CoreLogic Reports Fourth Quarter and Full-Year 2013 Financial Results

Adjusted EBITDA totaled $70.5 million in fourth quarter 2013, 26.4% below prior-year levels.  D&A adjusted EBITDA totaled $42.9 million, a 6.4% increase from fourth quarter 2012 as growth in the Pacific region and geospatial analytics more than offset the impact of lower mortgage origination volumes, declines in specialty credit and unfavorable currency translation.  TPS adjusted EBITDA decreased 49.3% to $36.2 million compared with prior-year levels driven primarily by lower market volumes and integration costs related to the BAC acquisition.  Fourth quarter adjusted EBITDA was also adversely impacted by severance charges across all segments and stranded AMPS costs as outlined previously.

Cost Reduction Programs
Fourth quarter and full-year 2013 cost reductions related to the Company's previously announced Project 30 program were approximately $6.5 million and $22.0 million respectively.  Project 30 cost savings relate primarily to workforce reductions in corporate shared services and information technology (IT), the outsourcing of certain IT and business process functions and cuts in spending on real estate and outside services.

CoreLogic launched the TTI during mid-2012.  The primary objective of the TTI is to convert the Company's existing technology infrastructure to a new platform which is expected to provide CoreLogic with new functionality, increased performance and a reduction in application management and development costs commencing in mid-2015.  Fourth-quarter and full-year 2013 charges related to TTI implementation totaled $2.4 million and $19.1 million, respectively.

During the fourth quarter of 2013, CoreLogic announced the launch of a new cost reduction program designed to lower 2014 operating expenses by an additional $25 million.  During the fourth quarter of 2013, the Company took actions to secure a significant portion of these savings by reducing headcount and further consolidating corporate facilities.  As discussed previously, severance and facilities related charges associated with this program totaled $8.3 million for the fourth quarter of 2013.

Liquidity and Capital Resources
At December 31, 2013, the Company had cash and cash equivalents of $134.7 million compared with $152.0 million at December 31, 2012.  Principal drivers of the change in cash balances during 2013 follow:

  • Free cash flow (FCF) totaled $195.8 million for the full year 2013, which represented 50.2% of adjusted EBITDA.  FCF is defined as net cash provided by continuing operating activities less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets. 
  • CoreLogic repurchased 8.1 million common shares for a total of $241.2 million
  • Cash outlays for acquisitions, including EQECAT and the tax processing and flood zone determination operations of the Bank of America, totaled $92.0 million.
  • Total debt as of December 31, 2013 was $839.9 million, up $47.5 million from December 31, 2012. 

As of December 31, 2013, the Company had available capacity on its revolving credit facility of $450.0 million.

During the third quarter, the Company announced the pending acquisition of Marshall & Swift/Boeckh and DataQuick Information Systems for $661.0 million which is subject to customary closing conditions including regulatory clearance.  In connection with this transaction, on September 18, 2013, the Company entered into a credit agreement (CA) to refinance its existing term loan debt upon the closing of the acquisition. For information on the material terms of the CA, refer to the Company's Form 8-K filed on September 19, 2013.

Segment and Financial Reporting
In line with the Company's long-term strategic plan, CoreLogic reorganized its core business operations into two operating segments - D&A and TPS - effective December 31, 2013.  The reorganization and its resulting impact on the Company's financial reporting are outlined below:

  • The operations comprising the Company's Property Information and Analytics, Insurance and Spatial Solutions and Multifamily and Specialty Services businesses continue to be reported within the D&A segment as of December 31, 2013.  In addition, the D&A segment has been expanded through the acquisition of EQECAT, Inc., a leading global catastrophe modeling firm.  EQECAT will be reported within the D&A segment's Insurance and Spatial Solutions group.
  • CoreLogic's Residential and Commercial Property Tax Processing, Originations and Underwriting Services (Credit and Verification Services and Flood Zone Determination) and Technology and Outsourcing Solutions businesses previously reported in our former Mortgage Origination Services segment will be reported within the TPS segment as of December 31, 2013.  In addition, the TPS segment will include the Company's document processing, retrieval and loan file review operations previously reported as part of the D&A segment.
  • As previously announced, CoreLogic plans to divest the businesses that comprise its AMPS segment.  As a result, the businesses comprising the AMPS segment are classified as held for sale as of December 31, 2013 and we have retrospectively reclassified the financial statement balances for the AMPS segment to discontinued operations in our consolidated financial statements. Full-year 2013 revenues and operating income for the AMPS segment aggregated $266.9 million and $2.2 million, respectively.  For the fourth quarter, AMPS revenues and operating loss were $55.9 million and $42.2 million, respectively including the impairment charge discussed previously.

In addition to the changes noted above, the Company has updated its adjusted EPS metric to exclude non-cash expenses associated with the amortization of acquisition-related intangible assets.  We believe this adjusted non-GAAP metric facilitates greater comparability with our peer companies.

The Company believes this updated reporting convention will facilitate the review of its results.  Three years of reclassified quarterly segment results (on an unaudited basis) can be accessed at

2014 Financial Guidance (Continuing Operations)

($ in millions except adjusted EPS)

2013 Results

2014 Guidance



$1,350.0 - $1,400.0

Adjusted EBITDA(1)


$360.0 - $390.0

Adjusted EPS(1)


$1.40 - $1.55


Definition of Adjusted EBITDA and Adjusted EPS, as well as other non-GAAP financial measures used by management is included in the Use of Non-GAAP Financial Measures section of this release.  A reconciliation of 2013 Non-GAAP measures to their nearest GAAP equivalents are also provided below in this release.

2014 guidance is based upon the following estimates and assumptions:

  • Projected mortgage origination volumes of $1.0 to $1.1 trillion in 2014 versus 2013 estimate of $1.7 to $1.8 trillion .
  • Consolidation of Marshall & Swift/Boeckh and DataQuick Information Systems results from April 1, 2014 .
  • 2014 adjusted EBITDA and adjusted EPS reflect the impact of acquisition integrations, severance, stranded AMPS costs and other charges associated with the Company's cost reduction program; which collectively, aggregate approximately $25.0 million .  Excluding these items, 2014 adjusted EBITDA and adjusted EPS ranges would be $385.0 - $415.0 million and $1.55 - $1.70 , respectively.
  • Completion of previously announced cost reduction program targeting $25 million in 2014 expense savings.
  • Repurchase of 3 million common shares.
  • AMPS segment operating results excluded from 2013 results and 2014 guidance.

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