CoreLogic, Inc., together with its subsidiaries (collectively "we", "us" or "our"), is a leading global property information, insight, analytics and data-enabled solutions 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 solutions. Clients rely on us to help identify and manage growth opportunities, improve performance and mitigate risk.

The accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of only normal recurring items which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full year or for any future periods.

We generate the majority of our operating revenues from clients with operations in the US residential real estate, mortgage origination and mortgage servicing markets. Approximately 29%30% and 34%32% of our operating revenues for the three months ended March 31,June 30, 2019 and 2018, respectively, were generated from our top ten clients, who consist of the largest U.S.US mortgage originators and servicers. None of our clients individually accounted for greater than 10% of our operating revenues for the three months ended March 31,June 30, 2019 nor 2018. Approximately 29% and 33% of our operating revenues for the six months ended June 30, 2019 and 2018, respectively, were generated from our top ten clients with none of our clients individually accounting for greater than 10% of our operating revenues during the periods.

We deem the carrying value of cash, cash equivalents and restricted cash to be a reasonable estimate of fair value due to the nature of these instruments. Restricted cash is comprised of certificates of deposit that are pledged for various letters of credit/bank guarantees secured by us, escrow accounts due to acquisitions and divestitures as well as short-term investments within our deferred compensation plan trust. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows:

We derive our operating revenues primarily from US mortgage lenders, servicers and insurance companies with good creditworthiness. Operating revenue arrangements are written and specify the products or services to be delivered, pricing, and payment terms. Operating revenue is recognized when the distinct good, service, or performance obligation, is delivered and control has been transferred to the client. Generally, clients contract with us to provide products and services that are highly interrelated and not separately identifiable. Therefore, the entire contract is accounted for as one performance obligation. At times, some of our contracts have multiple performance obligations where we allocate the total price to each performance obligation based on the estimated relative standalone selling price using observable sales or the cost-plus-margin approach.

For products or services where delivery occurs at a point in time, we recognize operating revenue when the client obtains control of the products upon delivery. When delivery occurs over time, we generally recognize operating revenue ratably over the service period, once initial delivery has occurred. For certain of our products or services, clients may also pay upfront fees, which we defer and recognize as operating revenue over the longer of the contractual term or the expected client relationship period.

Licensing arrangements that provide our clients with the right to access or use our intellectual property are considered functional licenses for which we generally recognize operating revenue based on usage. For arrangements that provide a stand-ready obligation or substantive updates to the intellectual property which the client is contractually or practically required to use, we recognize operating revenue ratably over the contractual term.

Client payment terms are standard with no significant financing components or extended payment terms granted. In limited cases we allow for client cancellations for which we estimate a reserve.

Investments in affiliates are accounted for under the equity method of accounting when we are deemed to have significant influence over the affiliate but do not control or have a majority voting interest in the affiliate. Investments are carried at the cost of acquisition, including subsequent impairments, capital contributions and loans from us, plus our equity in undistributed earnings or losses since inception of the investment.

We recorded equity in losses of affiliates, net of tax, of $0.4 million and equity in earnings of affiliates, net of tax, of $0.2 million for the three months ended March 31, 2019 and 2018, respectively. For the three and six months ended March 31,June 30, 2019, we did not have any operating revenues related to our investment in affiliates and had $0.3 million and $0.6 million for the three and six months ended March 31,June 30, 2018, we recorded $0.3 million.respectively. We recorded operating expenses of $0.2$0.5 million and $3.3$2.0 million related to our investment in affiliates for the three months ended March 31,June 30, 2019 and 2018, respectively, and $0.7 million and $5.3 million for the six months ended June 30, 2019 and 2018, respectively.

As of March 31,June 30, 2019, and December 31, 2018, we had insignificant accounts payable and accounts receivable with these affiliates.

As of March 31,June 30, 2019, and December 31, 2018, we recorded assets of discontinued operations of $0.7 million and $0.6 million respectively, within prepaid expenses and other current assets within our condensed consolidated balance sheets. Additionally, as of March 31,June 30, 2019 and December 31, 2018, we recorded liabilities of $2.1 million and $2.2 million, respectively, within accounts payable and other accrued expenses mainly consisting of legal related accruals.

These deposits generally remain in the accounts for a period of two to five business days. We record earnings credits from these activities as a reduction to related administrative expenses, including the cost of bank fees and other administration costs.

In August 2017,April 2019, the Financial Accounting Standards Board ("FASB") issued guidance to amend or clarify certain areas within three previously issued standards related to financial instruments which includes clarification for fair value using the measurement alternative, measuring credit losses and accounting for derivatives and hedging. The amendments in this guidance are largely effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We have not elected early adoption and do not anticipate that this guidance will have a material impact on our consolidated financial statements.

In August 2017, the FASB issued guidance to amend and improve the accounting for hedging activities. The amendment eliminates the requirement to separately measure and report hedge ineffectiveness. An initial quantitative assessment to establish that the hedge is highly effective is still required but the amendment allows until the end of the first quarter it is designated to perform the assessment. After initial qualification, a qualitative assessment can be performed if the hedge is highly effective and the documentation at inception can reasonably support an expectation of high effectiveness throughout the hedge’s term. The amendment requires companies to present all hedged accounting elements that affect earnings in the same income statement line as the hedged item. For highly effective cash flow hedges, fair value changes will be recorded in other comprehensive loss and reclassified to earnings when the hedged item impacts earnings. The guidance is effective prospectively for fiscal years beginning after December 15, 2018. In October 2018, the FASB issued incremental guidance to this update to permit the Overnight Index Swap Rate and the Secured Overnight Financing Rate to be utilized as US benchmark interest rates for hedge accounting purposes. We have adopted this guidance in the current year as required, which has not had a material impact on our consolidated financial statements.

In February 2016, the FASB issued guidance on lease accounting which requires leases, regardless of classification, to be recognized on the balance sheet as lease assets and liabilities. The objective of this standard is to provide greater transparency on the amount, timing and uncertainty of cash flows arising from leasing arrangements. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee depends upon its classification as a finance or operating lease. On January 1, 2019, we adopted the new lease accounting standard, and all related amendments, using the modified retrospective approach. Comparative information has not been restated and continues to be reported under the standards in effect for those prior periods as allowed by the guidance. As part of our adoption we elected the package of

Adoption of the new lease accounting standard resulted in the recording of operating lease assets and lease liabilities of approximately $67.7 million and $103.9 million, respectively, as of January 1, 2019. There was no impact to opening equity as a result of adoption as the difference between the asset and liability balance is attributable to reclasses of pre-existing balances, such as deferred and prepaid rent, into the lease asset balance. The standard has not materially impacted our consolidated statement of operations or presentation of cash flows and we do not anticipate a material impact in the future based on our current operations. See below for our accounting policy reflecting the updated guidance.

We determine if an arrangement contains a lease at inception and determine the classification of the lease, as either operating or finance, at commencement.

Operating and finance lease assets and liabilities are recorded based on the present value of future lease payments which factors in certain qualifying initial direct costs incurred as well as any lease incentives received. If an implicit rate is not readily determinable, we utilize our incremental borrowing rate and inputs from third-party lenders to determine the appropriate discount rate. Lease expense for operating lease payments are recognized on a straight-line basis over the lease term. Finance leases incur interest expense using the effective interest method in addition to amortization of the leased asset on straight-line basis, both over the applicable lease term. Lease terms may factor in options to extend or terminate the lease.

We adhere to the short-term lease recognition exemption for all classes of assets (i.e. facilities and equipment). As a result, leases with an initial term of twelve months or less are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. In addition, for certain equipment leases, we account for lease and non-lease components, such as services, as a single lease component as permitted.

Depreciation expense for property and equipment was approximately $23.4$22.5 million and $21.8$22.4 million, for the three months ended March 31,June 30, 2019 and 2018, respectively, and $45.9 million and $44.2 million for the six months ended June 30, 2019 and 2018, respectively.

Other intangible assets, net consistconsists of the following:

Amortization expense for other intangible assets, net was $16.6$15.4 million and $15.2$16.3 million for the three months ended March 31,June 30, 2019 and 2018, respectively, and $32.0 million and $31.5 million for the six months ended June 30, 2019 and 2018, respectively.

Estimated amortization expense for other intangible assets, net is as follows:

Our long-term debt consists of the following:

In August 2017,May 2019, we amended and restated our credit agreement (“Credit Agreement”(the "Credit Agreement") with Bank of America, N.A., as the administrative agent, and other financial institutions. The Credit Agreement provides for a $1.8 billion five-year term loan A facility (“Term Facility”(the "Term Facility"), and a $700.0$750.0 million five-year revolving credit facility ("Revolving(the "Revolving Facility"). The Term Facility matures, and the Revolving Facility expires, in August 2022.May 2024. The Revolving facilityFacility includes a $100.0 million multicurrencymulti-currency 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/orand Revolving Facility by up to $100.0$300.0 million in the aggregate; however, the lenders are not obligated to do so.

As of March 31,June 30, 2019, we had a remaining borrowing capacity of $521.7$740.0 million under the Revolving Facility and we were in compliance with all of our covenants under the Credit Agreement.

In connection with the amendment and restatement of the Credit Agreement, in August 2017,May 2019, we incurred approximately $14.3$9.9 million of debt issuance costs of which $14.0$9.6 million were initially capitalized within long-term debt, net of current in the accompanying condensed consolidated balance sheets. In addition, when we amended and restated the Credit Agreement, we wrote-off previously unamortized debt issuance costs of $1.8$1.5 million within (loss)/gain on investments and other, net in the accompanying consolidated statement of operations; resulting in a remaining $12.0$14.6 million of previously unamortized costs. We will amortize all of these costs over the term of the Credit Agreement. For both the three months ended March 31,June 30, 2019 and 2018, $1.3 million and $1.4 million, respectively, werewas recognized in the accompanying condensed consolidated statement of operations related to the amortization of debt issuance costs. For the six months ended June 30, 2019 and 2018, $2.6 million and $2.7 million, respectively, were recognized related to the amortization of debt issuance costs.

We have entered into amortizing interest rate swaps ("Swaps") in order to convert a portion of our interest rate exposure on the Term Facility floating rate borrowings from variable to fixed. Under the Swaps, we agree to exchange floating rate for fixed rate interest payments periodically over the life of the agreement. The floating rates in our Swaps are based on the one-month London interbank offering rate. The notional balances, terms and maturities of our Swaps are designed to have at least 50% of our debt as fixed rate.

As of March 31,June 30, 2019, the Swaps have a combined remaining notional balance of $1.5$1.4 billion, a weighted average fixed interest rate of 2.05%2.00% (rates range from 1.03% to 2.98%), and scheduled terminations through December 2025. Notional balances under our Swaps are scheduled to increase and decrease based on our expectations of the level of variable rate debt to be in effect in future periods. Currently, we have scheduled notional amounts of between $1.3 billion and $1.5 billion through December 2020, then $1.0$1.4 billion and $1.2 billion through September 2020, then $1.2 billion and $1.0 billion through August 2022, and $416.0 million and $400.0 million thereafter until December 2025. Approximate weighted average fixed interest rates for the aforementioned time intervals are 2.16%2.18%, 2.70%2.61%, and 2.98%2.95%, respectively.

We have designated the Swaps as cash flow hedges. The estimated fair valuevalues of these cash flow hedges isare recorded in prepaid expenses and other current assets as well as other assets and other liabilities in the accompanying condensed consolidated balance sheets. As of March 31,June 30, 2019, the estimated fair value of certain of these cash flow hedges resulted in an asset of $8.7$2.2 million as well asrecorded within prepaid and other current assets, with the remainder resulting in a liability of $26.9$48.5 million. As of December 31, 2018, the estimated fair value of certain of these cash flow hedges resulted in an asset of $13.3 million, of which $0.6 million is classified within prepaid expenses and other current assets, as well aswith the remainder resulting in a liability of $15.2 million.

Unrealized losses of $12.2$21.1 million (net of $4.1$7.0 million in deferred taxes) and unrealized gains of $4.1 million (net $1.4 million in deferred taxes) for the three months ended March 31,June 30, 2019 and 2018, respectively, were recognized in other comprehensive loss/(income)loss related to the Swaps.

We have entered into renewable commitment agreements for certain real estate facilities and equipment, such as computers and printers, which we individually classify as either operating or finance leases. We possess contractual options to renew certain leases ranging from 6 months to 5 years at a time, as well as, in certain instances, contractual options to terminate leases with varying notification requirements and potential termination fees. As of March 31,June 30, 2019, our leases with initial terms greater than twelve months had remaining lease terms of up to 13 years.

    

The following table provides a breakdown of lease balances within our condensed consolidated balance sheet as of March 31,June 30, 2019 and December 31, 2018:

    

For the three and six months ended March 31,June 30, 2019, the components of lease cost are as follows:

Other supplementary information for the threesix months ended March 31,June 30, 2019 are as follows:

Maturities of lease liabilities as of March 31,June 30, 2019 are as follows:

Future minimum lease commitments, undiscounted, as of December 31, 2018 were as follows:

As of March 31,June 30, 2019, we have antwo operating leaseleases for a facility that hasfacilities which have not yet commenced with ana combined initial lease liability of approximately $2.0$11.0 million and a seven-year term, which isinitial terms ranging from 8 to 9 years. These liabilities are not reflected within the 2019 maturity schedule above. Total lease cost for all operating leases, including month-month rentals, for the three months ended March 31, 2018, excluding taxes, was $5.9 million.

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. 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 active markets for similar assets and liabilities, or, quoted prices in markets that are not active.

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

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

Restricted cash is comprised of certificates of deposit that are pledged for various letters of credit/bank guarantees secured by us, escrow accounts due to acquisitions and divestitures and short-term investments within our deferred compensation plan trust. We deem the carrying value to be a reasonable estimate of fair value due to the nature of these instruments.

Other investments is currently comprised of a minority equity investment in a foreign enterprise which we measure at cost and adjust to fair value on a quarterly basis when there are observable price changes in orderly transactions for the identical, or similar, investment. Changes in fair value are recorded within (loss)/gain on investmentinvestments and other, net in our condensed consolidated statement of operations.

The fair value of the contingent consideration was estimated using the Monte-Carlo simulation model, which relies on significant assumptionassumptions and estimates including discount rates and future market conditions, among others.

The fair value of 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.

The fair values of the Swaps were estimated based on market-value quotes received from the counterparties to the agreements.