UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐           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
(Street Address)	(City)	(State)	(Zip Code)

(949) 214-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading symbol(s)	Name of exchange on which registered
Common Stock, $0.00001 par value	CLGX	New York Stock Exchange
Preferred Stock Purchase Rights	CLGX	New York Stock Exchange

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  ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes  ☒     No   ☐

Indicate by check mark whether the registrant: is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No   ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On July 21, 2020 there were 79,458,522 shares of common stock outstanding.

CoreLogic, Inc.

Table of Contents

Part I:	Financial Information	1
Item 1.	Financial Statements (unaudited)
	A. Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	1
	B. Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019	2
	C. Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019	3
	D. Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	4
	E. Condensed Consolidated Statement of Stockholders' Equity for the three and six months ended June 30, 2020 and 2019	7
	F. Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
Part II:	Other Information	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	45

PART I: FINANCIAL INFORMATION

Item 1.  Financial Statements.

CoreLogic, Inc.

Condensed Consolidated Balance Sheets

(Unaudited) 

(in thousands, except par value)	June 30,		December 31,
Assets	2020		2019
Current assets:
Cash and cash equivalents	$	137,286	$	105,185
Accounts receivable (less allowance for credit losses of $8,007 and $7,161 as of June 30, 2020 and December 31, 2019, respectively)	290,199		281,392
Prepaid expenses and other current assets	68,991		59,972
Total current assets	496,476		446,549
Property and equipment, net	440,015		451,021
Operating lease assets	59,571		65,825
Goodwill, net	2,400,412		2,396,096
Other intangible assets, net	351,055		378,818
Capitalized data and database costs, net	327,936		327,078
Investment in affiliates, net	11,839		16,666
Other assets	76,087		76,604
Total assets	$	4,163,391	$	4,158,657
Liabilities and Equity
Current liabilities:
Accounts payable and other accrued expenses	$	185,355	$	173,989
Accrued salaries and benefits	67,039		86,598
Contract liabilities, current	362,702		321,647
Current portion of long-term debt	2,504		56,022
Operating lease liabilities, current	17,855		18,058
Total current liabilities	635,455		656,314
Long-term debt, net of current	1,566,292		1,610,538
Contract liabilities, net of current	589,744		563,246
Deferred income tax liabilities	85,280		110,396
Operating lease liabilities, net of current	76,411		85,139
Other liabilities	208,086		181,814
Total liabilities	3,161,268		3,207,447
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; 79,459 and 78,972 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	1		1
Additional paid-in capital	120,029		111,000
Retained earnings	1,099,154		1,006,992
Accumulated other comprehensive loss	(217,061)		(166,783)
Total stockholders' equity	1,002,123		951,210
Total liabilities and equity	$	4,163,391	$	4,158,657

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

1

CoreLogic, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2020		2019		2020		2019
Operating revenues	$	477,464	$	459,538	$	921,349	$	877,246
Cost of services (excluding depreciation and amortization shown below)	214,491		227,210		430,056		446,271
Selling, general and administrative expenses	124,061		122,798		238,467		251,022
Depreciation and amortization	46,701		47,106		93,544		96,325
Impairment loss	1,228		47,834		1,228		47,834
Total operating expenses	386,481		444,948		763,295		841,452
Operating income	90,983		14,590		158,054		35,794
Interest expense:
Interest income	98		401		512		1,379
Interest expense	17,743		19,582		35,936		39,285
Total interest expense, net	(17,645)		(19,181)		(35,424)		(37,906)
Gain/(loss) on investments and other, net	7,136		(2,884)		4,089		(2,150)
Tax indemnification release	—		(13,394)		—		(13,394)
Income/(loss) from continuing operations before equity in earnings/(losses) of affiliates and income taxes	80,474		(20,869)		126,719		(17,656)
Provision/(benefit) for income taxes	21,845		(15,031)		34,796		(13,973)
Income/(loss) from continuing operations before equity in earnings/(losses) of affiliates	58,629		(5,838)		91,923		(3,683)
Equity in earnings/(losses) of affiliates, net of tax	376		314		888		(108)
Net income/(loss) from continuing operations	59,005		(5,524)		92,811		(3,791)
(Loss)/income from discontinued operations, net of tax	—		(48)		13		(94)
Net income/(loss)	$	59,005	$	(5,572)	$	92,824	$	(3,885)
Basic income per share:
Net income/(loss) from continuing operations	$	0.74	$	(0.07)	$	1.17	$	(0.05)
(Loss)/income from discontinued operations, net of tax	—		—		—		—
Net income/(loss)	$	0.74	$	(0.07)	$	1.17	$	(0.05)
Diluted income per share:
Net income/(loss) from continuing operations	$	0.73	$	(0.07)	$	1.15	$	(0.05)
(Loss)/income from discontinued operations, net of tax	—		—		—		—
Net income/(loss)	$	0.73	$	(0.07)	$	1.15	$	(0.05)
Weighted-average common shares outstanding:
Basic	79,403		80,473		79,216		80,326
Diluted	80,646		80,473		80,767		80,326

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

2

CoreLogic, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
(in thousands)	2020		2019		2020		2019
Net income/(loss)	$	59,005	$	(5,572)	$	92,824	$	(3,885)
Other comprehensive income/(loss)
Market value adjustments on interest rate swaps, net of tax	(1,490)		(21,088)		(38,380)		(33,294)
Reclassification adjustment for gain on terminated interest rate swap included in net income	—		(67)		—		(67)
Foreign currency translation adjustments	26,680		(820)		(12,010)		4,522
Supplemental benefit plans adjustments, net of tax	(75)		(150)		112		(299)
Total other comprehensive income/(loss)	25,115		(22,125)		(50,278)		(29,138)
Comprehensive income/(loss)	$	84,120	$	(27,697)	$	42,546	$	(33,023)

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

3

CoreLogic, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended June 30,
(in thousands)	2020		2019
Cash flows from operating activities:
Net income/(loss)	$	92,824	$	(3,885)
Less: Income/(loss) from discontinued operations, net of tax	13		(94)
Net income/(loss) from continuing operations	92,811		(3,791)
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:
Depreciation and amortization	93,544		96,325
Amortization of debt issuance costs	2,493		2,583
Amortization of operating lease assets	7,284		7,923
Impairment loss	1,228		47,834
Provision for bad debt and claim losses	7,893		7,577
Share-based compensation	21,838		17,755
Equity in (earnings)/losses of affiliates, net of taxes	(888)		108
Loss on early extinguishment of debt	—		1,453
Deferred income tax	3,087		(8,291)
(Gain)/loss on investments and other, net	(4,089)		2,150
Tax indemnification release	—		13,394
Change in operating assets and liabilities, net of acquisitions:
Accounts receivable	(9,545)		(38,845)
Prepaid expenses and other current assets	(4,767)		(6,189)
Accounts payable and other accrued expenses	4,889		(24,962)
Contract liabilities	66,786		12,329
Income taxes	(7,893)		15,890
Dividends received from investments in affiliates	109		—
Other assets and other liabilities	(31,660)		(22,649)
Net cash provided by operating activities - continuing operations	243,120		120,594
Net cash provided by operating activities - discontinued operations	18		—
Total cash provided by operating activities	$	243,138	$	120,594
Cash flows from investing activities:
Purchases of property and equipment	$	(31,855)	$	(44,714)
Purchases of capitalized data and other intangible assets	(18,535)		(18,307)
Cash paid for acquisitions, net of cash acquired	(12,046)		(41)
Purchases of investments	(631)		(658)
Cash received from sale of business-lines	—		1,082
Proceeds from investments and other	2,281		1,157
Net cash used in investing activities - continuing operations	(60,786)		(61,481)
Net cash provided by investing activities - discontinued operations	—		—
Total cash used in investing activities	$	(60,786)	$	(61,481)
Cash flows from financing activities:
Proceeds from long-term debt	$	—	$	1,770,000
Debt issuance costs	—		(9,621)
Repayment of long-term debt	(101,680)		(1,789,702)
Proceeds from issuance of shares in connection with share-based compensation	5,785		6,559
Payment of tax withholdings related to net share settlements	(9,346)		(9,267)
Shares repurchased and retired	(9,273)		(29,030)
Dividends paid	(34,839)		—
Contingent consideration payments subsequent to acquisitions	—		(600)
Net cash used in financing activities - continuing operations	(149,353)		(61,661)
Net cash provided by financing activities - discontinued operations	—		—
Total cash used in financing activities	$	(149,353)	$	(61,661)
Effect of exchange rate on cash, cash equivalents, and restricted cash	(1,553)		26
Net change in cash, cash equivalents, and restricted cash	31,446		(2,522)
Cash, cash equivalents, and restricted cash at beginning of period	115,702		98,250
Less: Change in cash, cash equivalents, and restricted cash - discontinued operations	18		—
Plus: Cash swept from discontinued operations	18		—
Cash, cash equivalents, and restricted cash at end of period	$	147,148	$	95,728
Supplemental disclosures of cash flow information:
Cash paid for interest	$	32,095	$	35,393
Cash paid for income taxes	$	36,436	$	9,909
Cash refunds from income taxes	$	424	$	16,061
Non-cash investing activities:
Capital expenditures included in accounts payable and other accrued expenses	$	12,374	$	17,179

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

4

CoreLogic, Inc.

Condensed Consolidated Statement of Stockholders' Equity (Quarter-to-Date)

(Unaudited)

	Common Stock Shares	Common Stock Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands)
For the Three Months Ended June 30, 2020
Balance as of March 31, 2020	79,411	$	1	$	111,481	$	1,057,692	$	(242,176)	$	926,998
Net income	—	—		—		59,005		—		59,005
Shares issued in connection with share-based compensation	198	—		2,853		—		—		2,853
Payment of tax withholdings related to net share settlements	—	—		(1,295)		—		—		(1,295)
Share-based compensation	—	—		13,753		—		—		13,753
Shares repurchased and retired	(150)	—		(6,842)		—		—		(6,842)
Dividends on common shares	—	—		79		(17,543)		—		(17,464)
Other comprehensive income	—	—		—		—		25,115		25,115
Balance as of June 30, 2020	79,459	$	1	$	120,029	$	1,099,154	$	(217,061)	$	1,002,123
For the Three Months Ended June 30, 2019
Balance as of March 31, 2019	80,633	$	1	$	164,969	$	977,062	$	(142,761)	$	999,271
Net loss	—	—		—		(5,572)		—		(5,572)
Shares issued in connection with share-based compensation	200	—		3,801		—		—		3,801
Payment of tax withholdings related to net share settlements	—	—		(716)		—		—		(716)
Share-based compensation	—	—		7,863		—		—		7,863
Shares repurchased and retired	(700)	—		(29,030)		—		—		(29,030)
Other comprehensive loss	—	—		—		—		(22,125)		(22,125)
Balance as of June 30, 2019	80,133	$	1	$	146,887	$	971,490	$	(164,886)	$	953,492

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

5

CoreLogic, Inc.

Condensed Consolidated Statement of Stockholders' Equity (Year-to-Date)

(Unaudited)

	Common Stock Shares	Common Stock Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
(in thousands)
For the Six Months Ended June 30, 2020
Balance as of December 31, 2019	78,972	$	1	$	111,000	$	1,006,992	$	(166,783)	$	951,210
Adoption of new accounting standards	—	—		—		16,827		—		16,827
Net income	—	—		—		92,824		—		92,824
Shares issued in connection with share-based compensation	687	—		5,785		—		—		5,785
Payment of tax withholdings related to net share settlements	—	—		(9,346)		—		—		(9,346)
Share-based compensation	—	—		21,838		—		—		21,838
Shares repurchased and retired	(200)	—		(9,273)		—		—		(9,273)
Dividend on common shares	—	—		25		(17,489)		—		(17,464)
Other comprehensive loss	—	—		—		—		(50,278)		(50,278)
Balance as of June 30, 2020	79,459	$	1	$	120,029	$	1,099,154	$	(217,061)	$	1,002,123
For the Six Months Ended June 30, 2019
Balance as of December 31, 2018	80,092	$	1	$	160,870	$	975,375	$	(135,748)	$	1,000,498
Net loss	—	—		—		(3,885)		—		(3,885)
Shares issued in connection with share-based compensation	741	—		6,559		—		—		6,559
Payment of tax withholdings related to net share settlements	—	—		(9,267)		—		—		(9,267)
Share-based compensation	—	—		17,755		—		—		17,755
Shares repurchased and retired	(700)	—		(29,030)		—		—		(29,030)
Other comprehensive loss	—	—		—		—		(29,138)		(29,138)
Balance as of June 30, 2019	80,133	$	1	$	146,887	$	971,490	$	(164,886)	$	953,492

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

6

Note 1 – Basis of Condensed Consolidated Financial Statements

CoreLogic, Inc., together with its subsidiaries (collectively “the Company”, “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, property risk and replacement cost, 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.

Our condensed consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States ("US") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The 2019 year-end condensed consolidated balance sheet was derived from the Company’s audited financial statements for the year ended December 31, 2019. Interim financial information does not require the inclusion of all the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019.

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.

Client Concentration

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 34% and 30% of our operating revenues for the three months ended June 30, 2020 and 2019, respectively, were generated from our top ten clients, who consist of the largest US mortgage originators and servicers. None of our clients individually accounted for greater than 10% of our operating revenues during these periods. Approximately 32% and 29% of our operating revenues for the six months ended June 30, 2020 and 2019, respectively, were generated from our top ten clients. None of our clients individually accounted for greater than 10% of our operating revenues during these periods.

Cash, Cash Equivalents, and Restricted Cash

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 deposits 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:

(in thousands)	June 30, 2020		June 30, 2019
Cash and cash equivalents	$	137,286	$	82,042
Restricted cash included in other assets	$	9,494	11,662
Restricted cash included in prepaid expenses and other current assets	$	368	2,024
Total cash, cash equivalents, and restricted cash	$	147,148	$	95,728

7

Operating Revenue Recognition

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 or service (also referred as "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 at the point-of-sale.

See further discussion in Note 7 - Operating Revenues.

Comprehensive Income/(Loss)

Comprehensive income/(loss) includes all changes in equity except those resulting from investments by shareholders and distributions to shareholders. Specifically, foreign currency translation adjustments, amounts related to supplemental benefit plans, unrealized gains and losses on interest rate swap transactions and investments are recorded in other comprehensive income/(loss). The following table shows the components of accumulated other comprehensive loss, net of taxes, as of June 30, 2020 and December 31, 2019:

(in thousands)	2020		2019
Cumulative foreign currency translation	$	(134,513)	$	(122,503)
Cumulative supplemental benefit plans	(8,805)		(8,917)
Net unrecognized losses on interest rate swaps	(73,743)		(35,296)
Reclassification adjustment for gain on terminated interest rate swap included in net income	—		(67)
Accumulated other comprehensive loss	$	(217,061)	$	(166,783)

8

Investment in Affiliates, net

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, less dividends received.

As of June 30, 2020, and December 31, 2019, we had insignificant revenue, expense, accounts receivable, and accounts payable with these affiliates.

In January 2020, we completed the acquisition of the remaining 66% of Location, Inc. ("Location") for $11.5 million, subject to certain working capital adjustments. In connection with this transaction, we remeasured our pre-existing 34% investment balance of $5.6 million to fair value based on the purchase price, resulting in a $0.6 million step-up gain which is reflected within gain/(loss) on investments and other, net, in our condensed consolidated statement of operations for the six months ended June 30, 2020. See Note 12 - Acquisitions for additional information. Prior to the acquisition of the remaining interest, we accounted for Location under the equity method and received dividends of $0.7 million in the first quarter of 2020.

Leases

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 over the lease term 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, which, if applicable, may factor in renewal or termination options. Finance leases incur interest expense using the effective interest method in addition to amortization of the leased asset on a 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.

Dividends

We record cash dividends as reductions to retained earnings upon declaration, with a corresponding increase to current liabilities, based on common shares outstanding on the record date. In addition, as part of our share-based compensation program, the terms of our restricted stock units (“RSUs”) and performance-based restricted stock units (“PBRSUs”) stipulate that holders of these awards are credited with dividend equivalent units on each date that a cash dividend is paid to holders of common stock. These dividend equivalents are subject to the same vesting and performance requirements of the underlying units and therefore are forfeitable (i.e. non-participating). Upon declaration of a dividend, we record dividend equivalents as a reduction to retained earnings, derived from the number of eligible unvested shares, with a corresponding increase to additional paid-in-capital.

In December 2019, we announced that our Board of Directors approved the initiation of a quarterly cash dividend to common shareholders. In connection with this, in December 2019, our Board of Directors initiated and declared a cash dividend of $0.22 per common share. As a result, as of December 31, 2019, we recorded a liability of $17.4 million within accounts payable and other accrued expenses, as well as $0.4 million in dividend equivalents reflected in additional paid-in-capital within our accompanying consolidated balance sheets. The dividend declared was paid in January 2020. In April 2020, our Board of Directors announced a cash dividend to common shareholders of $0.22 per share of common stock which was paid in June 2020 to stockholders of record at the close of business on June 1, 2020. In July 2020, our Board of Directors announced a 50% increase in our cash dividend to $0.33 per share. See Note 14 - Subsequent Events for further details.

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Discontinued Operations

As of both June 30, 2020, and December 31, 2019, we recorded assets of discontinued operations of $6.3 million within prepaid expenses and other current assets within our condensed consolidated balance sheets, mainly consisting of income tax-related assets. Additionally, as of both June 30, 2020 and December 31, 2019, we recorded liabilities of $0.4 million within accounts payable and other accrued expenses, which mainly consisted of legal-related accruals.

Tax Escrow Disbursement Arrangements

We administer tax escrow disbursements as a service to our clients in connection with our tax services business. Funds to be disbursed are deposited and maintained in segregated accounts for the benefit of our clients and totaled $832 million and $1.4 billion as of June 30, 2020 and December 31, 2019, respectively. Because these deposits are held on behalf of our clients, they are not our funds and, therefore, are not included in the accompanying condensed consolidated balance sheets.

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

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 total claim reserves relating to incorrect disposition of assets of $22.5 million and $22.7 million as of June 30, 2020 and December 31, 2019, respectively. Within these amounts are $10.0 million and $9.8 million, respectively, which are short-term and are therefore reflected within accounts payable and other accrued expenses within our accompanying condensed consolidated balance sheets. The remaining reserves are reflected within other liabilities.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued guidance to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform, in connection with the scheduled phase-out of LIBOR as a reference interest rate. The guidance provides practical expedients and exceptions in accounting for contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Entities electing the practical expedients will be allowed, among other topics, to account for reference rate modification of debt and receivables prospectively; to not reassess lease classifications and discount rates in reference rate lease modifications; and ease cash-flow hedge effectiveness testing guidelines for hedges affected by reference rate reform. The guidance is effective through December 2022 with adoption permitted as of any date within the aforementioned time frame from the beginning of the selected interim period on a prospective basis. We have elected to adopt the guidance in the first quarter of 2020, which has not had a material effect on our condensed consolidated financial statements.

In December 2019, as part of a simplification initiative, the FASB issued guidance to remove certain exceptions and added further guidance to simplify the accounting for income taxes. The exceptions that were removed relate to recognizing deferred taxes for investments, performing intra-period allocation, and calculating income taxes in interim periods. The guidance reduces the complexity of recognizing deferred taxes for goodwill and allocating taxes to entities of a consolidated group. The guidance is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. We elected to early adopt on January 1, 2020 via the modified retrospective method with a cumulative effect adjustment at the date of initial application, resulting in an increase to retained earnings of $16.8 million. This impact results from the release of a deferred tax liability that had previously been established for the outside basis difference of an equity method investment that later became a subsidiary.

In November 2018, the FASB issued guidance to clarify the definition and interaction of collaborative arrangements with previously issued guidance on revenue recognition. This guidance is effective for fiscal years beginning after December 15, 2019 on a retrospective basis to the date of the initial adoption of the revenue standard. We adopted this guidance in the first quarter of 2020, which has not had a material impact on our condensed consolidated financial statements.

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In August 2018, the FASB issued guidance that amends fair value disclosure requirements. The guidance removes disclosure requirements on the transfers between Level 1 and Level 2 of the fair value hierarchy in addition to the disclosure requirements on the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The guidance clarifies the measurement uncertainty disclosure and adds disclosure requirements for Level 3 unrealized gains and losses and significant unobservable inputs used to develop Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019. Entities were permitted to early adopt any removed or modified disclosures upon issuance and delay adoption of the additional disclosures until the effective date. We early adopted the removal of disclosure provisions of the new guidance in 2018 and adopted the measurement uncertainty disclosure and additional Level 3 disclosures in the current year as required. Adoption of this guidance has not had a material impact on our condensed consolidated financial statements.

In June 2016, the FASB issued guidance for accounting of credit losses affecting the impairment model for most financial assets and certain other instruments. Entities are required to use a forward-looking current expected credit loss model for trade and other receivables, held-to-maturity debt securities, loans, and other instruments, which will generally lead to an earlier recognition of loss allowances. Entities will recognize expected losses on available-for-sale debt securities as allowances rather than a reduction in amortized cost of the security while the measurement process of such loss does not change. Disclosure requirements are expanded regarding an entity’s assumptions, models, and methods of estimations of the allowance. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. In November 2018 and 2019, the FASB issued updates to this standard which, amongst other items, clarified that impairment of receivables arising from operating leases should be accounted for under applicable leasing guidance. We adopted this guidance in the first quarter of 2020, which has not had a material impact on our condensed consolidated financial statements.

Note 2 - Property and Equipment, Net

Property and equipment, net as of June 30, 2020 and December 31, 2019 consists of the following:

(in thousands)	2020		2019
Land	$	7,476	$	7,476
Buildings	6,487		6,487
Furniture and equipment	74,799		74,978
Capitalized software	928,035		916,820
Leasehold improvements	50,206		48,811
Construction in progress	371		3,064
	1,067,374		1,057,636
Less accumulated depreciation	(627,359)		(606,615)
Property and equipment, net	$	440,015	$	451,021

Depreciation expense for property and equipment, net, was approximately $23.1 million and $22.5 million for the three months ended June 30, 2020 and 2019, respectively, and $46.3 million and $45.9 million for the six months ended June 30, 2020 and 2019, respectively.

Impairment losses for property and equipment of $1.2 million and $12.2 million were recorded for both the three and six months ended June 30, 2020 and 2019, respectively. See Note 6 - Fair Value for further discussion.

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Note 3 – Goodwill, Net

A reconciliation of the changes in the carrying amount of goodwill and accumulated impairment losses, by reporting unit, for the six months ended June 30, 2020 is as follows:

(in thousands)	PIRM		UWS		Consolidated
Balance as of January 1, 2020
Goodwill	$	1,107,494	$	1,296,127	$	2,403,621
Accumulated impairment losses	(600)		(6,925)		(7,525)
Goodwill, net	1,106,894		1,289,202		2,396,096
Acquisition	12,584		—		12,584
Measurement period adjustments	—		17		17
Translation adjustments	(8,285)		—		(8,285)
Balance as of June 30, 2020
Goodwill, net	$	1,111,193	$	1,289,219	$	2,400,412

See Note 12 - Acquisitions for discussion of current year acquisition and measurement period adjustments.

Note 4 – Other Intangible Assets, Net

Other intangible assets, net consists of the following:

	June 30, 2020						December 31, 2019
(in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Client lists	$	655,182	$	(367,000)	$	288,182	$	662,611	$	(354,011)	$	308,600
Non-compete agreements	26,752		(18,900)		7,852		26,409		(16,249)		10,160
Tradenames and licenses	127,311		(72,290)		55,021		127,176		(67,118)		60,058
	$	809,245	$	(458,190)	$	351,055	$	816,196	$	(437,378)	$	378,818

Amortization expense for other intangible assets, net was $14.3 million and $15.4 million for the three months ended June 30, 2020 and 2019, respectively, and $28.6 million and $32.0 million for the six months ended June 30, 2020 and 2019, respectively.

Impairment losses of $35.6 million were recorded for both the three and six months ended June 30, 2019. For the three and six months ended June 30, 2020, there were no impairments. See Note 6 - Fair Value for further discussion.

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

(in thousands)
Remainder of 2020	$	28,862
2021	54,276
2022	52,492
2023	44,248
2024	37,875
Thereafter	133,302
	$	351,055

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Note 5 – Long-Term Debt

Our long-term debt consists of the following:

		June 30, 2020						December 31, 2019
(in thousands)		Gross		Debt Issuance Costs		Net		Gross		Debt Issuance Costs		Net
Bank debt:
	Term loan facility borrowings due May 2024, weighted-average interest rate of 2.26% as of June 30, 2020	$	1,572,000	$	(13,097)	$	1,558,903	$	1,672,188	$	(14,868)	$	1,657,320
	Revolving line of credit borrowings due May 2024, weighted-average interest rate of 2.26% as of June 30, 2020	—		(5,703)		(5,703)		$	—	$	(6,425)	$	(6,425)
Notes:
	7.55% senior debentures due April 2028	9,531		(25)		9,506		$	9,524	$	(26)	$	9,498
Other debt:
	Various debt instruments with maturities through March 2024	6,090		—		6,090		$	6,167	$	—	$	6,167
Total long-term debt		1,587,621		(18,825)		1,568,796		$	1,687,879	$	(21,319)	$	1,666,560
Less current portion of long-term debt		2,504		—		2,504		$	56,022	$	—	$	56,022
Long-term debt, net of current portion		$	1,585,117	$	(18,825)	$	1,566,292	$	1,631,857	$	(21,319)	$	1,610,538

As of June 30, 2020 and December 31, 2019, we recorded $0.9 million and $0.4 million, respectively, of accrued interest expense on our debt-related instruments within accounts payable and other accrued expenses.

Credit Agreement

In May 2019, we amended and restated our 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 5-year term loan facility (the “Term Facility”), and a $750.0 million 5-year revolving credit facility (the “Revolving Facility”). The Term Facility matures, and the Revolving Facility expires, in May 2024. The Revolving Facility includes a $100.0 million multi-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 Revolving Facility by up to $300.0 million in the aggregate; however, the lenders are not obligated to do so. As of June 30, 2020, we had a remaining borrowing capacity of $750.0 million under the Revolving Facility and we were in compliance with all financial and restrictive covenants under the Credit Agreement.

Debt Issuance Costs

In connection with the amendment and restatement of the Credit Agreement, in May 2019, we incurred approximately $9.7 million of debt issuance costs of which $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 $1.5 million within gain/(loss) on investments and other, net, in the accompanying consolidated statement of operations, which resulted in a remaining $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 June 30, 2020 and 2019, $1.3 million was recognized in the accompanying condensed consolidated statement of operations related to the amortization of debt issuance costs. For the six months ended June 30, 2020 and 2019, $2.5 million and $2.6 million, respectively, were recognized in the accompanying condensed consolidated statements of operations related to the amortization of debt issuance costs.

7.55% Senior Debentures

In April 1998, we issued $100.0 million in aggregate principal amount of 7.55% senior debentures due 2028. The indentures governing these debentures, as amended, contain limited restrictions on us.

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Interest Rate Swaps

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 ("LIBOR"). The notional balances, terms and maturities of our Swaps are designed to have the effect of fixing the rate of interest on at least 50% of the principal balance of our senior term debt.

As of June 30, 2020, the Swaps have a combined remaining notional balance of $1.2 billion, a weighted average fixed interest rate of 2.34% (rates range from 0.66% 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 approximately $1.2 billion through September 2021, then $1.1 billion and $1.0 billion through August 2022, and $496.8 million and $465.0 million through December 2025. Approximate weighted average fixed interest rates for the aforementioned time periods are 2.55%, 2.64%, and 2.61%, respectively.

We have designated the Swaps as cash flow hedges. The estimated fair values of these cash flow hedges are recorded in prepaid expenses and other current assets or other assets as well as accounts payable and other accrued expenses or other liabilities in the accompanying condensed consolidated balance sheets. As of June 30, 2020, the estimated fair value of these cash flow hedges resulted in a liability of $98.3 million, of which $5.2 million was recorded within accounts payable and other accrued expenses. As of December 31, 2019, the estimated fair value of these cash flow hedges resulted in an asset of $0.6 million which was recorded within prepaid expenses and other current assets, as well as a liability of $47.7 million recorded within other liabilities.

Unrealized losses of $1.5 million (net of $0.5 million in deferred taxes) and $21.1 million (net of $7.0 million in deferred taxes) for the three months ended June 30, 2020 and 2019, respectively, were recognized in other comprehensive income/(loss) related to the Swaps. Unrealized losses of $38.4 million (net of $12.8 million in deferred taxes) and $33.3 million (net of $11.1 million in deferred taxes) for the six months ended June 30, 2020 and 2019, respectively, were recognized in other comprehensive income/(loss) related to the Swaps.

As a result of our Swap activity, for the three months ended June 30, 2020 and 2019, included within interest expense, on a pre-tax basis, we recognized interest expense of $5.9 million and interest income of $1.7 million, respectively. For the six months ended June 30, 2020 and 2019, included within interest expense, on a pre-tax basis, we recognized interest expense of $7.2 million and interest income of $3.8 million, respectively. Estimated net losses included in accumulated other comprehensive loss related to the Swaps as of June 30, 2020, that will be reclassified into earnings as interest expense over the next 12 months, utilizing June 30, 2020 LIBOR, is estimated to be $18.1 million, on a pre-tax basis.

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Note 6 – Fair Value

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 fair value, we used the following methods and assumptions:

Cash and Cash Equivalents

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

Restricted cash is comprised of deposits 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. We deem the carrying value to be a reasonable estimate of fair value due to the nature of these instruments.

Other Investments

Other investments are 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, investments. Changes in fair value are recorded within gain/(loss) on investments and other, net, in our condensed consolidated statement of operations.

Contingent Consideration

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

Long-Term Debt

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.

Swaps

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

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The fair values of our financial instruments as of June 30, 2020 are presented in the following table:

(in thousands)	Fair Value Measurements Using
As of June 30, 2020	Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and cash equivalents	$	137,286	$	—	$	—	$	137,286
Restricted cash	$	8,184	1,678		—		9,862
Other investments	—		2,513		—		2,513
Total	$	145,470	$	4,191	$	—	$	149,661
Financial Liabilities:
Contingent consideration	$	—	$	—	$	1,900	$	1,900
Total debt	—		1,590,050		—		1,590,050
Total	$	—	$	1,590,050	$	1,900	$	1,591,950
Derivatives:
Liability for Swaps	$	—	$	98,259	$	—	$	98,259
As of December 31, 2019
Financial Assets:
Cash and cash equivalents	$	105,185	$	—	$	—	$	105,185
Restricted cash	9,791		726		—		10,517
Other investments	—		1,898		—		1,898
Total	$	114,976	$	2,624	$	—	$	117,600
Financial Liabilities:
Contingent consideration	$	—	$	—	$	4,509	$	4,509
Total debt	—		1,690,731		—		1,690,731
Total	$	—	$	1,690,731	$	4,509	$	1,695,240
Derivatives:
Asset for Swaps	$	—	$	572	$	—	$	572
Liability for Swaps	$	—	$	47,691	$	—	$	47,691

For both the three and six months ended June 30, 2020, we recorded non-cash impairment charges of $1.2 million in property and equipment, net, related to capitalized software within our Underwriting & Workflow Solutions ("UWS") segment. For both the three and six months ended June 30, 2019, we recorded non-cash impairment charges of $35.6 million in other intangible assets, net, as well as $12.2 million in property and equipment, net. Both impairments are due to ongoing business transformation activities of our appraisal management company within our UWS segment. The impairments within other intangible assets, net include $32.3 million for client lists and $3.3 million for licenses. The impairments within property and equipment, net relate to capitalized software. All impairments were derived using an undiscounted cash flow methodology.

In connection with certain acquisitions in 2017, we entered into contingent consideration agreements for up to $20.5 million in cash by 2022 upon the achievement of certain revenue targets ending in fiscal year 2021. These contingent payments were originally recorded at a fair value of $6.2 million using the Monte-Carlo simulation model. In connection with the 2019 acquisition of National Tax Search, LLC (“NTS”), we entered into a contingent consideration agreement for up to $7.5 million in cash based upon certain revenue targets in fiscal years 2020 and 2021. This contingent consideration has been assessed with no fair value as of June 30, 2020 using the Monte-Carlo simulation model. The contingent payments are remeasured at fair value quarterly, and changes are recorded within gain/(loss) on investments and other, net, in our condensed consolidated statement of operations. During the three months ended June 30, 2020 and 2019, we decreased the fair value of our contingent consideration by $1.8 million and $0.6 million, respectively, and recorded the gain in our condensed consolidated statement of

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operations. During the six months ended June 30, 2020 and 2019, we decreased the fair value of our contingent consideration by $2.6 million and $0.6 million, respectively, and recorded the gain in our condensed consolidated statement of operations.

During the three months ended June 30, 2019, due to an observable price change in an inactive market, we recorded an unfavorable fair value adjustment of $4.3 million to our minority equity investment, which was recorded within gain/(loss) on investments and other, net in our condensed consolidated statement of operations. For the six months ended June 30, 2019, the total unfavorable fair value adjustment for this minority owned equity investment was $6.6 million. No adjustments were necessary for the three and six months ended June 30, 2020.

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Note 7 – Operating Revenues

Operating revenues by solution type consist of the following:

(in thousands)	PIRM		UWS		Corporate and Eliminations		Consolidated
For the Three Months Ended June 30, 2020
Property insights	$	118,836	$	—	$	—	$	118,836
Insurance and spatial solutions	48,440		—		—		48,440
Flood data solutions	—		29,977		—		29,977
Valuation solutions	—		62,956		—		62,956
Credit solutions	—		82,523		—		82,523
Property tax solutions	—		125,950		—		125,950
Other	9,310		3,734		(4,262)		8,782
Total operating revenue	$	176,586	$	305,140	$	(4,262)	$	477,464
For the Three Months Ended June 30, 2019
Property insights	$	122,737	$	—	$	—	$	122,737
Insurance and spatial solutions	48,421		—		—		48,421
Flood data solutions	—		21,613		—		21,613
Valuation solutions	—		87,142		—		87,142
Credit solutions	—		71,686		—		71,686
Property tax solutions	—		92,471		—		92,471
Other	12,559		6,105		(3,196)		15,468
Total operating revenue	$	183,717	$	279,017	$	(3,196)	$	459,538
For the Six Months Ended June 30, 2020
Property insights	$	235,813	$	—	$	—	$	235,813
Insurance and spatial solutions	95,280		—		—		95,280
Flood data services	—		57,580		—		57,580
Valuation solutions	—		124,203		—		124,203
Credit solutions	—		163,650		—		163,650
Property tax solutions	—		227,941		—		227,941
Other	18,548		7,387		(9,053)		16,882
Total operating revenue	$	349,641	$	580,761	$	(9,053)	$	921,349
For the Six Months Ended June 30, 2019
Property insights	$	241,407	$	—	$	—	$	241,407
Insurance and spatial solutions	93,837		—		—		93,837
Flood data services	—		38,589		—		38,589
Valuation solutions	—		153,465		—		153,465
Credit solutions	—		139,500		—		139,500
Property tax solutions	—		179,053		—		179,053
Other	24,281		12,928		(5,814)		31,395
Total operating revenue	$	359,525	$	523,535	$	(5,814)	$	877,246

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Property Insights

Our property insights solutions combine our patented predictive analytics with our proprietary and contributed data to enable our clients to improve customer acquisition and retention, detect and prevent fraud, improve mortgage transaction cycle time and cost efficiency, identify real estate trends and neighborhood characteristics, track market performance, and increase market share. Our data is comprised of real estate information, incorporating crime, site inspection, neighborhood, document images, and other information from proprietary sources. We also offer verification of applicant income, identity and employment services. We typically license data in one of two forms: bulk data licensing and transactional licensing. Operating revenue for bulk data licensing contracts that provide a stand-ready obligation or include substantive updates to the intellectual property is recognized ratably over the contractual term; otherwise, operating revenue is recognized upon delivery. For transactional licensing, we recognize operating revenue based on usage.

Insurance and Spatial Solutions

Our insurance and spatial solutions provide originators and property and casualty insurers the ability to more effectively locate, assess and manage property-level assets and risks through location-based data and analytics. We also provide cloud-based property claims workflow technology for property and casualty insurers. The licensed intellectual property data is generally provided to our clients on a subscription or usage basis. For subscription contracts, operating revenue is recognized ratably over the contractual term once initial delivery has occurred. For contracts to provide a license to data which is delivered via report or data file, operating revenue is recognized when the client obtains control of the products, which is upon delivery.

Property Tax Solutions

Our property tax solutions are built from aggregated property tax information from over 20,000 taxing authorities. We use this information to advise mortgage lenders and servicers of the property tax payment status of loans in their portfolio and to monitor that status over the life of the loans. If a mortgage lender or servicer requires tax payments to be impounded on behalf of its borrowers, we can also facilitate the transfer of these funds to the taxing authorities and provide the lender or servicer with payment confirmation. Property tax processing revenues are primarily comprised of periodic loan fees and life-of-loan fees. For periodic fee arrangements, we generate monthly fees at a contracted rate for as long as we service the loan. For life-of-loan fee arrangements, we charge a one-time fee when the loan is set-up in our tax servicing system. Life-of-loan fees are deferred and recognized ratably over the expected service period of 10 years and adjusted for early loan cancellation. Revenue recognition rates of loan portfolios are regularly analyzed and adjusted monthly to reflect current trends.

Valuation Solutions

Our valuation solutions represent property valuation-related data driven services and analytics combined with collateral valuation workflow technologies which assist our clients in assessing risk of loss using both traditional and alternative forms of property valuation, driving process efficiencies as well as ensuring compliance with lender and governmental regulations. We provide collateral information technology and solutions that automate property appraisal ordering, tracking, documentation and review for lender compliance with government regulations. Revenue for the property appraisal service is recognized when the appraisal service is performed and delivered to the client. In addition, to the extent that we provide continuous access to the hosted software platform, we recognize operating revenue over the term of the arrangement.

Credit Solutions

Our credit solutions provide credit and income verification services to the mortgage and automotive industries. We provide comprehensive information, typically in the form of a report, about credit history, income verification, employment verification, and home address history. We normalize the data to provide a broad range of advanced business information solutions designed to reduce risk and improve business performance to mortgage and automotive lenders. Operating revenue is recognized when the report or information is delivered to the client.

Flood Data Solutions

Our flood data solutions provide flood zone determinations primarily to mortgage lenders in accordance with US Federal legislation passed in 1994, which requires that most 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 if contracted to do so. We also provide flood zone determinations to insurance companies. We generally recognize operating revenue upon delivery of the initial determination. If contracted for life of loan monitoring, we recognize operating revenue over the estimated service period, as adjusted for early loan cancellation.

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Contract Costs

Incremental costs to obtain or fulfill client contracts are recognized as an asset. As of June 30, 2020, we had $11.4 million of current deferred contract costs which are presented in prepaid expenses and other current assets, as well as $24.2 million of long-term deferred contract costs which are presented in other assets in our condensed consolidated balance sheet. As of December 31, 2019, we had $9.8 million of current deferred contract costs which are presented in prepaid expenses and other current assets as well as $23.1 million of long-term deferred contract costs which are presented in other assets in our consolidated balance sheet. Our deferred contract costs primarily include certain set-up and acquisition costs related to property tax solutions, which amortize ratably over an expected 10-year life, adjusted for early loan cancellations. For the three months ended June 30, 2020 and 2019, we recorded amortization associated with deferred contract costs of $4.5 million and $3.3 million, respectively, and $8.2 million and $6.4 million, respectively, for the six months ended June 30, 2020 and 2019.

Contract Liabilities

We record a contract liability when amounts are invoiced, which is generally prior to the satisfaction of the performance obligation. For property tax solutions, we invoice upfront fees to clients for services to be performed over time. For property insights and insurance and spatial solutions we invoice quarterly and annually, commencing upon execution of the contracts or at the beginning of the license term, as applicable.

As of June 30, 2020, we had $952.4 million in contract liabilities compared to $884.9 million as of December 31, 2019. The overall change of $67.5 million in contract liability balances is primarily due to $388.3 million of new deferred billings in the current year, partially offset by $321.1 million of operating revenue recognized, of which $192.6 million related to contracts previously deferred, and other increases of $0.3 million.

Remaining Performance Obligations

The majority of our arrangements are between one and three years with a significant portion being one year or less. For the remaining population of non-cancellable and fixed arrangements greater than one year, as of June 30, 2020 we had $1.1 billion of remaining performance obligations. We expect to recognize approximately 18% percent of this remaining revenue backlog in 2020, 29% in 2021, 18% in 2022 and 35% thereafter. See further discussion of performance obligations in Note 1 - Basis for Condensed Consolidated Financial Statements.

Note 8 – Share-Based Compensation

We currently issue equity awards under the CoreLogic, Inc. 2018 Performance Incentive Plan (the “Plan”), which was approved by our stockholders at our Annual Meeting held in May 2018. The Plan includes the ability to grant share-based instruments such as restricted stock units ("RSUs"), performance-based restricted stock units ("PBRSUs"), and stock options. Prior to the approval of the Plan, we issued share-based awards under the CoreLogic, Inc. 2011 Performance Incentive Plan, as amended, which was preceded by the CoreLogic, Inc. 2006 Incentive Plan. The Plan provides for up to 15,139,084 shares of the Company's common stock to be available for award grants.

We have primarily utilized RSUs and PBRSUs 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 common stock on the date of grant and is recognized as compensation expense over its vesting period.

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Restricted Stock Units

For the six months ended June 30, 2020 and 2019, we awarded 730,319 and 628,730 RSUs, respectively, with an estimated grant-date fair value of $25.8 million and $23.0 million, respectively. The RSU awards will vest ratably over 3 years. RSU activity for the six months ended June 30, 2020 is as follows:

	Number of Shares	Weighted-Average Grant-Date Fair Value
(in thousands, except weighted-average fair value prices)
Unvested RSUs outstanding at 12/31/2019	1,032	$	39.84
RSUs granted	730	$	35.39
RSUs vested	(503)	$	40.40
RSUs forfeited	(34)	$	33.74
Unvested RSUs outstanding at 6/30/2020	1,225	$	37.15

As of June 30, 2020, there was $34.1 million of total unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 1.8 years. The fair value of RSU awards are based on the market value of our common stock on the date of grant.

Performance-Based Restricted Stock Units

For the six months ended June 30, 2020 and 2019, we awarded 296,244 and 203,464 PBRSUs, respectively, with an estimated grant-date fair value of $11.1 million and $7.5 million, respectively. These awards are generally subject to service-based, performance-based, and market-based vesting conditions. The service and performance period for the 2020 grants is from January 2020 to December 2022 and the performance metric is adjusted earnings per share.

The performance and service period for the PBRSUs awarded in the first quarter of 2019 is from January 2019 to December 2021. These awards are generally subject to service-based, performance-based, and market-based vesting conditions with the performance metric as adjusted earnings per share. Additionally, within our unvested PBRSUs, there are prior year grants which do not include market-based conditions but have adjusted EBITDA margin or organic revenue growth rate as the performance metric.

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The fair values of the awards containing market-based vesting conditions were estimated using Monte-Carlo simulation with the following weighted-average assumptions:

	For the Six Months Ended June 30,
	2020		2019
Expected dividend yield (1)	—	%	—	%
Risk-free interest rate (2)	0.60	%	2.44	%
Expected volatility (3)	32.53	%	28.24	%
Average total stockholder return (3)	(21.47)	%	17.15	%
(1) Since PBRSU participants are credited with dividend equivalent shares when dividends are paid, 0.00% was used in the Monte-Carlo simulation which is mathematically equivalent to paying dividend equivalents upon vesting. Please see Note 1 - Basis for Condensed Consolidated Financial Statements for further information regarding dividends. (2) The risk-free interest rate for the periods within the contractual term of the PBRSUs is based on the US Treasury yield curve in effect at the time of the grant. (3) The expected volatility and average total stockholder return are measures of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

PBRSU activity for the six months ended June 30, 2020 is as follows:

	Number of Shares	Weighted-Average Grant-Date Fair Value
(in thousands, except weighted-average fair value prices)
Unvested PBRSUs outstanding at December 31, 2019	636	$	42.62
PBRSUs granted	296	$	37.53
PBRSUs vested	(184)	$	39.50
PBRSUs forfeited	(12)	$	43.65
Unvested PBRSUs outstanding at June 30, 2020	736	$	41.93

As of June 30, 2020, there was $21.4 million of total unrecognized compensation cost related to unvested PBRSUs that is expected to be recognized over a weighted-average period of 1.9 years. The fair value of PBRSU awards are based on the market value of our common stock on the date of grant.

Stock Options

Prior to 2015, we issued stock options as incentive compensation for certain employees. Option activity for the six months ended June 30, 2020 is as follows:

(in thousands, except weighted-average price)	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2019	479	$	19.59
Options exercised	(46)	$	18.19
Options outstanding at June 30, 2020	433	$	19.73	2.1	$	20,604

As of June 30, 2020, there was no unrecognized compensation cost related to unvested stock options.

The intrinsic value of options exercised was $1.2 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively. This intrinsic value represents the difference between the fair market value of our 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 recognize an expense for the amount equal to the estimated fair value of the discount during each offering period.

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The following table sets forth the share-based compensation expense recognized for the three and six months ended June 30, 2020 and 2019:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
(in thousands)	2020		2019		2020		2019
RSUs	$	5,601	$	5,612	$	11,412	$	12,924
PBRSUs	7,363		$	1,743	8,938		$	3,658
Stock options	—		$	—	—		$	—
Employee stock purchase plan	789		$	508	1,488		$	1,173
	$	13,753	$	7,863	$	21,838	$	17,755

The table above includes $0.8 million and $0.6 million of share-based compensation expense within cost of services in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2020 and 2019, respectively, and $1.5 million and $1.4 million for the six months ended June 30, 2020 and 2019, respectively.

Note 9 – Litigation and Regulatory Contingencies

We have been named in various lawsuits and we are from time to time subject to audit or investigation by governmental agencies arising in the ordinary course of business.

With respect to matters where we determine that a loss is both probable and reasonably estimable, we record a liability representing our best estimate of the financial exposure based on known facts. For matters where a settlement has been reached, we record the expected amount of such settlements. With respect to audits, investigations or lawsuits that are ongoing, although their final dispositions are not yet determinable, we do not believe that the ultimate resolution of such matters, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows. 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. As of June 30, 2020, our accrual for litigation and regulatory contingencies was immaterial.

Fair Credit Reporting Act Class Actions

In July 2017, Rental Property Solutions, LLC (“RPS”) was named as a defendant in Claudinne Feliciano, et. al., v. CoreLogic SafeRent, LLC, a putative class action lawsuit in the US District Court for the Southern District of New York. The named plaintiff alleges that RPS prepared a background screening report about her that contained a record of a New York Housing Court action without noting that the action had previously been dismissed. On this basis, she seeks damages under the Fair Credit Reporting Act and the New York Fair Credit Reporting Act on behalf of herself and a class of similarly situated consumers with respect to reports issued during the period of July 2015 to the present. In July 2019, the District Court issued an order certifying a class of approximately 2,000 consumers. In June 2020, we reached an agreement to resolve the case, which we expect to be finalized in the coming months. The settlement amount has been recorded for the quarter ended June 30, 2020.

In May 2020, Rental Property Solutions, LLC (“RPS”) was named as a defendant in Terry Brown v. CoreLogic Rental Property Solutions, LLC, a putative class action lawsuit filed in the US District Court for the Eastern District of Virginia. The named plaintiff alleges that RPS prepared a background screening report about him that included a sex offender record that did not relate to him. He seeks damages under the Fair Credit Reporting Act on behalf of himself and a class of similarly situated consumers, as well as a subclass of consumers for whom misattributed sex offender records were removed following a dispute. The Company intends to vigorously defend itself in the litigation.

In June 2020, CoreLogic Credco, LLC (“Credco”) was named as a defendant in Marco Fernandez v. CoreLogic Credco, LLC, a putative class action lawsuit filed in California Superior Court in San Diego County. The named plaintiff alleges that Credco provided a lender with a consumer report about him that erroneously indicated he is on the Office of Foreign Asset Control’s list of Specially Designated Nationals and Blocked Persons (“OFAC List”). He further alleges that Credco failed to provide him with a copy of the OFAC List designation upon request, failed to notify him of what entities had received such a notification in the past, and failed to respond to his effort to dispute the item. He seeks to represent three classes and four subclasses based upon these allegations, and asserts seven claims under the Fair Credit Reporting Act, the California Credit Reporting Agencies Act, and California’s Unfair Competition law. The Company has removed the case to the US District Court for the Southern District of California, and intends to vigorously defend itself in the litigation.

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Separation

Following the separation of the financial services businesses of our predecessor company, The First American Corporation (“FAC”) on June 1, 2010 (the “Separation”), we are responsible for a portion of First American Financial Corporation's ("FAFC") 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 each other 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. As of June 30, 2020, no reserves were considered necessary.

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.

Note 10 – Income Taxes

The effective income tax rate for income taxes as a percentage of income/(loss) from continuing operations before equity in earnings/(losses) of affiliates and income taxes was a provision of 27.2% and a benefit of 72.0% for the three months ended June 30, 2020 and 2019, respectively, and a provision of 27.5% and a benefit of 79.1% for the six months ended June 30, 2020 and 2019, respectively.

For the three and six months ended June 30, 2020, when compared to the same periods for 2019, the change in the effective income tax rate was primarily due to a nonrecurring benefit recorded in 2019 related to the reversal of state tax reserves.  

We are currently under examination for the years 2010 through 2012 and 2016, by the US Internal Revenue Service ("IRS"), our primary taxing authority, and for other years by various other taxing authorities. It is reasonably possible the amount of the unrecognized benefits, as well as the valuation allowance with respect to certain tax attributes, could be significantly impacted which would have an impact on net income. In the next 12 months we expect expiration of statutes of limitations on reserves of approximately $1.3 million and the release of reserves and allowances of approximately $17 million to $20 million upon the conclusion of the IRS examination for years 2010 through 2012.

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Note 11 – Earnings Per Share

The following is a reconciliation of net income per share:

	For the Three Months Ended June 30,				For the Six Months Ended Jun 30,
	2020		2019		2020		2019
(in thousands, except per share amounts)
Numerator for basic and diluted net income per share:
Net income/(loss) from continuing operations	$	59,005	$	(5,524)	$	92,811	$	(3,791)
(Loss)/income from discontinued operations, net of tax	—		(48)		13		(94)
Net income	$	59,005	$	(5,572)	$	92,824	$	(3,885)
Denominator:
Weighted-average shares for basic income/(loss) per share	79,403		80,473		79,216		80,326
Dilutive effect of stock options and RSUs	1,243		—		1,551		—
Weighted-average shares for diluted income/(loss) per share	80,646		80,473		80,767		80,326
Income/(loss) per share
Basic:
Net income/(loss) from continuing operations	$	0.74	$	(0.07)	$	1.17	$	(0.05)
(Loss)/income from discontinued operations, net of tax	—		—		—		—
Net income	$	0.74	$	(0.07)	$	1.17	$	(0.05)
Diluted:
Net income/(loss) from continuing operations	$	0.73	$	(0.07)	$	1.15	$	(0.05)
(Loss)/income from discontinued operations, net of tax	—		—		—		—
Net income	$	0.73	$	(0.07)	$	1.15	$	(0.05)

The dilutive effect of share-based compensation awards has been calculated using the treasury-stock method. For the three and six months ended June 30, 2020 an aggregate of 0.1 million of RSUs were excluded from the weighted-average diluted common shares outstanding due to their anti-dilutive effect. Given our net loss position for the three and six months ended June 30, 2019, basic and diluted shares are the same, as the assumed exercise of stock options and restricted stock are anti-dilutive.

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Note 12 – Acquisitions

In January 2020, we acquired the remaining 66% of Location for $11.5 million, subject to certain working capital adjustments. Location is a leading provider of geographic location indicators for crime and non-weather related events connected to underwriting risk assessment. This acquisition further progresses our long-term strategic plan by adding scale to our insurance and spatial businesses. Location is included as a component of our Property Intelligence & Risk Management Solutions ("PIRM") 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 have preliminarily recorded proprietary technology of $6.0 million with an estimated useful life of 10 years, client lists of $0.3 million with an estimated useful life of 5 years, trademarks of $0.8 million with an estimated useful life of 8 years, non-compete agreements of $0.4 million with an estimated useful life of 5 years, and goodwill of $12.6 million. For the six months ended June 30, 2020, goodwill increased by $0.3 million as a result of a change in the purchase price allocation for certain working capital adjustments. In connection with this acquisition, we remeasured our then-existing 34% investment ownership in Location which resulted in a $0.6 million step-up gain that we recorded within gain/(loss) on investments and other, net, in our condensed consolidated statement of operations for the six months ended June 30, 2020.

In August 2019, we completed the acquisition of National Tax Search LLC ("NTS") for $15.0 million, subject to certain working capital adjustments, and up to $7.5 million to be paid in cash by 2022, contingent upon the achievement of certain revenue targets in fiscal years 2020 and 2021 (see Note 6 - Fair Value for further details). NTS is a leading provider of commercial property tax payment services and specializes in identifying potential collateral loss related to unpaid property tax, homeowners association fees, and inaccurate flood zone determinations. The NTS acquisition increases the Company's commercial property information offerings and is expected to drive future growth in the US. NTS is included as a component of our UWS 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 have preliminarily recorded client lists of $5.0 million with an estimated useful life of 10 years, proprietary technology of $3.3 million with an estimated useful life of 7 years, trademarks of $1.0 million with an estimated useful life of 7 years, non-compete agreements of $0.3 million with an estimated useful life of 5 years, contract liabilities of $2.5 million, and goodwill of $5.5 million, all of which is deductible for tax purposes. For the six months ended June 30, 2020, goodwill increased by less than $0.1 million as a result of a change in the purchase price allocation for certain working capital adjustments.

These business combinations did not have a material impact on our condensed consolidated statements of operations.

There were no acquisition-related costs within selling, general and administrative expenses on our condensed consolidated statement of operations for the three months ended June 30, 2020 and $0.1 million for 2019; additionally, we had $0.9 million and $0.2 million for the six months ended June 30, 2020 and 2019, respectively.

Note 13 – Segment Information

We have organized into two reportable segments: PIRM and UWS.

Property Intelligence & Risk Management Solutions. Our PIRM segment combines property information, mortgage information, and consumer information to deliver unique housing market and property-level insights, predictive analytics and risk management capabilities. We have also developed proprietary technology and software platforms to access, automate, and track this information and assist our clients with decision-making and compliance tools in the real estate industry, insurance industry, and the single and multifamily industry. We deliver this information directly to our clients in a standard format over the web, through hosted software platforms, or in bulk data form. Our PIRM solutions include property insights and insurance and spatial solutions in North America, Western Europe, and Asia Pacific. The segment's 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, government agencies, and government-sponsored enterprises.

The operating results of our PIRM segment included intercompany revenues of $3.7 million and $2.2 million for the three months ended June 30, 2020 and 2019, respectively, and $7.7 million and $4.0 million for the six months ended June 30, 2020 and 2019, respectively. The segment also included intercompany expenses of $0.6 million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.8 million for the six months ended June 30, 2020 and 2019, respectively.

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Underwriting & Workflow Solutions. Our UWS segment combines property, mortgage, and consumer information to provide comprehensive mortgage origination and monitoring solutions, including, underwriting-related solutions, and data-enabled valuations and appraisals. We have also developed proprietary technology and software platforms to access, automate, and track this information, and assist our clients with vetting and onboarding prospects, meeting compliance regulations and understanding, evaluating, and monitoring property values. Our UWS solutions include property tax solutions, valuation solutions, credit solutions, and flood data solutions in North America. 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, fixed-income investors, government agencies, and property and casualty insurance companies.

The operating results of our UWS segment included intercompany revenues of $0.6 million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively, and $1.3 million and $1.8 million for the six months ended June 30, 2020 and 2019 respectively. The segment also included intercompany expenses of $1.8 million and $2.2 million for the three months ended June 30, 2020 and 2019, respectively, and $3.6 million and $4.0 million for the six months ended June 30, 2020 and 2019, respectively.

We also separately report on our corporate and eliminations. Corporate consists primarily of corporate personnel and other expenses associated with our corporate functions and facilities, investment gains and losses, equity in earnings/(losses) of affiliates, net of tax, and interest expense. The results of our Corporate segment included intercompany expenses of $1.9 million and $4.1 million for the three and six months ended June 30, 2020, respectively, and none for both the three and six months ended June 30, 2019.

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Selected financial information by reportable segment is as follows:

(in thousands)	Operating Revenues		Depreciation and Amortization		Operating Income/(Loss)		Equity in Earnings/(Losses) of Affiliates, Net of Tax		Net Income/(Loss) From Continuing Operations		Capital Expenditures
For the Three Months Ended June 30, 2020
PIRM	$	176,586	$	25,050	$	30,159	$	764	$	30,792	$	15,494
UWS	305,140		13,283		96,365		—		98,170		2,112
Corporate	—		8,368		(35,541)		(388)		(69,957)		9,008
Eliminations	(4,262)		—		—		—		—		—
Consolidated (excluding discontinued operations)	$	477,464	$	46,701	$	90,983	$	376	$	59,005	$	26,614
For the Three Months Ended June 30, 2019
PIRM	$	183,717	$	26,113	$	23,026	$	482	$	19,272	$	14,290
UWS	279,017		13,757		19,779		(8)		20,377		4,861
Corporate	—		7,236		(28,215)		(160)		(45,173)		10,903
Eliminations	(3,196)		—		—		—		—		—
Consolidated (excluding discontinued operations)	$	459,538	$	47,106	$	14,590	$	314	$	(5,524)	$	30,054
For the Six Months Ended June 30, 2020
PIRM	$	349,641	$	50,061	$	48,477	$	1,470	$	50,024	$	29,570
UWS	580,761		26,528		171,979		—		174,603		4,016
Corporate	—		16,955		(62,402)		(582)		(131,816)		16,804
Eliminations	(9,053)		—		—		—		—		—
Consolidated (excluding discontinued operations)	$	921,349	$	93,544	$	158,054	$	888	$	92,811	$	50,390
For the Six Months Ended June 30, 2019
PIRM	$	359,525	$	52,912	$	37,378	$	(42)	$	30,659	$	29,903
UWS	523,535		29,532		65,631		(8)		65,812		10,629
Corporate	—		13,881		(67,215)		(58)		(100,262)		22,489
Eliminations	(5,814)		—		—		—		—		—
Consolidated (excluding discontinued operations)	$	877,246	$	96,325	$	35,794	$	(108)	$	(3,791)	$	63,021

(in thousands)
Assets	June 30, 2020		December 31, 2019
PIRM	$	1,904,923	$	1,988,915
UWS	2,167,497		2,159,403
Corporate	5,956,259		5,938,106
Eliminations	(5,871,554)		(5,934,053)
Consolidated (excluding discontinued operations)	$	4,157,125	$	4,152,371

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Note 14 – Subsequent Events

As of July 23, 2020, we have three separate subsequent events as noted below.

Shareholder Rights Plan Updates

In July 2020, our Board of Directors adopted a shareholder rights plan (the “Rights Agreement”).

Pursuant to the Rights Agreement, on July 6, 2020, our Board of Directors declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock to shareholders of record on July 17, 2020. Each Right entitles its holder to purchase from the Company, when exercisable and subject to adjustment, a unit (“Unit”) consisting of one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.00001 per share, at an exercise price of $308 per Unit (the “purchase price”).

Under the Rights Agreement, the Rights will generally be exercisable only in the event that a person or group of affiliated or associated persons (such person or group being an “Acquiring Person”), other than certain exempt persons, acquires beneficial ownership of ten percent (10%) or more of the outstanding shares of our common stock (or twenty percent (20%) or more of the outstanding shares of our common stock in the case of passive institutional investors reporting beneficial ownership on Schedule 13G). In such case, subject to certain exceptions specified in the Rights Agreement, each holder of a Right (other than the Acquiring Person, whose Rights would become null and void) will have the right to receive, upon payment of the purchase price, common stock (or, in certain circumstances, other securities, cash, or other assets of the Company) having a value equal to two (2) times the purchase price.

In the event that, at any time after a person or group has become an Acquiring Person, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the continuing or surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the continuing or surviving corporation and the shares of common stock of the Company are changed or exchanged or (iii) fifty percent (50%) or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (other than the Acquiring Person, whose Rights would become null and void) would thereafter have the right to receive, upon payment of the purchase price, common stock of the acquiring company having a value equal to two (2) times the purchase price.

Our Board of Directors may redeem the Rights for $0.001 per Right, subject to adjustment, at any time until the earlier of 10 business days following a public announcement that an Acquiring Person has become such or the expiration of the Rights Agreement. The Rights will expire on July 6, 2021, unless the Rights are earlier redeemed, exchanged or terminated.

The Rights are not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by our Board of Directors. However, the overall effect of the Rights may render it more difficult or discourage a merger, tender offer or other business combination involving the Company that is not supported by our Board of Directors.

Additional details about the Rights Agreement are contained in a Form 8-K filed by the Company with the SEC on July 7, 2020.

Dividends

In July 2020, our Board of Directors announced a 50% increase in the quarterly cash dividend, declaring a cash dividend of $0.33 per share of common stock to be paid in September 2020 to shareholders of a record as of September 1, 2020.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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 Quarterly 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 cost management program, our acquisition strategy and our growth plans, expectations regarding our recent acquisitions, share repurchases, the level of aggregate US mortgage originations, the reasonableness of the carrying value related to specific financial assets and liabilities, the near and long-term consequences of the unsolicited proposal from Senator Investment Group, L.P. and Cannae Holdings, Inc. to acquire the Company for $65.00 per share in cash (the “Unsolicited Proposal”) and our recent adoption of a shareholder rights plan.

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:

•the potential impact of, and any potential developments related to, the Unsolicited Proposal;

•our adoption of a shareholder rights plan;

•the potential impact that the COVID-19 pandemic, or the perception of its effects, may have on our business;

•compromises in the security or stability of our data and systems, including from cyber-based attacks, the unauthorized transmission of confidential information or systems interruptions;

•limitations on access to, or increase in prices for, data from external sources, including government and public record sources;

•interruptions which could impair the delivery of our products and services;

•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;

•difficult or uncertain conditions in the mortgage and consumer lending industries and the economy generally;

•reliance on our top ten clients for a significant portion of our revenue and profit;

•intense competition in the market against third parties and the in-house capabilities of our clients;

•risks related to the outsourcing of services and international operations;

•our ability to realize the anticipated benefits of certain acquisitions and the timing thereof;

•our ability to operate in international markets;

•our ability to protect proprietary technology rights and avoid infringement of others’ proprietary technology rights;

•the level of our indebtedness, our ability to service our indebtedness and the restrictions in our various debt agreements;

•our ability to attract and retain qualified management; and

•the remaining tax sharing arrangements and other obligations associated with the spin-off of First American Financial Corporation (“FAFC”).

We urge you to carefully consider 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 of Part II of this Quarterly Report on Form 10-Q, Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2019, 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, except as required by applicable law. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of the filing of this Quarterly Report on Form 10-Q.

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Business Overview

We are a leading global property information, analytics and data-enabled software platforms and 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, other encumbrances, property risk and replacement cost, 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 a comprehensive national database 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 structured property-specific data consisting of over 150 million parcel records covers 99% of the United States ("US"), includes both residential and commercial real estate data and is enriched by over 1 billion historical sales, mortgage, and pre-foreclosure transactions. Our consortium data covers loan level mortgage performance, appraisal, as well as mortgage application data and is in excess of 300 million records. We are also the industry's first parcel-based geocoder and have developed a proprietary spatial database covering more than 150 million parcel polygons across the US. We believe the quality of the data we offer is distinguished by our broad range of data sources and our experience 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 property tax processing, property valuation, mortgage and automotive credit reporting, tenancy screening, hazard risk, property risk and replacement cost, flood plain location determination, other geospatial data analytics, and related services.

Reportable Segments

We have organized into the following two reportable segments:

Our Property Intelligence & Risk Management (“PIRM”) segment combines property information, mortgage information, and consumer information to deliver unique housing market and property-level insights, predictive analytics and risk management capabilities. We have also developed proprietary technology and software platforms to access, automate or track this information and assist our clients with decision-making and compliance tools in the real estate industry, insurance industry and the single and multifamily industry. We deliver this information directly to our clients in a standard format over the web, through hosted software platforms or in bulk data form. Our solutions include property insights as well as insurance and spatial solutions in North America, Western Europe and Asia Pacific.

Our Underwriting & Workflow Solutions (“UWS”) segment combines property information, mortgage information and consumer information to provide comprehensive mortgage origination and monitoring solutions, including underwriting-related solutions and data-enabled valuations and appraisals. We have also developed proprietary technology and software platforms to access, automate or track this information and assist our clients with vetting and on-boarding prospects, meeting compliance regulations and understanding, diagnosing and monitoring property values. Our solutions include property tax solutions, valuation solutions, credit solutions and flood services in North America.

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Results of Operations

Overview of Business Environment and Company Developments

COVID-19

The global coronavirus ("COVID-19") pandemic and the mitigation efforts by governments to attempt to control its spread have adversely impacted the global economy, leading to disruptions and volatility in the global financial markets. Most states and many countries have issued policies intended to stop or slow the further spread of the disease. Our first priority remains ensuring the safety and health of our employees, clients, and others with whom we partner in conducting our business. We have deployed risk mitigation activities, safety practices, and business continuity strategies so that we can continue offering our clients consistent service offerings while continuing to protect our employees.

The volume of US mortgage loan originations serves as a key market driver for more than half of our business. We believe the volume and related volatility of real estate and mortgage transactions is primarily affected by real estate prices, the availability of funds for mortgage loans, mortgage interest rates, housing supply, employment levels, actions by the Federal Reserve, and the overall state of the US economy. Mortgage interest rates are extremely low by historical standards, and are resulting in higher demand for refinance activity, while the purchase market has been adversely impacted by reduced construction and sales of new and existing homes, and more recently, the COVID-19 pandemic and resulting economic instability. For the three and six months ended June 30, 2020, we experienced unfavorable business and revenue impacts of approximately $15.1 million and $20.9 million, respectively, related to the COVID-19 pandemic, exclusive of the increased mortgage refinance volumes. As of June 30, 2020, the impact we have experienced as a result of the COVID-19 pandemic has not had a significant impact on our financial condition, cash flows, control environment, or any related disclosures.

We will continue to monitor our business trends, financial condition, and liquidity, and are taking steps to manage our operating cash flows, by prioritizing our investments, and evaluating our capital needs and activities. Our liquidity as of June 30, 2020 consisted primarily of $137.3 million of cash and cash equivalents, and $750.0 million of unused committed capacity under our revolving credit facility, and we are in compliance will all financial covenants.

Business Environment

We believe mortgage origination unit volumes increased by approximately 30% in the second quarter of 2020 relative to the same period in 2019, primarily due to higher mortgage refinance volumes resulting from lower interest rates. For 2020, we expect total mortgage unit volumes to increase by approximately 25% relative to 2019 levels, with historically low interest rates benefiting refinance volumes. Further, in June 2020, the Federal Reserve indicated that short-term rates will remain near zero until at least 2022 and expectations are that mortgage rates will remain near historically low levels through 2022. Given this favorable rate environment and the significant population of existing loans that are in the money and meet broad-based eligibility criteria for refinance, we expect refinance volumes to remain at elevated levels through at least 2022.

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 34% and 30% of our operating revenues for the three months ended June 30, 2020 and 2019, respectively, were generated from our top ten clients, who consist of the largest US mortgage originators and servicers. None of our clients individually accounted for greater than 10% of our operating revenues for the three months ended June 30, 2020 or 2019. Approximately 32% and 29% of our operating revenues for the six months ended June 30, 2020 and 2019, respectively, were generated from our top ten clients. None of our clients individually accounted for greater than 10% of our operating revenues during the six months ended June 30, 2020 or 2019.

While the majority of our revenues are generated in the US, continued strengthening of the US dollar versus other currencies in 2020 unfavorably impacted the translation of the financial results of our international operating revenues by $2.0 million and $4.5 million for the three and six months ended June 30, 2020, respectively.

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Capital Return

In July 2020, our Board of Directors authorized the repurchase up to $1.0 billion of outstanding shares of our common stock. The authorization has no expiration date and supersedes our previous share repurchase authorization. We expect to repurchase approximately $1 billion worth of outstanding shares by the end of 2022, inclusive of at least $500.0 million of shares in 2020.

In July 2020, our Board of Directors announced a 50% increase to the quarterly cash dividend, declaring a cash dividend of$0.33 per share of common stock to be paid in September 2020 to shareholders of record as of the close of business on September 1, 2020. We paid a cash dividend of $0.22 per share of common stock in each of January and June 2020 to shareholders of record as of the close of business on June 1, 2020.

Acquisitions

In January 2020, we acquired the remaining 66% of Location, Inc. ("Location") for $11.5 million, subject to certain working capital adjustments. Location is included as a component of our PIRM segment. See Note 12 - Acquisitions for further discussion.

Technology Transformation

In September 2018, we announced the adoption of the Google Cloud Platform (“GCP”) as a foundational element of our ongoing technology transformation program to further expand infrastructure capabilities and drive efficiencies. Successful deployment of this technology has already begun and we expect to complete the initial transformation phase of GCP by December 2020. After the initial deployment, we will continue transitioning our technology over the foreseeable future on an opportunistic basis. As we transition to GCP, we will continue to leverage the capabilities of the cloud platform to achieve best-in-class system performance and reliability and to facilitate the deployment of unique business insights fueled by gold-standard data, information, and analytics. Additionally, we expect to realize cost efficiencies and enhanced security as we transition.

Business Exits & Transformation

In December 2018, we announced our intent to exit a loan origination software unit and its remaining legacy default management related platforms, as well as accelerate an appraisal management company ("AMC") transformation program. We believe these actions have expanded our overall profit margins and provide for enhanced long-term organic growth trends. In September 2019, we divested our default management related platforms and received proceeds of $3.8 million. The AMC transformation was concluded in December 2019. Operating revenues attributable to the aforementioned business exits and AMC transformation were $27.9 million and $48.7 million for three and six months ended June 30, 2020, respectively.

Unsolicited Proposal

On June 26, 2020, we received an unsolicited proposal from Senator Investment Group, LP (“Senator”) and Cannae Holdings, Inc. (“Cannae”) to acquire the Company for $65.00 per share in cash (the “Unsolicited Proposal”). Our Board of Directors, in consultation with its independent financial and legal advisors, unanimously determined to reject the Unsolicited Proposal, as it significantly undervalues the Company, raises serious regulatory concerns and is not in the best interests of the Company and its stockholders. On July 14, 2020, we received written notification from the Federal Trade Commission (the “FTC”) that the FTC is conducting an investigation of the proposed acquisition of the Company by Senator and Cannae and requesting that we produce information in connection with that investigation. The events surrounding the Unsolicited Proposal and related circumstances, and our response, have required us, and may continue to require us, to incur significant legal and advisory fees and expenses; and significant time and attention by management and our Board of Directors.

For a further discussion of risks, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Item 1A of Part I of this Quarterly Report on Form 10-Q as well as in Item 1A of Part II in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

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

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Consolidated Results of Operations

Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

Operating Revenues

Our consolidated operating revenues were $477.5 million for the three months ended June 30, 2020, an increase of $17.9 million, or 3.9% when compared to the comparable period in 2019, and consisted of the following:

(in thousands, except percentages)	2020		2019		$ Change		% Change
PIRM	$	176,586	$	183,717	$	(7,131)	(3.9)	%
UWS	305,140		279,017		26,123		9.4
Corporate and eliminations	(4,262)		(3,196)		(1,066)		33.4
Operating revenues	$	477,464	$	459,538	$	17,926	3.9	%

Our PIRM segment operating revenues decreased by $7.1 million, or 3.9%, for the three months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $0.9 million, operating revenues decreased $8.0 million primarily due to the impact of COVID-19 totaling $9.5 million across our solution groups. Additionally, included within our property insights revenues is unfavorable foreign exchange of $2.0 million. The decrease was offset by higher market volumes and market share gains of $3.5 million primarily within our property insights business.

Our UWS segment revenues increased by $26.1 million, or 9.4%, for the three months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $1.8 million, operating revenues increased $24.4 million due to higher property tax solutions revenues of $31.7 million, higher credit solutions revenues of $10.8 million, and higher flood data solutions revenues of $8.4 million primarily related to increased volumes. These increases were partially offset by lower valuation solutions revenue of $24.2 million due to the impacts of our AMC transformation program, and lower other revenues of $2.3 million. Operating revenues attributable to the aforementioned business exits and AMC transformation were $27.9 million for the quarter ended June 30, 2019. Refer to "Business Exits & Transformation" discussion above for further details. Additionally, the UWS segment revenues reflected a total adverse impact of $5.6 million related to COVID-19.

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

Cost of Services (excluding depreciation and amortization)

Our consolidated cost of services was $214.5 million for the three months ended June 30, 2020, a decrease of $12.7 million, or 5.6%, when compared to 2019. Excluding acquisition activity of $1.7 million, the decrease of $14.5 million was primarily due to favorable product mix.

Selling, General and Administrative Expenses

Our consolidated selling, general and administrative expenses was $124.1 million for the three months ended June 30, 2020, an increase of $1.3 million, or 1.0%, when compared to 2019. Excluding acquisition activity of $1.0 million, the increase of $0.3 million was primarily due to higher compensation costs of $4.6 million and higher other expenses of $1.8 million, partially offset by lower travel costs of $3.9 million and lower professional fees of $2.2 million.

Depreciation and Amortization

Our consolidated depreciation and amortization expense was $46.7 million for the three months ended June 30, 2020, a decrease of $0.4 million, or 0.9%, when compared to 2019. Excluding acquisition activity of $0.5 million, the decrease of $0.9 million was primarily due to assets that were fully impaired during the prior year.

Impairment Loss

Our consolidated impairment loss was $1.2 million for the three months ended June 30, 2020, a decrease of $46.6 million, or 97.4%, when compared to 2019, primarily due to prior year write-offs of clients lists of $32.3 million, software of $12.3 million, and licenses of $3.3 million related to the transformation of our AMC business, offset by current year impairment charges related to software.

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Operating Income

Our consolidated operating income was $91.0 million for the three months ended June 30, 2020, an increase of $76.4 million, or 523.6%, when compared to 2019, and consisted of the following:

(in thousands, except percentages)	2020		2019		$ Change		% Change
PIRM	$	30,159	$	23,026	$	7,133	31.0	%
UWS	96,365		19,779		76,586		387.2
Corporate and eliminations	(35,541)		(28,215)		(7,326)		26.0
Operating income	$	90,983	$	14,590	$	76,393	523.6	%

Our PIRM segment operating income increased by $7.1 million, or 31.0%, for the three months ended June 30, 2020 when compared to 2019. Excluding acquisition activity of $0.1 million operating income increased by $7.3 million and margins increased by 470 basis points, primarily due to the impact of our ongoing operational efficiency programs.

Our UWS segment operating income increased by $76.6 million, or 387.2%, for the three months ended June 30, 2020 when compared to 2019. Excluding acquisition activity of $0.6 million, operating income increased by $77.2 million and margins increased by 2,480 basis points, primarily driven by lower impairment loss, higher revenues, favorable product mix, and the impact of our ongoing operational efficiency programs.

Corporate and eliminations had an unfavorable variance of $7.3 million, or 26.0%, for the three months ended June 30, 2020 when compared to 2019, primarily due to higher compensation costs.

Total Interest Expense, net

Our consolidated total interest expense, net was $17.6 million for the three months ended June 30, 2020, a decrease of $1.5 million, or 8.0%, when compared to 2019. The decrease was primarily due to lower interest rates as well as lower average outstanding principal balances.

Gain/(Loss) on Investments and Other, net

Our consolidated gain on investments and other, net was $7.1 million for the three months ended June 30, 2020, a favorable variance of $10.0 million or 347.4%, when compared to 2019. The variance is primarily due to higher gains of $2.9 million related to supplemental benefit plans, a $1.2 million gain from a fair value adjustment on an acquisition-related contingent consideration, a prior year loss of $4.3 million related to a non-cash impairment charge on an equity method investment and a prior year $1.5 million loss of unamortized debt issuance cost write-offs due to financing activities.

Tax Indemnification Release

In the prior year, we recorded a $13.4 million loss related to the release of a tax indemnification receivable due to the expiration of the statutes of limitations in our principal state jurisdictions. Associated state tax reserves of $15.3 million were also released and recognized, in the prior year, as income tax benefit through the provision for income taxes.

Provision/(Benefit) for Income Taxes

Our consolidated provision/(benefit) for income taxes from continuing operations before equity in earnings/(losses) of affiliates and income taxes was a provision of $21.8 million and a benefit of $15.0 million for the three months ended June 30, 2020 and 2019, respectively. The effective tax rate was 27.2% on our provision and 72.0% on our benefit for income taxes for the three months ended June 30, 2020 and 2019, respectively. The change in the effective income tax rate was primarily due to the nonrecurring benefit recorded in 2019 related to the reversal of state tax reserves.

Equity in Earnings/(Losses) of Affiliates, net of tax

Our consolidated equity in earnings of affiliates, net of tax was $0.4 million for the three months ended June 30, 2020, a favorable variance of $0.1 million when compared to 2019. We have equity interests in various affiliates which had higher earnings in the current period compared to the prior year period.

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Consolidated Results of Operations

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Operating Revenues

Our consolidated operating revenues were $921.3 million for the six months ended June 30, 2020, an increase of $44.1 million, or 5.0%, when compared to 2019, and consisted of the following:

(in thousands, except percentages)	2020		2019		$ Change		% Change
PIRM	$	349,641	$	359,525	$	(9,884)	(2.7)	%
UWS	580,761		523,535		57,226		10.9
Corporate and eliminations	(9,053)		(5,814)		(3,239)		55.7
Operating revenues	$	921,349	$	877,246	$	44,103	5.0	%

Our PIRM segment revenues decreased by $9.9 million, or 2.7%, for the six months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $1.5 million, the decrease of $11.4 million primarily due to the impact of COVID-19 totaling $10.9 million across our solution groups. Additionally, included within our property insights revenues is unfavorable foreign exchange of $4.5 million. The decrease was offset by higher market volumes and market share gains of $4.0 million primarily within our property insights business.

Our UWS segment revenues increased by $57.2 million, or 10.9%, for the six months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $3.3 million, the increase of $53.9 million was primarily due to higher property tax solutions revenues of $45.6 million, higher credit solutions revenues of $24.2 million, and higher flood data solutions revenues of $19.0 million primarily related to increased volumes. These increases were partially offset by lower valuation solutions revenue of $29.3 million due to the impacts of our AMC transformation program, and lower other revenues of $5.6 million. Operating revenues attributable to the aforementioned business exits and AMC transformation were $48.7 million for the six months ended June 30, 2019. Additionally, the UWS segment revenues reflected a total adverse impact of $10.0 million related to COVID-19.

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

Cost of Services (excluding depreciation and amortization)

Our consolidated cost of services was $430.1 million for the six months ended June 30, 2020, a decrease of $16.2 million, or 3.6%, when compared to 2019. Excluding acquisition activity of $3.3 million, the decrease of $19.5 million was primarily due to favorable product mix.

Selling, General and Administrative Expenses

Our consolidated selling, general and administrative expenses were $238.5 million for the six months ended June 30, 2020, a decrease of $12.6 million, or 5.0%, when compared to 2019. Excluding acquisition activity of $1.8 million, the decrease of $14.4 million was primarily due to lower compensation costs of $13.1 million, lower professional fees of $9.3 million and lower travel cost of $4.3 million, offset by higher external services and other of $12.3 million.

Depreciation and Amortization

Our consolidated depreciation and amortization expense was $93.5 million for the six months ended June 30, 2020, a decrease of $2.8 million, or 2.9%, when compared to 2019. Excluding acquisition activity of $1.0 million, the decrease of $3.8 million is primarily due to assets that were fully impaired during the prior year.

Impairment Loss

Our consolidated impairment loss was $1.2 million for the six months ended June 30, 2020, a decrease of $46.6 million, or 97.4%, when compared to 2019, primarily due to prior year write-offs of clients lists of $32.3 million, software of $12.3 million, and licenses of $3.3 million related to the transformation of our AMC business, offset by current year impairment charges related to software.

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Operating Income

Our consolidated operating income was $158.1 million for the six months ended June 30, 2020, an increase of $122.3 million, or 341.6%, when compared to 2019, and consisted of the following:

(in thousands, except percentages)	2020		2019		$ Change		% Change
PIRM	$	48,477	$	37,378	$	11,099	29.7	%
UWS	171,979		65,631		106,348		162.0
Corporate and eliminations	(62,402)		(67,215)		4,813		(7.2)
Operating income	$	158,054	$	35,794	$	122,260	341.6	%

Our PIRM segment operating income increased by $11.1 million, or 29.7%, for the six months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $0.5 million, operating income increased by $11.6 million and margins increased by 370 basis points primarily due to favorable product mix and the impact of our ongoing operational efficiency programs.

Our UWS segment operating income increased by $106.3 million, or 162.0%, for the six months ended June 30, 2020, when compared to 2019. Excluding acquisition activity of $0.9 million, operating income increased by $107.3 million and margins increased by 1,740 basis points, primarily impacted by lower impairment loss, higher revenues, improved product mix, and the impact of our ongoing operational efficiency programs.

Corporate and eliminations had a favorable variance of $4.8 million, or 7.2%, for the six months ended June 30, 2020, primarily due to lower investments in data and technology capabilities as well as lower compensation costs.

Total Interest Expense, net

Our consolidated total interest expense, net, was $35.4 million for the six months ended June 30, 2020, a decrease of $2.5 million, or 6.6%, when compared to 2019. The decrease was primarily due to lower interest rates as well as lower average outstanding principal balances.

Gain/(Loss) on Investments and Other, net

Our consolidated gain on investments and other, net, was $4.1 million for the six months ended June 30, 2020, a favorable variance of $6.2 million or 290.2%, when compared to 2019. The variance is due to a prior year loss of $6.6 million related to revaluation of an equity investment, a prior year loss of $1.5 million from unamortized debt issuance cost write-offs due to financing activities, a current year $2.6 million gain related to acquisition activities, and other gains of $0.5 million; partially offset by higher losses of $4.6 million related to supplemental benefit plans.

Tax Indemnification Release

In the prior year, we recorded a $13.4 million loss related to the release of a tax indemnification receivable due to the expiration of the statutes of limitations in our principal state jurisdictions. Associated state tax reserves of $15.3 million were also released and recognized, in the prior year, as income tax benefit through the provision for income taxes.

Provision/(Benefit) for Income Taxes

Our consolidated provision/(benefit) for income taxes from continuing operations before equity in earnings/(losses) of affiliates and income taxes was a provision of $34.8 million and a benefit of $14.0 million for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate was 27.5% on our provision and 79.1% on our benefit for income taxes for the six months ended June 30, 2020 and 2019, respectively. The change in the effective income tax rate was primarily due to the nonrecurring benefit recorded in 2019 related to the reversal of state tax reserves.

Equity in Earnings/(Losses) of Affiliates, net of tax

Our consolidated equity in earnings of affiliates, net of tax was $0.9 for the six months ended June 30, 2020, a favorable variance of $1.0 when compared to 2019. We have equity interests in various affiliates which had higher earnings in the current period compared to prior year.

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Liquidity and Capital Resources

Cash and cash equivalents as of June 30, 2020 totaled $137.3 million, an increase of $32.1 million from December 31, 2019. As of June 30, 2020, our cash balances held in foreign jurisdictions totaled $56.2 million and are primarily related to our international operations. We plan to maintain significant cash balances outside of the US for the foreseeable future.

Restricted cash of $9.9 million as of June 30, 2020 and $10.5 million as of December 31, 2019 is comprised of deposits 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.

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 approximately $243.1 million and $120.6 million for the six months ended June 30, 2020 and 2019, respectively. The increase in cash provided by operating activities was primarily due to higher net income from continuing operations, as adjusted for non-cash activities, and favorable changes in working capital items.

Investing Activities. Total cash used in investing activities was approximately $60.8 million and $61.5 million during the six months ended June 30, 2020 and 2019, respectively. The decrease was primarily related to lower investments in technology and innovation of $12.6 million, partially offset by higher net cash paid for acquisitions of $12.0 million.

Financing Activities. Total cash used in financing activities was approximately $149.4 million for the six months ended June 30, 2020, which was primarily comprised of dividends paid of $34.8 million, net outflows from share-based compensation-related transactions of $3.6 million, share repurchases of $9.3 million, and repayments of long-term debt of $101.7 million. Total cash used in financing activities was approximately $61.7 million for the six months ended June 30, 2019, which was primarily comprised of net repayment of long-term debt of $29.3 million, share repurchases of $29.0 million, net outflows from share-based compensation-related transactions of $2.7 million, and contingent consideration payments of $0.6 million.

Financing and Financing Capacity

We had total debt outstanding of $1.6 billion for both June 30, 2020 and December 31, 2019. Our significant debt instruments and borrowing capacity are described below.

Credit Agreement

The Credit Agreement provides for a $1.8 billion term loan facility (the “Term Facility”), and a $750.0 million revolving credit facility (the “Revolving Facility”). The Term Facility matures and the Revolving Facility expires in May 2024. As of June 30, 2020, we had borrowing capacity under the Revolving Facility of $750.0 million and were in compliance with the financial and restrictive covenants of the Credit Agreement. See Note 5 - Long-Term Debt for further discussion.

Interest Rate Swaps

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 the effect of fixing the rate of interest on at least 50% of the principal balance of our senior term debt.

As of June 30, 2020, the Swaps have a combined remaining notional balance of $1.2 billion, a weighted average fixed interest rate of 2.34% (rates range from 0.66% 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 approximately $1.2 billion through September 2021, then $1.1 billion and $1.0 billion through August 2022, and $496.8 million and $465.0 million through December 2025. Approximate weighted average fixed interest rates for the aforementioned time periods are 2.55%, 2.64%, and 2.61%, respectively.

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Liquidity and Capital Strategy

We expect that cash flow from operations and current cash balances, together with available borrowings under our Revolving Facility, will be sufficient to meet operating requirements through the next twelve months. Cash available from operations, however, could be affected by any general economic downturn, such as financial impacts related to COVID-19, or any decline or adverse changes in our business such as a loss of clients, challenges collecting payments from clients, competitive pressures, or other significant change in our business environment.

We strive to pursue a balanced approach to capital allocation and have initiated a dividend in December 2019. We will also continue to evaluate the repurchase of shares, management of outstanding debt, and the pursuit of strategic acquisitions and investments on an opportunistic basis.

In October 2018, our Board of Directors established a new share repurchase authorization of up to $500.0 million of our common stock. During the six months ended June 30, 2020, we repurchased 0.2 million shares of our common stock for $9.3 million. In July 2020, our Board of Directors canceled all prior repurchase authorizations and established a new share repurchase authorization of up to $1.0 billion.The Company expects to fully utilize such repurchase authorization by the end of 2022, inclusive of $500.0 million of shares by the end of 2020. Purchases may be made from time to time in the open market at prevailing market prices or in privately negotiated transactions, and may be made according to a plan adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended. See Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds - Purchases of Equity Securities by the Issuer and Affiliated Purchasers for further discussion.

For the six months ended June 30, 2020, we paid cash dividends of $34.8 million. In July 2020, our Board of Directors announced a 50% increase to the quarterly cash dividend, declaring a cash dividend of $0.33 per share of common stock to be paid in September 2020. We expect to make regular quarterly dividend payments for the foreseeable future. The timing, declaration, and payment of future dividends, however, falls within the discretion of our Board of Directors and will depend upon many factors, including the Company’s financial condition and earnings, the capital requirements of our businesses, restrictions imposed by applicable law, and any other factors our Board of Directors deems relevant from time to time.

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, continued general economic instability, such as financial impacts resulting from COVID-19 which has caused, and may continue to cause, disruptions in the financial markets or 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 on acceptable terms or at all and/or increase our cost of borrowings.

Critical Accounting Policies and Estimates

For additional information with respect to our critical accounting policies, which are those that could have the most significant effect on our reported results and require subjective or complex judgments by management, see Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2019. Management believes there have been no material changes to this information.

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Item 3.  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.

As of June 30, 2020, we had approximately $1.6 billion in gross, long-term debt outstanding, predominately all of which was variable-interest-rate debt. An increase in interest rates could increase the costs of our variable-interest-rate debt obligations. Rising interest rates could also limit our ability to refinance our debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness.

To manage our interest rate risk we have entered into 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 notional balances, terms and maturities of our Swaps are designed to have the effect of fixing the rate of interest on at least 50% of the principal balance of our senior term debt. As of June 30, 2020, the combined remaining notional balance of the Swaps was $1.2 billion, with a weighted average fixed interest rate of 2.34% (rates range from 0.66% to 2.98%), and scheduled terminations through December 2025. Notional balances under our Swaps are scheduled to increase and decrease over their contract lengths based on our expectations of the level of variable rate debt to be in effect in future periods. After giving effect to the Swaps, a hypothetical 1% increase or decrease in interest rates would result in an approximately $0.8 million change to interest expense on our existing indebtedness as of June 30, 2020, on a quarterly basis.

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.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer have concluded that, as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q, our 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).

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the quarter ended June 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item  1.  Legal Proceedings.

For a description of our legal proceedings, see Note 9 – Litigation and Regulatory Contingencies of our condensed consolidated financial statements, which is incorporated by reference in response to this item.

Item  1A.  Risk Factors.

We have described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, the primary risks related to our business, and we may periodically update those risks for material developments. Those risks are not the only ones we face, but do represent those risks that we believe are material to us. Our business is also subject to the risks that affect many other companies, such as general economic conditions, geopolitical events and employment relations. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Please read the cautionary notice regarding forward-looking statements under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations.” You should carefully consider the risks and uncertainties our business faces. We are including two supplemental risk factors below, which disclosures should be read in conjunction with the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

The Unsolicited Proposal may be disruptive to our business and could create uncertainty that may adversely affect our operations.

On June 26, 2020, we received an unsolicited proposal from Senator and Cannae to acquire the Company for $65.00 per share in cash (the “Unsolicited Proposal”). Our Board of Directors, in consultation with its independent financial and legal advisors, unanimously determined to reject the Unsolicited Proposal, as it significantly undervalues the Company, raises serious regulatory concerns and is not in the best interests of the Company and its stockholders. On July 14, 2020, we received written notification from the FTC that the FTC is conducting an investigation of the proposed acquisition of the Company by Senator and Cannae and requesting that we produce information in connection with that investigation.

The events surrounding the Unsolicited Proposal and related circumstances, and our response, have required us, and may continue to require us, to incur significant legal and advisory fees and expenses, and have required, and may continue to require, significant time and attention by management and our Board of Directors. Further, actions taken by Senator and Cannae or other third parties as a result of the Unsolicited Proposal, including a proxy contest or consent solicitation, could disrupt our business, distract us from efforts to improve our business, cause us to incur substantial additional expense, create perceived uncertainties among current and potential customers, clients, suppliers, employees and other constituencies as to our future direction as a consequence thereof that may result in lost sales or other business arrangements and the loss of potential business opportunities, and make it more difficult to attract and retain qualified personnel and business partners. There is no assurance that any acquisition proposal will lead to any transaction. Actions that our Board of Directors has taken, and may take in the future, in response to any offer or other related actions by Senator and Cannae, including the Unsolicited Proposal, or any other offer or proposal may result in litigation against us. These lawsuits may be a significant distraction for our management and employees and may require us to incur significant costs. If determined adversely to us, these lawsuits could harm our business and have a material adverse effect on our results of operations. We also believe the future trading price of our common stock could be subject to wide price fluctuations based on uncertainty associated with the Unsolicited Proposal.

The shareholder rights plan adopted by our Board of Directors may impair a takeover attempt.

On July 6, 2020, our Board of Directors adopted a shareholder rights plan (the “Rights Agreement”).

Pursuant to the Rights Agreement, on July 6, 2020, our Board of Directors declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock to shareholders of record on July 17, 2020. Each Right entitles its holder to purchase from us, when exercisable and subject to adjustment, a unit (“Unit”) consisting of one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.00001 per share, at an exercise price of $308 per Unit (the “purchase price”).

Under the Rights Agreement, the Rights will generally be exercisable only in the event that a person or group of affiliated or associated persons (such person or group being an “Acquiring Person”), other than certain exempt persons, acquires beneficial ownership of ten percent (10%) or more of the outstanding shares of our common stock (or twenty percent (20%) or more of the

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outstanding shares of our common stock in the case of passive institutional investors reporting beneficial ownership on Schedule 13G). In such case, subject to certain exceptions specified in the Rights Agreement, each holder of a Right (other than the Acquiring Person, whose Rights would become null and void) will have the right to receive, upon payment of the purchase price, common stock (or, in certain circumstances, other securities, cash, or other assets of the Company) having a value equal to two (2) times the purchase price.

In the event that, at any time after a person or group has become an Acquiring Person, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the continuing or surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the continuing or surviving corporation and the shares of common stock of the Company are changed or exchanged or (iii) fifty percent (50%) or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (other than the Acquiring Person, whose Rights would become null and void) would thereafter have the right to receive, upon payment of the purchase price, common stock of the acquiring company having a value equal to two (2) times the purchase price.

Our Board of Directors may redeem the Rights for $0.001 per Right, subject to adjustment, at any time until the earlier of 10 business days following a public announcement that an Acquiring Person has become such or the expiration of the Rights Agreement. The Rights will expire on July 6, 2021, unless the Rights are earlier redeemed, exchanged or terminated.

The Rights are not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by our Board of Directors. However, the overall effect of the Rights may render it more difficult or discourage a merger, tender offer or other business combination involving the Company that is not supported by our Board of Directors.

Additional details about the Rights Agreement are contained in a Form 8-K filed by the Company with the SEC on July 7, 2020.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

During the quarter ended June 30, 2020, we did not issue any shares of our common stock in any transaction that was not registered under the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In October 2018, our Board of Directors canceled all prior repurchase authorizations and established a new share repurchase authorization of up to $500.0 million. As of June 30, 2020, we had $382.0 million in value of shares of common stock (inclusive of commissions and fees) available to be repurchased under the plan. In July 2020, our Board of Directors canceled all prior repurchase authorizations and established a new share repurchase authorization of up to $1.0 billion. The stock repurchase authorization has no expiration date and repurchases may be made in the open market, in privately negotiated transactions or pursuant to 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 3.5 to 1.0. While we continue to preserve the capacity to execute stock repurchases under our existing share repurchase authorization, going forward we will strive to pursue a balanced approach to capital allocation and will consider the repurchase of shares of our common stock, the retirement of outstanding debt and the pursuit of strategic acquisitions on an opportunistic basis.

During the quarter ended June 30, 2020, we repurchased 0.2 million shares of our common stock in an open market purchase pursuant to the terms of our stock repurchase authorization.

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
April 1 to April 30, 2020	—	$	—	—	$	388,858,603
May 1 to May 31, 2020	100,000	$	44.69	100,000	$	384,389,603
June 1 to June 30, 2020	50,000	$	47.46	50,000	$	382,017,157
Total	150,000	$	—	150,000

(1) Calculated inclusive of commissions.

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Item 6.  Exhibits.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of CoreLogic, Inc., dated May 28, 2010 (incorporated by reference to 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 Exhibit 3.2 to the Company’s Current Report on Form 8-K as filed with the SEC on July 7, 2020)
3.3	Certificate of Designation, Preferences, and Rights of Series A Junior Participating Preferred Stock of CoreLogic, Inc., dated July 7, 2020 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K as filed with the SEC on July 7, 2020)
4.1	Rights Agreement dated as of July 6, 2020, by and between the Company and Equiniti Trust Company, as rights agent, which includes as Exhibit B the Form of Rights Certificate (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on July 7, 2020)
31.1	Certification by Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 ü
31.2	Certification by Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 ü
32.1	Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 **
32.2	Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 **
101	The following unaudited consolidated financial statements for the quarter ended March 31, 2020 included in this quarterly report on Form 10-Q formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders' Equity, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tagsü
104	Cover Page Interactive Data File (formatted in Inline XBRL and included in the interactive data files submitted as Exhibit 101)ü

ü	Filed herewith.
**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements 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/   Frank D. Martell
		Frank D. Martell
		President and Chief Executive Officer
		(Principal Executive Officer)
		By: /s/  James L. Balas
		James L. Balas
		Chief Financial Officer
		(Principal Financial Officer)
		By: /s/  John K. Stumpf
		John K. Stumpf
		Controller
		(Principal Accounting Officer)
Date:	July 23, 2020

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