CoreLogic, Inc., together with its subsidiaries (collectively "we", "us" or "our"), is a leading global property information, insight, analytics and data-enabled solutions provider operating in North America, Western Europe and Asia Pacific. Our combined data from public, contributory and proprietary sources provides detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets we serve include real estate and mortgage finance, insurance, capital markets and the public sector. We deliver value to clients through unique data, analytics, workflow technology, advisory and managed solutions. Clients rely on us to help identify and manage growth opportunities, improve performance and mitigate risk.

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

We generate the majority of our operating revenues from clients with operations in the U.S. residential real estate, mortgage origination and mortgage servicing markets. Approximately 34%32% and 40%41% of our operating revenues for the three months ended March 31,June 30, 2018 and 2017, respectively, and 33% and 41% for the six months ended June 30, 2018 and 2017, respectively, were generated from our top ten clients, who consist of the largest U.S. mortgage originators and servicers. None of our clients accounted for greater than 10% of our operating revenues for the three months ended March 31,June 30, 2018, and onetwo of our clients accounted for approximately 12%14% and 10% of our operating revenues for the three months ended March 31,June 30, 2017. None of our clients accounted for greater than 10% of our operating revenues for the six months ended June 30, 2018, and two of our clients accounted for approximately 13% and 10% of our operating revenues for the six months ended June 30, 2017.

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. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows:

We derive our operating revenues primarily from U.S. 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, or performance obligation, is delivered and control has been transferred to the client. Generally, clients contract with us to provide products and services that are highly

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

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

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

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

We recorded equity in earnings of affiliates, net of tax of $0.2$2.8 million and equity in losses of affiliates, net of tax of $0.7$0.3 million for the three months ended March 31,June 30, 2018 and 2017, respectively, and equity in earnings of affiliates, net of tax of $3.1 million and equity in losses of affiliates, net of tax of $1.0 million for the six months ended June 30, 2018 and 2017, respectively. For the three months ended March 31,June 30, 2018 and 2017, we recorded $0.3 million and $2.2$1.9 million, respectively, of operating revenues and $3.3$2.0 million and $2.8$2.9 million, respectively, of operating expenses related to our investment in affiliates. For the six months ended June 30, 2018 and 2017, we recorded $0.6 million and $4.1 million, respectively, of operating revenues and $5.3 million and $5.7 million, respectively, of operating expenses related to our investment in affiliates.

For the threesix months ended March 31,June 30, 2017, we recorded a gain of $4.5 million related to a pre-tax legal settlement in AMPS within our discontinued operations. There was no pre-tax legal settlement for the threesix months ended March 31,June 30, 2018. As of March 31,June 30, 2018 and December 31, 2017, we recorded assets of discontinued operations of $0.6$0.5 million and $0.4 million, respectively, within prepaid expenses and other current assets within our condensed consolidated balance sheets. Additionally, as of March 31,June 30, 2018 and December 31, 2017, we recorded liabilities of $1.8 million for both periods, within accounts payable and other accrued expenses.

In February 2018, the FASB issued guidance permitting companies to reclassify stranded tax effects from the TCJA from accumulated other comprehensive incomeloss to retained earnings. The stranded tax effects consist of deferred taxes originally recorded in accumulated other comprehensive incomeloss that exceed the newly enacted federal corporate tax rate. As permitted in the guidance, we elected to early adopt as of January 1, 2018. The net impact of adoption was a balance sheet reclassification of a $0.4 million unrealized loss within accumulated other comprehensive loss to retained earnings in the first quarter of 2018.earnings.

In August 2017, the FASB issued guidance to amend and improve the accounting for hedging activities. The amendment eliminates the requirement to separately measure and report hedge ineffectiveness. An initial quantitative assessment to establish that the hedge is highly effective is still required but the amendment allows until the end of the first quarter it is designated to perform to prepare the assessment. After initial qualification, a qualitative assessment can be performed if the hedge is highly effective and the documentation at inception can reasonably support an expectation of high effectiveness throughout the hedge’s term. The amendment requires companies to present all hedged accounting elements that affect earnings in the same income statement line as the hedged item. For highly effective cash flow hedges, fair value changes will be recorded in other comprehensive income and reclassified to earnings when the hedged item impacts earnings. The guidance is effective prospectively in fiscal years beginning after December 15, 2018. Early adoption is permitted but we do not anticipate to elect early adoption. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In November 2016, the FASB issued guidance that affects the presentation of restricted cash in the statement of cash flows and related disclosures. The guidance requires that the statement of cash flows explain the change in the combined total of restricted and unrestricted balances. Disclosure of how the statement of cash flows reconciles to the balance sheet is required

In February 2016, the FASB issued guidance on lease accounting which requires leases with durations greater than 12-months to be recognized on the balance sheet as lease assets and lease liabilities beginning after December 15, 2018. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or operating lease. Early adoption is permitted, however we will elect to adopt via the modified retrospective approach on the required date of January 1, 2019. We are continuing to evaluate the impact of adopting this standard on our consolidated financial statements, controls and processes.processes, and are in the process of implementing a new lease administration software solution. We anticipate that our notes to the consolidated financial statements related to leases will be expanded and the most substantial change to our consolidated financial statements will be a gross-up of our total assets and liabilities of less than 5%, based on our preliminary analysis. Further, the guidance is not expected to materially impact our results of operations in the upcoming fiscal years and interim periods. Once further evaluation is complete we will expand our disclosure regarding the expected impact of adopting the updated guidance.

In January 2016, the FASB issued guidance on accounting for equity investments and financial liabilities. The standard does not apply to equity method investments or investments in consolidated subsidiaries. The update provides that equity investments with readily determinable values be measured at fair value and changes in the fair value flow through net income. These changes historically have been included in other comprehensive income. Equity investments without readily determinable fair values have the option to be measured at fair value or at cost adjusted for changes in observable prices minus impairment. Changes in fair value from the application of either method are also recognized in net income. The standard requires a qualitative assessment of impairment indicators at each reporting period. For financial liabilities, entities that elect the fair value option must recognize the change in fair value attributable to instrument-specific credit risk in other comprehensive loss rather than net income. Lastly, regarding deferred tax assets, the need for a valuation allowance on a deferred tax asset will need to be assessed in relation to available-for-sale debt securities. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We have adopted this guidance in the current period,year, which did not have a material effectimpact on our financial statements.

In May 2014, the FASB issued updated guidance on revenue recognition in order to i) remove inconsistencies in revenue requirements, ii) provide a better framework for addressing revenue issues, iii) improve comparability across entities, industries, etc., iv) provide more useful information through improved disclosures, and v) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. Under the amendment, an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting treatment for the incremental costs of obtaining a contract, which would not have been incurred had the contract not been obtained. Further, an entity is required to disclose sufficient information to enable the user of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. The updated guidance provides two methods of adoption: i) retrospective application to each prior reporting period presented, or ii) recognition of the cumulative effect from the retrospective application at the date of initial application.

On January 1, 2018, we adopted this new accounting standard, and all the related amendments, using the modified retrospective approach for all contracts that were not completedin effect as of the adoption date. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those prior periods. We also applied practical expedients which permit (i) the omission of remaining performance obligations that have contracts with an original expected duration of one year or less, (ii) the omission of performance obligations, which are for usage-based variable consideration, which we will recognize over the term of the arrangements based on the actual usage by the customers and (iii) expensing incremental contract costs, which would have otherwise been recognized in one year or less.

The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 for the adoption of the new accounting standard is as follows:

In connection with the adoption of the new accounting guidance, we increased our total contract liabilities by $31.6 million of which $23.2 million was the result of a change in the accounting for contracts containing material rights the client would have not received without entering into the contract. The performance obligation associated with the material right is recognized when the future products or services are transferred or when the option expires. Further, we recorded $1.6 million of contract-related assets associated with the change in accounting, which are presented in prepaid expenses and other current assets and other assets in our condensed consolidated balance sheet. As a result of the adoption-related adjustments previously discussed, we adjusted our related deferred income tax and retained earnings accounts.

The impact of the adoption of the new accounting standard on our condensed consolidated balance sheet is as follows:

The impact of the adoption of the new accounting standard on our condensed consolidated statement of operations is as follows:

Depreciation expense for property and equipment was approximately $21.8$22.4 million and $20.6$20.1 million for the three months ended March 31,June 30, 2018 and 2017, respectively, and $44.2 million and $40.7 million for the six months ended June 30, 2018 and 2017, respectively.

Amortization expense for other intangible assets, net was $15.2$16.3 million and $14.0$13.9 million for the three months ended March 31,June 30, 2018 and 2017, respectively, and $31.5 million and $27.9 million for the six months ended June 30, 2018 and 2017, respectively.

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

Our long-term debt consists of the following:

In August 2017, we amended and restated our credit agreement (“Credit Agreement”) with Bank of America, N.A. as the administrative agent, and other financial institutions. The Credit Agreement provides for a $1.8 billion five-year term loan A facility (“Term Facility”), and a $700.0 million five-year revolving credit facility ("Revolving Facility"). The Term Facility matures and the Revolving Facility expires in August 2022. The Revolving facility includes a $100.0 million multicurrency revolving sub-facility and a $50.0 million letter of credit sub-facility. The Credit Agreement also provides for the ability to increase the Term Facility and/or Revolving Facility by up to $100.0 million in the aggregate; however the lenders are not obligated to do so. As of March 31,June 30, 2018, we had a remaining borrowing capacity of $700.0$580.0 million under the Revolving Facility and we were in compliance with all of our covenants under the Credit Agreement.

In connection with the amendment and restatement of the Credit Agreement, in August 2017, we incurred approximately $14.3 million of debt issuance costs of which $14.0 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 had $12.0 million remaining in previously unamortized costs. We will amortize all of these costs over the term of the Credit Agreement. For the three months ended March 31,June 30, 2018 and 2017, $1.4$1.3 million and $1.5 million, respectively, were expensed for both periodsin the accompanying condensed consolidated statement of operations related to debt issuance costs. For the six months ended June 30, 2018 and 2017, $2.7 million and $2.9 million, respectively, were expensed in the accompanying condensed consolidated statement of operations related to debt issuance costs.

We have entered into amortizing interest rate swaps ("Swaps") in order to convert a portion of our interest rate exposure on the Term Facility floating rate borrowings from variable to fixed. Under the Swaps, we agree to exchange floating

As of March 31,June 30, 2018, we have four Swaps with a combined remaining notional balance of $1.3 billion, a weighted average fixed interest rate of 1.31%1.76% (rates range from 1.03% to 2.61%), and scheduled terminations through August 2022. As previously indicated, notional balances under our Swaps are currently scheduled to increase and decrease over their contract lengths based on our expectations of variable debt levels. We currently have scheduled notional amounts of between $1.3 billion and $1.1 billion through March 2021 with $585.0 million thereafter until August 2022.

We have designated the Swaps as cash flow hedges. The estimated fair value of these cash flow hedges is recorded in prepaid expenses and other current assets other assets and other liabilitiesassets in the accompanying condensed consolidated balance sheets. The estimated fair value of these cash flow hedges resulted in an asset of $18.5$23.0 million, of which $1.6$1.5 million is classified within prepaid expenses and other current assets and a liability of $1.0 million as of MarchJune 30, 2018. As of December 31, 2018. We2017, we recorded an asset of $12.0 million as of December 31, 2017.within other assets.

Unrealized gains of $4.1 million (net of $1.4 million in deferred taxes) and unrealized gains of $1.5$0.1 million (net of $0.9less than $0.1 million in deferred taxes) for the three months ended March 31,June 30, 2018 and 2017, respectively, and unrealized gains of $8.2 million (net of $2.7 million in deferred taxes) and unrealized gains of $1.6 million (net of $1.0 million in deferred taxes) for the six months ended June 30, 2018 and 2017, respectively, were recognized in other comprehensive income related to the Swaps.

Operating revenues by solution type consists of the following:

Our property insights combine our patented predictive analytics and 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 with crime, site inspection, neighborhood, document images and other information from proprietary sources. We also provide verification of applicant income, identity and certain employment verification 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.

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.

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, and 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.

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 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. Operating revenue is recognized when the report or information is delivered to the client.

Our flood data services provide flood zone determinations primarily to mortgage lenders in accordance with U.S. 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.

Incremental costs to obtain or fulfill client contracts are recognized as an asset. As of March 31,June 30, 2018, we had $11.6 million of current deferred costs which are presented in prepaid expenses and other current assets and $21.4$21.1 million of long term deferred costs which are presented in other assets in our condensed consolidated balance sheet. These deferred costs primarily include certain set-up and acquisition costs related to property tax solutions and amortize ratably over an expected ten year life and adjusted for early loan cancellations. As of March 31,For the three and six months ended June 30, 2018 we have recorded $3.4$3.5 million and $6.9 million, respectively, of amortization associated with these deferred costs.

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

As of January 1, 2018, we had $840.4 million in contract liabilities compared to $838.4$834.5 million as of March 31,June 30, 2018. The overall change of $2.0$5.9 million in contract liability balances are primarily due to $121.2$271.4 million of new deferred billings in

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 shares on the date of grant and is recognized as compensation expense over its vesting period.

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

In June 2015, a companion case, Witt v. CoreLogic National Background Data, et. al. was filed in the United States District Court for the Eastern District of Virginia by the same attorneys as in Henderson, alleging the same claim against CBD. Witt also names as a defendant CoreLogic SafeRent, LLC (n/k/a CoreLogic Rental Property Solutions, LLC (“RPS”)) on the theory that RPS provided criminal record “reports” to CBD at the same time that CBD delivered reports to CBD’s consumer reporting agency customers. The parties have agreed to settle the case on a class-wide basis and the settlement was approved in March 2018.

In July 2017, RPS was named as a defendant in a putative class action lawsuit styled Claudinne Feliciano, et. al., v. CoreLogic SafeRent, LLC, in the United States 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. RPS has denied the claims and intends to defend the case vigorously.

The effective income tax rate for income taxes as a percentage of income from continuing operations before equity in earnings/(losses) of affiliates and income taxes was (2.6)%23.7% and 31.8%31.0% for the three months ended March 31,June 30, 2018 and 2017, respectively, and 16.5% and 31.2% for the six months ended June 30, 2018 and 2017, respectively.

For the three and six months ended March 31,June 30, 2018, when compared to 2017, the decrease in the effective income tax rate was primarily due to changes in the statutory tax rate from the enactment of the TCJA, favorable excess tax benefit related to share-based compensation and a favorable benefit related to the release of tax reserves due to the closure of state tax examinations.TCJA.

In December 2017, the U.S. passed the TCJA which included a reduction of the U.S. corporate income tax rate from 35.0% to 21.0%, an assessment of a one-time transition tax on certain foreign earnings that were previously tax deferred, a new provision that taxes certain income from foreign operations, a new limitation on deductible interest expense and limitations on the deductibility of certain executive compensation.

At December 31, 2017, we recorded a provisional tax benefit related to the remeasurementre-measurement of our deferred tax assets and liabilities due to the reduction in the corporate income tax rate. As of March 31,June 30, 2018, we have not completed our accounting for the tax effects of the TCJA. When our analysis is finalized, any resulting adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. We currently anticipate finalizing and recording any such adjustments and related elections by the end of 2018.

We are currently under examination for the years 2010 through 2012, by the U.S., our primary taxing jurisdiction, and various other state taxing authorities. It is reasonably possible the amount of the unrecognized benefits with respect to certain