

(10
)
(10
)
Additional Separation distribution of FAFC
—

—

8,932

(3,588
)
—

—

5,344

Other comprehensive income
—

—

—

—

4,802

—

4,802

Balance at December 31, 2012
97,698

$
1

$
866,720

$
318,094

$
(15,514
)
$
1,645

$
1,170,946

Net income
—

—

—

107,728

—

(26
)
107,702

Shares repurchased and retired
(8,121
)
—

(241,161
)
—

—

—

(241,161
)
Shares issued in connection with share-based compensation
1,677

—

28,232

—

—

—

28,232

Minimum tax withholdings related to net share settlements of restricted stock units
—

—

(8,665
)
—

—

—

(8,665
)
Share-based compensation
—

—

27,039

—

—

—

27,039

Sale of subsidiary shares to noncontrolling interests
—

—

—

—

—

(1,619
)
(1,619
)
Adjust redeemable noncontrolling interests to redemption value
—

—

—

(26
)
—

—

(26
)
Other comprehensive loss
—

—

—

—

(38,075
)
—

(38,075
)
Balance at December 31, 2013
91,254

$
1

$
672,165

$
425,796

$
(53,589
)
$
—

$
1,044,373

Net income
—

—

—

73,200

—

—

73,200

Shares repurchased and retired
(3,125
)
—

(91,475
)
—

—

—

(91,475
)
Shares issued in connection with share-based compensation
1,214

—

15,213

—

—

—

15,213

Minimum tax withholdings related to net share settlements of restricted stock units
—

—

(15,980
)
—

—

—

(15,980
)
Share-based compensation
—

—

25,588

—

—

—

25,588

Adjust redeemable noncontrolling interest to redemption value
—

—

—

(6,555
)
—

—

(6,555
)
Other comprehensive loss
—

—

—

—

(30,197
)
—

(30,197
)
Balance at December 31, 2014
89,343

$
1

$
605,511

$
492,441

$
(83,786
)
$
—

$
1,014,167


The accompanying notes are an integral part of these consolidated financial statements.

46

CoreLogic, Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2014 , 2013 and 2012
(in thousands)
2014
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
 
Net income
$
74,467

 
$
107,675

 
$
111,648

Less: (Loss)/income from discontinued operations, net of tax
(16,653
)
 
14,423

 
12,387

Less: Gain/(loss) from sale of discontinued operations, net of tax
112

 
(7,008
)
 
3,841

Income from continuing operations, net of tax
91,008

 
100,260

 
95,420

Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:
 

 
 

 
 

Depreciation and amortization
138,394

 
126,332

 
117,108

Impairment loss
4,970

 
44,433

 
19,880

Provision for bad debts and claim losses
11,825

 
13,345

 
20,027

Share-based compensation
25,379

 
26,901

 
20,752

Tax benefit related to stock options
(6,791
)
 
(5,146
)
 
(935
)
Equity in earnings of investee, net of taxes
(14,120
)
 
(27,361
)
 
(35,983
)
(Gain)/loss on sale of property and equipment
(13,866
)
 
—

 
951

Loss on early extinguishment of debt
763

 
—

 
326

Deferred income tax
20,986

 
8,120

 
34,476

Gain on investments and other, net
(3,882
)
 
(12,032
)
 
(4,996
)
Change in operating assets and liabilities, net of acquisitions:
 

 
 

 
 

Accounts receivable
13,151

 
24,553

 
(35,032
)
Prepaid expenses and other assets
1,231

 
113

 
3,017

Accounts payable and accrued expenses
(5,000
)
 
(9,330
)
 
61,073

Deferred revenue
16,010

 
48,125

 
10,830

Income taxes
(11,380
)
 
(27,543
)
 
(15,707
)
Dividends received from investments in affiliates
38,655

 
36,680

 
70,666

Other assets and other liabilities
28,260

 
(19,230
)
 
(25,222
)
Net cash provided by operating activities - continuing operations
335,593

 
328,220

 
336,651

Net cash (used in)/provided by operating activities - discontinued operations
(13,717
)
 
25,600

 
26,494

Total cash provided by operating activities
$
321,876

 
$
353,820

 
$
363,145

Cash flows from investing activities:
 

 
 

 
 

Purchases of property and equipment
$
(52,025
)
 
$
(68,745
)
 
$
(51,545
)
Purchases of capitalized data and other intangible assets
(35,129
)
 
(37,841
)
 
(32,189
)
Cash paid for acquisitions, net of cash acquired
(694,871
)
 
(92,049
)
 
(78,354
)
Cash received from sale of subsidiary, net
25,366

 
2,263

 
10,000

Purchases of investments
—

 
(2,351
)
 
—

Proceeds from sale of property and equipment
13,937

 
—

 
1,863

Proceeds from sale of investments
—

 
—

 
8,000

Change in restricted cash
(310
)
 
10,068

 
86

Net cash used in investing activities - continuing operations
(743,032
)
 
(188,655
)
 
(142,139
)
Net cash provided by/(used in) investing activities - discontinued operations
1,536

 
1,862

 
(5,203
)
Total cash used in investing activities
$
(741,496
)
 
$
(186,793
)
 
$
(147,342
)
Cash flows from financing activities:
 

 
 

 
 

Proceeds from long-term debt
690,017

 
51,647

 
50,000

Debt issuance costs
(14,042
)
 
(10,436
)
 
—


47

Repayments of long-term debt
(200,006
)
 
(4,666
)
 
(166,715
)
Shares repurchased and retired
(91,475
)
 
(241,161
)
 
(226,629
)
Proceeds from issuance of stock related to stock options and employee benefit plans
15,213

 
28,232

 
13,497

Minimum tax withholding paid on behalf of employees for restricted stock units
(15,980
)
 
(8,665
)
 
(3,466
)
Distribution to noncontrolling interests
—

 
—

 
(10
)
Tax benefit related to stock options
6,791

 
5,146

 
935

Net cash provided by/(used in) financing activities - continuing operations
390,518

 
(179,903
)
 
(332,388
)
Net cash used in financing activities - discontinued operations
—

 
—

 
(79
)
Total cash provided by/(used in) financing activities
$
390,518

 
$
(179,903
)
 
$
(332,467
)
Effect of Exchange Rate on cash
(625
)
 
(2,116
)
 
(153
)
Net decrease in cash and cash equivalents
$
(29,727
)
 
$
(14,992
)
 
$
(116,817
)
Cash and cash equivalents at beginning of year
134,419

 
149,568

 
258,116

Less: Change in cash and cash equivalents of discontinued operations
(12,181
)
 
27,462

 
21,212

Plus: Cash swept (to)/from discontinued operations
(12,196
)
 
27,305

 
$
29,481

Cash and cash equivalents at end of year
$
104,677

 
$
134,419

 
$
149,568


 
 
 
 
 
Supplemental disclosures of cash flow information:
 

 
 

 
 

Cash paid for interest
$
59,376

 
$
46,432

 
$
51,828

Cash paid for income taxes
$
5,436

 
$
71,055

 
$
71,283

Cash refunds from income taxes
$
27,545

 
$
14,096

 
$
18,330

Non-cash investing and financing activities:
 
 
 

 
 
Capital expenditures included in accounts payable and accrued liabilities
$
4,492

 
$
2,339

 
$
2,287


The accompanying notes are an integral part of these consolidated financial statements.


48
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



Note 1 - Description of the Company

We are a leading global property information, analytics and data-enabled services provider operating in North America, Western Europe and Asia Pacific. Our combined data from public, contributory and proprietary sources provides detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets we serve include real estate and mortgage finance, insurance, capital markets and the public sector. We deliver value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on us to help identify and manage growth opportunities, improve performance and mitigate risk. We are also a party to several joint ventures under which we share control of the management of the operations with the other partner.

We were originally incorporated in California in 1894, and were reincorporated in Delaware on June 1, 2010 immediately following a transaction that spun-off our financial services businesses, which we refer to as "the Separation" as more fully described below. Before June 1, 2010, we operated as The First American Corporation (“First American” or “FAC”). In connection with the Separation, we changed our name to CoreLogic, Inc. and began trading on the New York Stock Exchange under the symbol “CLGX.” As used herein, the terms "CoreLogic," the Company," "we," "our" and "us" refer to CoreLogic, Inc. and our consolidated subsidiaries, except where it is clear that the terms mean only CoreLogic, Inc. and not our subsidiaries.

Divestiture of Non-Core Businesses

As of December 31, 2013, we concluded that we would actively pursue the sale of our Asset Management and Processing Solutions ("AMPS") reporting segment, which was comprised of collateral solutions, field services, technology solutions, solutions express and outsourcing services. As a result, these businesses were reflected in our consolidated financial statement as discontinued operations.

On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment, for consideration of $29.1 million , subject to working capital adjustments, as well as contingent consideration of up to $20.0 million , which will be recognized when realized. Further, we concluded to cease pursuing the sale of our remaining product lines, previously included in our AMPS reporting segment. These remaining product lines included our technology solutions, solutions express and outsourcing services product lines and were previously reflected as discontinued operations and are now reflected as part of continuing operations within our Technology Processing Solutions ("TPS") segment reporting disclosures for all periods presented. The impact of the reclassification to our consolidated statements of operations includes goodwill impairment of $3.9 million and $42.2 million for the years ended December 31, 2014 and 2013 , respectively, and is as follows:

 
2014
 
2013
Operating revenues
$
66,560

 
$
73,775

Net income from continuing operations
$
4,584

 
$
(19,022
)
Basic income per share from continuing operations
$
0.05

 
$
(0.20
)
Diluted income per share from continuing operations
$
0.05

 
$
(0.20
)

Reporting Segments

In September 2014, we transferred our under-banked credit services business from our Data & Analytics ("D&A") segment to our TPS segment to combine this operation within our credit and income verification services and leverage the core business capabilities of the TPS segment. All segment reporting disclosures presented herein reflect this transfer.


49
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Separation Transaction

On June 1, 2010, we completed the Separation under which we spun-off our financial services businesses into a new, publicly-traded, New York Stock Exchange-listed company called First American Financial Corporation (“FAFC”) through a distribution (the “Distribution”) of all of the outstanding shares of FAFC to the holders of our common shares, par value $1.00 per share, as of May 26, 2010. After the Distribution, we retained the information solutions businesses which we renamed CoreLogic Inc. as noted above.

To effect the Separation, we entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”) that governs the rights and obligations of the Company and FAFC regarding the Distribution. It also governs the on-going relationship between the Company and FAFC subsequent to the completion of the Separation and provides for the allocation of assets and liabilities between FAFC and the Company. In addition, we also entered into a Tax Sharing Agreement (the “Tax Sharing Agreement”) as described in Note 9 – Income Taxes .

While we are a party to the Separation and Distribution Agreement and various other agreements relating to the Separation, we have determined that we have no material continuing involvement in the operations of FAFC.

Note 2 - Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all controlled subsidiaries. All significant intercompany transactions and balances have been eliminated. Equity investments in which we exercise significant influence, do not control, and are not the primary beneficiary, are accounted for using the equity method. Investments in which we do not exercise significant influence over the investee are accounted for under the cost method.

Out-of-Period Adjustment

During the second quarter of 2014, we identified an error which understated a 2013 goodwill impairment charge by $3.9 million ( $3.3 million , net of tax) see Note 6 – Goodwill, Net for further discussion. We recorded an out-of-period adjustment to correct the error in the quarter ended June 30, 2014 and reduced basic and diluted net income per share by $0.04 for the year ended December 31, 2014 . We assessed the materiality of this error in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108, and concluded the error was not material to the results of operations or financial condition for the prior annual, interim periods or the full year results for fiscal year 2014.

Use of Estimates

The preparation of financial statements in accordance with general accepted accounting policies ("GAAP") requires management to make estimates and assumptions that affect the financial statements. Actual results could differ from the estimates and assumptions used.

Cash Equivalents

We consider cash equivalents to be all short-term investments that have an initial maturity of 90 days or less and are not restricted.

Accounts Receivable

Accounts receivable are generally due from mortgage originators and servicers, financial institutions, insurers, and other businesses, government and government-sponsored enterprises located throughout the United States and abroad. Credit is extended based on an evaluation of the client’s financial condition, and generally, collateral is not required.

The allowance for doubtful accounts for all probable uncollectible receivables is based on a combination of historical data, cash payment trends, specific client issues, write-off trends, general economic conditions and other factors. These factors are continuously monitored by management to arrive at the estimate for the amount of accounts receivable that may be ultimately uncollectible. In circumstances where we are aware of a specific client’s inability to meet its financial obligations, we record a specific allowance for doubtful accounts against amounts due to reduce the net recognized receivable to the amount

50
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


we reasonably believe will be collected. Management believes the balances for allowance for doubtful accounts at December 31, 2014 and 2013 are reasonably stated.

Marketable Securities

Debt securities are carried at fair value and consist primarily of investments in obligations of various corporations and mortgage-backed securities. Equity securities are carried at fair value and consist primarily of investments in marketable common and preferred stock. We classify our publicly traded debt and equity securities as available-for-sale and carry them at fair value with unrealized gains or losses classified as a component of accumulated other comprehensive income/(loss). As of December 31, 2014 and 2013 , our marketable securities consist primarily of investments in preferred stock of $22.3 million and $22.2 million , respectively.

Property and Equipment

Property and equipment are recorded at cost. Property and equipment includes computer software acquired or developed for internal use and for use with our products. Software development costs include certain payroll-related costs of employees directly associated with developing software and payments to third parties for completed or developing software. We begin capitalizing qualifying software development costs on a project when the preliminary project stage is completed and management has authorized further funding for completion. Capitalization ends once a project is substantially complete and the software is ready for its intended use. Costs incurred in the planning and post-implementation phases of software developing are expensed as incurred.

Depreciation on buildings and on furniture and equipment is computed using the straight-line method over estimated useful lives of 25 to 40 , and 3 to 10 years, respectively. Capitalized software costs are amortized using the straight-line method over estimated useful lives of 3 to 10 years. Leasehold improvements are amortized over useful lives that are consistent with the lease terms.

Capitalized Data and Database Development Costs, Net

Capitalized data and database development costs represent our cost to acquire or develop the proprietary databases of information for client use. The costs are capitalized from the time the third party data is acquired until the information is ready for use, assuming both the preliminary project stage is complete and management has authorized funding for the completion of the data project. Property and eviction data costs are amortized using the straight-line method over estimated useful lives of 5 to 20 years.

The carrying value for the flood data zone certification is $55.4 million as of December 31, 2014 and 2013 . Because properly maintained flood zone databases have indefinite lives and do not diminish in value with the passage of time, no provision has been made for depreciation or amortization. We periodically analyze our assets for impairment. This analysis includes, but is not limited to, the effects of obsolescence, duplication, demand and other economic factors. See further discussion in Note 4 – Capitalized Data and Database Development Costs, Net.

Restricted Cash

Restricted cash is comprised of certificates of deposit that are pledged for various letters of credit secured by the Company. We deem the carrying value to be a reasonable estimate of fair value due to the nature of these instruments.

Purchase Accounting

The purchase method of accounting requires companies to assign values to assets and liabilities acquired based upon their fair values at the acquisition date. In most instances, there are not readily defined or listed market prices for individual assets and liabilities acquired in connection with a business, including intangible assets. The determination of fair value for assets and liabilities in many instances requires a high degree of estimation. The valuation of intangible assets, in particular, is very subjective. We generally obtain third-party valuations to assist us in estimating fair values. The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense.


51
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Goodwill

We perform an annual impairment test for goodwill and other indefinite-lived intangible assets for each reporting unit every fourth quarter. In addition, we periodically assess whether events or circumstances have occurred that potentially indicate the carrying amounts of these assets may not be recoverable. In assessing the overall carrying value of our goodwill and other intangibles, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Examples of such events or circumstances include the following: cost factors, financial performance, legal and regulatory factors, entity specific events, industry and market factors, macroeconomic conditions and other considerations.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not the fair value of a reporting unit is less than its carrying value, then our impairment testing process may include two additional steps. The first step (“Step 1”) compares the fair value of each reporting unit to its book value. The fair value of each reporting unit is determined by using discounted cash flow analysis and market approach valuations. If the fair value of the reporting unit exceeds its book value, then goodwill is not considered impaired and no additional analysis is required. However, if the book value is greater than the fair value, a second step (“Step 2”) must be completed to determine if the implied fair value of the goodwill exceeds the book value of the goodwill.

Step 2 involves calculating an implied fair value of goodwill for each reporting unit for which Step 1 indicated impairment. The implied fair value of goodwill is determined in a manner similar to the amount of goodwill calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit, as determined in Step 1, over the aggregate estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment loss is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. The valuation of goodwill requires assumptions and estimates of many critical factors including revenue growth, cash flows, market multiples and discount rates. Forecasts of future operations are based, in part, on operating results and our expectations as to future market conditions. These types of analysis contain uncertainties because they require us to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. However, if actual results are not consistent with our estimates and assumptions, we may be exposed to an additional impairment loss that could be material.

These tests utilize a variety of valuation techniques, all of which require us to make estimates and judgments. Fair value is determined by employing an expected present value technique, which utilizes multiple cash flow scenarios that reflect a range of possible outcomes and an appropriate discount rate. The use of comparative market multiples compares the reporting unit to other comparable companies (if such comparables are present in the marketplace) based on valuation multiples to arrive at a fair value. We also use certain of these valuation techniques in accounting for business combinations, primarily in the determination of the fair value of acquired assets and liabilities. In assessing the fair value, we utilize the results of the valuations and consider the range of fair values determined under all methods and the extent to which the fair value exceeds the book value of the equity. See further discussion in Note 6 – Goodwill, Net.

Other Intangible Assets

Our intangible assets consist of covenants not to compete, client lists and trade names. Each of these intangible assets is amortized on a straight-line basis over its useful life ranging from 2 to 20 years and is subject to impairment tests on a periodic basis.

Long-Lived Assets

Long-lived assets held and used include investment in affiliates, property and equipment, capitalized software and other intangible assets. Management uses estimated future cash flows (undiscounted and excluding interest) to measure the recoverability of long-lived assets held and used, at the asset group level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable. If the undiscounted cash flow analysis indicates a long-lived asset is not recoverable, the impairment loss recorded is the excess of the carrying amount of the asset over its fair value.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


In addition, we carry long-lived assets held for sale at the lower of cost or market as of the date that certain criteria have been met.

Revenue Recognition

We derive our revenues principally from U.S. mortgage originators and servicers with good creditworthiness. Our product and service deliverables are generally comprised of data or other related services. Our revenue arrangements with our clients generally include a work order or written agreement specifying the data products or services to be delivered and related terms of sale including payment amounts and terms. The primary revenue recognition-related judgments we exercise are to determine when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) our price to the buyer is fixed or determinable; and (4) collectability is reasonably assured.

For products or services where delivery occurs at a point in time, we recognize revenue upon delivery. These products or services include sales of tenancy data and analytics, credit solutions for mortgage and automotive industries, under-banked credit services, flood data and services, claims management and default services.

For products or services where delivery occurs over time, we recognize revenue ratably on a subscription basis over the contractual service period once initial delivery has occurred. Generally these service periods range from one to three years. Products or services recognized on a license or subscription basis include information and analytic products, flood database licenses, realtors solutions and lending solutions. For certain of our products or services, clients may also pay us upfront set-up fees, which we defer and recognize into revenue over the longer of the contractual term or expected client relationship period.

Tax service revenues are comprised of periodic loan fees and life-of-loan fees. For periodic loans, we generate monthly fees at a contracted fixed rate for as long as we service the loan. Loans serviced with a one-time, life-of-loan fee are billed once the loan is boarded to our tax servicing system in accordance with a client tax servicing agreement. Life-of-loan fees are then deferred and recognized ratably over the expected service period. The rates applied to recognize revenues assume a 10 -year expected life and are adjusted to reflect prepayments. We review the tax service contract portfolio quarterly to determine if there have been material changes in the expected lives, deferred on-boarding costs, expected service period and/or changes in the number and/or timing of prepayments. Accordingly, we may adjust the rates to reflect current trends.

Cost of Services

Cost of services represents direct costs incurred in the creation and delivery of our products and services. Cost of services consists primarily of data acquisition costs, royalty fees, hardware and software expense associated with transaction processing systems, telecommunication and computer network expense and occupancy costs associated with facilities where these functions are performed by employees. Cost of services also includes client service costs, which include personnel costs to collect, maintain and update our proprietary databases, to develop and maintain software application platforms and to provide consumer and client call center support.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel-related costs, selling costs, restructuring costs, corporate costs, fees for professional and consulting services, advertising costs, uncollectible accounts and other costs of administration such as marketing, human resources, finance, legal and administrative roles.

Income Taxes

We account for income taxes under the asset and liability method, whereby we recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as expected benefits of utilizing net operating loss and credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates we expect to apply in the years in which we expect to recover or settle those temporary differences. We recognize in income the effect of a change in tax rates on deferred tax assets and liabilities in the period that includes the enactment date.


53
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


We recognize the effect of income tax positions only if sustaining those positions is more likely than not. We reflect changes in recognition or measurement of uncertain tax positions in the period in which a change in judgment occurs. We recognize interest and penalties, if any, related to uncertain tax positions within income tax expense. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

We evaluate the need to establish a valuation allowance based upon expected levels of taxable income, future reversals of existing temporary differences, tax planning strategies and recent financial operations. We establish a valuation allowance to reduce deferred tax assets to the extent we believe it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

Comprehensive Income/(Loss)

Comprehensive income/(loss) includes all changes in equity except those resulting from investments by owners and distributions to owners. Specifically, foreign currency translation adjustments, amounts related to supplemental benefit plans, unrealized gains and losses on interest rate swap transactions and unrealized gains and losses on investment are recorded in other comprehensive income/(loss).

The following table shows the components of accumulated other comprehensive loss, net of taxes as of December 31, 2014 and 2013 :

 
2014
 
2013
Cumulative foreign currency translation
$
(77,460
)
 
$
(50,787
)
Cumulative supplemental benefit plans
(4,266
)
 
(568
)
Net unrecognized losses on interest rate swap
(2,335
)
 
(2,482
)
Net unrealized gains on marketable securities
275

 
248

Accumulative other comprehensive loss
$
(83,786
)
 
$
(53,589
)

Share-based Compensation

We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide services in exchange for the award. We used the binomial lattice option-pricing model to estimate the fair value for any options granted after December 31, 2005 through December 31, 2009. For the options granted subsequent to December 31, 2009, we used the Black-Scholes model to estimate the fair value. We utilize the Monte-Carlo simulation to estimate the fair value for any performance-based restricted stock units (“PBRSUs”) granted. We utilize the straight-line single option method of attributing the value of stock-based compensation expense unless another expense attribution model is required. As stock-based compensation expense recognized in results of operations is based on awards ultimately expected to vest, stock-based compensation expense has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We apply the long-form method for determining the pool of windfall tax benefits.

Currently, our primary means of providing stock-based compensation is granting restricted stock units (“RSUs”), PBRSUs and stock options. The fair value of any grant is based on the market value of our shares on the date of grant and is generally recognized as compensation expense over the vesting period. Shares granted to certain key employees have graded vesting and have a service and performance requirement and are therefore expensed using the accelerated multiple-option method to record stock-based compensation expense. All other awards have graded vesting and service is the only requirement to vest in the award and are therefore generally expensed using the straight-line single option method to record stock-based compensation expense.

In addition, we have an employee stock purchase plan that allows eligible employees to purchase common stock of the Company at 85.0% of the closing price on the first or last day of each quarter, whichever is lower (which was updated for 2014 from the closing price on the last day of each quarter). We recognize an expense in the amount equal to the estimated fair value of the discount. The 2001 employee stock purchase plan expired in September 2011. Our 2012 employee stock purchase plan

54
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


was approved by our stockholders at our 2012 annual meeting of stockholders and the first offering period commenced in October 2012.

See Note 13 –Share-based Compensation Plans for additional information related to stock options and restricted stock units.

Foreign Currency

The functional currencies of our foreign subsidiaries are their respective local currencies. The financial statements of the foreign subsidiaries are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange and income and expense amounts at average rates prevailing throughout the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income/(loss),” a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included within “Selling, general and administrative expenses” and are not material to the results of operations.

Earnings/(loss) Per Share

Basic earnings/(loss) per share is computed by dividing net income/(loss) available to our stockholders by the weighted-average number of common shares outstanding. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the weighted-average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if dilutive stock options had been exercised and RSUs and PBRSUs were vested. The dilutive effect of stock options and unvested RSUs and PBRSUs is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of stock options and vesting of RSUs and PBRSUs would be used to purchase shares of common stock at the average market price for the period. The assumed proceeds include the purchase price the grantee pays, the hypothetical windfall tax benefit that we receive upon assumed exercise or vesting and the hypothetical average unrecognized compensation expense for the period. We calculate the assumed proceeds from excess tax benefits based on the “as-if” deferred tax assets calculated under stock-based compensation standards.

Tax Escrow Disbursement Arrangements

We administer tax escrow disbursements as a service to our clients in connection with our tax services business. These deposits are maintained in segregated accounts for the benefit of our clients. These deposits totaled $265.6 million and $317.2 million at December 31, 2014 and 2013 , respectively. Because these deposits are held on behalf of our clients, they are not our funds and, therefore, are not included in the accompanying consolidated balance sheets.

These deposits generally remain in the accounts for a period of two to five business days, and we invest the funds in highly-rated, liquid investments, such as bank deposit products or AAA-rated money market funds. We earn interest income from these investments and bear the risk of any losses. However, we have not historically incurred any investment losses and do not anticipate incurring any future investment losses. As a result, we do not maintain any reserves for losses in value of these investments.

Under our contracts with our clients, if we make a payment in error or fail to pay a taxing authority when a payment is due, we could be held liable to our clients for all or part of the financial loss they suffer as a result of our act or omission. We maintained claim reserves relating to incorrect disposition of assets of $20.2 million and $21.4 million as of December 31, 2014 and 2013 , respectively.

Recent Accounting Pronouncements
    
In August 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements, and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted but we do not anticipate

55
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


electing early adoption. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In June 2014, the FASB issued updated guidance related to stock compensation. The amendment requires that a performance target that affects vesting and that could be achieved after the requisite period, be treated as a performance condition. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued updated guidance on revenue recognition in order to 1) remove inconsistencies in revenue requirements, 2) provide a better framework for addressing revenue issues, 3) improve comparability across entities, industries, etc., 4) provide more useful information through improved disclosures, and 5) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. Under the amendment, an entity should recognize revenue to depict the transfer of promised goods or services to clients in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting treatment for the incremental costs of obtaining a contract, which would not have been incurred had the contract not been obtained. Further, an entity is required to disclose sufficient information to enable the user of the financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows from contracts with clients. The updated guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In April 2014, the FASB issued updated guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In July 2013, the FASB issued updated guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss (“NOL”), a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a NOL carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a NOL carryforward, similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction and the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability. The updated guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. Adoption of this guidance did not have a material impact on our consolidated financial statements.

In March 2013, the FASB issued updated guidance related to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. This update clarifies that the release of cumulative translation adjustments into net income is required for both an entity ceasing to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity and when there is a loss of a controlling financial interest in a foreign entity or a step acquisition involving an equity method investment that is a foreign entity. The updated guidance is effective for annual and interim periods beginning after December 15, 2013. Adoption of this guidance did not have a material impact on our consolidated financial statements.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Note 3 - Property and Equipment, Net

Property and equipment, net as of December 31, 2014 and 2013 consists of the following:

(in thousands)
2014
 
2013
Land
$
4,000

 
$
4,000

Buildings
230

 
10,780

Furniture and equipment
91,397

 
90,420

Capitalized software
701,482

 
498,522

Leasehold improvements
30,001

 
50,369

 
827,110

 
654,091

Less: accumulated depreciation
(458,496
)
 
(456,549
)
Property and equipment, net
$
368,614

 
$
197,542


Depreciation expense for property and equipment was approximately $68.3 million , $60.8 million and $62.4 million for the years ended December 31, 2014 , 2013 and 2012 , respectively. We have reclassified $1.7 million of property and equipment, net, to assets of discontinued operations as of December 31, 2013 . Further, we recognized a gain of $13.9 million and a loss of $1.0 million on sale of property and equipment for the years ended December 31, 2014 and 2012 , respectively. See Note 12 - Fair Value of Financial Instruments for further discussion on property and equipment, net measured at fair value on a nonrecurring basis.

Note 4 - Capitalized Data and Database Development Costs, Net

Capitalized data and database development costs, net as of December 31, 2014 and 2013 consists of the following:

(in thousands)
2014
 
2013
Property data
$
477,221

 
$
446,991

Flood data
55,416

 
55,416

Eviction data
18,068

 
16,559

 
550,705

 
518,966

Less accumulated amortization
(217,440
)
 
(188,778
)
Capitalized data and database costs, net
$
333,265

 
$
330,188


Amortization expense for capitalized data and database development costs was approximately $32.6 million , $30.1 million and $27.3 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Note 5 - Investment in Affiliates, Net

Investment in affiliates, net is accounted for under the equity method of accounting as we are deemed to have significant influence over the affiliate but do not control or have a majority voting interest in the affiliate. The investment is carried at the cost of acquisition, including subsequent capital contributions and loans from us, plus our equity in undistributed earnings or losses since acquisition. Income tax expense of $8.9 million , $16.5 million and $22.1 million was recorded on those earnings for the years ended December 31, 2014, 2013 and 2012 , respectively. Dividends from equity method investments were $38.7 million , $36.7 million and $70.7 million for the years ended December 31, 2014, 2013 and 2012 , respectively.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


One of our subsidiaries owns a 50.1% interest in RELS LLC, a joint venture that provides products and services used in connection with loan originations. This investment in an affiliate contributed 80.0% , 70.7% and 73.8% of our total equity in earnings of affiliates, net of tax, for the years ended December 31, 2014, 2013 and 2012 , respectively. For the year ended December 31, 2014 , 2013 and 2012 we recorded $6.4 million , $8.7 million and $14.2 million , respectively, of operating revenues related to RELS LLC. Based on the terms and conditions of the joint venture agreement, we have significant influence but do not have control of, or a majority voting interest in, the joint venture. Accordingly, this investment is also accounted for under the equity method. The following summarized financial information for this investment (assuming 100.0% ownership interest) is as follows:

(in thousands)
2014
 
2013
Balance sheets
 
 
 
Total assets
$
44,536

 
$
56,925

Total liabilities
$
15,977

 
$
28,562


(in thousands)
2014
 
2013
 
2012
Statements of operations
 
 
 
 
 
Total revenues
$
221,328

 
$
347,070

 
$
451,876

Expenses and other
183,761

 
282,686

 
370,533

Net income from continuing operations
$
37,567

 
$
64,384

 
$
81,343

Income from discontinued operations
—

 
—

 
7,050

Net income attributable to RELS LLC
$
37,567

 
$
64,384

 
$
88,393

CoreLogic equity in earnings of affiliate, pre-tax
$
18,821

 
$
32,256

 
44,285


In March 2014, we acquired certain equity interests, assets and intellectual property; which we collectively refer to as "MSB/DataQuick." See Note 16 - Acquisitions for additional information. The acquisition included a 29.4% interest in Symbility Solutions Inc. ("Symbility"). In connection with the purchase price allocation, we recorded $18.3 million to reflect our basis in Symbility. The purchase allocation included $11.3 million of basis difference between the purchase price and our interest in the net assets of Symbility, which is comprised of an indefinite-lived component of $2.0 million and a finite-lived component of $9.4 million with an estimated weighted-average life of 15 years.

In September 2013, we acquired an additional 10% interest in PropertyIQ Ltd. ("PIQ") for NZD $3.3 million , or $2.6 million , a New Zealand joint venture, resulting in a 60% controlling interest. As we previously held a noncontrolling interest in PIQ, we recorded a gain of approximately $6.6 million during the third quarter of 2013, which is included in gain on investments and other, net in the accompanying consolidated statement of operations. Prior to our acquisition of the controlling interest, we accounted for the investment in PIQ using the equity method. See Note 16 - Acquisitions for additional information.

In August 2012, we completed the disposition of our remaining 29.8% interest in Lone Wolf Real Estate Technologies, Inc. for $8.0 million . The disposition resulted in a gain of $2.2 million , net for the year ended December 31, 2013 . This gain is included in gain on investments and other, net in the accompanying consolidated statements of operations.

See Note 12 - Fair Value of Financial Instruments for further discussion on investment in affiliates, net measured at fair value on a nonrecurring basis.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Note 6 - Goodwill, Net

A reconciliation of the changes in the carrying amount of goodwill, net, by reporting unit, for the years ended December 31, 2014 and 2013 is as follows:

(in thousands)
D&A
 
TPS
 
Consolidated
Balance at January 1, 2013
 
 
 
 
 
Goodwill
$
708,577

 
$
653,771

 
$
1,362,348

Accumulated impairment losses
(600
)
 
(6,925
)
 
(7,525
)
Goodwill, net
707,977

 
646,846

 
1,354,823

Acquisitions
26,846

 
28,942

 
55,788

Translation adjustments
(20,262
)
 
—

 
(20,262
)
Document solutions reclassification
(26,044
)
 
26,044

 
—

Other
325

 
—

 
325

Balance at December 31, 2013
 
 
 
 
 
Goodwill, net
688,842

 
701,832

 
1,390,674

Acquisitions
285,801

 
39,140

 
324,941

Transfer from assets of discontinued operations
—

 
77,616

 
77,616

Impairment loss on transferred assets of discontinued operations
—

 
(3,900
)
 
(3,900
)
Translation adjustments
(12,527
)
 
(303
)
 
(12,830
)
Under-banked credit services reclassification
(9,044
)
 
9,044

 
—

Other
4,257

 
—

 
4,257

Balance at December 31, 2014
 
 
 
 
 
Goodwill, net
$
957,329

 
$
823,429

 
$
1,780,758


As of December 31, 2013, we concluded that we would actively pursue the sale of our Asset Management and Processing Solutions ("AMPS") reporting segment, which was comprised of collateral solutions, field services, technology solutions, solutions express and outsourcing services. As a result, these businesses were reflected in our consolidated financial statement as discontinued operations. On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment, for consideration of $29.1 million , subject to working capital adjustments, as well as contingent consideration of up to $20.0 million . Further, we concluded to cease pursuing the sale of our remaining product lines, previously included in our AMPS reporting segment. These remaining product lines included our technology solutions, solutions express and outsourcing services product lines. These product lines were previously reflected as discontinued operations and are now reflected as part of continuing operations within our TPS segment reporting disclosures for all periods presented. See Note 1 - Description of the Company and Note 18 - Discontinued Operations for further discussion .

During 2013, as part of the process of marketing the sale of the AMPS businesses, we developed long-term projections and obtained indicative fair market values from potential participants. The level of indicative values was below the net book value of the businesses being marketed; therefore, we recorded a pre-tax non-cash impairment of $42.2 million related to our retained product lines, which is currently within continuing operations, and a pre-tax non-cash impairment of $9.6 million related to the businesses sold within discontinued operations. During the second quarter of 2014, we identified and corrected an error which understated the 2013 goodwill impairment charge by $3.9 million related to the retained product lines within continuing operations.
  
At September 30, 2014, we allocated the former AMPS reporting unit goodwill between the businesses sold and the retained product lines based on their relative fair value and also evaluated the retained goodwill of $73.7 million at the TPS reporting unit level noting no additional impairment indicators. Additionally, we reclassified $20.0 million of goodwill, net, to assets of discontinued operations as of the year ended December 31, 2013 , in connection with the sale of our collateral solutions and field services businesses. Further, in September 2014, we transferred our under-banked credit services business from our D&A segment to our TPS segment due to changes in our management structure and internal reporting, see Note 1 - Description

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


of the Company . As a result of the transfer, we revised our reporting for segment disclosure purposes, see Note 19 - Segment Financial Information and reassessed our reporting units for purposes of evaluating the carrying value of our goodwill. This assessment required us to perform a third quarter reassignment of our goodwill to each reporting unit impacted using the relative fair value approach, based on the fair values of the reporting units as of August 31, 2014. As of December 31, 2014 and December 31, 2013 , the assessment resulted in $8.7 million and $9.0 million , respectively, of goodwill allocated to our TPS reporting unit previously from D&A.

In connection with our acquisition of MSB/DataQuick, we recorded $277.8 million of goodwill within our D&A reporting unit and $29.9 million of goodwill within our TPS reporting unit for the year ended December 31, 2014 . Further, for the year ended December 31, 2014 , we recorded $2.3 million of goodwill in connection with our acquisition of Terralink International Limited ("Terralink") within our D&A segment, $9.2 million of goodwill in connection with our acquisition of Bank of America's mortgage-related credit reporting operations within our TPS segment and $5.7 million of goodwill in connection with acquisitions that were not significant, all of which were within our D&A reporting unit. See Note 16 - Acquisitions for additional information. For the year ended December 31, 2013, we recorded $12.7 million of goodwill in connection with our acquisition of EQECAT, Inc. and EQECAT Sarl ("EQECAT") in December 2013, $14.9 million of goodwill in connection with our acquisition of an additional 10% interest in PIQ in September 2013, $28.9 million of goodwill in connection with our acquisition of Bank of America's flood zone determination and tax processing services operations in July 2013 and $0.5 million of goodwill in connection with an acquisition that was not significant.

Our policy is to perform an annual goodwill impairment test for each reporting unit in the fourth quarter. In addition to our annual impairment test, we periodically assess whether events or circumstances occurred that potentially indicate that the carrying amounts of these assets may not be recoverable. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates and future market conditions, among others. Key assumptions used to determine the fair value of our reporting units in our testing were: (a) expected cash flow for the period from 2015 to 2020; and (b) a discount rate ranging from 9.0% to 9.5% , which was based on management's best estimate of the after-tax weighted average cost of capital. Based on the results of our fourth quarter goodwill impairment test, the goodwill attributable to our reporting units is not impaired as of December 31, 2014 . It is reasonably possible that changes in the facts, judgments, assumptions and estimates used in assessing the fair value of the goodwill could cause a reporting unit to become impaired.

Note 7 - Other Identifiable Intangible Assets, Net

Other identifiable intangible assets, net as of December 31, 2014 and 2013 consist of the following:

 
2014
 
2013
(in thousands)
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Client lists
$
394,070

 
$
(192,612
)
 
$
201,458

 
$
318,939

 
$
(165,578
)
 
$
153,361

Non-compete agreements
9,332

 
(7,351
)
 
1,981

 
9,150

 
(6,659
)
 
2,491

Trade names and licenses
93,497

 
(18,666
)
 
74,831

 
31,108

 
(11,152
)
 
19,956

 
$
496,899

 
$
(218,629
)
 
$
278,270

 
$
359,197

 
$
(183,389
)
 
$
175,808


Amortization expense for other identifiable intangible assets, net was $37.5 million , $35.1 million and $27.1 million for the years ended December 31, 2014, 2013 and 2012 , respectively. See Note 12 - Fair Value of Financial Instruments for further discussion on other identifiable intangible assets measured at fair value on a nonrecurring basis.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Estimated amortization expense for other identifiable intangible assets anticipated for the next five years is as follows:

(in thousands)
 
2015
$
39,795

2016
33,650

2017
31,702

2018
30,898

2019
28,139

Thereafter
114,086

 
$
278,270



61
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Note 8 - Long-Term Debt

Long-term debt as of December 31, 2014 and 2013 consist of the following:

(in thousands)
2014
 
2013
Acquisition-related notes:
 
 
 
 
Non-interest bearing acquisition note, $5.0 million installment due March 2016
$
4,623

 
$
9,276

Notes:
 
 

 
 

 
7.25% senior notes due June 2021
393,000

 
393,000

 
5.7% senior debentures due August 2014
—

 
825

 
7.55% senior debentures due April 2028
59,645

 
59,645

Bank debt:
 
 

 
 

 
Revolving line of credit borrowings due March 2019, weighted-average interest rate of 3.92% at December 31, 2014
85,000

 
—

 
Term loan facility borrowings due March 2019, weighted-average interest rate of 2.41% at December 31, 2014
786,250

 
—

 
Revolving line of credit borrowings due May 2016, weighted-average interest rate of 1.9% at December 31, 2013, extinguished March 2014
—

 
100,000

 
Term loan facility borrowings due May 2016, weighted-average interest rate of 2.9% at December 31, 2013, extinguished in March 2014
—

 
275,625

Other debt:
 
 

 
 

 
Various interest rates with maturities through 2017
2,045

 
1,559

Total long-term debt
1,330,563

 
839,930

Less current portion of long-term debt
11,352

 
28,154

Long-term debt, net of current portion
$
1,319,211

 
$
811,776


7.25% Senior Notes

On May 20, 2011, CoreLogic, Inc. issued $400.0 million aggregate principal amount of 7.25% senior notes due 2021 (the "Notes"). The Notes are guaranteed on a senior unsecured basis by each of our existing and future direct and indirect subsidiaries that guarantee our Credit Agreement. Separate financial statements for each guarantor subsidiary are not included in this filing because each guarantor subsidiary is 100% owned and the guarantees are full and unconditional, as well as joint and several. There were no significant restrictions on the ability of the parent company or any guarantor subsidiary to obtain funds from its subsidiaries by dividend or loan. The Notes bear interest at 7.25% per annum and mature on June 1, 2021. Interest is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2011. We repurchased $7.0 million of the Notes during 2012.

The Notes are senior unsecured obligations and: (i) rank equally with any of our existing and future senior unsecured indebtedness; (ii) rank senior to all our existing and future subordinated indebtedness; (iii) are subordinated to any of our secured indebtedness (including indebtedness under our credit facility) to the extent of the value of the assets securing such indebtedness; and (iv) are structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the Notes. The guarantees will: (i) rank equally with any existing and future senior unsecured indebtedness of the guarantors; (ii) rank senior to all existing and future subordinated indebtedness of the guarantors; and (iii) are subordinated in right of payment to any secured indebtedness of the guarantors (including the guarantee of our credit facility) to the extent of the value of the assets securing such indebtedness.

The Notes are redeemable by us, in whole or in part on or after June 1, 2016 at a price up to 103.63% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, to the applicable redemption date, subject to other limitations. We may also redeem up to 35.0% of the original aggregate principal amount of the Notes at any time prior to June 1, 2014 with the proceeds from certain equity offerings at a price equal to 107.25% of the aggregate principal amount of the Notes, together with accrued and unpaid interest, if any, to the applicable redemption date, subject to certain other limitations.

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


We may also redeem some or all of the Notes before June 1, 2016 at a redemption price equal to 100.0% of the aggregate principal amount of the Notes, plus a "make-whole premium," plus accrued and unpaid interest, if any, to the redemption date.

Upon the occurrence of specific kinds of change of control events, holders of the Notes have the right to cause us to purchase some or all of the Notes at 101.0% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

The indenture governing the Notes contains restrictive covenants that limit, among other things, our ability and that of our restricted subsidiaries to incur additional indebtedness or issue certain preferred equity, pay dividends or make other distributions or other restricted payments, make certain investments, create restrictions on distributions from restricted subsidiaries, create liens on properties and certain assets to secure debt, sell certain assets, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into certain transactions with affiliates and designate our subsidiaries as unrestricted subsidiaries. The indenture also contains customary events of default, including upon the failure to make timely payments on the Notes or other material indebtedness, the failure to satisfy certain covenants and specified events of bankruptcy and insolvency. If we have a significant increase in our outstanding debt or if our EBITDA decreases significantly, we may be unable to incur additional amounts of indebtedness, and the holders of the notes may be unwilling to permit us to amend the restrictive covenants to provide additional flexibility. In addition, the indenture contains a financial covenant for the incurrence of additional indebtedness that requires that the interest coverage ratio be at least 2.00 to 1.00 on a pro forma basis after giving effect to any new indebtedness. There are carve-outs that permit us to incur certain indebtedness notwithstanding satisfaction of this ratio, but they are limited. Based on our EBITDA and interest charges as of December 31, 2014 , we would be able to incur additional indebtedness without breaching the limitation on indebtedness covenant contained in the indenture and we are in compliance with all of our covenants under the indenture.

Credit Agreement

On March 25, 2014, the Company, CoreLogic Australia Pty Limited and the guarantors named therein entered into a senior secured credit facility agreement (the "Credit Agreement") with Bank of America, N.A. as administrative agent and other financial institutions, which replaced our previous senior secured credit facility that was entered into on May 23, 2011 (the "Terminated Credit Agreement"). The Credit Agreement provides for an $850.0 million five -year term loan facility (the "Term Facility") and a $550.0 million revolving credit facility (the "Revolving Facility"). The Revolving Facility includes a $100.0 million multicurrency revolving sub-facility and a $50.0 million letter of credit sub-facility. The Credit Agreement also provides for the ability to increase the Term Facility and Revolving Facility by up to $500.0 million in the aggregate.

The loans under the Credit Agreement bear interest, at our election, at (i) the Alternate Base Rate (as defined in the Credit Agreement) plus the Applicable Rate (as defined in the Credit Agreement) or (ii) the London interbank offering rate for Eurocurrency borrowings, or the LIBO Rate, adjusted for statutory reserves, or the Adjusted LIBO Rate plus the Applicable Rate. The initial Applicable Rate for Alternate Base Rate borrowings is 1.00% and for Adjusted LIBO Rate borrowings is 2.00% . Starting with the full fiscal quarter after the closing date, the Applicable Rate will vary depending on our leverage ratio. The minimum Applicable Rate for Alternate Base Rate borrowings will be 0.25% and the maximum will be 1.50% . The minimum Applicable Rate for Adjusted LIBO Rate borrowings will be 1.25% and the maximum will be 2.50% . The Credit Agreement also requires us to pay commitment fees for the unused portion of the Revolving Facility, which will be a minimum of 0.25% and a maximum of 0.50% , depending on our leverage ratio.

The obligations under the Credit Agreement are our and the guarantors' senior secured obligations, collateralized by a lien on substantially all of our and the guarantors' personal property assets and mortgages or deeds of trust on our and the guarantors' real property with a fair market value of $10.0 million or more (collectively, the "Collateral") and rank senior to any of our and the guarantors' unsecured indebtedness (including the Notes) to the extent of the value of the Collateral.

The Credit Agreement provides that loans under the Term Facility shall be repaid in quarterly installments, commencing on June 30, 2014 and continuing on each three-month anniversary thereafter until and including December 31, 2018 in an amount equal to $10.6 million on each repayment date from June 30, 2014 through March 31, 2016, $21.3 million on each repayment date from June 30, 2016 through March 31, 2017 and $31.9 million on each repayment date from June 30, 2017 through December 31, 2018. The outstanding balance of the term loan will be due on the fifth anniversary of the closing date of the Credit Agreement. The Term Facility is also subject to prepayment from (i) the net cash proceeds of certain debt incurred or issued by us and the guarantors and (ii) the net cash proceeds received by us or the guarantors from certain assets sales and recovery events, subject to certain reinvestment rights.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


The Credit Agreement contains financial maintenance covenants, including a (i) maximum total leverage ratio not to exceed 4.25 to 1.00 (stepped down to 4.00 to 1.00 starting with the fiscal quarter ending June 30, 2014, with a further step down to 3.50 to 1.00 starting with the fiscal quarter ending June 30, 2015) and (ii) a minimum interest coverage ratio of not less than 3.00 to 1.00 . The Credit Agreement also contains restrictive covenants that limit, among other things, our ability and that of our subsidiaries, to incur additional indebtedness or issue certain preferred equity, pay dividends or make other distributions or other restricted payments, make certain investments, create restrictions on distributions from subsidiaries, to enter into sale leaseback transactions, amend the terms of certain other indebtedness, create liens on certain assets to secure debt, sell certain assets, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets and enter into certain transactions with affiliates. The Credit Agreement also contains customary events of default, including upon the failure to make timely payments under the Term Facility and the Revolving Facility or other material indebtedness, the failure to satisfy certain covenants, the occurrence of a change of control and specified events of bankruptcy and insolvency. If we have a significant increase in our outstanding debt or if our earnings decrease significantly, we may be unable to incur additional amounts of indebtedness, and the lenders under the Credit Agreement may be unwilling to permit us to amend the financial or restrictive covenants described above to provide additional flexibility.

For the year ended December 31, 2014 , we prepaid $31.9 million of outstanding indebtedness under the Term Facility. This prepayment was applied to the most current portion of the term loan amortization schedule. At December 31, 2014 , we had borrowing capacity under the revolving lines of credit of $465.0 million , and were in compliance with the financial and restrictive covenants of our Credit Agreement. As of December 31, 2014 and 2013 , we have recorded $9.2 million and $4.6 million , respectively, of accrued interest expense.

7.55% Senior Debentures

In April 1998, we issued $100.0 million in aggregate principal amount of 7.55% senior debentures due 2028. In April 2010, in anticipation of the Separation, we commenced a cash tender offer for these debentures and also solicited consent from the holders thereof to expressly affirm that the Separation would not conflict with the terms of the debentures. In April 2010, we announced that valid consents were tendered representing over  50.0%  of the outstanding debentures. Accordingly, we received the requisite approvals from debenture holders and amended the related indentures. The indentures governing these debentures, as amended, contain limited restrictions on the Company.

Acquisition-Related Notes

In March 2011, we acquired a joint venture interest in Speedy Title & Appraisal Review Services LLC ("STARS'). Our initial investment in STARS was $20.0 million and we also issued a note payable for an additional $15.0 million of consideration payable in three equal installments of $5.0 million . The remaining note payable is for $5.0 million and is non-interest bearing and was discounted to $4.6 million as of December 31, 2014 .

Debt Issuance Costs

In connection with entering into the Credit Agreement, we incurred approximately $14.0 million of debt issuance costs of which $0.5 million was recorded as interest expense in the accompanying consolidated statements of operations for the year ended December 31, 2014 . We capitalized the remaining $13.5 million of debt issuance costs, within other assets in the accompanying consolidated balance sheet as of December 31, 2014 , and will amortize these costs over the term of the Credit Agreement. When we entered into the Credit Agreement, we had unamortized costs of $5.4 million related to previously recorded debt issuance costs, which we will amortize over the term of the Credit Agreement and we wrote-off $0.8 million of unamortized debt issuance costs during the year ended December 31, 2014 .

Interest Rate Swaps
 
In May 2014, we entered into amortizing interest rate swap transactions ("Swaps"). The Swaps became effective on December 31, 2014 and terminate in March 2019. The Swaps are for an initial notional balance of $500.0 million , with a fixed interest rate of 1.57% , and amortize quarterly by $12.5 million through December 31, 2017 and $25.0 million through December 31, 2018, with a remaining notional amount of $250.0 million . Previous amortizing interest rate swap transactions, entered into in June 2011, were terminated with a realized loss of $4.1 million for the year ended December 31, 2014 upon full repayment of the underlying debt associated with the Terminated Credit Agreement.
 

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


We entered into the Swaps in order to convert a portion of our interest rate exposure on the Term Facility floating rate borrowings from variable to fixed. We have designated the Swaps as cash flow hedges. The estimated fair value of these cash flow hedges resulted in a liability of $3.8 million and $4.0 million at December 31, 2014 and 2013 , respectively, which is included in the accompanying consolidated balance sheets as a component of other liabilities.
 
For the years ended December 31, 2014 , 2013 and 2012 , an unrealized loss of $2.4 million (net of $1.5 million in deferred taxes), an unrealized gain of $1.5 million (net of $0.9 million in deferred taxes) and an unrealized loss of $0.9 million (net of $0.6 million in deferred taxes), respectively, were recognized in other comprehensive loss related to these Swaps.
 
The aggregate annual maturities for long-term debt are as follows:

(in thousands)
 
Year ending December 31,
 
2015
$
11,352

2016
80,080

2017
117,386

2018
127,601

2019
541,875

Thereafter
452,645

Total (1)
$
1,330,939

 
 

(1)
Includes the acquisition related remaining note payable of $5.0 million , which is non-interest bearing and discounted to $4.6 million as of December 31, 2014 .

Note 9 - Income Taxes

Income before income taxes from continuing operations is as follows for the years ended December 31, 2014, 2013 and 2012 :
 
2014
 
2013
 
2012
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
United States
$
86,195

$
22,988

 
$
94,744

$
43,022

 
$
125,644

$
56,928

Foreign
19,196

—

 
11,881

795

 
(2,074
)
1,153

Total
$
105,391

$
22,988

 
$
106,625

$
43,817

 
$
123,570

$
58,081


For the years ended December 31, 2014 , 2013 and 2012 , income on continuing operations attributable to Corelogic includes income of certain incorporated noncontrolling interests.


65
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Provision for Income Taxes

The provision for taxes consists of the following for the years ended December 31, 2014, 2013 and 2012 :

(in thousands)
2014
 
2013
 
2012
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
Current:
 
 
 
 
 
 
 
 
Federal
$
186

$
7,603

 
$
19,294

$
14,083

 
$
23,574

$
18,929

State
2,137

1,265

 
(1,596
)
2,151

 
5,389

2,846

Foreign
3,249

—

 
2,006

222

 
(3,358
)
323

 
5,572

8,868

 
19,704

16,456

 
25,605

22,098

Deferred:
 

 
 
 

 
 
 

 
Federal
26,769

—

 
14,568

—

 
25,530

—

State
1,299

—

 
(273
)
—

 
2,658

—

Foreign
(3,870
)
—

 
(326
)
—

 
9,695

—

 
24,198

—

 
13,969

—

 
37,883

—

Total income tax provision
$
29,770

$
8,868

 
$
33,673

$
16,456

 
$
63,488

$
22,098


A reconciliation of the provision for taxes based on the federal statutory income tax rate on income from continuing operations to our effective income tax rate is as follows for the years ended December 31, 2014, 2013 and 2012 :

(in thousands)
2014
 
2013
 
2012
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
 
 Continuing Operations Attributable to CoreLogic
 Equity In Earnings of Affiliates
Federal statutory income tax rate
35.0
 %
35.0
%
 
35.0
 %
35.0
 %
 
35.0
%
35.0
 %
State taxes, net of federal benefit
6.2

3.6

 
4.0

3.2

 
6.1

3.2

Foreign taxes (less than) in excess of federal rate
(5.6
)
—

 
1.0

(0.6
)
 
5.0

(0.1
)
Non-deductible expenses, including Separation-related
1.7

—

 
4.9

—

 
0.3

—

Gain on disposition of subsidiary
—

—

 
—

—

 
—

—

Change from investee to subsidiary
—

—

 
(2.3
)
—

 
—

—

Change in uncertain tax positions
1.3

—

 
2.7

—

 
0.1

—

Research and development credits
(7.9
)
—

 
(10.2
)
—

 
—

—

Other items, net
(2.5
)
—

 
(3.5
)
—

 
4.9

—

Effective income tax rate
28.2
 %
38.6
%
 
31.6
 %
37.6
 %
 
51.4
%
38.1
 %

During the year ended December 31, 2014, we recorded income tax benefits of $8.4 million related to domestic research and development credits related to tax years 2013 and 2014.

As of December 31, 2014 , we had an estimated $13.2 million of undistributed earnings from foreign subsidiaries that are intended to be indefinitely reinvested in foreign operations. No incremental U.S. tax has been provided for these earnings. If in the future these earnings are repatriated to the U.S., or if we determine that the earnings will be remitted in the foreseeable future, additional tax provisions may be required. It is not practicable to calculate the deferred taxes associated with those

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


earnings because of the variability of multiple factors that would need to be assessed at the time of assumed repatriation; however, foreign tax credits may be available to reduce federal income taxes in the event of distribution.

Deferred Tax Assets and Liabilities

Deferred income taxes arise from temporary differences between financial reporting and tax reporting bases of assets and liabilities, and operating loss and tax credit carryforwards for tax purposes. The components of the deferred income tax assets and liabilities as of December 31, 2014 and 2013 are as follows:

(in thousands)
2014
 
2013
Deferred tax assets:
 
 
 
Net losses and credit carryforwards
$
98,633

 
$
41,582

Deferred revenue
137,090

 
115,850

Bad debt reserves
2,962

 
5,205

Employee benefits
47,414

 
48,646

Accrued expenses and loss reserves
29,791

 
29,976

Other
(989
)
 
324

Less: valuation allowance
(21,912
)
 
(24,173
)
 
$
292,989

 
$
217,410

Deferred tax liabilities:
 

 
 

Depreciable and amortizable assets
247,458

 
190,905

Investment in affiliates
19,169

 
16,985

 
$
266,627

 
$
207,890

Net deferred tax asset
$
26,362

 
$
9,520


As of December 31, 2014 and 2013 , we had federal net operating losses (“NOLS”) of $195.5 million and $55.0 million , respectively, which begin to expire in 2021. The state NOLS were $289.4 million and $94.8 million as December 31, 2014 and 2013 , respectively, which begin to expire in 2015. The foreign NOLS were $15.3 million and $25.4 million as of December 31, 2014 and 2013 , respectively, of which approximately $2.2 million have an indefinite expiration and the remainder begin to expire in 2015. The increase in the federal and state NOLS was primarily due to the acquisition of MSB/DataQuick. As of December 31, 2014 we had available federal capital losses of $19.4 million expiring in 2017. As of December 31, 2014 we had available state capital losses of $87.2 million expiring at various times beginning in 2015. The change of ownership provisions of the Tax Reform Act of 1986 may limit utilization of a portion of our domestic NOL and tax credit carryforwards to future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.

As of December 31, 2014 and 2013 , we had valuation allowances of approximately $21.9 million and $24.2 million , respectively, against certain U.S. and foreign deferred tax assets to reflect the deferred tax asset at the net amount that is more likely than not to be realized. The decrease in the valuation allowance recorded of approximately $2.3 million is primarily an offset to foreign deferred tax assets, which we believe is more likely than not that future taxable income will be sufficient to realize.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Unrecognized Tax Benefits

A reconciliation of the unrecognized tax benefits for the years ended December 31, 2014 , 2013 and 2012 are as follows:

(in thousands)
2014
 
2013
 
2012
Unrecognized tax benefits - opening balance
$
55,325

 
$
52,654

 
$
19,302

Gross increases - tax positions in prior period
2,950

 
—

 
33,787

Gross decreases - tax positions in prior period
(22,698
)
 
—

 
(21
)
Gross increases - current-period tax positions
651

 
2,671

 
—

Settlements with taxing authorities
(565
)
 
—

 
(163
)
Expiration of the statute of limitations for the assessment of taxes
—

 
—

 
(251
)
Unrecognized tax benefits - ending balance
$
35,663

 
$
55,325

 
$
52,654


Included in the December 31, 2014 and 2013 balances are $12.7 million and $11.2 million , respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The remaining $21.5 million and $44.1 million for the years ended December 31, 2014 and 2013 , respectively, would be offset against FAFC receivable pursuant to the Tax Sharing Agreement entered in connection with the Separation. In addition, our reserves increased by $1.9 million due to our acquisition of MSB/DataQuick, which were presented as a reduction to deferred tax assets for net operating loss carry forwards.

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014 and 2013 , we had $16.0 million and $9.1 million , respectively, accrued for the payment of interest and penalties. These balances are gross amounts before any tax benefits and are included in other liabilities in the accompanying consolidated balance sheets. For the years ended December 31, 2014, 2013 and 2012 , we recognized approximately $0.6 million , $0.8 million and $0.6 million , respectively in interest and penalties, in the accompanying consolidated statements of income. Our material tax jurisdiction is the U.S. With a few minor exceptions, we are no longer subject to U.S. federal, state, local, or foreign income tax examinations by tax authorities for years prior to December 31, 2006. Our income tax returns, in several jurisdictions, are being examined by various tax authorities. Management believes that adequate amounts of tax and related interest and penalties, if any, have been provided for any adjustments that may result from these examinations.

During the year ended December 31, 2014 , we effectively settled our 2007-2010 Internal Revenue Service ("IRS") exam, which resulted in a reversal of approximately $0.3 million in unrecognized tax benefits. The decrease in our reserves for uncertain tax positions relates primarily to the settlement of the claim, on our behalf by FAFC, for an uncertain tax position on a prior year tax return. The claim is for FAFC losses reported and is subject to indemnification from FAFC under the Tax Sharing Agreement. As of December 31, 2014 , the liability was reduced by approximately $29.6 million of which the impact to net income was zero.

We are currently under examination for the tax years 2005 through 2011 by the U.S. and various taxing authorities. It is reasonably possible the amount of the unrecognized benefit with respect to certain unrecognized positions could significantly increase or decrease within the next twelve months. We estimate that unrecognized tax benefits could decrease by up to $21.6 million within the next twelve months. The estimated change is primarily related to IRS audits, subject to the FAFC indemnification, and will have no impact to net income.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Note 10 - Earnings/(Loss) Per Share

The following is a reconciliation of net income per share attributable to CoreLogic for the years ended December 31, 2014 , 2013 and 2012 , using the treasury-stock method:
(in thousands, except per share amounts)
2014
 
2013
 
2012
Numerator for basic and diluted net income/(loss) per share:
 
 
 
 
 
Income from continuing operations, net of tax
$
89,741

 
$
100,313

 
$
96,065

(Loss)/income from discontinued operations, net of tax
(16,653
)
 
14,423

 
12,387

Gain/(loss) from sale of discontinued operations, net of tax
112

 
(7,008
)
 
3,841

Net income attributable to CoreLogic
$
73,200

 
$
107,728

 
$
112,293

Denominator:
 

 
 

 
 

Weighted-average shares for basic income/(loss) per share
90,825

 
95,088

 
102,913

Dilutive effect of stock options and restricted stock units
1,604

 
2,021

 
1,137

Weighted-average shares for diluted income/(loss) per share
92,429

 
97,109

 
104,050

Income/(loss) per share
 

 
 

 
 

Basic:
 

 
 

 
 

Income from continuing operations, net of tax
$
0.99

 
$
1.05

 
$
0.93

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

Gain/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

Net income attributable to CoreLogic
$
0.81

 
$
1.13

 
$
1.09

Diluted:
 

 
 

 
 

Income from continuing operations, net of tax
$
0.97

 
$
1.03

 
$
0.92

(Loss)/income from discontinued operations, net of tax
(0.18
)
 
0.15

 
0.12

Gain/(loss) from sale of discontinued operations, net of tax
—

 
(0.07
)
 
0.04

Net income attributable to CoreLogic
$
0.79

 
$
1.11

 
$
1.08


For the year ended December 31, 2014 , 2013 and 2012 , RSUs, PBRSUs and stock options of 0.3 million , 0.4 million and 2.6 million , respectively, were excluded from the weighted average diluted common shares outstanding due to their antidilutive effect.

Note 11 - Employee Benefit Plans

We currently offer a variety of employee benefit plans, including a 401(k) savings plan and non-qualified plans, including our frozen unfunded supplemental management and executive benefit plans (collectively, the “SERPs”), a frozen pension restoration plan (“Restoration”) and a deferred compensation plan.

The non-qualified plans are exempt from most provisions of the Employee Retirement Income Security Act because they are only available to a select group of management and highly compensated employees and are therefore not qualified employee benefit plans. To preserve the tax-deferred savings advantages of a non-qualified plan, federal law requires that it be an unfunded or informally funded future promise to pay.

As part of our acquisition of CDS Mapping in December 2012, we recorded a liability related to the pension obligation and an asset related to the fair value of plan assets. The CDS Mapping plan was terminated, effective December 31, 2012. Refer below for details of the amounts recorded. In addition refer to Note 16 - Acquisitions, for further details of the CDS Mapping acquisition.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


The following table summarizes the balance sheet impact, including benefit obligations, assets and funded status associated with the SERPs and Restoration plan as of December 31, 2014 and 2013 :

(in thousands)
2014
 
2013
Change in projected benefit obligation:
 
 
 
Benefit obligation at beginning of period
$
27,059

 
$
34,102

Service costs
282

 
637

Interest costs
1,233

 
1,293

Actuarial losses/(gains)
5,564

 
(5,826
)
Benefits paid
(1,879
)
 
(3,147
)
Projected benefit obligation at end of period
$
32,259

 
$
27,059

 
 
 
 
Change in plan assets:
 

 
 

Plan assets at fair value at beginning of period
$
—

 
$
1,432

Actual return on plan assets
—

 
(53
)
Company contributions
1,879

 
1,770

Benefits paid
(1,879
)
 
(3,149
)
Plan assets at fair value at end of the period
—

 
—

Reconciliation of funded status:
 

 
 

Unfunded status of the plans
$
(32,259
)
 
$
(27,059
)
 
 
 
 
Amounts recognized in the consolidated balance sheet consist of:
 

 
 

Accrued benefit liability
$
(32,259
)
 
$
(27,059
)
Pension plan asset
$
—

 
$
—

 
$
(32,259
)
 
$
(27,059
)
Amounts recognized in accumulated other comprehensive income/(loss):
 

 
 

Unrecognized net actuarial loss
$
13,685

 
$
8,840

Unrecognized prior service credit
(6,775
)
 
(7,920
)
 
$
6,910

 
$
920


The net periodic pension cost for the years ended December 31, 2014 , 2013 and 2012 , for the FAC defined benefit pension plan, SERPs, Restoration plan and CDS Mapping cash balance plan includes the following components:

(in thousands)
2014
 
2013
 
2012
Expenses:
 
 
 
 
 
Service costs
$
282

 
$
637

 
$
932

Interest costs
1,231

 
1,293

 
1,386

Expected return on plan assets
—

 
(57
)
 
(41
)
Amortization of net (gain)/loss
(424
)
 
179

 
80

 Net periodic benefit cost
$
1,089

 
$
2,052

 
$
2,357



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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Weighted-average discount rate used to determine costs for the plans were as follows:

 
2014
 
2013
 
2012
SERP Plans
4.72
%
 
3.89
%
 
4.52
%
Restoration Plan
4.82
%
 
4.02
%
 
4.57
%
CDS Mapping
N/A

 
N/A

 
4.00
%

Weighted-average actuarial assumptions used to determine benefit obligations for the plans were as follows:

 
2014
 
2013
SERP Plans
 
 
 
Discount rate
3.85
%
 
4.72
%
Salary increase rate
N/A

 
N/A

Restoration Plan
 
 
 
Discount rate
3.98
%
 
4.82
%
CDS Mapping
 
 
 
Discount rate
N/A

 
N/A

Salary increase rate
N/A

 
N/A


The discount-rate assumption used for pension plan accounting reflects the yield available on high-quality, fixed-income debt securities that match the expected timing of the benefit obligation payments.

The following table provides the funded status in the defined SERPs as of December 31, 2014 , 2013 and 2012 :

(in thousands)
2014
 
2013
 
2012
Projected benefit obligation
$
32,259

 
$
27,059

 
$
34,102

Accumulated benefit obligation
$
32,259

 
$
27,059

 
$
34,102

Plan assets at fair value at end of year
$
—

 
$
—

 
$
—


The following benefit payments for all plans, which reflect expected future turnover, as appropriate, are expected to be paid as follows:

(in thousands)
 
 
2015
 
$
1,955

2016
 
1,414

2017
 
1,397

2018
 
1,379

2019
 
1,361

2020-2024
 
8,358

 
 
$
15,864


The Corelogic, Inc. 401(k) Savings Plan (the "Savings Plan") allows for employee-elective contributions up to the maximum deductible amount as determined by the Internal Revenue Code. We make discretionary matching contributions to the Savings Plan based on participant contributions as well as discretionary contributions based on profitability. The expense within continuing operations for the years ended December 31, 2014 , 2013 and 2012 related to the Savings Plan were $5.7 million , $7.6 million and $6.0 million , respectively. The Savings Plan allows the participants to purchase shares of our common

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


stock as one of the investment options, subject to certain limitations. The Savings Plan held 866,559 and 951,704 shares of our common stock, representing 1.0% of the total shares outstanding at December 31, 2014 and 2013 .

We have a deferred compensation plan that allows participants to defer up to 80% of their salary, commissions and bonus. Participants allocate their deferrals among a variety of investment crediting options (known as “deemed investments”). Deemed investments mean that the participant has no ownership interest in the funds they select; the funds are only used to measure the gains or losses that will be attributed to their deferral account over time. Participants can elect to have their deferral balance paid out in a future year while they are still employed or after their employment ends. The participants’ deferrals and any earnings on those deferrals are general unsecured obligations of the Company. The Company is informally funding the deferred compensation plan through a tax-advantaged investment known as variable universal life insurance. Deferred compensation plan assets are held as a Company asset within a special trust, called a “rabbi trust.”

The value of the assets underlying our deferred compensation plan was $30.3 million and $30.5 million as of December 31, 2014 and 2013 , respectively, and is included in other assets in the consolidated balance sheets. The unfunded liability for our deferred compensation plan was $34.2 million and $34.3 million as of December 31, 2014 and 2013 , respectively, and is included in other liabilities in the accompanying consolidated balance sheets.

Note 12 - Fair Value of Financial Instruments

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable.
 
The market approach is applied for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value balances are classified based on the observability of those inputs.
 
A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize observable inputs in markets other than active markets.

In estimating the fair value of the financial instruments presented, we used the following methods and assumptions:

Cash and cash equivalents

For cash and cash equivalents, we believe that the carrying value is a reasonable estimate of fair value due to the short-term nature of the instruments.

Restricted cash

Restricted cash is comprised of certificates of deposit that are pledged for various letters of credit secured by the Company. We deem the carrying value to be a reasonable estimate of fair value due to the nature of these instruments.

Marketable securities

Equity and debt securities are classified as available-for-sale securities and are valued using quoted prices in active markets.

Long-term debt

The fair value of long-term debt was estimated based on the current rates available to us for similar debt of the same remaining maturities and consideration of our default and credit risk.


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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Interest rate swap agreements and foreign currency purchase agreements
 
The fair value of the interest rate swap agreements and forward currency purchase agreements were estimated based on market value quotes received from the counter parties to the agreements.

The fair values of our financial instruments as of December 31, 2014 are presented in the following table:

 
Fair Value Measurements Using
 
 
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
104,677

 
$
—

 
$
—

 
$
104,677

Restricted cash
—

 
12,360

 
—

 
12,360

Equity securities
22,264

 
—

 
—

 
22,264

Total Financial Assets
$
126,941

 
$
12,360

 
$
—

 
$
139,301

 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
Total debt
$
—

 
$
1,323,201

 
$
—

 
$
1,323,201

Total Financial Liabilities
$
—

 
$
1,323,201

 
$
—

 
$
1,323,201

 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
Liability for interest rate swap agreements
$
—

 
$
3,781

 
$
—

 
$
3,781


The fair values of our financial instruments as of December 31, 2013 are presented in the following table:

 
Fair Value Measurements Using
 
 
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
134,419

 
$
—

 
$
—

 
$
134,419

Restricted cash
—

 
12,050

 
—

 
12,050

Equity securities
22,220

 
—

 
—

 
22,220

Total Financial Assets
$
156,639

 
$
12,050

 
$
—

 
$
168,689

 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
Total debt
$
—

 
$
869,232

 
$
—

 
$
869,232

Total Financial Liabilities
$
—

 
$
869,232

 
$
—

 
$
869,232

 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
Liability for interest rate swap agreements
$
—

 
$
4,020

 
$
—

 
$
4,020



73
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2014 :

 
 
 
Fair Value Measurements Using
 
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
Impairment Losses
Property and equipment, net
$
—

 
$
—

 
$
—

 
$
—

 
$
1,070

Goodwill, net
—

 
—

 
—

 
—

 
3,900

Investment in affiliates, net
—

 
—

 
—

 
—

 
360

 
$
—

 
$
—

 
$
—

 
$
—

 
$
5,330


The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2013 :

 
 
 
Fair Value Measurements Using
 
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
Impairment Losses
Assets of discontinued operations
$
19,961

 
$
—

 
$
—

 
$
19,961

 
$
9,614

Property and equipment, net
—

 
—

 
—

 
—

 
1,969

Goodwill, net
77,616

 
—

 
—

 
77,616

 
42,216

Other intangible assets, net
—

 
—

 
—

 
—

 
248

 
$
97,577

 
$
—

 
$
—

 
$
97,577

 
$
54,047


The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2012 :

 
 
 
Fair Value Measurements Using
 
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
Impairment Losses
Assets of discontinued operations
$
—

 
$
—

 
$
—

 
$
—

 
$
18,741

Property and equipment, net
—

 
—

 
—

 
—

 
19,880

Investment in affiliates, net
—

 
—

 
—

 
—

 
1,246

 
$
—

 
$
—

 
$
—

 
$
—

 
$
39,867


We recorded non-cash impairment charges of $9.6 million and $18.7 million for the years ended December 31, 2013 and 2012 , respectively, in our assets of discontinued operations primarily due to the disposition or wind down of our discontinued operations. See Note 18 - Discontinued Operations for further discussion. We recorded non-cash impairment charges of $1.1 million , $2.0 million and $19.9 million for the years ended December 31, 2014, 2013 and 2012 , respectively, in our property and equipment, net primarily due to land and internally developed software. Further, we recorded non-cash impairment charges of $3.9 million and $42.2 million for the years ended December 31, 2014 and 2013 , respectively, in our goodwill, net related to our technology solutions, solutions express and outsourcing services product lines. See Note 6 - Goodwill, Net for further discussion. In addition, we recorded a non-cash impairment charge of $0.2 million for the year ended December 31, 2013 in our other intangible assets, net related to client lists. Finally, we recorded non-cash impairment charges of $0.4 million and $1.2 million for the years ended December 31, 2014 and 2012 , respectively, in our investment in affiliates, net due to other than temporary loss in value from the absence of an ability to recover the carrying amount of the investments. These non-cash impairment charges relate to investments for which there is no material income/loss included in equity in earnings of affiliates, net of tax. Therefore, they are included in gain on investments and other, net in the accompanying consolidated statements of operations.

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Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



Note 13 - Share-Based Compensation Plans

We issue equity awards under the CoreLogic, Inc. 2011 Performance Incentive Plan (the “Plan”) which was approved by our stockholders at our Annual Meeting, held on May 19, 2011 and amended on July 29, 2014. The amended Plan permits the grant of RSUs, PBRSUs and stock options. Prior to the approval of the Plan, we issued share-based awards under the CoreLogic, Inc. 2006 Incentive Plan (the “2006 Plan”). The amended Plan was adopted, in part, to make an aggregate of 21,930,000 shares of the Company's common stock available for award grants, so that the Company will have sufficient authority and flexibility to adequately provide for future incentives.

We primarily utilize RSUs, PBRSUs and stock options as our share-based compensation instruments for employees and directors. The fair value of any share-based compensation instrument grant is based on the market value of our shares on the date of grant and is recognized as compensation expense over the vesting period.

Restricted Stock Units

For the years ended December 31, 2014 , 2013 and 2012 , we awarded 807,890 , 788,680 and 780,682 RSUs, respectively, with an estimated value of $24.7 million , $20.8 million and $13.6 million , respectively. The RSU awards will vest ratably over 3 years. RSU activity for the year ended December 31, 2014 is as follows:

(in thousands, except weighted average fair value prices)
Number of Shares
 
Weighted Average Grant-Date Fair Value
Unvested RSUs outstanding at December 31, 2013
1,466

 
$
22.13

RSUs granted
808

 
$
30.62

RSUs vested
(697
)
 
$
20.89

RSUs forfeited
(197
)
 
$
26.02

Unvested RSUs outstanding at December 31, 2014
1,380

 
$
27.17


As of December 31, 2014 , there was $19.7 million of total unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 1.9 years. The fair value of RSUs is based on the market value of the Company’s shares on the date of grant.

Performance-Based Restricted Stock Units

For the years ended December 31, 2014 , 2013 and 2012 , we awarded 367,558 , 410,497 and 347,572 PBRSUs, respectively, with an estimated value of $11.6 million , $10.7 million and $5.6 million , respectively. These awards could be subject to service-based, performance-based and market-based vesting. The performance period for the PBRSUs awarded during 2014 is from January 1, 2014 to December 31, 2016 and the performance metric is adjusted earnings per share and market-based conditions. Subject to satisfaction of the performance criteria, the 2014 awards will vest on December 31, 2016.

The performance period for the PBRSUs awarded during 2013 is from January 1, 2013 to December 31, 2015 and the performance metric is adjusted earnings per share and market-based conditions. Subject to satisfaction of the performance criteria, the 2013 awards will vest on December 31, 2015. The fair values of the 2014 and 2013 awards were estimated using Monte-Carlo simulation with the following weighted-average assumptions:

 
 
2014
 
2013
 
 
 
 
 
Expected dividend yield
 
—
 %
 
—
%
Risk-free interest rate (1)
 
0.74
 %
 
0.41
%
Expected volatility (2)
 
27.88
 %
 
29.87
%
Average total shareholder return (2)
 
(0.90
)%
 
17.87
%

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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



(1)
The risk-free interest rate for the periods within the contractual term of the PBRSUs is based on the U.S. Treasury yield curve in effect at the time of the grant.
(2)
The expected volatility and average total shareholder return is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

The performance period for the PBRSUs awarded during 2012 was from January 1, 2012 to December 31, 2012 and the performance metric was adjusted earnings per share. Based on achievement of the performance criteria, the 2012 awards were earned at 150% of target and will vest subject to continuation of employment until December 31, 2014. The fair value of the 2012 awards were based on the market value of the Company's common stock on the date of grant.

PBRSU activity for the year ended December 31, 2014 is as follows:

(in thousands, except weighted average fair value prices)
Number of Shares
 
Weighted Average Grant-Date Fair Value
Unvested PBRSUs outstanding at December 31, 2013
1,247

 
$
18.52

PBRSUs granted
368

 
$
31.46

PBRSUs vested
(612
)
 
$
16.92

PBRSUs forfeited
(99
)
 
$
23.52

Unvested PBRSUs outstanding at December 31, 2014
904

 
$
22.19


As of December 31, 2014 , there was $1.1 million of total unrecognized compensation cost related to unvested PBRSUs that is expected to be recognized over a weighted-average period of 1.3 years. The fair value of PBRSUs is based on the market value of the Company’s shares on the date of grant.

Stock Options

In 2014 and 2013 , we issued stock options as incentive compensation for certain key employees. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The 2014 and 2013 options will vest in 3 equal annual installments on the first, second and third anniversaries of grant and expire 10 years after the grant date. The fair values of these stock options were estimated using a Black-Scholes model with the following weighted-average assumptions:
    
 
2014
 
2013
 
2012
Expected dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate (1)
1.74
%
 
0.90
%
 
1.00
%
Expected volatility (2)
37.92
%
 
41.65
%
 
42.81
%
Expected life (3)
5.5

 
5.5

 
5.5


(1)
The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.
(2)
The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.
(3)
The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

For the years ended December 31, 2014 , 2013 and 2012 we awarded 290,737 , 445,705 and 581,265 options, respectively, with an estimated value of $9.1 million , $11.7 million and $9.3 million , respectively. Option activity for the year ended December 31, 2014 is as follows:


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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


(in thousands, except weighted average prices)
Number of Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term
 
Aggregate Intrinsic Value
Options outstanding at December 31, 2013
2,663

 
$
21.12

 
 
 
 
Options granted
291

 
$
31.46

 
 
 
 
Options exercised
(303
)
 
$
19.77

 
 
 
 
Options canceled
(88
)
 
$
25.02

 
 
 
 
Options outstanding at December 31, 2014
2,563

 
$
22.32

 
4.9
 
$
23,903

Options vested and expected to vest at December 31, 2014
2,539

 
$
22.26

 
4.9
 
$
23,834

Options exercisable at December 31, 2014
1,953

 
$
21.18

 
3.9
 
$
20,344


As of December 31, 2014 , there was $3.5 million of total unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 1.8 years.

The intrinsic value of options exercised was $3.5 million , $13.8 million and $3.7 million for the years ended December 31, 2014 , 2013 and 2012 , respectively. This intrinsic value represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option.

Employee Stock Purchase Plan

The employee stock purchase plan allows eligible employees to purchase our common stock at 85.0% of the lesser of the closing price on the first day or the last day of each quarter. Our employee stock purchase plan was approved by our stockholders at our 2012 annual meeting of stockholders and the first offering period commenced in October 2012. We recognized an expense for the amount equal to the estimated fair value of the discount during the last offering period.

The following table sets forth the share-based compensation expense recognized for the years ended December 31, 2014 , 2013 and 2012 .

(in thousands)
2014
 
2013
 
2012
Restricted stock units
$
19,078

 
$
12,754

 
$
9,988

Performance-based restricted stock units
1,750

 
9,746

 
7,050

Stock options
3,730

 
3,982

 
3,664

Employee stock purchase plan
1,030

 
557

 
107

 
$
25,588

 
$
27,039

 
$
20,809


The above share-based compensation expense has $1.7 million , $1.0 million and $2.6 million included within cost of services for the years ended December 31, 2014 , 2013 and 2012 , respectively. It also includes $0.2 million , $0.1 million and $0.2 million of share-based compensation expense for the years ended December 31, 2014 , 2013 and 2012 , respectively, reported within (loss)/income from discontinued operations, net of tax.


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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Note 14 - Commitments and Contingencies

Lease Commitments

We lease certain office facilities, automobiles and equipment under operating leases, which, for the most part, are renewable. The majority of these leases also provide that the Company will pay insurance and taxes.

Future minimum rental payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2014 are as follows:

(in thousands)
 
2015
$
32,280

2016
27,795

2017
16,654

2018
12,814

2019
10,910

Thereafter
13,483

 
$
113,936


Total rental expenses for all operating leases and month-to-month rentals were $35.6 million , $39.8 million , $42.4 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Operational Commitments

In August 2011, an affiliate of Cognizant Technology Solutions Corporation ("Cognizant"), acquired CoreLogic India Global Services Private Limited, our India-based captive operations ("CoreLogic India"). The purchase price for CoreLogic India was $50.0 million in cash before working capital adjustments. As part of the transaction, we entered into a Master Professional Services Agreement ("Services Agreement") and supplement ("Supplement") with Cognizant under which Cognizant will provide a range of business process and information technology services to us. The Supplement has an initial term of seven years and we have the unilateral right to extend the term for up to three one -year periods. During the first five years of the agreement, we are subject to a net total minimum commitment of approximately $303.5 million , plus applicable inflation adjustments. In connection with the sale, we recorded $27.1 million of deferred gain on sale which is being recognized to income over the commitment period of five years. As of December 31, 2014 , the remaining minimum commitment totaled $93.5 million .

Note 15 - Litigation and Regulatory Contingencies

We have been named in various lawsuits. Also, we may from time to time be subject to audit or investigation by governmental agencies. Currently, governmental agencies are auditing or investigating certain of our operations.

With respect to matters where we have determined that a loss is both probable and reasonably estimable, we have recorded a liability representing our best estimate of the financial exposure based on known facts. While the ultimate disposition of each such audit, investigation or lawsuit is not yet determinable, we do not believe that the ultimate resolution of these matters, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows. In addition, we do not believe there is a reasonable possibility that a material loss exceeding amounts already accrued may have been incurred. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. We record expenses for legal fees as incurred.
    
Federal Deposit Insurance Corporation

On May 9, 2011, the Federal Deposit Insurance Corporation (the “FDIC”), as Receiver of Washington Mutual Bank (“WaMu”), filed a complaint in the United States District Court for the Central District of California (the “Court”) against

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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


CoreLogic Valuation Services, LLC (“CVS”), as successor to eAppraiseIT, LLC (“eAppraiseIT”) and several of its current and former affiliates.

The FDIC complaint alleged that eAppraiseIT was grossly negligent and breached its contract with WaMu in the provision of appraisal services in 2006 and 2007 relating to 194 residential mortgage loans. On November 14, 2011, the Court granted the defendants' motion to dismiss the FDIC's gross negligence, alter ego, single business enterprise and joint venture claims, and a portion of the breach of contract claim. On November 30, 2011, the FDIC filed its first amended complaint, alleging only breach of contract claims and naming only CVS and its parent CoreLogic Real Estate Solutions, LLC f/k/a First American Real Estate Solutions, LLC as defendants. The amended complaint sought to recover losses of at least $129.0 million that the FDIC alleges WaMu suffered on loans allegedly related to these appraisal services. On February 6, 2012, the Court granted the defendants' motion to dismiss the FDIC's $16.0 million breach of contract claim related to 26 appraisal services allegedly provided before the effective date of the WaMu - eAppraiseIT Agreement. On February 16, 2012, the FDIC filed a second amended complaint reasserting that claim. On April 25, 2012, the court granted the defendants' motion to dismiss that $16.0 million claim with prejudice. On December 4, 2012, the FDIC filed its third amended complaint further reducing the total number of transactions at issue to 160 and reducing the amount of its purported losses to at least $108.0 million . On June 20, 2013, the court dismissed 14 additional transactions with prejudice pursuant to a stipulation between the parties. As a result, the number of transactions at issue was reduced to 146 and the amount of the FDIC's purported losses was reduced to at least $98.9 million . On May 28, 2014 the parties settled the case with the defendants agreeing to pay a total of $12.0 million ; which was recorded within loss from discontinued operations, net of tax for the three months ended June 30, 2014. Following payment of the settlement amount on July 2, 2014, the case was dismissed with prejudice on July 7, 2014.

Real Estate Settlement Procedures Act Class Action

On February 8, 2008, a purported class action was filed in the United States District Court for the Northern District of California, San Jose Division, against WaMu and eAppraiseIT alleging breach of contract, unjust enrichment, and violations of the Real Estate Settlement Procedures Act (“RESPA”), the California Unfair Competition Law and the California Consumers Legal Remedies Act. The complaint alleged a conspiracy between WaMu and eAppraiseIT to allow WaMu to direct appraisers to artificially inflate appraisals in order to qualify higher value loans that WaMu could then sell in the secondary market. Plaintiffs subsequently voluntarily dismissed WaMu on March 9, 2009. On August 30, 2009, the court dismissed all claims against eAppraiseIT except the RESPA claim.

On July 2, 2010, the court denied plaintiff's first motion for class certification. On November 19, 2010, the plaintiffs filed a renewed motion for class certification. On April 25, 2012, the court granted plaintiffs' renewed motion and certified a nationwide class of all persons who, on or after June 1, 2006, received home loans from WaMu in connection with appraisals that were obtained through eAppraiseIT. On July 12, 2012, the Ninth Circuit Court of Appeals declined to review the class certification order. Following discovery, on July 1, 2014 the defendant filed motions for summary judgment and to decertify the class. On September 16, 2014 the trial court granted summary judgment against one named plaintiff but denied it as to the other, denied the motion to decertify the class, and bifurcated trial into two phases with the first phase to begin November 24, 2014. The parties thereafter conducted a court-ordered mediation and subsequently reached agreement, subject to court approval, to settle the case for a total of $9.9 million inclusive of attorney fees. This amount has been reserved and recorded within loss from discontinued operations, net of tax for the year ended December 31, 2014.

On December 12, 2014 the court preliminarily approved the settlement. Notice to the class is underway and the final fairness hearing is set for April 24, 2015.

Separation

Following the spin off of our financial services businesses into a new, publicly-traded, New York Stock Exchange-listed company called FAFC in June 2010, we became responsible for a portion of FAFC's contingent and other corporate liabilities. In the Separation and Distribution Agreement we entered into in connection with the Separation, we agreed with FAFC to share equally in the cost of resolution of a small number of corporate-level lawsuits, including certain consolidated securities litigation matters from which we have since been dropped. There were no liabilities incurred in connection with the consolidated securities matters. Responsibility to manage each case has been assigned to either FAFC or us, with the managing party required to update the other party regularly and consult with the other party prior to certain important decisions, such as settlement. The managing party will also have primary responsibility for determining the ultimate total liability, if any, related to the applicable case. We will record our share of any such liability when the responsible party determines a reserve is necessary. At December 31, 2014 , no reserves were considered necessary.

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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



In addition, the Separation and Distribution Agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of FAC's financial services business with FAFC and financial responsibility for the obligations and liabilities of FAC's information solutions business with us. Specifically, each party will, and will cause its subsidiaries and affiliates to, indemnify, defend and hold harmless the other party, its respective affiliates and subsidiaries and each of its respective officers, directors, employees and agents for any losses arising out of or otherwise in connection with the liabilities each such party assumed or retained pursuant to the Separation and Distribution Agreement; and any breach by such party of the Separation and Distribution Agreement.

Note 16 - Acquisitions

In November 2014, we completed our acquisition of Bank of America's mortgage-related credit reporting operation for approximately $19.6 million , which is included as a component of our TPS reporting segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis, which included significant unobservables. The purchase price allocation is subject to change based on our final determination of fair value in connection with certain tax and working capital matters. We preliminarily recorded property and equipment of $4.3 million with an estimated average life of 3 years, client lists of $6.1 million with an estimated average life of 10 years and goodwill of $9.2 million , which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated financial statements.

In March 2014, we completed the acquisition of Marshall & Swift/Boeckh ("MSB") and DataQuick Information Systems ("DataQuick"). In addition, we acquired the assets of the credit, flood services and automated valuation model operations of DataQuick Lending Solutions and certain intellectual property assets of Decision Insight Information Group S.à r.l. The total consideration paid in connection with the MSB/DataQuick acquisition was approximately $652.5 million in cash, which was funded through borrowings. The acquisition of MSB/DataQuick significantly expands our footprint in property and casualty insurance and adds scale to our existing property data and analytics business, which is a contributing factor to the recording of goodwill. The operations of MSB's and DataQuick's data licensing and analytics units are reported within our D&A segment and DataQuick's flood zone determination and credit servicing operations are reported within our TPS segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis, which included significant unobservable inputs. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed is recognized as goodwill. The purchase price allocation is subject to change based on our final determination of fair value in connection with certain tax and working capital matters. The preliminary allocation of the purchase price is as follows:

(in thousands)
 
Cash and cash equivalents
$
36

Accounts receivable
9,227

Prepaid expenses and other current assets
2,190

Deferred income tax assets, current
6,658

Property and equipment
177,311

Goodwill (1)
307,773

Other intangible assets
129,400

Deferred income tax, net of current
29,760

Investment in affiliates
18,300

Total assets acquired
$
680,655

Accounts payable and accrued expenses
3,911

Income taxes payable
31

Deferred revenue, current
22,371

Deferred revenue, net of current
1,823

Net assets acquired
$
652,519

 
 


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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


(1)
Goodwill of $307.8 million includes $167.8 million of deductible basis for tax purposes. Goodwill was reduced by approximately $55.5 million from the initial amount recorded in the first quarter of 2014, as a result of a change in the purchase price allocation for certain working capital and tax adjustments.

We reported revenues and net loss of approximately $67.5 million and $5.8 million , respectively, from the MSB/DataQuick acquisition from the acquisition date of March 25, 2014 through December 31, 2014 . The net loss includes $18.6 million of depreciation and amortization from acquired property and equipment and other intangible assets. The financial information in the table below summarizes the combined results of operations of MSB/DataQuick and us on a pro forma basis as though the companies had been combined as of January 1, 2013. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the periods presented. The pro forma financial information for all periods presented also includes elimination of intercompany revenue, the impact of fair value adjustments to deferred revenue, amortization expense from acquired intangible assets, adjustments to interest expense and related tax effects.

The unaudited pro forma financial information for the years ended December 31, 2014 and 2013 combines our results of operations for the periods presented.

(in thousands)
2014
 
2013
Net revenues
$
1,427,424

 
$
1,506,660

Net income
$
82,724

 
$
103,997


In January 2014, we completed our acquisition of Terralink for NZD $14.5 million , or $11.9 million , which is included as a component of our D&A reporting segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis, which included significant unobservables. We recorded property and equipment of $2.1 million with an estimated average life of 5 years, client lists of $1.4 million with an estimated average life of 15 years, trade names of $0.2 million with an estimated average life of 12 years, capitalized data and database costs of $6.0 million with an estimated average life of 15 years and goodwill of $2.3 million , which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated financial statements.

In December 2013, we completed our acquisition of EQECAT for $22.2 million , which is included as a component of our D&A reporting segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis which included significant unobservables. We recorded $3.9 million of client lists with an estimated average life of 10 years, $0.6 million of tradenames with an estimated average life of 10 years and goodwill of $16.9 million . The business combination did not have a material impact on our consolidated financial statements.

In September 2013, we acquired an additional 10% interest in PIQ for NZD $3.3 million or $2.6 million , resulting in a 60% controlling interest. We previously held a noncontrolling interest in the entity and as a result of the purchase of the controlling interest, we recognized a gain of approximately $6.6 million , to reflect our existing ownership interest at fair value, which is included in gain on investments and other, net in the accompanying consolidated statements of operations. PIQ is included as a component of the D&A segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis which included significant unobservables. We recorded $1.1 million of property and equipment with an estimated average life of 5 years, $9.0 million of capitalized data and database costs with an average estimated life of 15 years, $3.5 million of client lists with an estimated average life of 15 years, $0.7 million of tradenames with an estimated average life of 10 years and goodwill of $14.9 million . The business combination did not have a material impact on our consolidated financial statements.

In July 2013, we completed our acquisition of Bank of America's flood zone determination and tax processing services operations for $62.5 million , which is included as a component of the TPS segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis which included significant unobservables. We recorded $31.1 million of client lists with an estimated average life of 10 years, indefinite life capitalized data and database costs of $2.5 million and goodwill of $28.9 million , which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated financial statements.


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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


In December 2012, we completed our acquisition of CDS Mapping, a digital mapping sales and consulting company, for a cash price of $78.8 million , which is included as a component of the D&A segment. The purchase price was allocated to the assets acquired and liabilities assumed using a variety of valuation techniques including discounted cash flow analysis which included significant unobservable inputs. We recorded $33.9 million of goodwill, which is fully deductible for tax purposes, $24.5 million of client lists with an estimated average life of 13 years, $4.2 million of tradenames with an estimated average life of 14 years and $2.9 million of noncompete agreements with an estimated average life of 5 years. The business combination did not have a material impact on our consolidated financial statements.

For the year ended December 31, 2014 , we incurred $9.0 million of acquisition-related costs within selling, general and administrative expenses on our consolidated statements of operations. Acquisition related costs were not significant for the years ended December 31, 2013 and 2012 .

Note 17 – Redeemable Noncontrolling Interest

Noncontrolling interests that are redeemable at the option of the holder are classified as redeemable noncontrolling interests in the mezzanine section of our consolidated balance sheet between liabilities and stockholders’ equity. Redeemable noncontrolling interests are reported at their estimated redemption value in each reporting period, but contractually not less than their initial fair value. Any adjustments to the redemption value impacts retained earnings. As of December 31, 2014 , we recorded a $6.6 million adjustment to redeemable noncontrolling interests and retained earnings to account for changes in its estimated redemption value.

In September 2013, we acquired an additional 10% interest in PIQ for NZD $3.3 million , or $2.6 million , resulting in a 60% controlling interest. In connection with the acquisition, effective August 2015, the seller has the right to sell their remaining noncontrolling shares in PIQ to us (the "put") and we have the right to purchase the remaining noncontrolling interest in PIQ at fair value (the "call"). As the call and put do not represent separate assets or liabilities and the exercise of the put is outside of our control, the noncontrolling interest of NZD $13.2 million , or $10.2 million , was recorded on the date of acquisition as a redeemable noncontrolling interest in the accompanying consolidated balance sheet. For the year ended December 31, 2014, we recorded $1.3 million of net income attributable to redeemable noncontrolling interest.

Note 18 - Discontinued Operations

On September 30, 2014, we completed the sale of our collateral solutions and field services businesses, which were previously included in our AMPS reporting segment, for total consideration of $29.1 million , subject to working capital adjustments, as well as potential earn-outs of up to $20.0 million , which will be recognized when realized. Further, we determined to cease pursuing the sale of our remaining product lines, previously included in our AMPS reporting segment. These remaining product lines included our technology solutions, solutions express and outsourcing services product lines. These product lines were previously reflected as discontinued operations and are now reflected as part of continuing operations within our TPS segment. See Note 1 - Description of the Company for further discussion.

For the year ended December 31, 2014, we recorded a $0.1 million gain on the sale of discontinued operations, net of tax, primarily related to $1.5 million of earn-out payments, net of tax, from previously disposed discontinued operations, partially offset by an after-tax loss of $1.4 million related to the sale of our collateral solutions and field services businesses. For the year ended December 31, 2013, we recorded a $7.0 million loss on the sale of discontinued operations, net of tax primarily related to estimated liabilities associated with audits of previously disposed subsidiaries. As of August 31, 2012, we completed the disposition of our transportation services business (American Driving Records) for $11.0 million , which resulted in a pre-tax gain of $3.9 million for the year ended December 31, 2012. This gain is included in gain/(loss) from sale of discontinued operations, net of tax in the accompanying consolidated statements of operations. We completed the wind down of our consumer services business and our appraisal management company business in lieu of a sale as of September 2012. In connection with the wind down of our 100% owned appraisal management company business, we incurred a pre-tax write-down of the remaining goodwill of $13.9 million in the first quarter of 2012.

Each of these businesses is reflected in our accompanying consolidated financial statements as discontinued operations and the results of these businesses in the prior years have been recast to conform to the 2014 presentation.


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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Summarized below are certain assets and liabilities classified as discontinued operations as of December 31, 2014 , 2013 and 2012 :

(in thousands)
 
D&A
 
TPS
 
 
 
 
As of December 31, 2014
 
Marketing
 
Consumer
 
Appraisal
 
AMPS
 
Total
Deferred income tax asset and other current assets
 
$
177

 
$
149

 
$
3,808

 
$
133

 
$
4,267

Total assets
 
$
177

 
$
149

 
$
3,808

 
$
133

 
$
4,267

 
 
 
 
 
 
 
 
 
 
 
Total liabilities
 
$
194

 
$
88

 
$
10,941

 
$
2,481

 
$
13,704

 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2013
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
$
—

 
$
—

 
$
—

 
$
14,073

 
$
14,073

Other current assets
 
177

 
149

 
200

 
2,668

 
3,194

Property and equipment, net
 
—

 
—

 
—

 
1,698

 
1,698

Goodwill and other identifiable intangible assets, net
 
—

 
—

 
—

 
19,961

 
19,961

Total assets
 
$
177

 
$
149

 
$
200

 
$
38,400

 
$
38,926

 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
676

 
$
—

 
$
3,127

 
$
7,282

 
$
11,085

Other liabilities
 
259

 
88

 
568

 
8,616

 
9,531

Total liabilities
 
$
935

 
$
88

 
$
3,695

 
$
15,898

 
$
20,616

 

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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Summarized below are the components of our (loss)/income from discontinued operations, net of tax for the years ended December 31, 2014 , 2013 and 2012 :

(in thousands)
 
D&A
 
TPS
 
 
 
 
For the Year Ended December 31, 2014
 
Marketing
 
Consumer
 
Appraisal
 
AMPS
 
Total
Operating revenue
 
$
—

 
$
—

 
$
—

 
$
94,039

 
$
94,039

(Loss)/income from discontinued operations before income taxes
 
(717
)
 
—

 
(30,739
)
 
7,188

 
(24,268
)
(Benefit)/provision for income taxes
 
(350
)
 
—

 
(11,785
)
 
4,520

 
(7,615
)
(Loss)/income from discontinued operations, net of tax
 
$
(367
)

$
—


$
(18,954
)

$
2,668


$
(16,653
)
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
—

 
$
—

 
$
—

 
$
193,117

 
$
193,117

(Loss)/income from discontinued operations before income taxes
 
(2,129
)
 
196

 
(6,194
)
 
32,928

 
24,801

(Benefit)/provision for income taxes
 
(814
)
 
75

 
(2,369
)
 
13,486

 
10,378

(Loss)/income from discontinued operations, net of tax
 
$
(1,315
)

$
121


$
(3,825
)

$
19,442


$
14,423

 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
—

 
$
55,773

 
$
25,138

 
$
280,589

 
$
361,500

(Loss)/income from discontinued operations before income taxes
 
(122
)
 
5,026

 
(21,375
)
 
42,566

 
26,095

Provision/(benefit) for income taxes
 
4,891

 
15

 
(5,186
)
 
13,988

 
13,708

(Loss)/income from discontinued operations, net of tax
 
$
(5,013
)

$
5,011


$
(16,189
)

$
28,578


$
12,387


Note 19 - Segment Financial Information

We have organized our reportable segments into the following two segments: D&A and TPS. In September 2014, we concluded that we would cease pursuing the sale of the remaining AMPS related product lines. As a result, our technology solutions, solutions express and outsourcing services product lines are now reported within our TPS segment. Also, in September 2014, we transferred our under-banked credit services business from our D&A segment to our TPS segment. All segment reporting disclosures presented herein reflect these transfers. See Note 1 - Description of the Company for further discussion.

Data & Analytics . Our D&A segment owns or licenses data assets including loan information, criminal and eviction records, employment verification, property sales and characteristic information, property risk and replacement cost, and information on mortgage-backed securities. We both license our data directly to our clients and provide our clients with analytical products and workflow solutions for risk management, multiple listing services ("MLS"), insurance underwriting, collateral assessment, loan quality reviews and fraud assessment. We are also a provider of geospatial proprietary software and databases combining geographic mapping and our data assets. Our primary clients are commercial banks, mortgage lenders and brokers, investment banks, fixed-income investors, real estate agents, MLS companies property and casualty insurance companies, title insurance companies and government agencies and sponsored enterprises.

Our D&A segment includes intercompany revenues of $4.3 million , $8.5 million , and $10.1 million for the years ended December 31, 2014 , 2013 and 2012 , respectively; and intercompany expenses of $5.6 million , $0.9 million and $1.8 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Technology and Processing Solutions. Our TPS segment provides property tax monitoring, flood zone certification and monitoring, credit services, mortgage loan administration and production services, lending solutions, mortgage-related business

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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


process outsourcing, technology solutions and compliance-related services. The segment’s primary clients are large, national mortgage lenders and servicers, but we also serve regional mortgage lenders and brokers, credit unions, commercial banks, government agencies and casualty insurance companies.

Our TPS segment includes intercompany revenues of $5.5 million , $3.3 million , and $1.2 million for the years ended December 31, 2014 , 2013 and 2012 , respectively; and intercompany expenses of $4.3 million , $7.8 million and $9.4 million for the years ended December 31, 2014 , 2013 and 2012 , respectively.

Corporate consists primarily of investment gains and losses, corporate personnel and other expenses associated with our corporate functions and facilities, equity in earnings of affiliates, net of tax, and interest expense.

Due to the number of clients we service and the number of products and services we offer, it is impracticable to disclose revenues from external clients for each product and service offered.

Selected segment financial information is as follows:

(in thousands)
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2014
 
D&A
 
TPS
 
Corporate
 
Eliminations
 
Consolidated (Excluding Discontinued Operations)
Operating revenue
 
$
647,264

 
$
767,567

 
$
30

 
$
(9,821
)
 
$
1,405,040

Depreciation and amortization
 
$
98,313

 
$
26,019

 
$
14,062

 
$
—

 
$
138,394

Operating income/(loss)
 
$
97,654

 
$
139,168

 
$
(67,064
)
 
$
—

 
$
169,758

Equity in earnings/(loss) of affiliates, net of tax
 
$
49

 
$
22,900

 
$
(8,829
)
 
$
—

 
$
14,120

Net income/(loss) from continuing operations
 
$
98,975

 
$
167,726

 
$
(163,728
)
 
$
(11,965
)
 
$
91,008

Capital expenditures
 
$
56,383

 
$
8,336

 
$
22,435

 
$
—

 
$
87,154

 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
572,169

 
$
843,887

 
$
631

 
$
(12,286
)
 
$
1,404,401

Depreciation and amortization
 
$
74,186

 
$
30,780

 
$
21,366

 
$
—

 
$
126,332

Operating income/(loss)
 
$
100,963

 
$
137,225

 
$
(96,046
)
 
$
—

 
$
142,142

Equity in earnings/(loss) of affiliates, net of tax
 
$
1,631

 
$
41,638

 
$
(15,908
)
 
$
—

 
$
27,361

Net income/(loss) from continuing operations
 
$
110,143

 
$
179,622

 
$
(189,505
)
 
$
—

 
$
100,260

Capital expenditures
 
$
54,085

 
$
20,048

 
$
32,453

 
$
—

 
$
106,586

 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
544,753

 
$
800,890

 
$
640

 
$
(12,804
)
 
$
1,333,479

Depreciation and amortization
 
$
69,567

 
$
24,161

 
$
23,515

 
$
(135
)
 
$
117,108

Operating income/(loss)
 
$
96,519

 
$
189,700

 
$
(115,952
)
 
$
135

 
$
170,402

Equity in earnings/(loss) of affiliates, net of tax
 
$
2,197

 
$
55,570

 
$
(21,784
)
 
$
—

 
$
35,983

Net income/(loss) from continuing operations
 
$
99,188

 
$
245,686

 
$
(249,589
)
 
$
135

 
$
95,420

Capital expenditures
 
$
54,147

 
$
18,738

 
$
10,849

 
$
—

 
$
83,734



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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


(in thousands)
 
 
 
 
 
 
 
 
 
 
As of December 31, 2014
 
D&A
 
TPS
 
Corporate
 
Eliminations
 
Consolidated (Excluding Discontinued Operations)
Investment in affiliates, net
 
$
27,809

 
$
68,547

 
$
7,242

 
$
—

 
$
103,598

Long-lived assets
 
$
1,739,715

 
$
1,161,873

 
$
4,888,730

 
$
(4,774,581
)
 
$
3,015,737

Total assets
 
$
1,886,478

 
$
1,297,903

 
$
5,102,328

 
$
(4,774,614
)
 
$
3,512,095

 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2013
 
 
 
 
 
 
 
 
 
 
Investment in affiliates, net
 
$
9,460

 
$
78,290

 
$
7,593

 
$
—

 
$
95,343

Long-lived assets
 
$
1,176,994

 
$
1,130,237

 
$
4,232,718

 
$
(4,098,235
)
 
$
2,441,714

Total assets
 
$
1,306,023

 
$
1,257,195

 
$
4,499,268

 
$
(4,098,281
)
 
$
2,964,205


Operating revenue is attributed to countries based on location of the revenue-generating business. Operating revenue separated between domestic and foreign operations and by segment is as follows:

 
Year Ended December 31,
(in thousands)
2014
 
2013
 
2012
 
Domestic
 
Foreign
 
Domestic
 
Foreign
 
Domestic
 
Foreign
D&A
$
509,521

 
$
137,743

 
$
476,048

 
$
96,121

 
$
460,401

 
$
84,352

TPS
764,251

 
3,316

 
838,721

 
5,166

 
794,584

 
6,306

Corporate
—

 
30

 
—

 
631

 
—

 
640

Eliminations
(9,821
)
 
—

 
(12,286
)
 
—

 
(12,804
)
 
—

Consolidated
$
1,263,951

 
$
141,089

 
$
1,302,483

 
$
101,918

 
$
1,242,181

 
$
91,298


Long-lived assets separated between domestic and foreign operations and by segment is as follows:

 
As of December 31,
(in thousands)
2014
 
2013
 
Domestic
 
Foreign
 
Domestic
 
Foreign
D&A
$
1,429,305

 
$
310,410

 
$
856,111

 
$
320,883

TPS
1,161,853

 
20

 
1,130,234

 
3

Corporate
4,142,791

 
745,939

 
3,486,778

 
745,940

Eliminations
(4,028,642
)
 
(745,939
)
 
(3,352,295
)
 
(745,940
)
Consolidated (excluding assets for discontinued operations)
$
2,705,307

 
$
310,430

 
$
2,120,828

 
$
320,886


Note 20 - Guarantor Subsidiaries

As discussed in Note 8 - Long-Term Debt , the Notes are guaranteed on a senior unsecured basis by each of our existing and future direct and indirect subsidiaries that guarantee our Credit Agreement. These guarantees are required in support of the Notes, are full and unconditional, as well as joint and several, and are coterminous with the terms of the Notes and would require performance upon certain events of default referred to in the respective guarantees. The guarantees are subject to release under certain customary circumstances. The indenture governing the notes provides that the guarantees may be automatically and unconditionally released only upon the following circumstances: 1) the guarantor is sold or sells all of its assets in compliance with the terms of the indenture; 2) the guarantor is released from its guarantee obligations under the credit agreement; 3) the guarantor is properly designated as an “unrestricted subsidiary”, and 4) the requirements for legal or covenant defeasance or satisfaction and discharge have been satisfied. The maximum potential amounts that could be required to be paid under the domestic guarantees are essentially equal to the outstanding principal and interest under the Notes. The following

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Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


condensed consolidating financial information reflects CoreLogic, Inc.'s (the "Parent's") separate accounts, the combined accounts of the guarantor subsidiaries, the combined accounts of the non-guarantor subsidiaries, the combined consolidating adjustments and eliminations and the Parent's consolidated accounts for the dates and periods indicated.

 
 
Condensed Balance Sheet
 
 
As of December 31, 2014
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
61,602

 
$
8,733

 
$
34,342

 
$
—

 
$
104,677

Accounts receivable
 
—

 
189,138

 
25,206

 
—

 
214,344

Other current assets
 
55,867

 
120,531

 
5,206

 
—

 
181,604

Property and equipment, net
 
17,261

 
325,638

 
25,715

 
—

 
368,614

Goodwill, net
 
—

 
1,612,388

 
168,370

 
—

 
1,780,758

Other intangible assets, net
 
290

 
242,170

 
35,810

 
—

 
278,270

Capitalized data and database cost, net
 
—

 
254,236

 
79,029

 
—

 
333,265

Investment in affiliates, net
 
—

 
103,598

 
—

 
—

 
103,598

Deferred income tax assets, long-term
 
49,365

 
—

 
—

 
(49,365
)
 
—

Restricted cash
 
11,035

 
—

 
1,325

 
—

 
12,360

Investment in subsidiaries
 
2,350,467

 
—

 
—

 
(2,350,467
)
 
—

Intercompany receivable
 
89,780

 
158,939

 
—

 
(248,719
)
 
—

Other assets
 
105,262

 
31,925

 
1,685

 
—

 
138,872

Total assets
 
$
2,740,929

 
$
3,047,296

 
$
376,688

 
$
(2,648,551
)
 
$
3,516,362

 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity:
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
$
123,196

 
$
389,170

 
$
38,224

 
$
—

 
$
550,590

Long-term debt, net of current
 
1,313,270

 
5,941

 
—

 
—

 
1,319,211

Deferred revenue, net of current
 
—

 
389,302

 
6

 
—

 
389,308

Deferred income tax liabilities, long term
 
—

 
91,197

 
22,147

 
(49,365
)
 
63,979

Intercompany payable
 
158,939

 
22,325

 
67,455

 
(248,719
)
 
—

Other liabilities
 
131,357

 
27,930

 
1,797

 
—

 
161,084

Redeemable noncontrolling interest
 
—

 
—

 
18,023

 
—

 
18,023

Total CoreLogic stockholders' equity
 
1,014,167

 
2,121,431

 
229,036

 
(2,350,467
)
 
1,014,167

Total liabilities and equity
 
$
2,740,929

 
$
3,047,296

 
$
376,688

 
$
(2,648,551
)
 
$
3,516,362



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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


 
 
Condensed Balance Sheet
 
 
As of December 31, 2013
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
104,310

 
$
—

 
$
30,109

 
$
—

 
$
134,419

Accounts receivable
 
—

 
193,256

 
21,764

 
—

 
215,020

Other current assets
 
56,877

 
151,066

 
4,228

 
(193
)
 
211,978

Property and equipment, net
 
20,076

 
149,848

 
27,618

 
—

 
197,542

Goodwill, net
 
—

 
1,306,471

 
161,819

 
—

 
1,468,290

Other intangible assets, net
 
348

 
135,326

 
40,134

 
—

 
175,808

Capitalized data and database cost, net
 
—

 
249,472

 
80,716

 
—

 
330,188

Investment in affiliates, net
 
—

 
95,343

 
—

 
—

 
95,343

Deferred income tax assets, long-term
 
58,998

 
—

 
—

 
(58,998
)
 
—

Restricted cash
 
10,335

 
306

 
1,409

 
—

 
12,050

Investment in subsidiaries
 
2,210,416

 
—

 
—

 
(2,210,416
)
 
—

Intercompany receivable
 
63,647

 
554,894

 
9,170

 
(627,711
)
 
—

Other assets
 
118,709

 
41,680

 
2,104

 
—

 
162,493

Total assets
 
$
2,643,716

 
$
2,877,662

 
$
379,071

 
$
(2,897,318
)
 
$
3,003,131

 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity:
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
$
107,340

 
$
393,738

 
$
33,206

 
$
(193
)
 
$
534,091

Long-term debt, net of current
 
806,395

 
5,381

 
—

 
—

 
811,776

Deferred revenue, net of current
 
—

 
377,846

 
9

 
—

 
377,855

Deferred income taxes liabilities, long term
 
—

 
111,664

 
24,303

 
(58,998
)
 
76,969

Intercompany payable
 
564,064

 
—

 
63,647

 
(627,711
)
 
—

Other liabilities
 
121,544

 
23,050

 
3,271

 
—

 
147,865

Redeemable noncontrolling interest
 
—

 
—

 
10,202

 
—

 
10,202

Total CoreLogic stockholders' equity
 
1,044,373

 
1,965,983

 
244,433

 
(2,210,416
)
 
1,044,373

Total liabilities and equity
 
$
2,643,716

 
$
2,877,662

 
$
379,071

 
$
(2,897,318
)
 
$
3,003,131



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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


 
 
Condensed Statement of Operations
 
 
For the Year Ended December 31, 2014
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Operating revenue
 
$
—

 
$
1,263,980

 
$
141,060

 
$
—

 
$
1,405,040

Intercompany revenue
 
—

 
—

 
637

 
(637
)
 
—

Cost of services (exclusive of depreciation and amortization below)
 
—

 
686,630

 
53,696

 
(25
)
 
740,301

Selling, general and administrative expenses
 
58,176

 
252,879

 
41,174

 
(612
)
 
351,617

Depreciation and amortization
 
4,836

 
107,002

 
26,556

 
—

 
138,394

Impairment loss
 
—

 
4,970

 
—

 
—

 
4,970

Operating (loss)/income
 
(63,012
)
 
212,499

 
20,271

 
—

 
169,758

Total interest expense, net
 
(65,299
)
 
(627
)
 
(1,056
)
 
—

 
(66,982
)
Gain on investments and other, net
 
5,070

 
(6,278
)
 
5,090

 
—

 
3,882

(Benefit)/Provision for income taxes
 
(43,448
)
 
73,179

 
39

 
—

 
29,770

Equity in earnings of affiliates, net of tax
 
—

 
14,120

 
—

 
—

 
14,120

Equity in earnings of subsidiary, net of tax
 
152,993

 
—

 
—

 
(152,993
)
 
—

Net income/(loss) from continuing operations
 
73,200

 
146,535

 
24,266

 
(152,993
)
 
91,008

Loss from discontinued operations, net of tax
 
—

 
(16,653
)
 
—

 
—

 
(16,653
)
(Loss)/gain from sale of discontinued operations, net of tax
 
—

 
(1,424
)
 
1,536

 
—

 
112

Net income/(loss)
 
73,200

 
128,458

 
25,802

 
(152,993
)
 
74,467

Less: Net loss attributable to noncontrolling interests
 
—

 
—

 
1,267

 
—

 
1,267

Net income/(loss) attributable to CoreLogic
 
$
73,200

 
$
128,458

 
$
24,535

 
$
(152,993
)
 
$
73,200

 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
73,200

 
$
128,458

 
$
25,802

 
$
(152,993
)
 
$
74,467

Total other comprehensive (loss)/income
 
(30,197
)
 
—

 
(26,673
)
 
26,673

 
(30,197
)
Less: Comprehensive loss attributable to noncontrolling interests
 
—

 
—

 
1,267

 
—

 
1,267

Comprehensive income/(loss) attributable to CoreLogic
 
$
43,003

 
$
128,458

 
$
(2,138
)
 
$
(126,320
)
 
$
43,003



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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


 
 
Condensed Statement of Operations
 
 
For the Year Ended December 31, 2013
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Operating revenue
 
$
—

 
$
1,303,115

 
$
101,286

 
$
—

 
$
1,404,401

Intercompany revenue
 
—

 
—

 
631

 
(631
)
 
—

Cost of services (exclusive of depreciation and amortization below)
 
—

 
679,032

 
38,804

 
(631
)
 
717,205

Selling, general and administrative expenses
 
63,205

 
276,236

 
34,848

 
—

 
374,289

Depreciation and amortization
 
3,767

 
98,670

 
23,895

 
—

 
126,332

Impairment loss
 
—

 
44,433

 
—

 
—

 
44,433

Operating (loss)/income
 
(66,972
)
 
204,744

 
4,370

 
—

 
142,142

Total interest expense, net
 
(45,270
)
 
(2
)
 
(2,330
)
 
—

 
(47,602
)
Gain on investments and other, net
 
3,785

 
1,250

 
6,997

 
—

 
12,032

(Benefit)/provision for income taxes
 
(40,392
)
 
72,385

 
1,680

 
—

 
33,673

Equity in earnings of affiliates, net of tax
 
—

 
26,566

 
795

 
—

 
27,361

Equity in earnings of subsidiary, net of tax
 
175,793

 
—

 
—

 
(175,793
)
 
—

Net income from continuing operations
 
107,728

 
160,173

 
8,152

 
(175,793
)
 
100,260

Income/(loss) from discontinued operations, net of tax
 
—

 
14,595

 
(172
)
 
—

 
14,423

(Loss)/gain on sale of discontinued operations, net of tax
 
—

 
(8,514
)
 
1,506

 
—

 
(7,008
)
Net income
 
107,728

 
166,254

 
9,486

 
(175,793
)
 
107,675

Less: Net loss attributable to noncontrolling interests
 
—

 
—

 
(53
)
 
—

 
(53
)
Net income attributable to CoreLogic
 
$
107,728

 
$
166,254

 
$
9,539

 
$
(175,793
)
 
$
107,728

 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
107,728

 
$
166,254

 
$
9,486

 
$
(175,793
)
 
$
107,675

Total other comprehensive loss
 
(38,075
)
 
—

 
(43,337
)
 
43,337

 
(38,075
)
Less: Comprehensive loss attributable to noncontrolling interests
 
—

 
—

 
(53
)
 
—

 
(53
)
Comprehensive income/(loss) attributable to CoreLogic
 
$
69,653

 
$
166,254

 
$
(33,798
)
 
$
(132,456
)
 
$
69,653



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CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


 
 
Condensed Statement of Operations
 
 
For the Year Ended December 31, 2012
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Operating revenue
 
$
—

 
$
1,244,136

 
$
89,343

 
$
—

 
$
1,333,479

Intercompany revenue
 
—

 
—

 
1,955

 
(1,955
)
 
—

Cost of services (exclusive of depreciation and amortization below)
 
—

 
636,707

 
34,732

 
(1,955
)
 
669,484

Selling, general and administrative expenses
 
65,637

 
257,650

 
33,318

 
—

 
356,605

Depreciation and amortization
 
2,937

 
91,173

 
22,998

 
—

 
117,108

Impairment loss
 
—

 
19,880

 
—

 
—

 
19,880

Operating (loss)/income
 
(68,574
)
 
238,726

 
250

 
—

 
170,402

Total interest (expense)/income, net
 
(50,222
)
 
88

 
(2,339
)
 
—

 
(52,473
)
Gain on investments and other, net
 
3,492

 
1,504

 
—

 
—

 
4,996

(Benefit)/provision for income taxes
 
(44,908
)
 
102,058

 
6,338

 
—

 
63,488

Equity in earnings of affiliates, net of tax
 
—

 
35,153

 
830

 
—

 
35,983

Equity in earnings of subsidiary, net of tax
 
182,689

 
—

 
—

 
(182,689
)
 
—

Net income/(loss) from continuing operations
 
112,293

 
173,413

 
(7,597
)
 
(182,689
)
 
95,420

Income/(loss) from discontinued operations, net of tax
 
—

 
15,298

 
(2,911
)
 
—

 
12,387

Loss from sale of discontinued operations, net of tax
 
—

 
3,841

 
—

 
—

 
3,841

Net income/(loss)
 
112,293

 
192,552

 
(10,508
)
 
(182,689
)
 
111,648

Less: Net loss attributable to noncontrolling interests
 
—

 
—

 
(645
)
 
—

 
(645
)
Net income/(loss) attributable to CoreLogic
 
$
112,293

 
$
192,552

 
$
(9,863
)
 
$
(182,689
)
 
$
112,293

 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
 
$
112,293

 
$
192,552

 
$
(10,508
)
 
$
(182,689
)
 
$
111,648

Total other comprehensive income
 
4,802

 
—

 
5,921

 
(5,921
)
 
4,802

Less: Comprehensive loss attributable to noncontrolling interests
 
—

 
—

 
(645
)
 
—

 
(645
)
Comprehensive income/(loss) attributable to CoreLogic
 
$
117,095

 
$
192,552

 
$
(3,942
)
 
$
(188,610
)
 
$
117,095


91
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



 
 
Condensed Statement of Cash Flows
 
 
For the Year Ended December 31, 2014
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities - continuing operations
 
$
9,433

 
$
283,316

 
$
42,844

 
$
—

 
$
335,593

Net cash used in operating activities - discontinued operations
 
—

 
(13,717
)
 
—

 
—

 
(13,717
)
Total cash provided by operating activities
 
$
9,433

 
$
269,599

 
$
42,844

 
$
—

 
$
321,876

Cash flow from investing activities:
 
 
 
 
 
 
 
 
 


Purchases of property and equipment
 
$
(1,964
)
 
$
(40,598
)
 
$
(9,463
)
 
$
—

 
$
(52,025
)
Purchases of capitalized data and other intangible assets
 
—

 
(30,077
)
 
(5,052
)
 
—

 
(35,129
)
Cash paid for acquisitions, net of cash acquired
 
—

 
(665,753
)
 
(29,118
)
 
—

 
(694,871
)
Cash received from sale of subsidiary, net
 
—

 
25,366

 
—

 
—

 
25,366

Proceeds from sale of property and equipment
 
—

 
13,937

 
—

 
—

 
13,937

Change in restricted cash
 
(700
)
 
306

 
84

 
—

 
(310
)
Net cash used in investing activities - continuing operations
 
(2,664
)
 
(696,819
)
 
(43,549
)
 
—

 
(743,032
)
Net cash provided by investing activities - continuing operations
 
—

 
—

 
1,536

 
—

 
1,536

Total cash used in by investing activities
 
$
(2,664
)
 
$
(696,819
)
 
$
(42,013
)
 
$
—

 
$
(741,496
)
Cash flow from financing activities:
 
 
 
 
 
 
 
 
 


Proceeds from long-term debt
 
$
690,017

 
$
—

 
$
—

 
$
—

 
$
690,017

Debt issuance costs
 
(14,042
)
 
—

 
—

 
—

 
(14,042
)
Repayments of long-term debt
 
(195,217
)
 
(4,789
)
 
—

 
—

 
(200,006
)
Shares repurchased and retired
 
(91,475
)
 
—

 
—

 
—

 
(91,475
)
Proceeds from issuance of stock related to stock options and employee benefit plans
 
15,213

 
—

 
—

 
—

 
15,213

Minimum tax withholding paid on behalf of employees for restricted stock units
 
(15,980
)
 
—

 
—

 
—

 
(15,980
)
Tax benefit related to stock options
 
6,791

 
—

 
—

 
—

 
6,791

Intercompany loan payments
 
(610,239
)
 
(179,187
)
 
—

 
789,426

 
—

Intercompany loan proceeds
 
179,187

 
606,212

 
4,027

 
(789,426
)
 
—

Net cash (used in)/provided by financing activities - continuing operations
 
(35,745
)
 
422,236

 
4,027

 
—

 
390,518

Net cash provided by financing activities - discontinued operations
 
—

 
—

 
—

 
—

 
—

Total cash (used in)/provided by financing activities
 
$
(35,745
)
 
$
422,236

 
$
4,027

 
$
—

 
$
390,518

Effect of Exchange Rate on cash
 
—

 
—

 
(625
)
 
—

 
(625
)

92
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Net decrease in cash and cash equivalents
 
$
(28,976
)
 
$
(4,984
)
 
$
4,233

 
$
—

 
$
(29,727
)
Cash and cash equivalents at beginning of period
 
104,310

 
—

 
30,109

 
—

 
134,419

Less: Change in cash and cash equivalents - discontinued operations
 
—

 
(13,717
)
 
1,536


—

 
(12,181
)
Plus: Cash swept (to)/from discontinued operations
 
(13,732
)
 
—

 
1,536

 
—

 
(12,196
)
Cash and cash equivalents at end of year
 
$
61,602

 
$
8,733

 
$
34,342

 
$
—

 
$
104,677


93
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



 
 
Condensed Statement of Cash Flows
 
 
For the Year Ended December 31, 2013
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net cash (used in)/provided by operating activities - continuing operations
 
$
(51,864
)
 
$
354,004

 
$
26,080

 
$
—

 
$
328,220

Net cash provided by operating activities - discontinued operations
 
—

 
24,094

 
1,506

 
—

 
25,600

Total cash (used in)/provided by operating activities
 
$
(51,864
)
 
$
378,098

 
$
27,586

 
$
—

 
$
353,820

Cash flow from investing activities:
 
 
 
 
 
 
 
 
 


Purchases of property and equipment
 
$
(8,870
)
 
$
(51,660
)
 
$
(8,215
)
 
$
—

 
$
(68,745
)
Purchases of capitalized data and other intangible assets
 
(348
)
 
(23,171
)
 
(14,322
)
 
—

 
(37,841
)
Cash paid for acquisitions, net of cash acquired
 
—

 
(92,591
)
 
542

 
—

 
(92,049
)
Cash received from sale of discontinued operations
 
—

 
2,263

 
—

 
—

 
2,263

Purchases of investments
 
—

 
(2,351
)
 
—

 
—

 
(2,351
)
Change in restricted cash
 
7,964

 
—

 
2,104

 
—

 
10,068

Net cash used in investing activities - continuing operations
 
(1,254
)
 
(167,510
)
 
(19,891
)
 
—

 
(188,655
)
Net cash provided by investing activities - discontinued operations
 
—

 
1,862

 
—

 
—

 
1,862

Total cash used in investing activities
 
$
(1,254
)
 
$
(165,648
)
 
$
(19,891
)
 
$
—

 
$
(186,793
)
Cash flow from financing activities:
 
 
 
 
 
 
 
 
 


Proceeds from long-term debt
 
$
50,000

 
$
1,647

 
$
—

 
$
—

 
$
51,647

Debt issuance costs
 
—

 
(10,436
)
 
—

 
—

 
(10,436
)
Repayments of long-term debt
 
(4,375
)
 
(291
)
 
—

 
—

 
(4,666
)
Shares repurchased and retired
 
(241,161
)
 
—

 
—

 
—

 
(241,161
)
Proceeds from issuance of stock related to stock options and employee benefit plans
 
28,232

 
—

 
—

 
—

 
28,232

Minimum tax withholding paid on behalf of employees for restricted stock units
 
(8,665
)
 
—

 
—

 
—

 
(8,665
)
Tax benefit related to stock options
 
5,146

 
—

 
—

 
—

 
5,146

Intercompany loan payments
 
—

 
(180,885
)
 
(10,262
)
 
191,147

 
—

Intercompany loan proceeds
 
191,147

 
—

 
—

 
(191,147
)
 
—

Net cash provided by/(used in) financing activities - continuing operations
 
20,324

 
(189,965
)
 
(10,262
)
 
—

 
(179,903
)
Net cash provided by financing activities - discontinued operations
 
—

 
—

 
—

 
—

 
—

Total cash provided by/(used in) financing activities
 
$
20,324

 
$
(189,965
)
 
$
(10,262
)
 
$
—

 
$
(179,903
)
Effect of Exchange Rate on cash
 
—

 
—

 
(2,116
)
 
—

 
(2,116
)

94
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Net (decrease)/increase in cash and cash equivalents
 
$
(32,794
)
 
$
22,485

 
$
(4,683
)
 
$
—

 
$
(14,992
)
Cash and cash equivalents at beginning of period
 
111,305

 
3,471

 
34,792

 
—

 
149,568

Less: Change in cash and cash equivalents - discontinued operations
 
—

 
25,956

 
1,506

 
—

 
27,462

Plus: Cash swept from discontinued operations
 
25,799

 
—

 
1,506

 
—

 
27,305

Cash and cash equivalents at end of year
 
$
104,310

 
$
—

 
$
30,109

 
$
—

 
$
134,419


95
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012



 
 
Condensed Statement of Cash Flows
 
 
For the Year Ended December 31, 2012
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating/Eliminating Adjustments
 
Total
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net cash (used in)/provided by operating activities - continuing operations
 
$
(60,340
)
 
$
380,064

 
$
16,927

 
$
—

 
$
336,651

Net cash provided by operating activities - discontinued operations
 
—

 
26,494

 
—

 
—

 
26,494

Total cash (used in)/provided by operating activities
 
$
(60,340
)
 
$
406,558

 
$
16,927

 
$
—

 
$
363,145

Cash flow from investing activities:
 
 
 
 
 
 
 
 
 


Purchases of property and equipment
 
$
(3,195
)
 
$
(36,897
)
 
$
(11,453
)
 
$
—

 
$
(51,545
)
Purchases of capitalized data and other intangible assets
 
—

 
(28,792
)
 
(3,397
)
 
—

 
(32,189
)
Cash paid for acquisitions, net of cash acquired
 
—

 
(78,354
)
 
—

 
—

 
(78,354
)
Cash received from sale of subsidiary, net
 
—

 
10,000

 
—

 
—

 
10,000

Proceeds from sale of property and equipment
 
—

 
1,863

 
—

 
—

 
1,863

Proceeds from sale of investments
 
—

 
8,000

 
—

 
—

 
8,000

Change in restricted cash
 
(1
)
 
(184
)
 
271

 
—

 
86

Net cash used in investing activities - continuing operations
 
(3,196
)
 
(124,364
)
 
(14,579
)
 
—

 
(142,139
)
Net cash used in investing activities - discontinued operations
 
—

 
(5,203
)
 
—

 
—

 
(5,203
)
Total cash used in investing activities
 
$
(3,196
)
 
$
(129,567
)
 
$
(14,579
)
 
$
—

 
$
(147,342
)
Cash flow from financing activities:
 
 
 
 
 
 
 
 
 


Proceeds from long-term debt
 
$
50,000

 
$
—

 
$
—

 
$
—

 
$
50,000

Repayments of long-term debt
 
(103,368
)
 
(11,020
)
 
(52,327
)
 
—

 
(166,715
)
Shares repurchased and retired
 
(226,629
)
 
—

 
—

 
—

 
(226,629
)
Proceeds from issuance of stock related to stock options and employee benefit plans
 
13,497

 
—

 
—

 
—

 
13,497

Minimum tax withholding paid on behalf of employees for restricted stock units
 
(3,466
)
 
—

 
—

 
—

 
(3,466
)
Distribution to noncontrolling interests
 
—

 
—

 
(10
)
 
—

 
(10
)
Tax benefit related to stock options
 
935

 
—

 
—

 
—

 
935

Intercompany loan payments
 
(66,765
)
 
(278,231
)
 
—

 
344,996

 
—

Intercompany loan proceeds
 
278,231

 
—

 
66,765

 
(344,996
)
 
—

Net cash (used in)/provided by financing activities - continuing operations
 
(57,565
)
 
(289,251
)
 
14,428

 
—

 
(332,388
)
Net cash used in financing activities - discontinued operations
 
—

 
(79
)
 
—

 
—

 
(79
)
Total cash (used in)/provided by financing activities
 
$
(57,565
)
 
$
(289,330
)
 
$
14,428

 
$
—

 
$
(332,467
)

96
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


Effect of Exchange Rate on cash
 
—

 
—

 
(153
)
 
—

 
(153
)
Net (decrease)/increase in cash and cash equivalents
 
$
(121,101
)
 
$
(12,339
)
 
$
16,623

 
$
—

 
$
(116,817
)
Cash and cash equivalents at beginning of period
 
229,871

 
10,076

 
18,169

 
—

 
258,116

Less: Change in cash and cash equivalents - discontinued operations
 
—

 
21,212

 
—

 
—

 
21,212

Plus: Cash swept from discontinued operations
 
2,535

 
26,946

 
—

 
—

 
29,481

Cash and cash equivalents at end of year
 
$
111,305

 
$
3,471

 
$
34,792

 
$
—

 
$
149,568


Note 21 - Unaudited Quarterly Financial Data

The following table sets forth certain unaudited consolidated quarterly financial data for years ended 2014 and 2013 :

 
For the Quarters Ended
(in thousands, except per share amounts)
3/31/2014

 
6/30/2014

 
9/30/2014

 
12/31/2014

Operating revenue
$
326,104

 
$
365,970

 
$
367,454

 
$
345,512

Operating income
$
14,825

 
$
41,020

 
$
77,755

 
$
36,158

Equity in earnings of affiliates, net of tax
$
2,382

 
$
3,875

 
$
4,032

 
$
3,831

Amounts attributable to CoreLogic:
 
 
 
 
 
 
 
(Loss)/income from continuing operations, net of tax
$
(3,179
)
 
$
26,740

 
$
49,719

 
$
16,461

Income/(loss) from discontinued operations, net of tax
387

 
(10,752
)
 
(4,856
)
 
(1,432
)
Income/(loss) from sale of discontinued operations, net of tax
—

 
—

 
476

 
(364
)
Net (loss)/income attributable to CoreLogic stockholders
$
(2,792
)
 
$
15,988

 
$
45,339

 
$
14,665

Basic income/(loss) per share:
 

 
 

 
 

 
 

(Loss)/income from continuing operations, net of tax
$
(0.03
)
 
$
0.29

 
$
0.55

 
$
0.18

Income/(loss) from discontinued operations, net of tax
—

 
(0.12
)
 
(0.05
)
 
(0.02
)
Income/(loss) from sale of discontinued operations, net of tax
—

 
—

 
0.01

 
—

Net income
$
(0.03
)
 
$
0.17

 
$
0.51

 
$
0.16

Diluted income/(loss) per share:
 

 
 

 
 

 
 

(Loss)/income from continuing operations, net of tax
$
(0.03
)
 
$
0.29

 
$
0.54

 
$
0.18

Income/(loss) from discontinued operations, net of tax
—

 
(0.12
)
 
(0.05
)
 
(0.02
)
Income/(loss) from sale of discontinued operations, net of tax
—

 
—

 
0.01

 
—

Net income
$
(0.03
)
 
$
0.17

 
$
0.50

 
$
0.16

Weighted-average common shares outstanding:
 

 
 

 
 

 
 

Basic
91,433

 
91,750

 
90,518

 
89,597

Diluted
91,433

 
93,062

 
91,987

 
91,245



97
Table of Contents
CoreLogic, Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2014 , 2013 and 2012


 
For the Quarters Ended
(in thousands, except per share amounts)
3/31/2013
 
6/30/2013
 
9/30/2013
 
12/31/2013
Operating revenue
$
350,861

 
$
368,437

 
$
356,581

 
$
328,522

Operating income/(loss)
$
47,065

 
$
52,980

 
$
61,361

 
$
(19,264
)
Equity in earnings of affiliates, net of tax
$
8,788

 
$
9,347

 
$
5,716

 
$
3,510

Amounts attributable to CoreLogic:
 
 
 
 
 
 
 
Income/(loss) from continuing operations, net of tax
$
30,907

 
$
35,352

 
$
43,382

 
$
(9,328
)
Income/(loss) from discontinued operations, net of tax
4,405

 
8,198

 
5,332

 
(3,512
)
Loss on sale of discontinued operations, net of tax
(1,744
)
 
—

 
(5,052
)
 
(212
)
Net income
$
33,568

 
$
43,550

 
$
43,662

 
$
(13,052
)
Basic income/(loss) per share:
 

 
 

 
 

 
 

Income/(loss) from continuing operations, net of tax
$
0.32

 
$
0.37

 
$
0.46

 
$
(0.10
)
Income/(loss) from discontinued operations, net of tax
0.05

 
0.09

 
0.06

 
(0.04
)
Loss on sale of discontinued operations, net of tax
(0.02
)
 
—

 
(0.05
)
 
—

Net income
$
0.35

 
$
0.46

 
$
0.47

 
$
(0.14
)
Diluted income/(loss) per share:
 

 
 

 
 

 
 

Income/(loss) from continuing operations, net of tax
$
0.31

 
$
0.36

 
$
0.45

 
$
(0.10
)
Income/(loss) from discontinued operations, net of tax
0.04

 
0.08

 
0.06

 
(0.04
)
Loss on sale of discontinued operations, net of tax
(0.02
)
 
—

 
(0.05
)
 
—

Net income
$
0.33

 
$
0.44

 
$
0.46

 
$
(0.14
)
Weighted-average common shares outstanding:
 

 
 

 
 

 
 

Basic
97,113

 
95,516

 
94,773

 
92,946

Diluted
99,056

 
97,180

 
96,793

 
92,946



98
Table of Contents

CORELOGIC AND SUBSIDIARY COMPANIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
December 31, 2014 , 2013 and 2012

(in thousands)
Balance at Beginning of Period
 
Charged to Costs & Expenses
 
Charged to Other Accounts
 
Deductions
 
Balance at End of Period
For the Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
13,045

 
$
3,228

 
$
—

 
$
(5,447
)
(1)
$
10,826

Claim losses
$
26,128

 
$
11,138

 
$
—

 
$
(12,395
)
(2)
$
24,871

Tax valuation allowance
$
24,173

 
$
(5,506
)
 
$
3,244

(3
)
$
—

 
$
21,911

For the Year Ended December 31, 2013
 

 
 

 
 

 
 

 
 

Allowance for doubtful accounts
$
19,511

 
$
5,782

 
$
—

 
$
(12,248
)
(1)
$
13,045

Claim losses
$
26,106

 
$
13,998

 
$
—

 
$
(13,976
)
(2)
$
26,128

Tax valuation allowance
$
30,955

 
$
(5,295
)
 
$
(1,487
)
(3
)
$
—

 
$
24,173

For the Year Ended December 31, 2012
 

 
 

 
 

 
 

 
 

Allowance for doubtful accounts
$
15,634

 
$
11,109

 
$
—

 
$
(7,232
)
(1)
$
19,511

Claim losses
$
22,819

 
$
19,216

 
$
—

 
$
(15,929
)
(2)
$
26,106

Tax valuation allowance
$
29,389

 
$
13,134

 
$
(11,568
)
(3
)
$
—

 
$
30,955


(1)
Amount represents accounts written off, net of recoveries.
(2)
Amount represents claim payments, net of recoveries.
(3)
Amount represents adjustments for acquired net operating loss and credit carryforwards.


99
Table of Contents

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company’s principal executive officer and principal financial officer have concluded that, as of the end of the fiscal year covered by this Annual Report on Form 10-K, the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) thereunder.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

(1)
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2)
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(3)
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 . In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013). Based on that assessment, management determined that the Company’s internal control over financial reporting was effective as of December 31, 2014 .

We excluded MSB/DataQuick from our assessment of internal control over financial reporting as of December 31, 2014 as it was acquired during 2014. The total assets and total revenues of MSB/DataQuick, a wholly-owned subsidiary, represent 16.0% and 4.8%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2014 .

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the Company’s financial statements provided in Item 8, above, has issued a report on the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2014 .

(c) Changes in Internal Controls

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2014 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

On February 24, 2015, the Compensation Committee approved an increase in the annual base salary for Barry M. Sando, the Company’s Senior Executive Vice President and Group Executive, Technology and Processing Solutions, from $500,000 to $550,000, and an increase in the annual base salary for Stergios Theologides, the Company’s Senior Vice President, General Counsel and Secretary, from $350,000 to $425,000.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Except as provided below, the information required by this item will be included in an amendment to this Annual Report on Form 10-K or incorporated by reference from our Proxy Statement for our 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2014 .

Code of Ethics

Our Board of Directors has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. A copy of this code of ethics is posted on the Investors section of the Company's Web site under Corporate Governance at www.corelogic.com. The Board also has adopted a broader code of ethics and conduct, applying to all employees, officers and directors, which also has been posted under "Investors-Corporate Governance" on the Web site at the address stated above. If the Company waives or amends any provisions of these codes of ethics that apply to the Company's directors and executive officers, including our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, it will disclose such waivers or amendments on the Company's Web site, at the address and location specified above, to the extent required by applicable rules of the Securities and Exchange Commission or the New York Stock Exchange.

Item 11. Executive Compensation

The information required by this item will be included in an amendment to this Annual Report on Form 10-K or incorporated by reference from our Proxy Statement for our 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2014 .

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item will be included in an amendment to this Annual Report on Form 10-K or incorporated by reference from our Proxy Statement for our 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2014 .

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item will be included in an amendment to this Annual Report on Form 10-K or incorporated by reference from our Proxy Statement for our 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2014 .

Item 14. Principal Accountant Fees and Services

The information required by this item will be included in an amendment to this Annual Report on Form 10-K or incorporated by reference from our Proxy Statement for our 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2014 .


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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)
1. The following consolidated financial statements of CoreLogic, Inc. are included in Item 8.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2014 and 2013

Consolidated Statements of Operations for the Years Ended December 31, 2014 , 2013 and 2012

Consolidated Statement of Comprehensive/(Loss) Income for the Years Ended December 31, 2014 , 2013 and 2012

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2014 , 2013 and 2012

Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 , 2013 and 2012

Notes to the Consolidated Financial Statements for the Years Ended December 31, 2014 , 2013 and 2012

2. Financial Statement Schedule.

The financial statements of RELS LLC required by Rule 3-09 of Regulation S-X are provided as Exhibit 99.1 to this Annual Report on Form 10-K.

3. Exhibits – See Exhibit Index.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
CoreLogic, Inc.
 
 
(Registrant)
 
 
 
 
 
By: /s/   Anand Nallathambi
 
 
Anand Nallathambi
 
 
President and Chief Executive Officer
 
 
(Principal Executive Officer)
Date:
February 26, 2015
 

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Anand Nallathambi, Frank D. Martell and Stergios Theologides, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


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Signature
 
Title
Date
 
 
 
 
/s/ Anand Nallathambi
 
President and Chief Executive Officer
February 26, 2015
Anand Nallathambi
 
(Principal Executive Officer)
 
 
 
 
 
/s/ Frank D. Martell
 
Chief Operating and Financial Officer
February 26, 2015
Frank D. Martell
 
(Principal Financial Officer)
 
 
 
 
 
/s/ James L. Balas
 
Senior Vice President and Corporate Controller
February 26, 2015
James L. Balas
 
(Principal Accounting Officer)
 
 
 
 
 
/s/ Paul F. Folino
 
Chairman of the Board, Director
February 26, 2015
Paul F. Folino
 
 
 
 
 
 
 
/s/ J. David Chatham
 
Director
February 26, 2015
J. David Chatham
 
 
 
 
 
 
 
/s/ Douglas C. Curling
 
Director
February 26, 2015
Douglas C. Curling
 
 
 
 
 
 
 
/s/ John C. Dorman
 
Director
February 26, 2015
John C. Dorman
 
 
 
 
 
 
 
/s/ Thomas C. O’Brien
 
Director
February 26, 2015
Thomas C. O’Brien
 
 
 
 
 
 
 
/s/ Jaynie Miller Studenmund
 
Director
February 26, 2015
Jaynie Miller Studenmund
 
 
 
 
 
 
 
/s/ David F. Walker
 
Director
February 26, 2015
David F. Walker
 
 
 
 
 
 
 
/s/ Mary Lee Widener
 
Director
February 26, 2015
Mary Lee Widener
 
 
 


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EXHIBIT INDEX

Exhibit No.
Description
 
 
2.1
Agreement and Plan of Merger, dated May 28, 2010, by and between The First American Corporation and CoreLogic, Inc. (Incorporated by reference herein from Exhibit 2.1 to the Company's Form 8-K as filed with the SEC on June 1, 2010).
 
 
2.2
Purchase and Sale Agreement by and among CoreLogic Acquisition Co. I, LLC, CoreLogic Acquisition Co. II, LLC, CoreLogic Acquisition Co. III, LLC, Property Data Holdings, Ltd., DataQuick Lending Solutions, Inc., Decision Insight Information Group S.à r.l., and solely with respect to, and as specified in, Sections 2.5, 2.7, 2.10(f), 5.7, 5.18, 5.21, 8.2(b), 8.7(b), and 9.15 of the Purchase and Sale Agreement, CoreLogic Solutions, LLC, and solely with respect to, and as specified in, Sections 5.4 and 5.7 of the Purchase and Sale Agreement, Property Data Holdings, L.P. (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on July 5, 2013). † ^
 
 
3.1
Amended and Restated Certificate of Incorporation of CoreLogic, Inc., dated May 28, 2010 (Incorporated by reference herein from Exhibit 3.1 to the Company's Current Report on Form 8-K as filed with the SEC on June 1, 2010).
 
 
3.2
Amended and Restated Bylaws of CoreLogic, Inc. (incorporated by reference to the Company's Current Report on Form 8-K as filed with the SEC on March 5, 2014).
 
 
4.1
Specimen Certificate for shares of Common Stock of CoreLogic, Inc. (Incorporated by reference herein from Exhibit 3.3 to the Company's Current Report on Form 8-K as filed with the SEC on June 1, 2010).
 
 
4.2
Senior Indenture, dated as of April 7, 1998, between The First American Financial Corporation and Wilmington Trust Company as Trustee (Incorporated by reference herein from Exhibit (4) to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998 as filed with the SEC on August 14, 1998).
 
 
4.3
Form of First Supplemental Indenture (Incorporated by reference herein from Exhibit 4.2 of Registration Statement 333-116855 on Form S-3, dated June 25, 2004).
 
 
4.4
Third Supplemental Indenture to Senior Indenture, dated as of May 10, 2010 (Incorporated by reference herein from Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).
 
 
4.5
Fourth Supplemental Indenture to Senior Indenture, dated as of June 1, 2010 (Incorporated by reference herein from Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).
 
 
4.6
Senior Notes Indenture, dated May 20, 2011, among CoreLogic, Inc., the guarantors named therein and Wilmington Trust FSB, as trustee (Incorporated by reference herein to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on May 25, 2011).
 
 
4.7
Supplemental Indenture, dated November 13, 2013, among CoreLogic, Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee (Incorporated by reference herein from Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on November 15, 2013).
 
 
4.8
Registration Rights Agreement, dated May 20, 2011, by and among CoreLogic, Inc., the guarantors identified therein, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, Barclays Capital, Inc., SunTrust Robinson Humphrey, Inc., U.S. Bancorp Investments, Inc., Comerica Securities, Inc. and HSBC Securities (USA) Inc. (Incorporated by reference herein to Exhibit 4.2 to the Company's Current Report on Form 8-K as filed with the SEC on May 25, 2011).
 
 

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10.1
Separation and Distribution Agreement by and between The First American Corporation and First American Financial Corporation, dated as of June 1, 2010 (Incorporated by reference herein to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on June 1, 2010).
 
 
10.2
Tax Sharing Agreement by and between The First American Corporation and First American Financial Corporation, dated as of June 1, 2010 (Incorporated by reference herein to Exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the SEC on June 1, 2010).
 
 
10.3
Restrictive Covenants Agreement among First American Financial Corporation and The First American Corporation, dated June 1, 2010 (Incorporated by reference herein to Exhibit 10.4 to the Company's Current Report on Form 8-K as filed with the SEC on June 1, 2010).
 
 
10.4
Employment Agreement, dated May 3, 2011, between CoreLogic, Inc. and Anand K. Nallathambi (Incorporated by reference herein from Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011 as filed with the SEC on May 6, 2011).*
 
 
10.5
Employment Agreement, dated May 3, 2011, between CoreLogic, Inc. and Barry M. Sando (Incorporated by reference herein to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2011 as filed with the SEC on August 8, 2011).*
 
 
10.6
Amendment to Employment Agreement between the Company and Barry Sando effective as of June 16, 2014 (Incorporated by reference herein to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2014 as filed with the SEC on July 25, 2014).*
 
 
10.7
Amendment to Employment Agreement between the Company and Barry Sando effective as of October 6, 2014.* Ÿ
 
 
10.8
Form of Employment Agreement (Incorporated by reference herein from Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011 as filed with the SEC on May 6, 2011).*
 
 
10.9
Employment Agreement, dated August 29, 2011, between CoreLogic, Inc. and Frank Martell (Incorporated by reference herein to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2011 as filed with the SEC on November 4, 2011).*
 
 
10.10
Amendment to Employment Agreement between the Company and Frank Martell effective as of June 16, 2014 (Incorporated by reference herein to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2014 as filed with the SEC on July 25, 2014).*
 
 
10.11
Employment Agreement, dated May 4, 2011, between CoreLogic, Inc. and Stergios Theologides (Incorporated by reference herein from Exhibit 10.86 to the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2011 as filed with the SEC on April 30, 2012).*
 
 
10.12
Form of Change in Control Agreement (Incorporated by reference herein to Exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the SEC on June 14, 2010).*
 
 
10.13
Pension Restoration Plan, effective as of June 1, 2010 (Incorporated by reference herein from Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).*
 
 
10.14
Executive Supplemental Benefit Plan, effective as of June 1, 2010 (Incorporated by reference herein from Exhibit 10.19 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).*
 
 
10.15
Amendment No. 1 to the Company's Executive Supplemental Benefit Plan, effective as of December 31, 2010 (Incorporated by reference herein from Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on November 24, 2010).*

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10.16
Amendment No. 2 to the Company's Executive Supplemental Benefit Plan, dated as of January 27, 2011 (Incorporated by reference herein from Exhibit 10.23 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 as filed with the SEC on March 14, 2011).*
 
 
10.17
Management Supplemental Benefit Plan, effective as of June 1, 2010 (Incorporated by reference herein from Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).*
 
 
10.18
Amendment No. 1 to the Company's Management Supplemental Benefits Plan, effective as of December 31, 2010 (Incorporated by reference herein from Exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the SEC on November 24, 2010). *
 
 
10.19
Amendment No. 2 to the Company's Management Supplemental Benefit Plan, dated as of January 27, 2011 (Incorporated by reference herein from Exhibit 10.25 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 as filed with the SEC on March 14, 2011).*
 
 
10.20
Deferred Compensation Plan, effective as of June 1, 2010 (Incorporated by reference herein from Exhibit 10.21 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010 as filed with the SEC on August 9, 2010).*
 
 
10.21
Amendment No. 1 to the Company's Deferred Compensation Plan, effective as of December 31, 2010 (Incorporated by reference herein from Exhibit 10.3 to the Company's Current Report on Form 8-K as filed with the SEC on November 24, 2010).*
 
 
10.22
Amendment No. 2 to the Company's Deferred Compensation Plan, effective as of January 1, 2011 (Incorporated by reference herein from Exhibit 10.27 to the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2010 as filed with the SEC on March 31, 2011).*
 
 
10.23
Amendment No. 3 to the Company's Deferred Compensation Plan, effective as of September 29, 2011 (Incorporated by reference herein to Exhibit 10.30 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 as filed with the SEC on February 29, 2012).*
 
 
10.24
Amendment No. 4 to the Company's Deferred Compensation Plan, effective as of September 29, 2011 (Incorporated by reference herein to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 as filed with the SEC on February 29, 2012).*
 
 
10.25
Amendment No. 5 to the Company's Deferred Compensation Plan, effective as of January 1, 2012.* Ÿ
 
 
10.26
Amendment No. 6 to the Company's Deferred Compensation Plan, effective as of January 1, 2013.* Ÿ
 
 
10.27
1997 Directors’ Stock Plan (Incorporated by reference herein from Exhibit 4.1 of Registration Statement No. 333-41993 on Form S-8, dated December 11, 1997).*
 
 
10.28
Amendment No. 1 to 1997 Directors’ Stock Plan, dated February 26, 1998 (Incorporated by reference herein from Exhibit (10)(m) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.29
Amendment No. 2 to 1997 Directors’ Stock Plan, dated July 7, 1998 (Incorporated by reference herein from Exhibit (10)(n) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.30
Amendment No. 3 to 1997 Directors’ Stock Plan, dated July 19, 2000 (Incorporated by reference herein from Exhibit (10)(c) to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2000 as filed with the SEC on August 11, 2000).*

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10.31
1996 Stock Option Plan (Incorporated by reference herein from Exhibit 4 of Registration Statement No. 333-19065 on Form S-8, dated December 30, 1996).*
 
 
10.32
Amendment No. 1 to 1996 Stock Option Plan , dated February 26, 1998 (Incorporated by reference herein from Exhibit (10)(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.33
Amendment No. 2 to 1996 Stock Option Plan, dated June 22, 1998 (Incorporated by reference herein from Exhibit (10)(j) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.34
Amendment No. 3 to 1996 Stock Option Plan, dated July 7, 1998 (Incorporated by reference herein from Exhibit (10)(k) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.35
Amendment No. 4 to 1996 Stock Option Plan, dated April 22, 1999 (Incorporated by reference herein from Exhibit (10)(a) to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1999 as filed with the SEC on August 16, 1999).*
 
 
10.36
Amendment No. 5 to 1996 Stock Option Plan, dated February 29, 2000 (Incorporated by reference herein from Exhibit (10)(o) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as filed with the SEC on March 22, 1999).*
 
 
10.37
Amendment No. 6 to 1996 Stock Option Plan, dated July 19, 2000 (Incorporated by reference herein from Exhibit (10)(b) of Quarterly Report on Form 10-Q for the period ended June 30, 2000 as filed with the SEC on August 11, 2000).*
 
 
10.38
Amendment No. 7 to 1996 Stock Option Plan, dated June 4, 2002 (Incorporated by reference herein from Exhibit (10)(a) to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2002 as filed with the SEC on August14, 2002).*
 
 
10.39
The CoreLogic, Inc. 2006 Incentive Compensation Plan (formerly The First American Corporation 2006 Incentive Compensation Plan) (Incorporated by reference herein from Exhibit 10.42 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 as filed with the SEC on March 14, 2011).*
 
 
10.40
CoreLogic, Inc.'s Amended and Restated 2011 Performance Incentive Plan (Incorporated by reference herein to Exhibit 10.1 to the Company's Form 8-K as filed with the SEC on August 4, 2014).*
 
 
10.41
Form of Notice of Restricted Stock Unit Grant and Form of Restricted Stock Unit Award Agreement (Employee), approved January 28, 2015.* Ÿ
 
 
10.42
Form of Notice of Restricted Stock Unit Grant and Form of Restricted Stock Unit Award Agreement (NEO), approved January 28, 2015.* Ÿ
 
 
10.43
Form of Notice of Performance-Based Restricted Stock Unit Grant and Form of Performance-Based Restricted Stock Unit Award Agreement, approved January 28, 2015.* Ÿ
 
 
10.44
Form of Notice of Nonqualified Stock Option Grant and Nonqualified Stock Option Grant Agreement (Employee) (Incorporated by reference herein from Exhibit 10.59 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the SEC on March 14, 2011).*
 
 
10.45
Form of Notice of Option Grant and Option Award Agreement (Employee) (Incorporated by reference herein to Exhibit 10.5 to the Company's Current Report on Form 8-K as filed with the SEC on May 25, 2011).*
 
 

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10.46
Form of Performance Unit Grant and Form of Performance Unit Award Agreement, approved January 28, 2015.* Ÿ
 
 
10.47
Form of Indemnification Agreement (Directors and Officers) (Incorporated by reference herein to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on May 25, 2011).*
 
 
10.48
Credit Agreement, dated as of September 18, 2013, among CoreLogic, Inc., CoreLogic Australia Pty Limited, the guarantors named therein, the lenders party from time to time thereto and Bank of America, N.A., as administrative agent (Incorporated by reference herein to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2013 as filed with the SEC on October 25, 2013).
 
 
10.49
Reseller Services Agreement, dated as of November 30, 1997 (Incorporated by reference herein from Exhibit (10)(g) to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998 as filed with the SEC on May 15, 1998).
 
 
10.50
Amendment to Reseller Services Agreement for Resales to Consumers, dated as of November 30, 1997 (Incorporated by reference herein from Exhibit (10)(h) to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998 as filed with the SEC on May 15, 1998).
 
 
10.51
A greement for Service, dated October 7, 1998, between CoreLogic CREDCO (formerly First American CREDCO) and Equifax Credit Information Services, Inc. (Incorporated by reference herein from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011 as filed with the SEC on May 6, 2011).
 
 
10.52
Addendum to Agreement for Service, dated May 31, 2000, between CoreLogic CREDCO (formerly First American CREDCO) and Equifax Credit Information Services, Inc. (Incorporated by reference herein from Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011 as filed with the SEC on May 6, 2011).
 
 
10.53
Reseller Service Agreement, dated April 26, 2011, between CoreLogic, Inc. and Trans Union LLC (Incorporated by reference herein from Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2011 as filed with the SEC on May 6, 2011).
 
 
10.54
Master Professional Services Agreement, dated August 17, 2011, between CoreLogic Real Estate Solutions, LLC and Cognizant Technology Solutions U.S. Corporation (Incorporated by reference herein to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q/A for the period ended September 30, 2011 as filed with the SEC on March 23, 2012).±
 
 
10.55
Amendment No. 2 to Supplement A, effective as of March 1, 2012, by and between CoreLogic Solutions, LLC and Cognizant Technology Solutions U.S. Corporation, to the Master Professional Services Agreement between CoreLogic Real Estate Solutions, LLC and Cognizant Technology Solutions U.S. Corporation (Incorporated by reference herein to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2013 as filed with the SEC on October 25, 2013). ±
 
 
10.56
Amendment No. 3 to Supplement A, effective as of September 1, 2013, by and between CoreLogic Solutions, LLC and Cognizant Technology Solutions U.S. Corporation, to the Master Professional Services Agreement between CoreLogic Real Estate Solutions, LLC and Cognizant Technology Solutions U.S. Corporation (Incorporated by reference herein to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2014 as filed with the SEC on July 25, 2014).±
 
 
10.57
Master Services Agreement by and between the Company and Dell Marketing, L.P., dated as of July 19, 2012 (Incorporated by reference herein from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2012 as filed with the SEC on October 26, 2012).±
 
 
10.58
Amendment No. 1 dated October 23, 2012 to the Master Services Agreement by and between CoreLogic Solutions, LLC and Dell Marketing, L.P. (Incorporated by reference herein from Exhibit 10.85 to the Company's Annual Report on Form 10-K for the period ended December 31, 2013 as filed with the SEC on February 25, 2013).

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10.59
Amendment No. 2 dated October 26, 2012 to the Master Services Agreement and Supplement A between CoreLogic Solutions, LLC and Dell Marketing L.P. (Incorporated by reference herein from Exhibit 10.85 to the Company's Annual Report on Form 10-K for the period ended December 31, 2013 as filed with the SEC on February 25, 2013). ±
 
 
21.1
Subsidiaries of the registrant. Ÿ
 
 
23.1
Consent of Independent Registered Public Accounting Firm. Ÿ
 
 
23.2
Consent of Independent Registered Public Accounting Firm. Ÿ
 
 
31.1
Certification by Principal Executive Officer Pursuant to Rule 13a-14(a) under the Securities Act of 1934, as amended. Ÿ
 
 
31.2
Certification by Principal Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. Ÿ
 
 
32.1
Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350. Ÿ
 
 
32.2
Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. Ÿ
 
 
99.1
Audited Financial Statements of RELS LLC. Ÿ
 
 
101
The following financial information from CoreLogic, Inc.'s Annual Report on From 10-K for the year ended December 31, 2014, formatted in Extensible Business Reporting Language (XBRL) and furnished electronically herewith: (I) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive (Loss)/Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

Ÿ
Included in this filing
 
 
*
Indicates a management contract or compensatory plan or arrangement in which any director or named executive officer participates.
 
 
±
Confidential treatment has been requested with respect to portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934 and these confidential portions have been redacted from this exhibit. A complete copy of this exhibit, including the redacted terms, has been separately filed with the Securities and Exchange Commission.
 
 
^
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.
 
 
†
This agreement contains representations and warranties by us or our subsidiaries. These representations and warranties have been made solely for the benefit of the other parties to the agreement and (i) has been qualified by disclosures made to such other parties, (ii) were made only as of the date of such agreement or such other date(s) as may be specified in such agreement and are subject to more recent developments, which may not be fully reflected in our public disclosures, (iii) may reflect the allocation of risk among the parties to such agreement and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the actual state of affairs at the date hereof and should not be relied upon.

110
Exhibit 10.25

AMENDMENT NO.5 TO THE
CORELOGIC, INC. DEFERRED COMPENSATION PLAN

WHEREAS, CoreLogic, Inc. (the "Company") maintains the CoreLogic, Inc. Deferred Compensation Plan (the "Plan"); and

WHEREAS, Section 9.1 of the Plan reserves to the Board or Plan Committee the right to amend the Plan; and

WHEREAS, the purpose of this Amendment No. 5 (the "Amendment") to the Plan is to change the adopting employers to the Plan; and

WHEREAS, this Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment.

NOW THEREFORE, BE IT RESOLVED, that the Plan is amended as follows, effective as of January 1, 2012, unless otherwise indicated below:

IN WITNESS WHEREOF, this Amendment has been executed this 30 day of December, 2011.




COMPANY:     CoreLogic, Inc.

By: /s/ Bernie Malone


1


EXHIBIT I

Appendix B. Participating Companies

Employer Name
Participation Effective Date
Participation End Date
American Driving Records, LLC (formerly American Driving Records, Inc.)

1-Apr-10


 
Americas Innovative Insurance Solutions

1-Apr-10

 
Ati Title Agency of Ohio Inc.
1-Apr-10

 
CoreLogic Commercial Real Estate Services Inc. (formerly First American Commercial Real Estate Solutions)

1-Apr-10

 
CoreLogic Consumer Services, LLC (formerly CoreLogic Consumer Services, Inc.)

1-Apr-10

 
CoreLogic Credco, LLC
1-Apr-10

 
CoreLogic Default Information Services, LLC (formerly First American Default Management Solutions)

1-Apr-10

 
CoreLogic Flood Services, LLC (formerly First Am Flood Hazard Certification, LLC)

1-Apr-10

 
CoreLogic National Background Data, LLC

1-Apr-10

 
CoreLogic Solutions, LLC (formerly CoreLogic Real Estate Solutions, LLC/formerly First American Real Estate Solutions, LLC)

1-Apr-10

 
CoreLogic SafeRent, LLC (formerly CoreLogic SafeRent, Inc.)

1-Apr-10

 
 
 
 



Employer Name
Participation Effective Date
Participation End Date
CoreLogic Tax Services, LLC (formerly
First American Real Estate Tax Svc, LLC) 1-Apr-10 LLC)

1-Apr-10

31-Dec-11
CoreLogic Valuation Services, LLC (formerly Quantrix, LLC and eAappraiseIT, LLC)

1-Apr-10

 
CoreLogic Dorado, LLC (formerly
Dorado Network Systems Corporation)

11-Mar-11
 
Finiti Group, LLC

1-Apr-10

 
Finiti Title, LLC
1-Apr-10

 
Finiti, LLC
1-Apr-10
 
 
 
 
FPSDIRECT, LLC

1-Apr-10
 
Multifamily Community Insurance Agency, LLC (formerly Multifamily Community Insurance Agency, Inc.)

1-Apr-10
 
RealtyBid International, LLC

1-Jan-11
 
Rels Management Company, LLC

1-Apr-10
 
RELS Reporting Services, LLC

1-Apr-10
 
Rels Title Services, LLC

1-Apr-10
 
Rels, LLC

1-Apr-10
 
Speedy Title & Appraisal Review Services, LLC (STARS)

1-Apr-11
 
TeleTrack, Inc. (formerly CoreLogic TeleTrack, Inc)

1-Apr-10
 
CoreLogic Services, LLC

1-Jan-12
 
CoreLogic Holdings II

1-Jan-12
 
CompuNet Credit Services, LLC
1-Jan-12
 

3


Employer Name
Participation Effective Date
Participation End Date
CoreLogic Due Diligence, LLC

1-Jan-12
 
CoreLogic US, Inc. (formerly First Advantage Corporation)

1-Apr-10
31-Dec-2011
CoreLogic Information Solutions, Inc. (formerly First American CoreLogic, Inc.)

1-Apr-10
31-Dec-11
CoreLogic Jenark, Inc.

1-Apr-10
31-Dec-11
Marketlinx, Inc.

1-Apr-10
31-Dec-11
LeadClick Media, Inc. (correction formerly listed as Leadclick Holding Company, LLC)

1-Apr-10
31-Dec-11
CoreLogic Proxix Solutions, Inc. (formerly Proxix Solutions, Inc.)

1-Apr-10
31-Dec-11



Exhibit 10.26






AMENDMENT NO. 6 TO THE CORELOGIC, INC.
DEFERRED COMPENSATION PLAN

































1
LA01 / 1175528.1

AMENDMENT NO.6 TO THE
CORELOGIC, INC.
DEFERRED COMPENSATION PLAN

WHEREAS, CoreLogic, Inc. (the "Company") maintains the CoreLogic, Inc. Deferred Compensation Plan (the "Plan"); and

WHEREAS, Section 9.1 of the Plan reserves to the Board of Directors (the "Board") or the Benefits Administration Committee (the "Committee") the right to amend the Plan; and

WHEREAS, the purpose of this Amendment No. 6 (the "Amendment") to the Plan is to update the definition of "Compensation" under the Plan; and

WHEREAS, the purpose of this Amendment to the Plan is to also waive the vesting requirements under Sections 3.5 and 5 of the Plan for certain eligible employees; and

WHEREAS, this Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment.

NOW THEREFORE, BE IT RESOLVED, that the Plan is amended as follows, effective as of January 1, 2013, unless otherwise indicated below:

I. Compensation. A new paragraph is added to the end of Section 1.2(m) and shall read as follows:

"Effective January 1, 2013, notwithstanding the foregoing, 'Compensation' shall not include any short-term disability benefits received pursuant to the CoreLogic Consolidated Welfare Benefits and Cafeteria Plan."

II. Vesting . A new Appendix C, "Company Contribution Account Vesting," is added to the Plan and shall read in accordance with Exhibit II attached hereto.

III. Adopting Employers. Appendix B of the Plan, "Adopting Employers," is amended in its entirety and shall read in accordance with Exhibit I attached hereto.

IN WITNESS WHEREOF, this Amendment has been executed this 27th day of December, 2012.


COMPANY:     CoreLogic, Inc.


By: __/s/ Bernie Malone_____________

2
LA01 / 1175528.1


EXHIBIT I

Appendix B. Participating Companies

Employer Name
Participation
Effective Date
Participation End
Date
Americas Innovative Insurance Solutions
1-Apr-10
 
CDS Business Mapping, LLC
1-Jan-13
 
CoreLogic Commercial Real Estate Services Inc. (formerly First American Commercial Real Estate Solutions)
1-Apr-10
 
CoreLogic Collateral Solutions, LLC
1-May-12
 
CoreLogic Credco, LLC
1-Apr-10
 
CoreLogic Default Information Services, LLC (formerly First American Default Management Solutions)
1-Apr-10
 
CoreLogic Flood Services, LLC (formerly First Am Flood Hazard Certification, LLC)
1-Apr-10
 
CoreLogic National Background Data, LLC
1-Apr-10
 
CoreLogic Solutions, LLC (formerly CoreLogic Real Estate Solutions, LLC/formerly First American Real Estate Solutions, LLC)
1-Apr-10
 
CoreLogic SafeRent, LLC (formerly CoreLogic SafeRent, Inc.)
1-Apr-10
 
CoreLogic Tax Services, LLC (formerly First American Real Estate Tax Svc, LLC)
1-Apr-10
 
CoreLogic Dorado, LLC (formerly Dorado Network Systems Corporation)
11-Mar-11
 
Finiti Group, LLC
1-Apr-10
 
Finiti Title, LLC
1-Apr-10
 
Finiti, LLC
1-Apr-10
 
FPSDIRECT, LLC
1-Apr-10
 
Multifamily Community Insurance Agency, LLC, (formerly Multifamily Community Insurance Agency, Inc.)
1-Apr-10
 
RealtyBid International, LLC
1-Jan-11
 
Res Direct, LLC
1-Jan-13
 
Rels Management Company, LLC
1-Apr-10
 
Rels, LLC
1-Apr-10
 
Speedy Title & Appraisal Review Services, LLC (STARS)
1-Apr-11
 
TeleTrack, Inc. (formerly CoreLogic, TeleTrack, Inc.)
1-Apr-10
 
CoreLogic Services, LLC
1-Jan-12
 
CoreLogic Holdings II
1-Jan-12
 

3
LA01 / 1175528.1

Employer Name
Participation
Effective Date
Participation End
Date
CompuNet Credit Services, LLC
1-Jan-12
 
CoreLogic Due Diligence, LLC
1-Jan-12
 
American Driving Records, LLC (formerly American Driving Records, American Driving Records, LLC Inc.)
1-Apr-10
30-Aug-12
CoreLogic Consumer Services, LLC (formerly CoreLogic Consumer Services, Inc.)
1-Apr-10
31-Dec-12
Ati Title Agency of Ohio Inc.
1-Apr-10
30-Sep-12
RELS Reporting Services, LLC
1-Apr-10
31-Dec-12
Rels Title Services, LLC
1-Apr-10
30-Sep-12
CoreLogic Valuation Services, LLC (formerly Quantrix, LLC and eAappraiseIT, LLC)
1-Apr-10
31-Dec-12









4
LA01 / 1175528.1


EXHIBIT II

Appendix C. Company Contribution Account Vesting

Notwithstanding Plan sections 3.5 and 5, the following Eligible Employees shall become 100% vested in his/her Company Contribution Account, effective as of the date provided:


Employee Name
Effective Date
Todd Bjorklund
12/11/2012


5
LA01 / 1175528.1
Exhibit 10.41

Notice of Restricted Stock Unit Grant

Participant:          [Participant Name]
Corporation:         CoreLogic, Inc.
Notice:
You have been granted the following Restricted Stock Units in accordance with the terms of the Plan and the Restricted Stock Unit Award Agreement attached hereto.
Type of Award:
Restricted Stock Units
Plan:
CoreLogic, Inc. Amended and Restated 2011 Performance Incentive Plan
Grant:             Date of Grant:   [Grant Date]
            Number of Shares Underlying Bonus Restricted Stock Units:   [Number of Shares             Granted]

Period of Restriction:
Subject to the terms of the Plan and this Agreement, the Period of Restriction applicable to the Restricted Stock Units shall commence on the Date of Grant and shall lapse on the date listed in the “Lapse Date” column below as to that portion of Shares underlying the Restricted Stock Units set forth below opposite each such date.


Lapse Date
Portion of Shares as to
Which Period of Restriction Lapses
20 th  day of Date of Grant month + 1 year
1/3
20 th  day of Date of Grant month + 2 years
1/3
20 th  day of Date of Grant month + 3 years
1/3

For purposes of this Agreement, “Period of Restriction” means the period during which the Restricted Stock Units are subject to a substantial risk of forfeiture. The date on which the Period of Restriction lapses pursuant to this paragraph is referred to herein as the “Lapse Date.”

The vesting schedule set forth above requires the Participant’s continued employment or service through each applicable Lapse Date as a condition to the lapsing of the Period of Restriction on such Lapse Date. Except as provided in Section 4 or Section 5 of this Agreement, employment or service for only a portion of the Period of Restriction prior to the Lapse Date, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan.

Rejection:
If you wish to accept this Restricted Stock Unit Award, please access Fidelity NetBenefits® at www.netbenefits.com and follow the steps outlined under the "Accept Grant" link at any time within forty-five (45) days after the Date of Grant. If you do not accept your grant via Fidelity NetBenefits® within forty-five (45) days after the Date of Grant, you will have rejected this Restricted Stock Unit Award.








 
 




Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of the Date of Grant set forth in the Notice of Restricted Stock Unit Grant attached hereto (the “Grant Notice”), is made between CoreLogic, Inc. (the “Corporation”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.
1. Definitions .
Certain capitalized terms are defined in the Grant Notice, herein or in the attached Appendix A. Capitalized terms used but not defined in the Grant Notice, herein or in the attached Appendix A shall have the meaning assigned to such terms in the Plan.
2.     Grant of the Restricted Stock Units .
Subject to the provisions of this Agreement and the provisions of the Plan, the Corporation hereby grants to the Participant, pursuant to the Plan, a right to receive the number of shares of Common Stock (“Shares”) set forth in the Grant Notice (the “Restricted Stock Units”).
3.     Dividend Equivalents .
Each Restricted Stock Unit shall accrue Dividend Equivalents (as defined below) with respect to dividends that would otherwise be paid on the Share underlying such Restricted Stock Unit during the period from the Grant Date to the date such Share is delivered in accordance with Section 6. As of any date in this period that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall credit the Participant with an additional number of Restricted Stock Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such date, multiplied by (ii) the total number of Restricted Stock Units subject to the award as of the related dividend payment record date (including any Dividend Equivalents previously credited hereunder), divided by (iii) the fair market value (as determined in accordance with the terms of the Plan) of a share of Common Stock on the date of payment of such dividend. Any Restricted Stock Units credited pursuant to the foregoing provisions of this Section 3 shall be subject to the same Period of Restriction, payment, delivery and other terms, conditions and restrictions as the original Restricted Stock Units to which they relate. Any such crediting of Dividend Equivalents shall be conclusively determined by the Administrator. No crediting of Restricted Stock Units shall be made pursuant to this Section 3 with respect to any Restricted Stock Units which, as of such record date, have either been delivered or terminated pursuant to the Plan or this Agreement. For purposes of this Agreement, “Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to the Restricted Stock Units but that have not been issued or delivered.
4.     Period of Restriction; Termination .
The Period of Restriction with respect to the Restricted Stock Units shall be as set forth in the Grant Notice. Subject to the terms of the Plan, the remaining provisions of this Section 4 and Section 5(b), all Restricted Stock Units for which the Period of Restriction had not lapsed prior to the date of the Participant’s Termination (as defined in Appendix A attached hereto) shall be immediately forfeited. Notwithstanding the foregoing to the contrary:
(a) In the event of the Participant’s death or Disability (as defined in Appendix A attached hereto) prior to his or her Termination, the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety.
(b) In the event of the Participant’s Termination due to his or her Normal Retirement (as defined below), the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety, provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.

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(c) In the event of the Participant’s involuntary Termination by the Corporation or an Affiliate (as defined in Appendix A attached hereto) without Cause (as defined in Appendix A attached hereto), the Period of Restriction as to all remaining unpaid Bonus Restricted Stock Units shall lapse in its entirety; provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
For purposes of this Agreement, “Normal Retirement” means Termination of the Participant, other than for Cause, after the Participant has reached 62 years of age.
5.     Change in Control .
(a)    In the event of a corporate transaction described in Section 7.2 of the Plan (which generally includes transactions that the Corporation does not survive or does not survive as a public company in respect of its Common Stock), the provisions of Section 7.2 of the Plan shall apply to the remaining unpaid Restricted Stock Units; provided, however, that the payment date of the Restricted Stock Units that are to be paid pursuant to the award shall in all cases be determined pursuant to Section 6 .
(b)    In the event the Participant is Terminated by the Corporation or an Affiliate (including any successor to such entity) without Cause upon or at any time during the twelve-month period following a Change in Control (as defined in Appendix A attached hereto), the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety, provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
6.     Delivery of Shares .
The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed according to the vesting schedule set forth in the Grant Notice, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days following the applicable Lapse Date set forth in the Grant Notice. The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed pursuant to Section 4 or Section 5(b) of this Agreement, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable following the first to occur of (i) the date of the Participant’s death or Disability, or (ii) upon the twentieth day of the third month of the calendar quarter following the first anniversary of the Participant’s “separation from service” (as such term is used for purposes of Section 409A of the Code), whether such separation from service results from the Participant’s Normal Retirement, Termination by the Corporation or an Affiliate without Cause or otherwise. The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed pursuant to Section 7.2 of the Plan, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days following the applicable Lapse Date set forth in the Grant Notice; provided, however, that (i) if the Participant dies or incurs a Disability prior to any such Lapse Date, the related payment shall be made to the Participant as soon as reasonably practicable following the date of the Participant’s death or Disability, or (ii) if the Participant’s separation from service occurs prior to such Lapse Date, the related payment shall be made upon the twentieth day of the third month of the calendar quarter following the first anniversary of the Participant’s separation from service. For purposes of this Section 6, if such payment date is a day on which the New York Stock Exchange is not open for trading, the payment date shall be the next day on which such exchange is open for trading. Notwithstanding the foregoing provisions of this Section 6, the Administrator may provide for payment of any Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Corporation. The Participant shall have no rights to receive delivery of any Shares with respect to Restricted Stock Units that have been forfeited or cancelled, or for which

- 3 -






 
 



Shares have previously been delivered. No fractional Shares shall be delivered, and the Shares otherwise deliverable in any payment pursuant to this Section 6 shall be rounded down to the nearest whole number of Shares.
7.     No Ownership Rights Prior to Issuance of Shares .
Neither the Participant nor any other person shall become the beneficial owner of the Shares underlying the Restricted Stock Units, nor have any rights to dividends (other than rights to Dividend Equivalents pursuant to Section 3) or other rights as a shareholder with respect to any such Shares, until and after such Shares have been actually issued to the Participant and transferred on the books and records of the Corporation or its agent in accordance with the terms of the Plan and this Agreement.
8.     Detrimental Activity .
(a)    Notwithstanding any other provisions of this Agreement to the contrary, if at any time prior to the delivery of Shares with respect to the Restricted Stock Units, the Participant engages in Detrimental Activity (as defined below), such Restricted Stock Units shall be cancelled and rescinded without any payment or consideration therefor. The determination of whether the Participant has engaged in Detrimental Activity shall be made by the Administrator in its good faith discretion, and lapse of the Period of Restriction and delivery of Shares with respect to the Restricted Stock Units shall be suspended pending resolution to the Administrator’s satisfaction of any investigation of the matter.
(b)    For purposes of this Agreement, “Detrimental Activity” means at any time (i) using information received during the Participant’s employment with the Corporation and/or its Subsidiaries, Affiliates and predecessors in interest relating to the business affairs of the Corporation or any such Subsidiaries, Affiliates or predecessors in interest, in breach of the Participant’s express or implied undertaking to keep such information confidential; (ii) directly or indirectly persuading or attempting to persuade, by any means, any employee of the Corporation or any of its Subsidiaries or Affiliates to breach any of the terms of his or her employment with Corporation, its Subsidiaries or its Affiliates; (iii) directly or indirectly making any statement that is, or could be, disparaging of the Corporation or any of its Subsidiaries or Affiliates, or any of their respective employees (except to the extent necessary to respond truthfully to any inquiry from applicable regulatory authorities or to provide information pursuant to legal process); (iv) directly or indirectly engaging in any illegal, unethical or otherwise wrongful activity that is, or could be, substantially injurious to the financial condition, reputation or goodwill of the Corporation or any of its Subsidiaries or Affiliates; or (v) directly or indirectly engaging in an act of misconduct such as, embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Corporation or any of its Subsidiaries or Affiliates, breach of fiduciary duty or disregard or violation of rules, policies or procedures of the Corporation or any of its Subsidiaries or Affiliates, an unauthorized disclosure of any trade secret or confidential information of the Corporation or any of its Subsidiaries or Affiliates, any conduct constituting unfair competition, or inducing any customer to breach a contract with the Corporation or any of its Subsidiaries or Affiliates, in each case as determined by the Administrator in its good faith discretion.
9.     No Right to Continued Employment .
None of the Restricted Stock Units nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employ of the Corporation or any Subsidiary or Affiliate for any period, nor restrict in any way the right of the Corporation or any Subsidiary or any Affiliate, which right is hereby expressly reserved, to terminate the Participant’s employment at any time for any reason. For the avoidance of doubt, this Section 9 is not intended to amend or modify any other agreement, including any employment agreement, that may be in existence between the Participant and the Corporation or any Subsidiary or Affiliate.
10.     The Plan .
In consideration for this grant, the Participant agrees to comply with the terms of the Plan and this Agreement. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Administrator. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly, provided that the provisions of Section 6

- 4 -






 
 



(Delivery of Shares) of this Agreement shall control over any conflicting payment provisions of the Plan. The Plan and the prospectus describing the Plan can be found on Fidelity NetBenefits® at www.netbenefits.com under Plan Information and Documents. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Corporation at CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify.
11.     Compliance with Laws and Regulations .
(a)    The Restricted Stock Units and the obligation of the Corporation to sell and deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Administrator shall, in its discretion, determine to be necessary or applicable. Moreover, the Corporation shall not deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Corporation determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Corporation shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Corporation.
(b)    It is intended that the Shares received in respect of the Restricted Stock Units shall have been registered under the Securities Act. If the Participant is an “affiliate” of the Corporation, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Corporation may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Corporation deems appropriate to comply with Federal and state securities laws.
(c)    If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Corporation pursuant to this Agreement, an agreement (in such form as the Corporation may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the Shares acquired under this Agreement for the Participant's own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Corporation, from counsel for or approved by the Corporation, as to the applicability of such exemption thereto.
12.     Notices .
All notices by the Participant or the Participant’s assignees shall be addressed to CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Corporation's records.
13.     Severability .
In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

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14.     Other Plans .
The Participant acknowledges that any income derived from the Restricted Stock Units shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Corporation or any Subsidiary or Affiliate. Restricted Stock Units and Dividend Equivalents shall not be deemed to be “Covered Compensation” under any other benefit plan of the Corporation.
15.     Adjustments .
The Restricted Stock Units and the Shares underlying the Restricted Stock Units shall be subject to adjustment and conversion pursuant to the terms of Section 7.1 of the Plan.
16.     Tax Withholding .
Any payment or delivery of Shares pursuant to this Agreement shall be subject to the Corporation’s rights to withhold applicable Federal, state, local and non-United States taxes in accordance with Section 8.5 of the Plan.
17.     Section 409A .
The provisions of this Agreement shall be construed and interpreted to comply with Section 409A of the Code so as to avoid the imposition of any penalties, taxes or interest thereunder.
18.     Clawback .
The Restricted Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Restricted Stock Units or any Shares or other cash or property received with respect to the Restricted Stock Units (including any value received from a disposition of the Shares acquired upon payment of the Restricted Stock Units).
CORELOGIC, INC.

    
By:______________________________
Name: Anand Nallathambi
Title: Chief Executive Officer

Date: [Grant Date]


Acknowledged and agreed as of the Date of Grant:



Printed Name:     [Participant Name]


Date:     [Acceptance Date]


NOTE: GRANT WILL BE ACCEPTED ELECTRONICALLY


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APPENDIX A

Certain Definitions

“ Affiliate ” means any entity other than the Corporation and any Subsidiary that is affiliated with the Corporation through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of the Plan by the Administrator.


“ Cause ” has the same meaning as in the Participant’s employment agreement with the Corporation, a Subsidiary or an Affiliate (if any) as in effect at the time of the Participant’s Termination, or if the Participant is not a party to such an employment agreement (or is not a party to such an employment agreement that contains a definition of “cause”), “Cause” means: (i) embezzlement, theft or misappropriation by the Participant of any property of any of the Corporation or its Affiliates; (ii) the Participant’s breach of any fiduciary duty to the Corporation or its Affiliates; (iii) the Participant’s failure or refusal to comply with laws or regulations applicable to the Corporation or its Affiliates and their businesses or the policies of the Corporation and its Affiliates governing the conduct of its employees or directors; (iv) the Participant’s gross incompetence in the performance of the Participant’s job duties; (v) commission by the Participant of a felony or of any crime involving moral turpitude, fraud or misrepresentation; (vi) the failure of the Participant to perform duties consistent with a commercially reasonable standard of care; (vii) the Participant’s failure or refusal to perform the Participant’s job duties or to perform specific directives of the Participant’s supervisor or designee, or the senior officers or Board of Directors of the Corporation; or (viii) any gross negligence or willful misconduct of the Participant resulting in loss to the Corporation or its Affiliates, or damage to the reputation of the Corporation or its Affiliates.
“ Change in Control ” means the happening of any of the following after the date hereof:

(a)
The consummation of a merger or consolidation of the Corporation with or into another entity or any other corporate reorganization, if fifty percent (50%) or more of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation, or other reorganization is owned by persons who were not shareholders of the Corporation immediately prior to such merger, consolidation, or other reorganization.
(b)
The sale, transfer, or other disposition of all or substantially all of the Corporation’s assets or the complete liquidation or dissolution of the Corporation.
(c)
A change in the composition of the Board occurring within a two (2) year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “ Incumbent Directors ” shall mean directors who are directors of the Corporation immediately following the consummation of the transactions contemplated by the Separation and Distribution Agreement by and between the Corporation and the First American Financial Corporation dated June 1, 2010 (the “ Separation Agreement ”). “ Incumbent Directors ” shall also include directors who are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but shall not include an individual not otherwise an Incumbent Director whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Corporation.
(d)
Any transaction as a result of which any person or group is or becomes the “ beneficial owner ” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Corporation representing at least thirty percent (30%) of the total voting power of the Corporation’s then outstanding voting securities. For purposes of this paragraph, the term “ person ” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but shall exclude: (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or of a Subsidiary of the Corporation; (ii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person whose beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting








 
 



securities increases to thirty percent (30%) or more as a result of the acquisition of voting securities of the Corporation by the Corporation which reduces the number of such voting securities then outstanding; or (iii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person that acquires directly from the Corporation securities of the Corporation representing at least thirty percent (30%) of the total voting power represented by the Corporation’s then outstanding voting securities.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction.
For the avoidance of doubt, the consummation of any or all of the transactions in the Separation Agreement is not considered a Change in Control for purposes of this Agreement.
“ Disability ” means the inability to engage in any substantial gainful occupation to which the relevant individual is suited by education, training or experience, by reason of any medically determinable physical or mental impairment, which condition can be expected to result in death or continues for a continuous period of not less than twelve (12) months.
“ Termination ” means the time when the Participant ceases the performance of services for the Corporation, any Affiliate or Subsidiary, as applicable, for any reason, with or without Cause, including a Termination by resignation, discharge, retirement, death or Disability, but excluding (a) a Termination where there is a simultaneous reemployment or continuing employment of the Participant by the Corporation, any Affiliate or Subsidiary, (b) at the discretion of the Administrator, a Termination that results in a temporary severance, and (c) at the discretion of the Administrator, a Termination of an employee of the Corporation that is immediately followed by the Participant’s service as a non-employee director of the Board.  Notwithstanding any other provisions of the Plan or this Agreement to the contrary, a Termination shall not be deemed to have occurred for purposes of any provision the Plan or this Agreement providing for payment or distribution with respect to an award constituting deferred compensation subject to Code Section 409A upon or following a termination of employment or services unless such termination is also a “separation from service” within the meaning of Section 409A of the Code.





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Exhibit 10.40

Notice of Restricted Stock Unit Grant

Participant:          [Participant Name]
Corporation:         CoreLogic, Inc.
Notice:
You have been granted the following Restricted Stock Units in accordance with the terms of the Plan and the Restricted Stock Unit Award Agreement attached hereto.
Type of Award:
Restricted Stock Units
Plan:
CoreLogic, Inc. Amended and Restated 2011 Performance Incentive Plan
Grant:             Date of Grant:   [Grant Date]
            Number of Shares Underlying Bonus Restricted Stock Units:   [Number of Shares             Granted]

Period of Restriction:
Subject to the terms of the Plan and this Agreement, the Period of Restriction applicable to the Restricted Stock Units shall commence on the Date of Grant and shall lapse on the date listed in the “Lapse Date” column below as to that portion of Shares underlying the Restricted Stock Units set forth below opposite each such date.


Lapse Date
Portion of Shares as to
Which Period of Restriction Lapses
Date of Grant + 1 year
1/3
Date of Grant + 2 years
1/3
Date of Grant + 3 years
1/3

For purposes of this Agreement, “Period of Restriction” means the period during which the Restricted Stock Units are subject to a substantial risk of forfeiture. The date on which the Period of Restriction lapses pursuant to this paragraph is referred to herein as the “Lapse Date.”

The vesting schedule set forth above requires the Participant’s continued employment or service through each applicable Lapse Date as a condition to the lapsing of the Period of Restriction on such Lapse Date. Except as provided in Section 4 or Section 5 of this Agreement, employment or service for only a portion of the Period of Restriction prior to the Lapse Date, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan.

Rejection:
If you wish to accept this Restricted Stock Unit Award, please access Fidelity NetBenefits® at www.netbenefits.com and follow the steps outlined under the "Accept Grant" link at any time within forty-five (45) days after the Date of Grant. If you do not accept your grant via Fidelity NetBenefits® within forty-five (45) days after the Date of Grant, you will have rejected this Restricted Stock Unit Award.










 
 



Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of the Date of Grant set forth in the Notice of Restricted Stock Unit Grant attached hereto (the “Grant Notice”), is made between CoreLogic, Inc. (the “Corporation”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.
1. Definitions .
Certain capitalized terms are defined in the Grant Notice, herein or in the attached Appendix A. Capitalized terms used but not defined in the Grant Notice, herein or in the attached Appendix A shall have the meaning assigned to such terms in the Plan.
2.     Grant of the Restricted Stock Units .
Subject to the provisions of this Agreement and the provisions of the Plan, the Corporation hereby grants to the Participant, pursuant to the Plan, a right to receive the number of shares of Common Stock (“Shares”) set forth in the Grant Notice (the “Restricted Stock Units”).
3.     Dividend Equivalents .
Each Restricted Stock Unit shall accrue Dividend Equivalents (as defined below) with respect to dividends that would otherwise be paid on the Share underlying such Restricted Stock Unit during the period from the Grant Date to the date such Share is delivered in accordance with Section 6. As of any date in this period that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall credit the Participant with an additional number of Restricted Stock Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such date, multiplied by (ii) the total number of Restricted Stock Units subject to the award as of the related dividend payment record date (including any Dividend Equivalents previously credited hereunder), divided by (iii) the fair market value (as determined in accordance with the terms of the Plan) of a share of Common Stock on the date of payment of such dividend. Any Restricted Stock Units credited pursuant to the foregoing provisions of this Section 3 shall be subject to the same Period of Restriction, payment, delivery and other terms, conditions and restrictions as the original Restricted Stock Units to which they relate. Any such crediting of Dividend Equivalents shall be conclusively determined by the Administrator. No crediting of Restricted Stock Units shall be made pursuant to this Section 3 with respect to any Restricted Stock Units which, as of such record date, have either been delivered or terminated pursuant to the Plan or this Agreement. For purposes of this Agreement, “Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to the Restricted Stock Units but that have not been issued or delivered.
4.     Period of Restriction; Termination .
The Period of Restriction with respect to the Restricted Stock Units shall be as set forth in the Grant Notice. Subject to the terms of the Plan, the remaining provisions of this Section 4 and Section 5(b), all Restricted Stock Units for which the Period of Restriction had not lapsed prior to the date of the Participant’s Termination (as defined in Appendix A attached hereto) shall be immediately forfeited. Notwithstanding the foregoing to the contrary:
(a) In the event of the Participant’s death or Disability (as defined in Appendix A attached hereto) prior to his or her Termination, the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety.
(b) In the event of the Participant’s Termination due to his or her Normal Retirement (as defined below), the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety, provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.

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(c) In the event of the Participant’s involuntary Termination by the Corporation or an Affiliate (as defined in Appendix A attached hereto) without Cause (as defined in Appendix A attached hereto), the Period of Restriction as to all remaining unpaid Bonus Restricted Stock Units shall lapse in its entirety; provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
For purposes of this Agreement, “Normal Retirement” means Termination of the Participant, other than for Cause, after the Participant has reached 62 years of age.
5.     Change in Control .
(a)    In the event of a corporate transaction described in Section 7.2 of the Plan (which generally includes transactions that the Corporation does not survive or does not survive as a public company in respect of its Common Stock), the provisions of Section 7.2 of the Plan shall apply to the remaining unpaid Restricted Stock Units; provided, however, that the payment date of the Restricted Stock Units that are to be paid pursuant to the award shall in all cases be determined pursuant to Section 6 .
(b)    In the event the Participant is Terminated by the Corporation or an Affiliate (including any successor to such entity) without Cause upon or at any time during the twelve-month period following a Change in Control (as defined in Appendix A attached hereto), the Period of Restriction as to all remaining unpaid Restricted Stock Units shall lapse in its entirety, provided that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
6.     Delivery of Shares .
The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed according to the vesting schedule set forth in the Grant Notice, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days following the applicable Lapse Date set forth in the Grant Notice. The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed pursuant to Section 4 or Section 5(b) of this Agreement, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days, following the first to occur of (i) the date of the Participant’s death or Disability, or (ii) the first anniversary of the Participant’s “separation from service” (as such term is used for purposes of Section 409A of the Code), whether such separation from service results from the Participant’s Normal Retirement, Termination by the Corporation or an Affiliate without Cause or otherwise. The Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed pursuant to Section 7.2 of the Plan, together with Shares comprising all accrued Dividend Equivalents with respect to such Restricted Stock Units, shall be delivered by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days following the applicable Lapse Date set forth in the Grant Notice; provided, however, that (i) if the Participant dies or incurs a Disability prior to any such Lapse Date, the related payment shall be made to the Participant as soon as reasonably practicable, but in no event later than 74 days, following the date of the Participant’s death or Disability, or (ii) if the Participant’s separation from service occurs prior to such Lapse Date, the related payment shall be made on the first anniversary of the Participant’s separation from service. Notwithstanding the foregoing provisions of this Section 6, the Administrator may provide for payment of any Shares underlying the Restricted Stock Units for which the Period of Restriction has lapsed in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Corporation. The Participant shall have no rights to receive delivery of any Shares with respect to Restricted Stock Units that have been forfeited or cancelled, or for which Shares have previously been delivered. No fractional Shares shall be delivered, and the Shares otherwise deliverable in any payment pursuant to this Section 6 shall be rounded down to the nearest whole number of Shares.

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7.     No Ownership Rights Prior to Issuance of Shares .
Neither the Participant nor any other person shall become the beneficial owner of the Shares underlying the Restricted Stock Units, nor have any rights to dividends (other than rights to Dividend Equivalents pursuant to Section 3) or other rights as a shareholder with respect to any such Shares, until and after such Shares have been actually issued to the Participant and transferred on the books and records of the Corporation or its agent in accordance with the terms of the Plan and this Agreement.
8.     Detrimental Activity .
(a)    Notwithstanding any other provisions of this Agreement to the contrary, if at any time prior to the delivery of Shares with respect to the Restricted Stock Units, the Participant engages in Detrimental Activity (as defined below), such Restricted Stock Units shall be cancelled and rescinded without any payment or consideration therefor. The determination of whether the Participant has engaged in Detrimental Activity shall be made by the Administrator in its good faith discretion, and lapse of the Period of Restriction and delivery of Shares with respect to the Restricted Stock Units shall be suspended pending resolution to the Administrator’s satisfaction of any investigation of the matter.
(b)    For purposes of this Agreement, “Detrimental Activity” means at any time (i) using information received during the Participant’s employment with the Corporation and/or its Subsidiaries, Affiliates and predecessors in interest relating to the business affairs of the Corporation or any such Subsidiaries, Affiliates or predecessors in interest, in breach of the Participant’s express or implied undertaking to keep such information confidential; (ii) directly or indirectly persuading or attempting to persuade, by any means, any employee of the Corporation or any of its Subsidiaries or Affiliates to breach any of the terms of his or her employment with Corporation, its Subsidiaries or its Affiliates; (iii) directly or indirectly making any statement that is, or could be, disparaging of the Corporation or any of its Subsidiaries or Affiliates, or any of their respective employees (except to the extent necessary to respond truthfully to any inquiry from applicable regulatory authorities or to provide information pursuant to legal process); (iv) directly or indirectly engaging in any illegal, unethical or otherwise wrongful activity that is, or could be, substantially injurious to the financial condition, reputation or goodwill of the Corporation or any of its Subsidiaries or Affiliates; or (v) directly or indirectly engaging in an act of misconduct such as, embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Corporation or any of its Subsidiaries or Affiliates, breach of fiduciary duty or disregard or violation of rules, policies or procedures of the Corporation or any of its Subsidiaries or Affiliates, an unauthorized disclosure of any trade secret or confidential information of the Corporation or any of its Subsidiaries or Affiliates, any conduct constituting unfair competition, or inducing any customer to breach a contract with the Corporation or any of its Subsidiaries or Affiliates, in each case as determined by the Administrator in its good faith discretion.
9.     No Right to Continued Employment .
None of the Restricted Stock Units nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employ of the Corporation or any Subsidiary or Affiliate for any period, nor restrict in any way the right of the Corporation or any Subsidiary or any Affiliate, which right is hereby expressly reserved, to terminate the Participant’s employment at any time for any reason. For the avoidance of doubt, this Section 9 is not intended to amend or modify any other agreement, including any employment agreement, that may be in existence between the Participant and the Corporation or any Subsidiary or Affiliate.
10.     The Plan .
In consideration for this grant, the Participant agrees to comply with the terms of the Plan and this Agreement. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Administrator. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly, provided that the provisions of Section 6 (Delivery of Shares) of this Agreement shall control over any conflicting payment provisions of the Plan. The Plan and the prospectus describing the Plan can be found on Fidelity NetBenefits® at www.netbenefits.com under Plan Information and Documents. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the

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Participant’s written request to the Corporation at CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify.
11.     Compliance with Laws and Regulations .
(a)    The Restricted Stock Units and the obligation of the Corporation to sell and deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Administrator shall, in its discretion, determine to be necessary or applicable. Moreover, the Corporation shall not deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Corporation determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Corporation shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Corporation.
(b)    It is intended that the Shares received in respect of the Restricted Stock Units shall have been registered under the Securities Act. If the Participant is an “affiliate” of the Corporation, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Corporation may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Corporation deems appropriate to comply with Federal and state securities laws.
(c)    If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Corporation pursuant to this Agreement, an agreement (in such form as the Corporation may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the Shares acquired under this Agreement for the Participant's own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Corporation, from counsel for or approved by the Corporation, as to the applicability of such exemption thereto.
12.     Notices .
All notices by the Participant or the Participant’s assignees shall be addressed to CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Corporation's records.
13.     Severability .
In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.
14.     Other Plans .
The Participant acknowledges that any income derived from the Restricted Stock Units shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement

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maintained by the Corporation or any Subsidiary or Affiliate. Restricted Stock Units and Dividend Equivalents shall not be deemed to be “Covered Compensation” under any other benefit plan of the Corporation.
15.     Vesting of Restricted Stock Units Contingent on Corporation Performance .
Notwithstanding any other provisions in this Agreement, except in the event of an acceleration of vesting pursuant to Section 4(a) or Section 5 of this Agreement, the Participant’s entitlement to the receipt of any Shares hereunder is contingent upon the Corporation’s achievement of net income (as defined in accordance with generally acceptable accounting principles) for 2015 of $50 million or more. Net income shall be determined without regard to (a) amortization related to acquired intangibles, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (e) any transformation, reorganization and restructuring program costs, (f) extraordinary, unusual and/or nonrecurring items of gain or loss, and (g) foreign exchange gains and losses. The provisions of this Section 15 shall be a Business Criteria under the Plan, and shall be subject to all of the terms of the Plan applicable to Performance-Based Awards.
16.     Adjustments .
The Restricted Stock Units and the Shares underlying the Restricted Stock Units shall be subject to adjustment and conversion pursuant to the terms of Section 7.1 of the Plan.
17.     Tax Withholding .
Any payment or delivery of Shares pursuant to this Agreement shall be subject to the Corporation’s rights to withhold applicable Federal, state, local and non-United States taxes in accordance with Section 8.5 of the Plan.
18.     Section 409A .
The provisions of this Agreement shall be construed and interpreted to comply with Section 409A of the Code so as to avoid the imposition of any penalties, taxes or interest thereunder.
19.     Clawback .
The Restricted Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Restricted Stock Units or any Shares or other cash or property received with respect to the Restricted Stock Units (including any value received from a disposition of the Shares acquired upon payment of the Restricted Stock Units).
CORELOGIC, INC.

    
By:______________________________
Name: Anand Nallathambi
Title: Chief Executive Officer

Date: [Grant Date]


Acknowledged and agreed as of the Date of Grant:



Printed Name:     [Participant Name]


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Date:     [Acceptance Date]


NOTE: GRANT WILL BE ACCEPTED ELECTRONICALLY


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APPENDIX A

Certain Definitions

“ Affiliate ” means any entity other than the Corporation and any Subsidiary that is affiliated with the Corporation through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of the Plan by the Administrator.

“ Cause ” has the same meaning as in the Participant’s employment agreement with the Corporation, a Subsidiary or an Affiliate (if any) as in effect at the time of the Participant’s Termination, or if the Participant is not a party to such an employment agreement (or is not a party to such an employment agreement that contains a definition of “cause”), “Cause” means: (i) embezzlement, theft or misappropriation by the Participant of any property of any of the Corporation or its Affiliates; (ii) the Participant’s breach of any fiduciary duty to the Corporation or its Affiliates; (iii) the Participant’s failure or refusal to comply with laws or regulations applicable to the Corporation or its Affiliates and their businesses or the policies of the Corporation and its Affiliates governing the conduct of its employees or directors; (iv) the Participant’s gross incompetence in the performance of the Participant’s job duties; (v) commission by the Participant of a felony or of any crime involving moral turpitude, fraud or misrepresentation; (vi) the failure of the Participant to perform duties consistent with a commercially reasonable standard of care; (vii) the Participant’s failure or refusal to perform the Participant’s job duties or to perform specific directives of the Participant’s supervisor or designee, or the senior officers or Board of Directors of the Corporation; or (viii) any gross negligence or willful misconduct of the Participant resulting in loss to the Corporation or its Affiliates, or damage to the reputation of the Corporation or its Affiliates.
“ Change in Control ” means the happening of any of the following after the date hereof:

(a)
The consummation of a merger or consolidation of the Corporation with or into another entity or any other corporate reorganization, if fifty percent (50%) or more of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation, or other reorganization is owned by persons who were not shareholders of the Corporation immediately prior to such merger, consolidation, or other reorganization.
(b)
The sale, transfer, or other disposition of all or substantially all of the Corporation’s assets or the complete liquidation or dissolution of the Corporation.
(c)
A change in the composition of the Board occurring within a two (2) year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “ Incumbent Directors ” shall mean directors who are directors of the Corporation immediately following the consummation of the transactions contemplated by the Separation and Distribution Agreement by and between the Corporation and the First American Financial Corporation dated June 1, 2010 (the “ Separation Agreement ”). “ Incumbent Directors ” shall also include directors who are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but shall not include an individual not otherwise an Incumbent Director whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Corporation.
(d)
Any transaction as a result of which any person or group is or becomes the “ beneficial owner ” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Corporation representing at least thirty percent (30%) of the total voting power of the Corporation’s then outstanding voting securities. For purposes of this paragraph, the term “ person ” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but shall exclude: (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or of a Subsidiary of the Corporation; (ii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person whose beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities increases to thirty percent (30%) or more as a result of the acquisition of voting securities of the








 
 



Corporation by the Corporation which reduces the number of such voting securities then outstanding; or (iii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person that acquires directly from the Corporation securities of the Corporation representing at least thirty percent (30%) of the total voting power represented by the Corporation’s then outstanding voting securities.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction.
For the avoidance of doubt, the consummation of any or all of the transactions in the Separation Agreement is not considered a Change in Control for purposes of this Agreement.
“ Disability ” means the inability to engage in any substantial gainful occupation to which the relevant individual is suited by education, training or experience, by reason of any medically determinable physical or mental impairment, which condition can be expected to result in death or continues for a continuous period of not less than twelve (12) months.
“ Termination ” means the time when the Participant ceases the performance of services for the Corporation, any Affiliate or Subsidiary, as applicable, for any reason, with or without Cause, including a Termination by resignation, discharge, retirement, death or Disability, but excluding (a) a Termination where there is a simultaneous reemployment or continuing employment of the Participant by the Corporation, any Affiliate or Subsidiary, (b) at the discretion of the Administrator, a Termination that results in a temporary severance, and (c) at the discretion of the Administrator, a Termination of an employee of the Corporation that is immediately followed by the Participant’s service as a non-employee director of the Board.  Notwithstanding any other provisions of the Plan or this Agreement to the contrary, a Termination shall not be deemed to have occurred for purposes of any provision the Plan or this Agreement providing for payment or distribution with respect to an award constituting deferred compensation subject to Code Section 409A upon or following a termination of employment or services unless such termination is also a “separation from service” within the meaning of Section 409A of the Code.





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Exhibit 10.43

Notice of Performance-Based Restricted Stock Unit Grant

Participant:          [Participant Name]
Corporation:         CoreLogic, Inc.
Notice:
You have been granted the following Performance-Based Restricted Stock Units (“Performance-Based RSUs”) in accordance with the terms of the Plan and the Performance-Based Restricted Stock Unit Award Agreement attached hereto.
Type of Award:
Performance-Based RSUs
Plan:
CoreLogic, Inc. Amended and Restated 2011 Performance Incentive Plan
Grant:             Date of Grant:   [Grant Date]
            Target Number of Performance-Based RSUs:   [Number of RSUs Granted]

Vesting:
[Vesting term to be inserted here]

Measurement Period:
The performance period for the Performance-Based RSUs shall commence on [_________] and end on [_________] (the “Performance Period”). Each of the [____] calendar years occurring in the Performance Period is referred to as a “Performance Year.”
Performance Measures:
[Performance measure to be inserted here]

Forfeiture:
Any Performance-Based RSUs that have not been credited either with respect to the individual Performance Years or the cumulative Performance Period shall be immediately forfeited effective as of the end of the Performance Period.

Time-Based Vesting :
[Time-based vesting provisions to be inserted here]

Rejection:
If you wish to accept this Performance-Based RSU Award, please access Fidelity NetBenefits® at www.netbenefits.com and follow the steps outlined under the "Accept Grant" link at any time within forty-five (45) days after the Date of Grant. If you do not accept your grant via Fidelity NetBenefits® within forty-five (45) days after the Date of Grant, you will have rejected this Performance-Based RSU Award.


 
 
 




Performance-Based Restricted Stock Unit Award Agreement - 2015

This Performance-Based Restricted Stock Unit Award Agreement (this “Agreement”), dated as of the Date of Grant set forth in the Notice of Performance-Based Restricted Stock Unit Grant attached hereto (the “Grant Notice”), is made between CoreLogic, Inc. (the “Corporation”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.
1.
Definitions .
Certain capitalized terms are defined in the Grant Notice, herein or in the attached Appendix A. Capitalized terms used but not defined in the Grant Notice, herein or in the attached Appendix A have the meaning assigned to such terms in the Plan.
2.
Grant of the Performance-Based RSUs .
Subject to the provisions of this Agreement and the provisions of the Plan, the Corporation hereby grants to the Participant, pursuant to the Plan, a right to receive the number of shares of Common Stock (“Shares”) set forth in the Grant Notice (the “Performance-Based RSUs”).
3.
Dividend Equivalents .
Each Performance-Based RSU shall accrue Dividend Equivalents (as defined below) with respect to dividends that would otherwise be paid on the Share underlying such Performance-Based RSU during the period from the Grant Date to the earlier of the date such Share is paid in accordance with this Agreement or the date the Share is forfeited pursuant to the terms of this Agreement. As of any date in this period that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall credit the Participant with an additional number of Performance-Based RSUs equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such date, multiplied by (ii) the total number of Performance-Based RSUs subject to the award as of the related dividend payment record date (including any Dividend Equivalents previously credited hereunder), divided by (iii) the fair market value (as determined in accordance with the terms of the Plan) of a share of Common Stock on the date of payment of such dividend. Any Performance-Based RSUs credited pursuant to the foregoing provisions of this Section 3 shall be subject to the attainment of the same Performance Measures and time-based vesting requirements applicable to the original Performance-Based RSUs to which they relate, and shall otherwise be subject to the same vesting, payment, delivery and other terms, conditions and restrictions as the original Performance-Based RSUs to which they relate. Any such crediting of Dividend Equivalents shall be conclusively determined by the Administrator. No crediting of Performance-Based RSUs shall be made pursuant to this Section 3 with respect to any Performance-Based RSUs which, as of such record date, have either been delivered or terminated pursuant to the Plan or this Agreement. For purposes of this Agreement, “Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to the Performance-Based RSUs but that have not been issued or delivered.
4.
Vesting and Payment; Termination .
(a)    The Performance-Based RSUs shall vest and become payable subject to the attainment of the Performance Measures and time-based vesting requirements as set forth in the Grant Notice. Subject to the terms of the Plan, the remaining provisions of this Section 4 and Section 5, all Performance-Based RSUs which have not become vested and payable prior to the date of the Participant’s Termination shall be immediately forfeited.
(b)    Notwithstanding the foregoing Section 4(a) to the contrary, in the event of the Participant’s Termination due to his or her death, Disability or, except as provided in Section 5(d), Normal Retirement, in each case during the Performance Period and prior to the Shares underlying the Performance-Based RSUs becoming vested and payable, then the Shares underlying the Performance-Based RSUs shall remain outstanding and shall be eligible to become vested and payable on a prorated basis such that the number of such Shares that shall become vested and payable as of the conclusion of the Performance Period shall equal (i) the number of such Shares that would have vested as of the conclusion of the Performance Period based on the attainment of the Performance Measures set forth

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in the Grant Notice or that would have vested in connection with a change of control or other corporate transaction as provided in Section 5(a) (assuming no termination of employment had occurred), multiplied by (ii) a fraction, the numerator of which shall be the sum of the number of whole months during the Performance Period the Participant was employed by the Corporation or one of its Affiliates (as defined in Appendix A attached hereto), and the denominator of which shall be thirty-six months.
(c)    Notwithstanding the foregoing Section 4(a) to the contrary, in the event of the Participant’s Termination due to his or her death, Disability or Normal Retirement, in each case following the end of the Performance Period and prior to the Shares underlying the Performance-Based RSUs becoming vested and payable, then any Shares underlying the outstanding Performance-Based RSUs that have become eligible for vesting following the end of the Performance Period based on the Corporation’s performance shall become vested and payable.
(d)    Any such Shares that become vested and payable pursuant to this Section 4 shall be paid (together with Shares comprising all accrued Dividend Equivalents with respect to such Shares) to the Participant at the time as specified in Section 6. The vesting and payment provided for in this Section 4 in connection with a Termination due to the Participant’s Disability or Normal Retirement is subject to the condition that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
(e)    For purposes of this Agreement, “Normal Retirement” means Termination of the Participant, other than for Cause (as defined in Appendix A attached hereto), after the Participant has reached 62 years of age.
5.
Change in Control .
(a)    In the event during the Performance Period of a corporate transaction described in 7.2 of the Plan (which generally includes transactions that the Corporation does not survive or does not survive as a public company in respect of its Common Stock) in which the Administrator does not make a provision for the substitution, assumption, exchange or other continuation or settlement of the Performance-Based RSUs or (unless the Administrator has provided for the termination of the award) the award would otherwise not continue in accordance with its terms in the circumstances, the Performance Period shall be shortened so that the Performance Year then in effect as well as the Performance Period terminate prior to such transaction as determined by the Administrator (any such shortened Performance Period, the “Shortened Performance Period”). The [performance metric] performance levels shall be pro-rated based on the portion of the applicable period completed through the end of such Shortened Performance Period. For purposes of any Performance Year that had not commenced as of the end of such Shortened Performance Period, for purposes of determining the crediting of units, the number of units deemed credited with respect to any such Performance Year shall equal the same percentage of units credited (or deemed credited, as the case may be) in the immediately preceding Performance Year. Notwithstanding any continued employment or service requirement or time-based vesting requirement following the end of the Shortened Performance Period in the Plan or this Agreement to the contrary, the Participant shall be entitled to vesting and payment of the number of Shares subject to the Performance-Based RSUs (or the equivalent fair market value thereof, as determined by the Administrator, in cash) equal to the greater of (a) 100% of the total number of Performance-Based RSUs set forth in the Grant Notice or (b) the number of Performance-Based RSUs that would have become eligible for time-based vesting in accordance with the terms hereof based on the Corporation’s actual performance for the Shortened Performance Period as determined using the Performance Measures set forth in the Grant Notice as modified by this Section 5(a) (assuming that such performance levels had been achieved for the entire Performance Period).
(b)    In the event of a corporate transaction described in 7.2 of the Plan following the end of the Performance Period, the provisions of Section 7.2 of the Plan shall apply to any Shares underlying the outstanding Performance-Based RSUs that have become eligible for vesting following the end of the Performance Period based on the Corporation’s performance.

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(c)    Shares (or the equivalent fair market value thereof, as determined by the Administrator, in cash) underlying the Performance-Based RSUs that become vested and payable in connection with a transaction as described above in Section 5(a) or 5(b) shall be paid (together with any Shares comprising all accrued Dividend Equivalents with respect to such Shares) to the Participant at the time as specified in Section 6. Any Shares underlying Performance-Based RSUs that have been forfeited prior to the date of a transaction as described above in Section 5(a) or 5(b) shall not be eligible to become vested or payable in connection with any such transaction.
(d)    In the event the Participant is Terminated by the Corporation or an Affiliate (including any successor to such entity) without Cause during the Performance Period upon or at any time following a Change in Control and prior to the payment or other forfeiture of the Performance-Based RSUs, then the Shares underlying the Performance-Based RSUs shall remain outstanding such that the number of such Shares that shall become vested and payable as of the conclusion of the Performance Period shall equal the greater of (a) 100% of the total number of Performance-Based RSUs set forth in the Grant Notice or (b) the number of Performance-Based RSUs that would have become eligible for vesting in accordance with the terms hereof based on the Corporation’s actual performance for the Performance Period as determined using the Performance Measures set forth in the Grant Notice (assuming no termination of employment had occurred). In the event that the Participant would otherwise be entitled to accelerated vesting of the Performance-Based RSUs in connection with his or her Termination under both Section 4(b) and this Section 5(d), the provisions of this Section 5(d) will apply, and the Participant will not be entitled to any accelerated vesting under Section 4(b) with respect to such Termination.
(e)    In the event the Participant is Terminated by the Corporation or an Affiliate (including any successor to such entity) without Cause following the end of the Performance Period upon or at any time during the twelve-month period following a Change in Control and prior to the payment or other forfeiture of the Performance-Based RSUs, then any Shares underlying the outstanding Performance-Based RSUs that have become eligible for vesting following the end of the Performance Period based on the Corporation’s performance shall become vested and payable.
(f)    Any Shares underlying the Performance-Based RSUs that become vested and payable pursuant to this Section 5 shall be paid (together with any Shares comprising all accrued Dividend Equivalents with respect to such Shares) as provided in Section 6. Any Shares underlying Performance-Based RSUs that have been forfeited prior to the date of the Termination without Cause as described above shall not be eligible to become vested or payable in connection with any such Termination. The vesting and payment provided for in this Section 5 in connection with the Participant’s Termination without Cause is subject to the condition that the Participant shall have signed a separation agreement in the form established by the Corporation within 21 days (or such longer period of time required by applicable law) following his or her Termination and such separation agreement is not subsequently revoked.
6.
Payment of Shares .
(a)    The [Reference to Performance Measures to be Inserted here] , as well as the TSR Percentile, shall be Business Criteria under the Plan, and shall be subject to all of the terms of the Plan applicable to Performance-Based Awards including the requirement for Administrator determination of the attainment or non-attainment of the performance goals. The Administrator’s determination of performance, and the number of units credited based on performance and eligible to vest, will be final and binding.
(b)    The Shares underlying the Performance-Based RSUs which have become vested and payable at the end of the Performance Period according to the vesting schedule set forth in the Grant Notice, together with Shares comprising all accrued Dividend Equivalents with respect to such Shares, shall be paid by the Corporation to the Participant as soon as reasonably practicable in the year following the year in which the Performance Period ends, but in no event later than 74 days, following the end of the year in which the Performance Period set forth in the Grant Notice ends. The Shares underlying the Performance-Based RSUs which have become vested and payable in connection with a qualifying Termination occurring during the Performance Period pursuant to Section 4(b) or Section 5(d) of this Agreement, together with Shares comprising all accrued Dividend Equivalents with respect to such Shares, shall be paid by the Corporation to the Participant as soon as reasonably practicable in the year following the year in which the Performance Period ends, but in no event later than 74 days, following the end of the year in which the

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Performance Period set forth in the Grant Notice ends. The Shares underlying the Performance-Based RSUs which have become vested and payable in connection with a qualifying Termination occurring following the end of the Performance Period pursuant to Section 4(c) or Section 5(e) of this Agreement, together with Shares comprising all accrued Dividend Equivalents with respect to such Shares, shall be paid by the Corporation to the Participant as soon as reasonably practicable, but in no event later than 74 days, following the date of the Participant’s death or Disability or the date of the Participant’s “separation from service” (as such term is used for purposes of Section 409A of the Code). The Shares underlying the Performance-Based RSUs which have become vested and payable as a result of a transaction described in 7.2 of the Plan pursuant to Section 5(a) or Section 5(b), together with Shares comprising all accrued Dividend Equivalents with respect to such Shares, shall be paid by the Corporation to the Participant as soon as reasonably practicable in the year following the year in which the Performance Period ends, but in no event later than 74 days, following the end of the year in which the Performance Period set forth in the Grant Notice ends, provided, however, that (A) if the Participant dies, incurs a Disability or has a separation from service during the Performance Period, the related payment shall be made to the Participant as soon as reasonably practicable in the year following the year in which the Performance Period ends, but in no event later than 74 days, following the end of the year in which the Performance Period set forth in the Grant Notice ends, or (B) if the Participant dies, incurs a Disability or has a separation from service following the end of the Performance Period, the related payment shall be made to the Participant as soon as reasonably practicable, but in no event later than 74 days, following the date of the Participant’s death or Disability or the date of the Participant’s separation from service. Notwithstanding the foregoing provisions of this Section 6, the Administrator may provide for payment of any Shares underlying the Performance-Based RSUs which have become vested and payable in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Corporation.
(c)    Any Shares underlying the Performance-Based RSUs that have not become vested and payable following the end of the Performance Period based on the Corporation’s performance or pursuant to Section 4 or Section 5 shall be forfeited as of the last day of the Performance Period. The Participant shall have no rights to receive payment of any Shares, whether pursuant to this Section 6 or any other provision of this Agreement, with respect to Performance-Based RSUs that have been forfeited or cancelled, or for which Shares have previously been delivered. No fractional Shares shall be paid pursuant to this Section 6 or any other provision of this Agreement, and the Shares otherwise payable shall be rounded down to the nearest whole number of Shares.
7.
No Ownership Rights Prior to Issuance of Shares .
Neither the Participant nor any other person shall become the beneficial owner of the Shares underlying the Performance-Based RSUs, nor have any rights to dividends (other than rights to Dividend Equivalents pursuant to Section 3) or other rights as a stockholder with respect to any such Shares, until and after such Shares have been actually issued to the Participant and transferred on the books and records of the Corporation or its agent in accordance with the terms of the Plan and this Agreement.
8.
Detrimental Activity .
(a) Notwithstanding any other provisions of this Agreement to the contrary, if at any time prior to the delivery of Shares with respect to the Performance-Based RSUs, the Participant engages in Detrimental Activity (as defined below), such Performance-Based RSUs shall be cancelled and rescinded without any payment or consideration therefor. The determination of whether the Participant has engaged in Detrimental Activity shall be made by the Administrator in its good faith discretion, and the payment of Shares with respect to the Performance-Based RSUs shall be suspended pending resolution to the Administrator’s satisfaction of any investigation of the matter.
(b) For purposes of this Agreement, “Detrimental Activity” means at any time (i) using information received during the Participant’s employment with the Corporation and/or its Subsidiaries, Affiliates and predecessors in interest relating to the business affairs of the Corporation or any such Subsidiaries, Affiliates or predecessors in interest, in breach of the Participant’s express or implied undertaking to keep such information confidential; (ii) directly or indirectly persuading or attempting to persuade, by any means, any employee of the Corporation or any of its Subsidiaries or Affiliates to breach any of the terms of his or her employment with Corporation,

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its Subsidiaries or its Affiliates; (iii) directly or indirectly making any statement that is, or could be, disparaging of the Corporation or any of its Subsidiaries or Affiliates, or any of their respective employees (except to the extent necessary to respond truthfully to any inquiry from applicable regulatory authorities or to provide information pursuant to legal process); (iv) directly or indirectly engaging in any illegal, unethical or otherwise wrongful activity that is, or could be, substantially injurious to the financial condition, reputation or goodwill of the Corporation or any of its Subsidiaries or Affiliates; or (v) directly or indirectly engaging in an act of misconduct such as, embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Corporation or any of its Subsidiaries or Affiliates, breach of fiduciary duty or disregard or violation of rules, policies or procedures of the Corporation or any of its Subsidiaries or Affiliates, an unauthorized disclosure of any trade secret or confidential information of the Corporation or any of its Subsidiaries or Affiliates, any conduct constituting unfair competition, or inducing any customer to breach a contract with the Corporation or any of its Subsidiaries or Affiliates, in each case as determined by the Administrator in its good faith discretion.
9.
No Right to Continued Employment .
None of the Performance-Based RSUs nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employ of the Corporation or any Subsidiary or Affiliate for any period, nor restrict in any way the right of the Corporation or any Subsidiary or any Affiliate, which right is hereby expressly reserved, to terminate the Participant’s employment at any time for any reason. For the avoidance of doubt, this Section 9 is not intended to amend or modify any other agreement, including any employment agreement that may be in existence between the Participant and the Corporation or any Subsidiary or Affiliate.
10.
The Plan .
In consideration for this grant, the Participant agrees to comply with the terms of the Plan and this Agreement. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Administrator. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly, provided that the provisions of Section 4, Section 5 and Section 6 of this Agreement shall control over any conflicting payment provisions of the Plan. The Plan and the prospectus describing the Plan can be found on Fidelity NetBenefits® at www.netbenefits.com under Plan Information and Documents. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Corporation at CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify.
11.
Compliance with Laws and Regulations .
(a)    The Performance-Based RSUs and the obligation of the Corporation to sell and deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Administrator shall, in its discretion, determine to be necessary or applicable. Moreover, the Corporation shall not deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Corporation determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Corporation shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Corporation.
(b)    It is intended that the Shares received in respect of the Performance-Based RSUs shall have been registered under the Securities Act. If the Participant is an “affiliate” of the Corporation, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Corporation may bear a

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legend setting forth such restrictions on the disposition or transfer of the Shares as the Corporation deems appropriate to comply with Federal and state securities laws.
(c)    If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Corporation pursuant to this Agreement, an agreement (in such form as the Corporation may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the Shares acquired under this Agreement for the Participant's own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Corporation, from counsel for or approved by the Corporation, as to the applicability of such exemption thereto.
12.
Notices .
All notices by the Participant or the Participant’s assignees shall be addressed to CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Corporation's records.
13. Severability .
In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.
14.
Other Plans .
The Participant acknowledges that any income derived from the Performance-Based RSUs shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Corporation or any Subsidiary or Affiliate. Performance-Based RSUs and Dividend Equivalents shall not be deemed to be “Covered Compensation” under any other benefit plan of the Corporation.

15.     Adjustments .

The Performance-Based RSUs and the Shares underlying the Performance-Based RSUs shall be subject to adjustment and conversion pursuant to the terms of Section 7.1 of the Plan.

16.     Tax Withholding .

Any payment or delivery of Shares pursuant to this Agreement shall be subject to the Corporation’s rights to withhold applicable Federal, state, local and non-United States taxes in accordance with Section 8.5 of the Plan.

17.     Section 409A .

The provisions of this Agreement shall be construed and interpreted to comply with Section 409A of the Code so as to avoid the imposition of any penalties, taxes or interest thereunder. Notwithstanding any provision of Section 6 of this Agreement to the contrary, if the Participant is a “specified employee” as defined in Section 409A of the Code, the Participant shall not be entitled to any payment of Shares underlying Performance-Based RSUs that are considered deferred compensation subject to the requirements of Section 409A of the Code in connection with the Participant’s separation from service until the earlier of (a) the date which is six months after the Participant’s

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separation from service for any reason other than the Participant’s death, or (b) the date of the Participant’s death. Any Shares underlying the Performance-Based RSUs otherwise payable to the Participant following the Participant’s separation from service that are not so paid by reason of this Section 17 shall be paid as soon as reasonably practicable (but in no event later than 74 days) after the date that is six months after the Participant’s separation from service (or, if earlier, the date of the Participant’s death). The provisions of this Section 17 shall only apply if, and to the extent, required to comply with Section 409A of the Code.

18.     Clawback .

The Performance-Based RSUs are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Performance-Based RSUs or any Shares or other cash or property received with respect to the Performance-Based RSUs (including any value received from a disposition of the Shares acquired upon payment of the Performance-Based RSUs).




CORELOGIC, INC.

    
By:______________________________
Name: Anand Nallathambi
Title: Chief Executive Officer

Date: [Grant Date]


Acknowledged and agreed as of the Date of Grant:



Printed Name:     [Participant Name]


Date:     [Acceptance Date]


NOTE: GRANT WILL BE ACCEPTED ELECTRONICALLY


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APPENDIX A

Certain Definitions

[Performance metric definitions to be included]
“ Affiliate ” means any entity other than the Corporation and any Subsidiary that is affiliated with the Corporation through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of the Plan by the Administrator.

“ Beginning Price ” means, with respect to the Corporation and any other Corporation Peer Group member, the closing market price of such company’s common stock on the principal exchange on which such stock is traded on the last trading day before the beginning of the applicable measurement period (the relevant Performance Year or cumulative Performance Period). 
“ Cause ” has the same meaning as in the Participant’s employment agreement with the Corporation, a Subsidiary or an Affiliate (if any) as in effect at the time of the Participant’s Termination, or if the Participant is not a party to such an employment agreement (or is not a party to such an employment agreement that contains a definition of “cause”), “Cause” means: (i) embezzlement, theft or misappropriation by the Participant of any property of any of the Corporation or its Affiliates; (ii) the Participant’s breach of any fiduciary duty to the Corporation or its Affiliates; (iii) the Participant’s failure or refusal to comply with laws or regulations applicable to the Corporation or its Affiliates and their businesses or the policies of the Corporation and its Affiliates governing the conduct of its employees or directors; (iv) the Participant’s gross incompetence in the performance of the Participant’s job duties; (v) commission by the Participant of a felony or of any crime involving moral turpitude, fraud or misrepresentation; (vi) the failure of the Participant to perform duties consistent with a commercially reasonable standard of care; (vii) the Participant’s failure or refusal to perform the Participant’s job duties or to perform specific directives of the Participant’s supervisor or designee, or the senior officers or Board of Directors of the Corporation; or (viii) any gross negligence or willful misconduct of the Participant resulting in loss to the Corporation or its Affiliates, or damage to the reputation of the Corporation or its Affiliates.
“ Change in Control ” means the happening of any of the following after the date hereof:

(a)
The consummation of a merger or consolidation of the Corporation with or into another entity or any other corporate reorganization, if fifty percent (50%) or more of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation, or other reorganization is owned by persons who were not stockholders of the Corporation immediately prior to such merger, consolidation, or other reorganization.
(b)
The sale, transfer, or other disposition of all or substantially all of the Corporation’s assets or the complete liquidation or dissolution of the Corporation.
(c)
A change in the composition of the Board occurring within a two (2) year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “ Incumbent Directors ” shall mean directors who are directors of the Corporation immediately following the consummation of the transactions contemplated by the Separation and Distribution Agreement by and between the Corporation and the First American Financial Corporation dated June 1, 2010 (the “ Separation Agreement ”). “ Incumbent Directors ” shall also include directors who are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but shall not include an individual not otherwise an Incumbent Director whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Corporation.
(d)
Any transaction as a result of which any person or group is or becomes the “ beneficial owner ” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Corporation representing at least thirty percent (30%) of the total voting power of the Corporation’s then outstanding voting



securities. For purposes of this paragraph, the term “ person ” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but shall exclude: (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or of a Subsidiary of the Corporation; (ii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person whose beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities increases to thirty percent (30%) or more as a result of the acquisition of voting securities of the Corporation by the Corporation which reduces the number of such voting securities then outstanding; or (iii) so long as a person does not thereafter increase such person’s beneficial ownership of the total voting power represented by the Corporation’s then outstanding voting securities, a person that acquires directly from the Corporation securities of the Corporation representing at least thirty percent (30%) of the total voting power represented by the Corporation’s then outstanding voting securities.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction.
For the avoidance of doubt, the consummation of any or all of the transactions in the Separation Agreement is not considered a Change in Control for purposes of this Agreement.
“ Corporation Peer Group ” means the Corporation and each of the following companies:
[Applicable Peer Group to be Inserted Here]

The Corporation Peer Group shall be subject to adjustment by the Administrator for changes that occur prior to the end of the Performance Year or Performance Period, as applicable, as follows: In the event of a merger or other business combination of two Corporation Peer Group members (including, without limitation, the acquisition of one Corporation Peer Group member, or all or substantially all of its assets, by another Corporation Peer Group member), the surviving, resulting or successor entity, as the case may be, shall continue to be treated as a member of the Corporation Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the applicable period. In the event that the common stock (or similar equity security) of a Corporation Peer Group member is otherwise not listed or traded on a national securities exchange at the end of the Performance Year or Performance Period, as applicable, such entity shall be excluded from the Corporation Peer Group.
“ Disability ” means the inability to engage in any substantial gainful occupation to which the relevant individual is suited by education, training or experience, by reason of any medically determinable physical or mental impairment, which condition can be expected to result in death or continues for a continuous period of not less than twelve (12) months.
“ Ending Price ” means, with respect to the Corporation and any other Corporation Peer Group member, the closing market price of such company’s common stock on the principal exchange on which such stock is traded at the end of the applicable measurement period. 
“ Termination ” means the time when the Participant ceases the performance of services for the Corporation, any Affiliate or Subsidiary, as applicable, for any reason, with or without Cause, including a Termination by resignation, discharge, retirement, death or Disability, but excluding the following if in the circumstances the Termination would not constitute a “separation from service” within the meaning of Section 409A of the Code (a) a Termination where there is a simultaneous reemployment or continuing employment of the Participant by the Corporation, any Affiliate or Subsidiary, (b) at the discretion of the Administrator, a Termination that results in a temporary severance, and (c) at the discretion of the Administrator, a Termination of an employee of the Corporation that is immediately followed by the Participant’s service as a non-employee director of the Board.  Notwithstanding any other provisions of the Plan or this Agreement to the contrary, a Termination shall not be deemed to have occurred for purposes of any provision of the Plan or this

2


Agreement providing for payment or distribution with respect to an award constituting deferred compensation subject to Code Section 409A upon or following a termination of employment or services unless such termination is also a “separation from service” within the meaning of Section 409A of the Code.
[Performance metrics definitions to be included]
  

3

Exhibit 10.44


Notice of Performance Unit Grant

Participant:         [●]
Company:         CoreLogic, Inc. (the “Corporation”)
Notice:
You have been granted a Performance Unit in accordance with the terms of the Plan and the Performance Unit Award Agreement attached hereto.
Type of Award:
Performance Units
Plan:
CoreLogic, Inc. Amended and Restated 2011 Performance Incentive Plan
Grant:             Date of Grant:
Number of Performance Units: [●]
Each Performance Unit has the value of $1
Performance
Period:
Subject to the terms of the Plan and this Agreement, the Performance Period applicable to the Performance Units shall be January 1, 2015 to December 31, 2015.

Performance
Condition:
Your right to the receipt of cash for your Performance Units is conditioned on the Corporation’s achievement of net income (as defined in accordance with generally accepted accounting principles) for 2015 of $50 million or more, determined without regard to (a) amortization relating to acquired intangibles, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (e) any transformation, reorganization and restructuring program effects, (f) extraordinary, unusual and/or nonrecurring items of gain or loss, and (g) foreign exchange gains and losses. This condition is referred to as the “Performance Target.” Within a reasonable time after the determination of whether the Performance Target has been met, the Committee shall determine the final amount of Performance Units to which you shall be entitled, provided that the total amount thereof shall not exceed the amount set forth above. The Committee, in its sole and unfettered discretion, may decrease the number of Performance Units awarded to you at any time prior to the payment thereon.

Rejection:
If you wish to accept this Performance Unit Award, please return this Agreement, executed by you on the last page of this Agreement, at any time within forty-five (45) days after the Date of Grant, to CoreLogic, Inc., 40 Pacifica, Irvine, CA 92618, Attn: Incentive Compensation Plan


 
 
 


Administrator. Do not return a signed copy of this Agreement if you wish to reject this Performance Unit Award. If you do not return a signed copy of this Agreement within forty-five (45) days after the Date of Grant, you will have rejected this Performance Unit Award.




- 2 -
 
 
 


Performance Unit Award Agreement

This Performance Unit Award Agreement (this “Agreement”), dated as of the date of the Notice of Performance Unit Grant attached hereto (the “Grant Notice”), is made between CoreLogic, Inc. (the “Corporation”) and the Participant set forth in the Grant Notice. The Grant Notice is included and made a part of this Agreement.
1.
Definitions .
Capitalized terms used but not defined in this Agreement (including the Grant Notice) have the meaning set forth in the CoreLogic, Inc. 2011 Performance Incentive Plan.
2.      Grant of the Performance Units .
Subject to the provisions of this Agreement and the provisions of the Plan, the Corporation hereby grants to the Participant, pursuant to the Plan, the contingent right to receive in cash an amount equal in value to the performance units set forth in the Grant Notice, as such number of performance units may be reduced by the Committee in its sole and unfettered discretion (the “Performance Units”). Each Performance Unit has a value of $1.
3.      Vesting and Payment of Performance Units .
After the Performance Period (as specified in the Notice of Grant) has ended and provided that the Committee has determined that the Performance Target (as defined in the Notice of Grant) has been achieved, the Participant shall be entitled to receive, and the Corporation shall pay to the Participant, the cash value of the Performance Units; provided , however , that prior to paying to the Participant such cash value, the Committee may, in its sole and unfettered discretion, decrease the amount of Performance Units awarded to the Participant. If the Performance Target is not met, the Participant shall forfeit the Performance Units and the Participant shall not be entitled to any cash payment in connection therewith.
4.      No Right to Continued Employment.
None of the Performance Units nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employ of the Corporation or any Subsidiary or Affiliate for any period, nor restrict in any way the right of the Corporation or any Subsidiary or any Affiliate, which right is hereby expressly reserved, to terminate the Participant’s employment at any time for any reason. For the avoidance of doubt, this Section 4 is not intended to amend or modify any other agreement, including any employment agreement, that may be in existence between the Participant and the Corporation or any Subsidiary or Affiliate.

- 3 -
 
 
 


5.      The Plan.
In consideration for this grant, the Participant agrees to comply with the terms of the Plan and this Agreement. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Committee. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Plan and the prospectus describing the Plan can be found on the Corporation’s HR intranet. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Corporation at CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify.
6.      Notices.
All notices by the Participant or the Participant’s assignees shall be addressed to CoreLogic, Inc., 40 Pacifica, Suite 900, Irvine, California 92618, Attention: Incentive Compensation Plan Administrator, or such other address as the Corporation may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Corporation's records.
7.      Severability.
In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.
8.      Other Plans .
The Participant acknowledges that any income derived from the Performance Units shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Corporation or any Subsidiary or Affiliate.

9.      Assignment . Participant may not transfer or assign this Agreement or any part thereof. The Corporation reserves the right to transfer or assign this Agreement to any of its Affiliates.

- 4 -
 
 
 



10.      Clawback Provision.
The Performance Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Performance Units or other cash or property received with respect to the Performance Units.



CORELOGIC, INC.

    
By: ______________________________     
Name: Anand Nallathambi            
Title: President Chief Executive Officer

Date: ______________________________




Acknowledged and agreed as of the Date of Grant:


Signature:    _________________________________


Printed Name:    _________________________________


Date:    _________________________________


- 5 -
 
 
 

 
Exhibit 10.7

Corporate Office
40 Pacifica, Suite 900
Irvine, California 92618
USA




                                


November 4, 2014

Barry Sando
1 CoreLogic Drive
Westlake, TX 76262

RE: Amendment to Employment Agreement

Dear Barry:

This letter (this “Letter”), effective as of October 6, 2014, describes certain changes to the terms and conditions of your employment and, once signed, will serve as an amendment to the Employment Agreement between you and CoreLogic, Inc. (the “Company”), dated May 3, 2011, which incorporates the June 16, 2014, Amendment to Employment Agreement (collectively, “Employment Agreement”). Any terms used in this Letter that are not defined herein have the definition ascribed to them in the Employment Agreement. Note that you are referenced as “the Executive” herein.

This Letter, when fully executed, together with the Employment Agreement, which specifically incorporates the Confidential Information and Inventions Agreement you executed and corporate policies of the Company, reflects the entire agreement regarding the terms and conditions of your employment. Unless expressly modified by this Letter, the terms and conditions of the Employment Agreement will remain the same. To the extent that the terms of this Letter are inconsistent with the terms of your Employment Agreement, this Letter supersedes the terms of your Employment Agreement.

Section 1.2 of the Employment Agreement is hereby amended and restated in its entirety as follows:

Duties . During the Period of Employment, the Executive shall serve the Company as its Senior Executive Vice President, Group Executive of the Corporation, and shall have such other duties and responsibilities as the Chief Operating & Financial Officer (the “ COFO ”) or the Chief Executive Officer (the “ CEO ”) shall determine from time to time. The Executive shall be subject to the corporate policies of the Company as they are in effect from time to time throughout the Period of Employment (including, without limitation, the Company’s Code of Conduct, as it may change from time to time). During the Period of Employment, the Executive shall report directly to the COFO.


Page | 1


By executing this Letter, you confirm your decision to accept the amendment to the terms of your Employment Agreement and you agree that your employment will continue to be governed by the Employment Agreement, as amended by this Letter.

I have provided you two originals of this letter. Please sign both originals, and return one original to me no later than November 10, 2014.


Very truly yours,

CoreLogic, Inc.

/s/ Anand K. Nallathambi

Anand K. Nallathambi
President & Chief Executive Officer



Read, understood, consented to, and agreed to as of this 10th day of November, 2014:


/s/ Barry M. Sando        
Barry M. Sando

 

Page | 2



Exhibit 21.1

Subsidiaries of the Registrant
Name of Subsidiary:
 
State or Country Under Laws of Which Organized
 
 
 
A.C.N. 105 907 319 PTY LTD
 
Australia
A.C.N. 108 794 449 PTY LTD
 
Australia
ACN 108 719 197 PTY LTD
 
Australia
America's Innovative Insurance Solutions, Inc.
 
CA
ATI Title of Nevada*
 
NV
Basis 100, Inc.
 
ON, Canada
BMH ASIA PACIFIC PTY LTD
 
Australia
BRENNAN PARTNERS TRUST
 
Australia
C & S Appraisal Services, LLC*
 
MN
CDS Business Mapping, LLC
 
CT
Compunet Credit Services, LLC
 
DE
CoreLogic (India) Services Private Limited
 
India
CoreLogic Acquisition Co. I, LLC
 
DE
CoreLogic Acquisition Co. II, LLC
 
DE
CoreLogic Acquisition Co. III, LLC
 
DE
CoreLogic Acquisition CO. IV, LLC
 
DE
CoreLogic AG
 
Switzerland
CoreLogic Australia Holdings PTY Limited
 
Australia
CoreLogic Australia Pty Limited
 
Australia
CoreLogic Case-Shiller, LLC
 
DE
CoreLogic Commercial Real Estate Services, Inc.
 
FL
CoreLogic Credco of Puerto Rico, LLC
 
DE
CoreLogic Credco, LLC
 
DE
CoreLogic Default Information Services, LLC
 
FL
CoreLogic Dorado, LLC
 
CA
CoreLogic Flood Services, LLC
 
DE
CoreLogic Holdings II, Inc.
 
DE
CoreLogic Information Resources, LLC
 
DE
CoreLogic Investments Corporation
 
Cayman Islands
CoreLogic National Background Data, LLC
 
DE
CORELOGIC NZ LIMITED*
 
New Zealand
CoreLogic Saferent, LLC
 
DE
CoreLogic Services, LLC
 
DE
CoreLogic Solutions Canada, ULC
 
BC, Canada
CoreLogic Solutions Limited
 
United Kingdom
CoreLogic Solutions, LLC
 
CA
CoreLogic Spatial Solutions, LLC
 
DE
CoreLogic Tax Collection Services, LLC
 
DE
CoreLogic Tax Services, LLC
 
DE
CoreLogic Valuation Services, LLC
 
DE
CSAU PTY LTD
 
Australia
DataQuick Information Systems, Inc.
 
DE




Decision Insight Information Group (U.S.) I, Inc.
 
DE
Decision Insight Information Group (U.S.) III, LLC
 
DE
EQECAT SARL
 
France
Eqecat, Inc.
 
DE
EVR SERVICES PTY LTD
 
Australia
Finiti Group, LLC*
 
DE
Finiti Title Company of Alabama, LLC*
 
AL
Finiti Title, LLC*
 
DE
Finiti, LLC*
 
DE
First Canadian Credco, Inc.
 
Canada
FPSdirect, LLC*
 
DE
Happy Home Buying, Ltd.
 
Cayman Islands
HEAU PTY LTD
 
Australia
JACISA PTY. LTD
 
Australia
Leadclick Media, LLC
 
CA
LISTEM AUSTRALIA PTY. LTD.
 
Australia
LOCALWISE PTY LTD.
 
Australia
MARSHALL & SWIFT/BOECKH (CANADA) LTD.
 
Canada
Marshall & Swift/Boeckh, LLC
 
DE
Multifamily Community Insurance Agency, Inc.
 
MD
Multifamily Community Insurance Agency, LLC
 
MD
MYRP.COM.AU PTY LTD
 
Australia
New Decision Insight Information Group (U.S.) III, Inc.
 
DE
Prime Valuation Services, LLC*
 
DE
PROPERTYWEB PTY LTD
 
Australia
REAL SOFT PTY LTD
 
Australia
REALTOR.COM.AU PTY LTD
 
Australia
RELS Management Company, LLC*
 
DE
RELS Reporting Services, LLC
 
IA
RELS Title Services, LLC*
 
DE
RELS, LLC*
 
DE
RES Direct, LLC
 
DE
RP Data (H.K.) Limited
 
Hong Kong
RP DATA NEW ZEALAND LIMITED
 
New Zealand
RP DATA PTY LTD
 
Australia
RP DATA RADIO SHOW PTY. LTD
 
Australia
RP DATA VALUATION SERVICES PTY LTD
 
Australia
Screeners Advantage, LLC
 
DE
Servicios Professionales Atlas, S. de R.L de C.V.
 
Mexico
Soluciones Prediales de Mexico, S. de R.L. de C.V.
 
Mexico
Speedy Title & Appraisal Review Services LLC*
 
DE
Statistics Data, Inc.
 
DE
Teletrack UK Limited
 
United Kingdom
Teletrack, Inc.
 
GA
Teletrack, LLC
 
GA
VALEX GROUP PTY LTD
 
Australia
Valuation Exchange PTY LTD
 
Australia
Valuation Information Technology, L.L.C.*
 
IA
Valuation Ventures, LLC*
 
DE




        
Not wholly-owned.






Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-197988, 333-184292, 333-182957, 333-176353, 333-174373, 333-163197, 333-111829, 333-74620, 333-113269, 333-41993, and 333-134283) of CoreLogic, Inc. of our report dated February 26, 2015 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K .



/s/ PricewaterhouseCoopers LLP
Irvine, California
February 26, 2015






Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-197988, 333-184292, 333-182957, 333-176353, 333-174373, 333-163197, 333-111829, 333-74620, 333-113269, 333-41993, and 333-134283) of CoreLogic, Inc. of our report dated February 18, 2015 relating to the financial statements of RELS LLC, which appears in this Form 10-K.



/s/ PricewaterhouseCoopers LLP
Minneapolis, Minnesota
February 26, 2015





Exhibit 31.1

CERTIFICATIONS

I, Anand Nallathambi, certify that:

1.
I have reviewed this annual report on Form 10-K of CoreLogic, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2015
 
By: /s/ Anand Nallathambi
 
Anand Nallathambi
 
President and Chief Executive Officer
 




Exhibit 31.2

CERTIFICATIONS

I, Frank D. Martell, certify that:

1.
I have reviewed this annual report on Form 10-K of CoreLogic, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2015

By: /s/ Frank D. Martell
 
Frank D. Martell
 
Chief Financial Officer
 
(Principal Financial Officer) 
 




Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of CoreLogic, Inc. (the “Company”) filed on Form 10-K for the period ended December 31, 2014 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anand Nallathambi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
 
 
 
By: /s/ Anand Nallathambi
 
Anand Nallathambi
 
President and Chief Executive Officer
 
Date:
February 26, 2015

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.




Exhibit 32.2
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of CoreLogic, Inc. (the “Company”) filed on Form 10-K for the period ended December 31, 2014 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank D. Martell, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


 
By: /s/ Frank D. Martell
 
Frank D. Martell
 
Chief Financial Officer
 
(Principal Financial Officer)
 
Date:
February 26, 2015

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.





Exhibit 99.1




RELS LLC
Consolidated Financial Statements
December 31, 2014, 2013 and 2012







RELS LLC
Index
December 31, 2014, 2013 and 2012

 
Page(s)
Independent Auditor's Report
Consolidated Financial Statements
 
Balance Sheets
Statements of Income and Comprehensive Income
Statements of Partners' Capital
Statements of Cash Flows
Notes to the Financial Statements





Independent Auditor’s Report
To the Board of RELS LLC
We have audited the accompanying consolidated financial statements of RELS LLC and its subsidiaries (the “Company”), which comprise the consolidated balance sheets at December 31, 2014 and 2013, and the related consolidated statements of income and comprehensive income, partners’ capital and cash flows for the years ended December 31, 2014, 2013 and 2012.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of RELS LLC and its subsidiaries at December 31, 2014 and 2013, and the results of their income and comprehensive income, partners’ capital and cash flows for the years ended December 31, 2014, 2013 and 2012, in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 8 to the consolidated financial statements, the Company has significant related party transactions with Wells Fargo Corporation, CoreLogic, Inc. and Rels Management Company. Our opinion is not modified with respect to this matter.

/s/PricewaterhouseCoopers LLP

February 18, 2015





RELS LLC
Consolidated Balance Sheets
December 31, 2014 and 2013

 
 
2013
 
2012
Assets
 
 
 
 
Cash and cash equivalents
 
$
32,195,309

 
$
12,988,562

Accounts receivable, net of allowance for doubtful accounts of $297 and $20,564, respectively
 
6,390,669

 
6,406,494

Prepaid expenses and other assets
 
1,598,361

 
915,217

Due from related parties
 
—

 
33,515,551

Investment in RELS Management Company
 
81,150

 
—

Property and equipment, net
 
4,270,355

 
3,099,298

Total assets
 
$
44,535,844

 
$
56,925,122

 
 
 
 
 
 
 
 
 
 
Liabilities and Partners' Capital
 
 
 
 
Accounts payable and other liabilities
 
$
3,697,417

 
$
5,392,671

Accrued payroll and benefits
 
4,666,168

 
7,039,361

Accrued pension costs
 
6,890,923

 
4,204,570

Due to related parties
 
722,949

 
—

Accumulated losses of RELS Management Company in excess of investment
 
—

 
11,925,308

Total liabilities
 
15,977,457

 
28,561,910

 
 
 
 
 
Commitments and contingencies (Note 6)
 
 
 
 
 
 
 
 
 
Partners' capital
 
 
 
 
Wells Fargo & Co.
 
19,214,660

 
17,276,279

CoreLogic, Inc.
 
19,291,676

 
17,345,526

Accumulated other comprehensive loss
 
(9,947,949
)
 
(6,896,068
)
Total RELS LLC partners' capital
 
28,558,387

 
27,725,737

Noncontrolling interests
 
—

 
637,475

Total partners' capital
 
28,558,387

 
28,363,212

Total liabilities and partners' capital
 
$
44,535,844

 
$
56,925,122


The accompanying notes are an integral part of these consolidated financial statements.





RELS LLC
Consolidated Statements of Income and Comprehensive Income
Years Ended December 31, 2014, 2013 and 2012

 
 
2014
 
2013
 
2012
Revenues
 
 
 
 
 
 
Operating revenues
 
$
221,327,635

 
$
347,070,726

 
$
451,875,884

 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
Professional fees
 
76,332,795

 
149,332,233

 
232,134,850

Salaries and other personnel costs
 
83,181,626

 
103,701,622

 
110,797,949

Selling, general and administrative costs
 
23,692,570

 
29,915,994

 
29,467,344

Total expenses
 
183,206,991

 
282,949,849

 
372,400,143

 
 
 
 
 
 
 
Other (expense) income
 
 
 
 
 
 
Equity (loss) income from investment in RELS Management Company
 
(53,043
)
 
916,865

 
3,162,940

Total other (expense) income
 
(53,043
)
 
916,865

 
3,162,940

Income from continuing operations
 
38,067,601

 
65,037,742

 
82,638,681

Income from discontinued operations (Note 4)
 
—

 
—

 
7,050,125

Net income
 
38,067,601

 
65,037,742

 
89,688,806

 
 
 
 
 
 
 
 Net income attributable to noncontrolling interest
 
(112,680
)
 
(654,160
)
 
(1,296,210
)
Net income attributable to RELS LLC
 
$
37,954,921

 
$
64,383,582

 
$
88,392,596

 
 
 
 
 
 
 
Other comprehensive (loss) income
 
 
 
 
 
 
Net actuarial (loss) gain adjustment
 
(3,051,881
)
 
2,391,313

 
(557,009
)
Comprehensive Income
 
35,015,720

 
67,429,055

 
89,131,797

Comprehensive income attributable to noncontrolling interest
 
(112,680
)
 
(654,160
)
 
(1,296,210
)
Comprehensive income attributable to RELS LLC
 
$
34,903,040

 
$
66,774,895

 
$
87,835,587


The accompanying notes are an integral part of these consolidated financial statements.





RELS LLC
Consolidated Statements of Partners' Capital
Years Ended December 31, 2014, 2013 and 2012

 
 
Wells Fargo & Co.
 
CoreLogic, Inc.
 
Accumulated Other Comprehensive Loss
 
Total RELS LLC Capital
 
Noncontrolling Interests
 
Total Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2011
 
24,899,878

 
24,999,665

 
(8,730,372
)
 
41,169,171

 
5,866,887

 
47,036,058

Distributions
 
(49,754,752
)
 
(49,954,168
)
 
—

 
(99,708,920
)
 
(6,131,882
)
 
(105,840,802
)
Net income
 
44,107,900

 
44,284,696

 
—

 
88,392,596

 
1,296,210

 
89,688,806

Net actuarial loss adjustment
 
—

 
—

 
(557,009
)
 
(557,009
)
 
—

 
(557,009
)
Balances at December 31, 2012
 
19,253,026

 
19,330,193

 
(9,287,381
)
 
29,295,838

 
1,031,215

 
30,327,053

Distributions
 
(34,104,153
)
 
(34,240,843
)
 
—

 
(68,344,996
)
 
(1,047,900
)
 
(69,392,896
)
Net income
 
32,127,406

 
32,256,176

 
—

 
64,383,582

 
654,160

 
65,037,742

Net actuarial loss adjustment
 
—

 
—

 
2,391,313

 
2,391,313

 
—

 
2,391,313

Balances at December 31, 2013
 
17,276,279

 
17,345,526

 
(6,896,068
)
 
27,725,737

 
637,475

 
28,363,212

Distributions
 
(16,926,398
)
 
(16,994,239
)
 
—

 
(33,920,637
)
 
(750,155
)
 
(34,670,792
)
Net income
 
18,939,506

 
19,015,415

 
—

 
37,954,921

 
112,680

 
38,067,601

Acquisition of noncontrolling interest (Note 5)
 
(1,247,500
)
 
(1,252,500
)
 
—

 
(2,500,000
)
 
—

 
(2,500,000
)
Other (Note 1)
 
1,172,773

 
1,177,474

 
—

 
2,350,247

 
—

 
2,350,247

Net actuarial gain adjustment
 
—

 
—

 
(3,051,881
)
 
(3,051,881
)
 
—

 
(3,051,881
)
Balances at December 31, 2014
 
$
19,214,660

 
$
19,291,676

 
$
(9,947,949
)
 
$
28,558,387

 
$
—

 
$
28,558,387


The accompanying notes are an integral part of these consolidated financial statements.





RELS LLC
Consolidated Statements of Cash Flows
Years Ended December 31, 2014, 2013 and 2012

 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
Net income
 
$
38,067,601

 
$
65,037,742

 
$
89,688,806

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
Depreciation and amortization
 
3,573,291

 
2,274,829

 
2,344,910

Loss on disposal of property and equipment
 
522,512

 
448,620

 
531,295

Gain on sale of discontinued operations
 
—

 
—

 
(3,000,000
)
Accrued pension costs
 
(197,473
)
 
1,280,542

 
703,307

Equity loss (income) from investment in RELS Management Company
 
53,043

 
(916,865
)
 
(3,132,416
)
Changes in operating assets and liabilities, net
 
 
 
 
 
 
Accounts receivable
 
15,825

 
4,129,770

 
778,928

Prepaid expenses and other assets
 
(683,144
)
 
(615,327
)
 
(82,583
)
Accounts payable and other liabilities
 
(1,695,254
)
 
(2,305,792
)
 
(2,147,199
)
Accrued payroll and benefits
 
(2,373,193
)
 
(75,783
)
 
1,869,508

Cash provided by operating activities
 
37,283,208

 
69,257,736

 
87,554,556

Cash flows from investing activities
 
 
 
 
 
 
Purchases of property and equipment
 
(5,266,860
)
 
(3,563,429
)
 
(1,945,415
)
Net proceeds from sale of discontinued operations
 
—

 
—

 
3,000,000

Due from/to related parties, net
 
24,361,191

 
10,701,203

 
11,498,401

Cash provided by investing activities
 
19,094,331

 
7,137,774

 
12,552,986

Cash flows from financing activities
 
 
 
 
 
 
Capital distributions
 
(33,920,637
)
 
(68,344,996
)
 
(99,708,920
)
Distributions to noncontrolling interest holders in consolidated joint ventures
 
(750,155
)
 
(1,047,900
)
 
(6,131,882
)
Acquisition of noncontrolling interest
 
(2,500,000
)
 
—

 
—

Cash used in financing activities
 
(37,170,792
)

(69,392,896
)

(105,840,802
)
Net increase (decrease) in cash and cash equivalents
 
19,206,747

 
7,002,614

 
(5,733,260
)
Cash and cash equivalents
 
 
 
 
 
 
Beginning of year
 
12,988,562

 
5,985,948

 
11,719,208

End of year
 
$
32,195,309

 
$
12,988,562

 
$
5,985,948

 
 
 
 
 
 
 
Non-cash information
 
 
 
 
 
 
Forgiveness of due from related parties balance from RELS management Company (Note 8)
 
$
12,227,556

 
$
—

 
$
—


The accompanying notes are an integral part of these consolidated financial statements.



RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

1.
Description of Business and Significant Accounting Policies

Description of Business
RELS LLC (the “Company”) is primarily engaged in the business of providing customers with property appraisal services. The Company does business as RELS Valuation and Prime Valuation Services (“PVS”). The Company is owned 50.1% by CoreLogic, Inc. (“CoreLogic”) and 49.9% by Wells Fargo & Co. (“Wells Fargo”).
Summary of Significant Accounting Policies
Basis of Accounting
The consolidated financial statements are prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America.
Principles of Consolidation
The accompanying consolidated financial statements include the consolidated accounts of the Company and all majority-owned subsidiaries and effectively controlled joint ventures. All significant intercompany transactions and balances have been eliminated. The Company owns 50% of Rels Management Company (“RMC”). The Company uses the equity method of accounting for its investment in RMC as the Company has significant influence, but does not have effective control of RMC.
Partners’ Capital Adjustment
During 2014, partners’ capital balance increased as a result of correcting an understated related party balance. This out-of-period correction increased partners’ capital by $2.35 million. The Company concluded that the impact to both the current year and the prior year consolidated financial statements was not material.
Use of Estimates
The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The Company considers cash equivalents to be all short-term investments that have an initial maturity to the Company of three months or less and are not restricted.
Accounts Receivable
Accounts receivable are generally due from mortgage originators and servicers, financial institutions and other businesses located throughout the United States. Credit is extended based on an evaluation of the customer's financial condition, and generally, collateral is not required.
Property and Equipment
Property and equipment are recorded at cost and depreciated primarily on a straight-line basis over their estimated useful lives. Maintenance and repair costs are charged to expense as incurred. Major overhauls that extend the useful lives of existing assets are capitalized. When properties are retired or disposed, the costs and accumulated depreciation are eliminated and the resulting profit or loss is recognized in income.
Depreciation for financial statement purposes is computed using straight line rates according to the Company’s fixed asset policy. Useful lives by asset category are as follows:
Office furniture and equipment
 
5 years
Computers, related equipment and software
 
3 years
Leasehold improvements
 
Life of lease or economic life; whichever is shorter


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

The Company capitalizes costs of software developed or obtained for internal use, once the preliminary project stage has been completed, and management commits to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Costs incurred in the preliminary project stage and costs not qualifying for capitalization are charged to expense.
Revenue Recognition
The Company derives their revenues principally from U.S. mortgage originators and servicers with good creditworthiness. The Company’s product and service deliverables are generally comprised of property valuation or other related services. The Company’s revenue arrangements with their customers generally include a work order or written agreement specifying the data products or services to be delivered and related terms of sale including payment amounts and terms. The primary revenue recognition-related judgments exercised are to determine when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured.
Appraisal services are recognized at the time of delivery as the Company has no significant ongoing obligation after delivery.
Expenses
Professional fees represent costs of revenue which do not include an allocation of salaries and other personnel costs of approximately $44 million, $56 million and $57 million for the years ended December 31, 2014, 2013 and 2012, respectively. 
Income Taxes
As a limited liability company, the Company is taxed as a partnership and is not subject to federal taxes. The results of operations are included in the tax returns of the respective company members and not taxed at the entity level. There are currently no examinations being conducted of the Company by the Internal Revenue Service (“IRS”) or any other taxing authority.
Concentration of Risk of the Real Estate Market
Activity in the real estate market is cyclical in nature and is affected greatly by the cost and availability of long-term mortgage funds. Real estate activity and, in turn, the Company’s revenue base, can be adversely affected during periods of high interest rates and/or limited money supply.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements, and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted but the Company does not anticipate electing early adoption. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
In May 2014, the FASB issued updated guidance on revenue recognition in order to 1) remove inconsistencies in revenue requirements, 2) provide a better framework for addressing revenue issues, 3) improve comparability across entities, industries, etc., 4) provide more useful information through improved disclosures, and 5) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. Under the amendment, an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting treatment for the incremental costs of obtaining a contract, which would not have been incurred had the contract not been obtained. Further, an entity is required to disclose sufficient information to enable the user of the financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

flows from contracts with customers. The updated guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements.
In April 2014, the FASB issued updated guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
2.
Fair Value Measurements

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate that fair value. At December 31, 2014 and 2013, the Company’s financial instruments included cash and cash equivalents, accounts receivable and accounts payable. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximated carrying values due to the short-term nature of these instruments.
3.
Property and Equipment

At December 31, 2014 and 2013, property and equipment is comprised of the following:
 
 
2014
 
2013
 
 
 
 
 
Leasehold improvements
 
$
1,376,011

 
$
488,622

Furniture and equipment
 
19,629,782

 
6,235,608

Software
 
29,424,205

 
24,169,093

 
 
50,429,998

 
30,893,323

Less: Accumulated depreciation and amortization
 
(46,159,643
)
 
(27,794,025
)
 
 
$
4,270,355

 
$
3,099,298

Depreciation expense for property and equipment was $1,597,028, $202,227 and $231,981 for the years ended December 31, 2014, 2013 and 2012, respectively. Capitalized software amortization expense was $1,976,263, $2,072,602 and $2,112,929 during the years ended December 31, 2014, 2013 and 2012, respectively. The net book value of capitalized software costs included in property and equipment at December 31, 2014 and 2013, was $2,041,953 and $1,936,613, respectively.

4.
Sale of ResDirect and Rels Credit

On February 28, 2013, RMC which is owned 50% by RELS LLC and accounted for on the equity method, completed the sale of ResDirect, its wholly owned subsidiary, to CoreLogic Solutions LLC for $4.0 million. The sale resulted in a net gain of $1.5 million for the year ended 2013. The gain attributable to the Company is included in equity income from investment in Rels Management Company in the consolidated statements of income and comprehensive income. The ResDirect business, wholly owned by RMC, had approximately $3.9 million and $26.7 million of revenues for the years ended December 31, 2013 and 2012, respectively.
On July 1, 2012, the Company sold the stock of its wholly owned subsidiary, Rels Credit, to CoreLogic CredCo, LLC for $3.0 million, which resulted in a net gain of $3.0 million for the year ended 2012. Net asset


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

value of Rels Credit at the time of sale was minimal. From the date of this transaction, the Company has no continuing involvement in the credit services business, and therefore Rels Credit operations have been reflected as discontinued operations in the Company’s consolidated financial statements.
The operating results of the discontinued operations through June 30, 2012, included in the consolidated financial statements for the year ended December 31, 2012 were as follows:

 
 
2012
 
 
 
Total revenue
 
$
31,056,613

Total expenses
 
(24,006,488
)
Net income
 
$
7,050,125

5.
Acquisition of Noncontrolling Interests

On March 31, 2014, the Company acquired an additional 49.9% interest in PVS for $2.5 million in cash. The acquisition increased the Company’s ownership from 50.1% to 100%. The acquisition was completed after liquidating all significant liabilities and PVS’s share of the net assets. PVS provides appraisal services for customers other than Wells Fargo.
The acquisition was accounted for as an equity transaction, and no gain or loss was recognized in consolidated net income or comprehensive income.
6.
Commitments and Contingencies

The Company leases certain office facilities under operating leases, which are renewable. Certain leases provide that the Company will pay insurance and taxes. Rental expense for the years ended December 31, 2014, 2013 and 2012 was $2,455,506, $1,975,569 and $1,882,496, respectively.
Future minimum rental payments (including operating expenses) under operating leases, which end after 2014 and have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2014 are as follows:

2015
 
$
2,251,600

2016
 
1,908,300

2017
 
101,700

2018
 
9,500

2019 and after
 
—

Total minimum payments
 
$
4,271,100

The Company is involved in various routine legal proceedings related to its operations. While the ultimate disposition of each proceeding is not determinable, the Company does not believe that any such proceedings will have a materially adverse effect on its financial condition, results of operations or cash flows.

7.
Employee Benefit Plans

Defined Contribution Plan
The Company participates in a defined contribution 401(k) plan (the “Plan”) for the benefit of its employees and their beneficiaries, which allows eligible employees to save for retirement through pre-tax contributions. The Company makes discretionary contributions in accordance with the plan document. For the years ended


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

December 31, 2014 and 2013, the Company contributed approximately $1.2 million and $1.6 million, respectively, to the Plan.
Defined Benefit Plan
The Company has a frozen defined benefit pension plan that provides retirement benefits to substantially all employees of the Company who had monthly earnings prior to December 31, 2001. The net pension obligation recorded and the related periodic costs are based on, among other things, assumptions of the discount rate, estimated return on plan assets, highest average monthly compensation, as defined by the plan, and the mortality of participants. The obligation for these claims and the related periodic costs are measured using actuarial techniques and assumptions. Actuarial gains and losses are deferred and amortized over future periods. The plan assets of the Company’s pension plan are valued at fair value using quoted market prices. Investments, in general, are subject to various risks, including credit, interest and overall market volatility risks.
In August of 2014, the Company entered into an agreement with the Pension Benefit Guaranty Corporation that requires for plan years 2014 through 2017 excess contributions in addition to all minimum funding contributions. These excess contributions have been reflected in the disclosure below.
The obligations and funded status of the Company’s postretirement pension benefit plan as of December 31 is as follows:

 
 
2014
 
2013
Change in benefit obligation
 
 
 
 
Benefit obligation at beginning of year
 
$
14,875,863

 
$
16,651,678

Interest costs
 
716,616

 
667,569

Actuarial losses (gains)
 
3,021,869

 
(1,951,186
)
Benefits paid
 
(829,651
)
 
(492,198
)
Benefit obligation at end of year
 
$
17,784,697

 
$
14,875,863


As of December 31, 2014 and 2013, the accumulated benefit obligation equaled the projected benefit obligation for the plan.
 
 
2014
 
2013
 
 
 
 
 
Change in plan assets
 
 
 
 
Fair value of plan assets at beginning of year
 
$
10,671,293

 
$
11,457,101

Actual return on plan assets
 
(242,368
)
 
(314,007
)
Company contributions
 
1,294,500

 
20,397

Benefits, premiums and expenses paid
 
(829,651
)
 
(492,198
)
  Fair value of plan assets at end of year
 
$
10,893,774

 
$
10,671,293


 
 
2014
 
2013
 
 
 
 
 
Funded status
 
 
 
 
Unfunded status of the plan
 
$
(6,890,923
)
 
$
(4,204,570
)

 
2014
 
2013
 
 
 
 
Amounts recognized in the consolidated balance sheet consist of
 
 
 
Noncurrent postretirement benefit liability
$
(6,890,923
)
 
$
(4,204,570
)


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012


 
2014
 
2013
Amounts recognized in accumulated other comprehensive loss
 
 
 
Unrecognized net actuarial loss
$
9,475,930

 
$
6,592,104


Amounts included in accumulated other comprehensive loss as of December 31, 2014 which the Company expects to recognize in postretirement benefit expense during 2015 is $1,037,394.

 
 
2014
 
2013
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligations
 
 
 
 
Discount rate
 
4.09
%
 
4.92
%

Net periodic postretirement pension benefit costs as of December 31 included the following components:
 
 
2014
 
2013
 
2012
Components of net periodic benefit cost
 
 
 
 
 
 
Interest cost
 
$
716,616

 
$
667,569

 
$
690,276

Expected return on plan assets
 
(241,905
)
 
(167,577
)
 
(166,147
)
Amortization of net actuarial loss
 
622,316

 
800,948

 
685,542

Net periodic benefit cost
 
$
1,097,027

 
$
1,300,940

 
$
1,209,671


 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
Other changes in plan assets and projected benefit obligation recognized in other comprehensive loss
 
 
 
 
 
 
Net actuarial loss (gain)
 
$
3,506,142

 
$
(1,469,602
)
 
$
1,212,026

Reversal of amortization item
 
 
 
 
 
 
Net actuarial loss
 
(622,316
)
 
(800,948
)
 
(685,542
)
   Total recognized in other comprehensive loss (income)
 
$
2,883,826

 
$
(2,270,550
)
 
$
526,484


 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
Weighted-average assumptions used to determine net costs
 
 
 
 
 
 
Discount rate
 
4.92
%
 
4.11
%
 
4.66
%
Expected return on plan assets
 
4.50
%
 
3.50
%
 
3.50
%

Future Cash Flows
At December 31, 2014, the following pension benefit payments are expected to be paid by the Company’s plan and reflect expected future services, as appropriate:



RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

2015
 
$
560,359

2016
 
594,397

2017
 
655,407

2018
 
703,167

2019
 
763,431

2020 to 2024
 
4,637,071


Estimated contributions to the plan for 2015 are $1,327,000.
Plan Assets
The Company’s pension plan asset allocation by asset category as of the measurement date follows:
 
 
Percentage of Plan Assets
 
 
at December 31,
 
 
2014
 
2013
Asset category
 
 
 
 
Domestic and international equities
 
6
%
 
2
%
Fixed income funds
 
94
%
 
98
%
 
 
100
%
 
100
%

The Company’s retirement plan assets are measured at fair value on a recurring basis (annually). The Company determines the fair value of its defined benefit pension plans assets with a three‑level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The hierarchy level assigned to each security in the Company’s defined benefit pension plan assets is based on management’s assessment of the transparency and reliability of the inputs used in the valuation of such instrument at the measurement date. The three hierarchy levels are defined as follows:
Level 1
Valuations based on unadjusted quoted market prices in active markets for identical securities. The fair value of equity and certain fixed income securities are classified as Level 1.
Level 2
Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.
Level 3
Valuations based on inputs that are unobservable and significant to the overall fair value measurement, and involve management judgment.
As of December 31, 2014 and 2013, approximately 93% and 93%, respectively, of the Company's defined pension plan assets were Level 2 assets and 7% and 7% respectively, for 2014 and 2013 were classified as Level 1 assets.

8.
Related Parties

The Company has significant transactions with CoreLogic, Wells Fargo and RMC. For each of the years ended December 31, 2014, 2013 and 2012, approximately 91% of the Company’s revenues included in the consolidated statements of income and comprehensive income were received from Wells Fargo and its affiliates. For each of the years ended December 31, 2014 and 2013, approximately $4.5 million of the Company’s accounts receivable included in the consolidated balance sheets were due from Wells Fargo and its affiliates.


RELS LLC
Notes to the Consolidated Financial Statements
December 31, 2014, 2013 and 2012

The Company conducts business with CoreLogic, from whom they primarily receive certain services supporting the sales of appraisals. The expenses relating to these services provided by CoreLogic and its affiliates were approximately $6.4 million, $8.7 million and $14.2 million, respectively, for the years ended December 31, 2014, 2013 and 2012. There were no amounts due to CoreLogic within the Company’s accrued liabilities included in the consolidated balance sheets at either December 31, 2014 or 2013.
The operations and support services of RMC were transferred to the Company as of January 1, 2014, including property and equipment balances with cost and accumulated depreciations of $17,321,194 and $15,124,233, respectively. Also, during the year ended December 31, 2014, the Company agreed to forgive its receivable balance due from RMC of $12,227,556. The forgiveness has no impact to the Company’s consolidated partners’ capital, consolidated income, or comprehensive income.
During the years ended December 31, 2014, 2013 and 2012, the Company recorded equity (loss) income from its investment in RMC of ($53,043), $916,865 and $3,162,940, respectively. The expenses relating to the services provided by RMC were approximately $1.7 thousand, $2.6 million and $8.6 million, respectively, for the years ended December 31, 2014, 2013 and 2012.
The consolidated balance sheets include amounts due from the following related parties.

 
 
2014
 
2013
 
 
 
 
 
Due (to) from
 
 
 
 
RMC
 
$
1,551

 
$
33,538,218

Rels Title
 
(724,500
)
 
377,796

ResDirect
 
—

 
(400,463
)
 
 
$
(722,949
)
 
$
33,515,551


9.
Subsequent Events

The Company evaluated events that may have occurred after the consolidated balance sheet date for potential recognition or disclosure that have occurred subsequent to December 31, 2014, through February 18, 2015, the date the consolidated financial statements were available to be issued.