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CoreLogic, Inc (



Q4 2011 Earnings Conference Call

February 28, 2012 11:00 AM ET


Dan Smith – Senior Vice President, Investor Relations

Anand Nallathambi - President and Chief Executive Officer

Frank Martell – Chief Financial Officer


Darrin Peller – Barclays

Kevin McVeigh – Macquarie

Brett Horn – Morningstar



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Good day ladies and gentlemen and welcome to the fourth quarter 2011 CoreLogic Incorporated earnings conference call. My name is Collide and I will be your operator for today. At this time all the participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder this call is being recorded for replay purposes.

I would now like to turn the call over to Mr. Dan Smith, Senior Vice President of Investor Relations. Please proceed sir.

Dan Smith

Thank you and good afternoon. Welcome to our investor presentation and conference call where we present our financial results for the fourth quarter and full year 2011. Speaking today will be CoreLogic's President and CEO, Anand Nallathambi, and CFO Frank Martell. Before we begin, let me make a few important points. First, we have posted our slide presentation, which includes additional details on our financial results on our website.

Second, please note that during today's presentation we may make forward-looking statements within the meaning of the federal securities laws, including statements concerning our expected business and operational plans; performance outlook, cost containment and growth strategies, and our expectations regarding industry conditions. All of these statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

For further details concerning these risks and uncertainties, please refer to our SEC filings including our Annual Report on Form 10-K for 2011, which we expect to file later today. Our forward-looking statements are based on information currently available to us and we do not intend and undertake no duty to update these statements for any reason.

Additionally, today's presentation contains financial measures that are non-GAAP financial measures. A reconciliation of these non-GAAP measures to their GAAP equivalent is included in the appendix to today's presentation. Finally, unless specifically identified, comparisons of fourth quarter financial results to prior periods should be understood on a year-over-year basis, that is in reference to the fourth quarter of 2010. Thanks. And now let me introduce our President and CEO, Anand Nallathambi.

Anand Nallathambi

Thank you, Dan. Good morning everyone. Welcome to CoreLogic’s fourth quarter 2011 earnings call. I will lead off with an update on our results and progress against our business strategy and then cover 2012 focus areas. Frank will then discuss our financial results. We will then provide an update on the strategic review process and end with questions and answers.

CoreLogic exited 2011 with strong momentum. During the fourth quarter, we delivered year-on-year adjusted revenue growth of 7%, aggressively executed our Project 30 cost reduction program and almost doubled our cash on hand. We also reorganized the company into three core segments to further drive focus and accountability for delivering on our plans and vision for the future.

Our full year and fourth quarter results were above the top end of our previous guidance as we capitalized on a double digit jump in data and analytics revenues, higher mortgage refinancing volumes and Project 30 related cost savings. Our financial results clearly demonstrates that we are capturing the benefits of our strategy of investing in our data and analytics and positioning our mortgage origination and default services businesses to outperform their markets.

In many ways 2011 was a transformative year for CoreLogic. We took decisive actions to enhance our business model, to deliver higher revenue growth at significantly higher EBITDA margins. I believe these actions will allow us to deliver on the growth and market expansion targets implicit in our 2012 guidance. The actions we took in 2011 followed four broad categories and laid the foundation for achieving our vision for the future of CoreLogic.

I will now spend a few minutes recapping the progress we made against each of our 2011 focus areas. First, focus CoreLogic on high growth high margin businesses. In the second half of 2011, we exited five non-core businesses and sold, exited and wrote down a number of small units, product lines and minority investments. Although these units collectively generated significant revenues their business models lacked significant data, intellectual property and are scalable returns to support our long-term strategy. The cumulative impact of these actions with a significant improvement in our margin and growth profile a reduction in organizational complexity and cost and degeneration of cash.

Second, invest in data and analytics we continue to invest in our data and analytics segment throughout 2011 and adjusted revenues for the fourth quarter and the full year were up 25% and 18% respectively. This high rate of revenue growth reflects the acquisitions of RP Data and our success in leveraging our data assets in developing new fraud tools and analytical products.

During the fourth quarter, we launched CoreScore a suite of alternative credit report and scores that integrate our property, mortgage loan and alternative predict data to enhance our customer’s view of financial risks. CoreScore is a great example of our strategy to leverage unique data assets to drive high margin revenue streams in the future. CoreLogic data is a natural extension and augment to the consumer financial data resident at the national credit bureaus.

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