Acquisitions

In April 2016, we completed the acquisition of FNC for up to $475.0 million, with $400.0 million in cash paid at closing, subject to certain closing adjustments, and up to $75.0 million to be paid in cash in 2018, contingent upon the achievement of certain revenue targets in fiscal 2017. We fair-valued the contingent payment using the Monte-Carlo simulation model and initially recorded $8.0 million as contingent consideration. The contingent payment is fair-valued quarterly and changes are recorded within gain on investments and other, net in our consolidated statements of operations. See Note 12 - Fair Value of Financial Instruments for further discussion. FNC is a leading provider of real estate collateral information technology and solutions that automates property appraisal ordering, tracking, documentation and review for lender compliance with government regulations and is included as a component of our PI reporting segment. The acquisition expands our property valuation capabilities. 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. The purchase price allocation is subject to change based on our final determination of fair value in connection with intangible assets and working capital matters. We preliminarily recorded a deferred tax liability of $89.7 million, property and equipment of $79.8 million with an estimated average life of 12 years, customer lists of $141.8 million with an estimated average life of 16 years, trade names of $15.9 million with an estimated average life of 19 years, non-compete agreements of $18.8 million with an estimated average life of 5 years, other intangibles of $2.9 million with an estimated average life of 10 years and goodwill of $225.7 million. For the year ended December 31, 2016, goodwill was increased by approximately $14.2 million from the initial amount recorded in the second quarter of 2016, as a result of a change in purchase price allocation for certain working capital and tax adjustments. This business combination did not have a material impact on our consolidated statements of operations.

In January 2016, we acquired the remaining 40% interest in PIQ for NZD $27.8 million, or $19.0 million, and settled the mandatorily redeemable noncontrolling interest. PIQ is included as a component of our PI reporting segment.

In December 2015, we completed the acquisition of the remaining 49.9% interest in RELS for approximately $65.0 million and recorded an investment gain of approximately $34.3 million due to the step-up in fair value on the previously held 50.1% interest, which is included in gain on investment and other, net in the accompanying consolidated statements of operations. RELS is included as a component of our PI reporting segment. The acquisition of RELS expands our real estate asset valuation and appraisal solutions in connection with loan originations. 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 recorded property and equipment of $27.0 million with an estimated average life of 10 years, customer lists of $48.4 million with an estimated average life of 10 years, other intangibles of $5.0 million with an estimated useful life of 10 years and goodwill of $23.1 million, of which $11.5 million is deductible for tax purposes. The business combination did not have a material impact on our consolidated statements of operations.

In October 2015, we completed the acquisition of Cordell for AUD$70.0 million, or $49.1 million, subject to working capital adjustments, which is included as a component of our PI reporting segment. The acquisition of Cordell further expands our property information capabilities in Australia. 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 recorded property and equipment of $14.3 million with an estimated average life of 10 years, customer lists of $5.5 million with an estimated average life of 8 years, trade names of $0.6 million with an estimated useful life of 4 years and goodwill of $31.9 million, which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated statements of operations.

In September 2015, we completed the acquisition of LandSafe for $122.0 million, subject to working capital adjustments, which is included as a component of our PI reporting segment. The acquisition builds on our longstanding strategic relationship with a key client and continues to expand our property valuation capabilities. 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 recorded customer lists of $53.4 million with an estimated average life of 10 years, other intangibles of $4.3 million with an estimated useful life of 10 years and goodwill of $64.6 million, which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated statements of operations.

In November 2014, we completed our acquisition of Bank of America's mortgage-related credit reporting operation for approximately $19.6 million, which is included as a component of our RMW reporting 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 recorded property and equipment of $4.3 million with an estimated average life of 3 years, client lists of $6.1 million with an estimated average life of 10 years and goodwill of $9.2 million, which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated statements of operations.

In March 2014, we completed the acquisition of Marshall & Swift/Boeckh ("MSB") and DataQuick Information Systems ("DataQuick"). In addition, we acquired the assets of the credit, flood services and automated valuation model operations of DataQuick Lending Solutions and certain intellectual property assets of Decision Insight Information Group S.à r.l. The total consideration paid in connection with the MSB/DataQuick acquisition was approximately $652.5 million in cash, which was funded through borrowings. The acquisition of MSB/DataQuick significantly expands our footprint in property and casualty insurance and adds scale to our existing property data and analytics business, which is a contributing factor to the recording of goodwill. The operations of MSB's and DataQuick's data licensing and analytics units are reported within our PI segment and DataQuick's flood zone determination and credit servicing operations are reported within our RMW 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. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase price is as follows:



(in thousands)
Cash and cash equivalents	$	36
Accounts receivable	9,227
Prepaid expenses and other current assets	2,190
Deferred income tax assets, current	6,658
Property and equipment	177,311
Goodwill (1)	307,773
Other intangible assets	129,400
Deferred income tax, net of current	29,760
Investment in affiliates	18,300
Total assets acquired	$	680,655
Accounts payable and accrued expenses	3,911
Income taxes payable	31
Deferred revenue, current	22,371
Deferred revenue, net of current	1,823
Net assets acquired	$	652,519


(1)	Goodwill of $307.8 million includes $167.8 million of deductible basis for tax purposes.

We reported revenues and net loss of approximately $67.5 million and $5.8 million, respectively, from the MSB/DataQuick acquisition from the acquisition date of March 25, 2014 through December 31, 2014. The net loss includes $18.6 million of depreciation and amortization from acquired property and equipment and other intangible assets. The financial information in the table below summarizes the combined results of operations of MSB/DataQuick and us on a pro forma basis as though the companies had been combined as of January 1, 2013. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the periods presented. The pro forma financial information for all periods presented also includes elimination of intercompany revenue, the impact of fair value adjustments to deferred revenue, amortization expense from acquired intangible assets, adjustments to interest expense and related tax effects.

The unaudited pro forma financial information for the year ended December 31, 2014 combines our results of operations for the period.



(in thousands)	2014
Operating revenue	$	1,427,424
Net income	$	82,724

In January 2014, we completed our acquisition of Terralink International Limited for NZD$14.5 million, or $11.9 million, which is included as a component of our PI reporting 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 recorded property and equipment of $2.1 million with an estimated average life of 5 years, client lists of $1.4 million with an estimated average life of 15 years, trade names of $0.2 million with an estimated average life of 12 years, capitalized data and database costs of $6.0 million with an estimated average life of 15 years and goodwill of $2.3 million, which is fully deductible for tax purposes. The business combination did not have a material impact on our consolidated statements of operations.

For the years ended December 31, 2016, 2015 and 2014, we incurred $6.9 million, $3.9 million and $9.0 million, respectively, of acquisition-related costs within selling, general and administrative expenses in our consolidated statements of operations. For the years ended December 31, 2016, 2015 and 2014, the aggregation of the business combinations in each respective period did not have a material impact on our consolidated statements of operations.