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8-K - FORM 8-K - Fidelity National Financial, Inc.g21992e8vk.htm
Exhibit 99.1
(FIDELITY NATIONAL FINANCIAL LOGO)
Fidelity National Financial, Inc. Reports Fourth Quarter 2009 EPS of $0.30
Jacksonville, Fla. — (February 3, 2010) — Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services, today reported operating results for the three-month and twelve-month periods ended December 31, 2009.
                 
    Three Months Ended   Three Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $1.46 billion   $998.8 million
Net earnings (loss) attributable to common shareholders
  $69.3 million   ($14.9 million)
Net earnings (loss) per diluted share attributable to common shareholders
  $ 0.30       ($0.07 )
Cash flow from operations
  $12.6 million   $60.5 million
                 
    Twelve Months Ended   Twelve Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $5.83 billion   $4.25 billion
Net earnings (loss) attributable to common shareholders
  $222.3 million   ($179.0 million)
Net earnings (loss) per diluted share attributable to common shareholders
  $ 0.97       ($0.85 )
Cash flow from operations
  $380.3 million   $4.6 million
     The following are summary financial and operational results for the operating segments of FNF for the three-month and twelve-month periods ended December 31, 2009 and 2008:
     Fidelity National Title Group (“FNT”)
                 
    Three Months Ended   Three Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $1.34 billion   $896.2 million
Pre-tax earnings (loss)
  $109.6 million   ($9.7 million)
Pre-tax margin
    8.2 %     N/A  

 


 

                 
    Twelve Months Ended   Twelve Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $5.39 billion   $3.82 billion
Pre-tax earnings (loss)
  $370.0 million   ($231.0 million)
Pre-tax margin
    6.9 %     N/A  
                 
Month   Direct Orders Opened   Direct Orders Closed
October 2009
    207,300       133,700  
November 2009
    172,400       127,100  
December 2009
    170,900       139,800  
 
               
Fourth Quarter 2009
    550,600       400,600  
 
               
                 
Month   Direct Orders Opened   Direct Orders Closed
October 2008
    122,700       89,300  
November 2008
    101,400       66,800  
December 2008
    204,100       89,200  
 
               
Fourth Quarter 2008
    428,200       245,300  
 
               
                                 
    Open   Closed   Commercial    
    Commercial   Commercial   Revenue   Commercial
    Orders   Orders   (In thousands)   Fee Per File
4th Quarter 2009
    19,200       13,700     $ 62,700     $ 4,600  
4th Quarter 2008
    13,600       7,900     $ 38,300     $ 4,800  
  The preceding table only includes commercial activity from FNF’s commercial offices in the national commercial division and does not attempt to capture potential commercial activity in our local offices.
     Specialty Insurance
                 
    Three Months Ended   Three Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $92.8 million   $97.3 million
Pre-tax earnings
  $8.7 million   $18.2 million
Pre-tax margin
    9.4 %     18.7 %

 


 

                 
    Twelve Months Ended   Twelve Months Ended
    December 31, 2009   December 31, 2008
Total revenue
  $380.3 million   $383.3 million
Pre-tax earnings
  $43.6 million   $35.0 million
Pre-tax margin
    11.5 %     9.1 %
     “Despite operating against a difficult economic backdrop, 2009 was a year of significant accomplishments that has Fidelity National Financial well positioned as we enter 2010,” said Chairman William P. Foley, II. “We generated total revenue of $5.8 billion, pre-tax profits of $345 million, net earnings of $222 million and cash flow from operations of $380 million. All of these were significant increases over our 2008 results.”
     “The December 2008 acquisition of Lawyers Title and Commonwealth Title was fully integrated during the first half of 2009. From January through March, we aggressively removed costs from those operations and were able to return them to operational profitability by the month of March. The integration of Lawyers and Commonwealth was completed during the second quarter, with an overall total cost reduction of nearly $265 million. We eliminated approximately 2,300 positions, more than 40% of the employees transferred at closing, and more than 240 offices as part of the aggressive integration. These underwriters are fully integrated into the FNF family and we look forward to their continued significant contribution to our market-leading title insurance business in 2010 and beyond.”
     “In April, we were successful in issuing 18.2 million shares of our common stock for approximately $331 million in proceeds to further strengthen our balance sheet. Those proceeds were primarily used to reduce the outstanding balance on our credit facility, repurchase our existing public debt and to make a capital infusion into Lawyers Title to bolster that underwriter’s balance sheet. Throughout 2009, we reduced our outstanding debt by nearly $490 million, while also growing our equity by almost $460 million. As a result, our debt to capital ratio ended the year at 21%, after beginning 2009 at more than 32% and book value per share increased by more than $1.10, or 8%, from the beginning of 2009, ending at $14.41 on December 31, 2009.”

 


 

     “We are proud of our accomplishments in 2009, but we are never satisfied. We will continue to manage our title business as we always have, with continued dedication to our weekly operating metrics as we seek to maximize profitability in any market environment. As always, we remain committed to our ultimate goal of continuing to create value for our shareholders.”
     Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services. FNF is the nation’s largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Security Union Title and Alamo Title — that collectively issue more title insurance policies than any other title company in the United States. FNF also provides flood insurance, personal lines insurance and home warranty insurance through its specialty insurance business. FNF also is a leading provider of outsourced claims management services to large corporate and public sector entities through its minority-owned subsidiary, Sedgwick CMS. FNF is also a leading information services company in the human resource, retail and transportation markets through another minority-owned subsidiary, Ceridian Corporation. More information about FNF can be found at www.fnf.com.
     This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; weakness or adverse

 


 

changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U. S. economy; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; our dependence on operating subsidiaries as a source of cash flow; significant competition that our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President and Treasurer, 904-854-8120,
dkmurphy@fnf.com

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
                                 
    Three months ended     Twelve months ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
    (Unaudited)     (Unaudited)  
 
Direct title premiums
  $ 353,250     $ 227,896     $ 1,475,303     $ 1,140,266  
Agency title premiums
    638,187       383,623       2,452,253       1,554,743  
 
                       
Total title premiums
    991,437       611,519       3,927,556       2,695,009  
Escrow, title-related and other fees
    323,464       268,007       1,352,876       1,071,277  
 
                       
Total title and escrow
    1,314,901       879,526       5,280,432       3,766,286  
 
                               
Specialty insurance
    89,470       94,502       366,036       373,392  
Interest and investment income
    41,548       31,401       154,456       133,964  
Realized gains and losses
    9,368       (6,585 )     27,452       (22,453 )
 
                       
Total revenue
    1,455,287       998,844       5,828,376       4,251,189  
 
                               
Personnel costs
    389,384       282,520       1,649,775       1,321,964  
Other operating expenses
    319,409       305,110       1,343,452       1,179,853  
Agent commissions
    505,272       306,352       1,951,732       1,218,044  
Depreciation and amortization
    24,555       28,407       109,206       122,100  
Claim loss expense
    102,343       82,808       392,577       630,404  
Interest expense
    8,320       14,633       36,675       58,580  
 
                       
Total expenses
    1,349,283       1,019,830       5,483,417       4,530,945  
Earnings (loss) from continuing operations before taxes
    106,004       (20,986 )     344,959       (279,756 )
Income tax expense
    38,759       (12,962 )     106,839       (119,944 )
 
                       
Earnings (loss) from continuing operations before equity investments
    67,245       (8,024 )     238,120       (159,812 )
Earnings (loss) from equity investments
    2,291       (5,990 )     (11,704 )     (13,375 )
 
                       
Net earnings (loss) from continuing operations
    69,536       (14,014 )     226,416       (173,187 )
Discontinued operations, net of tax
          (993 )     (1,881 )     (10,039 )
 
                       
Net earnings (loss)
    69,536       (15,007 )     224,535       (183,226 )
Non-controlling interest earnings (loss)
    214       (123 )     2,224       (4,210 )
 
                       
Net earnings (loss) attributable to common shareholders
  $ 69,322       ($14,884 )   $ 222,311       ($179,016 )
 
                       
Earnings per share:
                               
Net earnings (loss) from continuing operations attributable to common shareholders — basic
  $ 0.30       ($0.07 )   $ 0.99       ($0.85 )
 
                       
Net earnings (loss) from continuing operations attributable to common shareholders — diluted
  $ 0.30       ($0.07 )   $ 0.97       ($0.85 )
 
                       
Weighted average shares — basic
    228,502       209,283       224,674       209,974  
 
                       
Weighted average shares — diluted
    231,676       209,283       228,485       209,974  
 
                       
Direct operations orders opened
    550,600       428,200       2,611,400       1,860,400  
Direct operations orders closed
    400,600       245,300       1,792,000       1,121,200  
Fee per file
  $ 1,368     $ 1,455     $ 1,248     $ 1,503  
Actual title claims paid
  $ 148,864     $ 50,331     $ 388,101     $ 278,162  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                     
Three Months Ended                       Specialty   Corporate
December 31, 2009     Consolidated     FNT   Insurance   and Other
Gross operating revenue
    $ 1,404,371       $ 1,296,225     $ 89,470     $ 18,676  
 
                                   
Interest and investment income
      41,548         33,391       2,892       5,265  
Realized gains and losses
      9,368         9,043       470       (145 )
             
Total revenue
      1,455,287         1,338,659       92,832       23,796  
 
                                   
Personnel costs
      389,384         366,075       11,197       12,112  
Other operating expenses
      319,409         267,330       37,389       14,690  
Agent commissions
      505,272         505,272              
Depreciation and amortization
      24,555         22,277       1,194       1,084  
Claim loss expense
      102,343         67,983       34,360        
Interest expense
      8,320         104       3       8,213  
             
Total expenses
      1,349,283         1,229,041       84,143       36,099  
 
                                   
Pretax earnings from continuing operations
      106,004         109,618       8,689       (12,303 )
 
                                   
Pretax margin
      7.3 %       8.2 %     9.4 %      
 
                                   
Open orders
      550,600         550,600              
Closed orders
      400,600         400,600              
                                     
Three Months Ended                       Specialty   Corporate
December 31, 2008     Consolidated     FNT   Insurance   and Other
Gross operating revenue
    $ 974,028       $ 872,614     $ 94,502     $ 6,912  
 
                                   
Interest and investment income
      31,401         28,978       2,662       (239 )
Realized gains and losses
      (6,585 )       (5,366 )     102       (1,321 )
             
Total revenue
      998,844         896,226       97,266       5,352  
 
                                   
Personnel costs
      282,520         266,865       10,775       4,880  
Other operating expenses
      305,110         252,555       37,088       15,467  
Agent commissions
      306,352         306,352              
Depreciation and amortization
      28,407         27,319       671       417  
Claim loss expense
      82,808         52,251       30,557        
Interest expense
      14,633         581       24       14,028  
             
Total expenses
      1,019,830         905,923       79,115       34,792  
 
                                   
Pretax earnings (loss) from continuing operations
      (20,986 )       (9,697 )     18,151       (29,440 )
 
                                   
Pretax margin
                    18.7 %      
 
                                   
Open orders
      428,200         428,200              
Closed orders
      245,300         245,300              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                     
Twelve Months Ended                       Specialty   Corporate
December 31, 2009     Consolidated     FNT   Insurance   and Other
Gross operating revenue
    $ 5,646,468       $ 5,228,194     $ 366,036     $ 52,238  
 
                                   
Interest and investment income
      154,456         138,339       12,293       3,824  
Realized gains and losses
      27,452         27,052       1,926       (1,526 )
             
Total revenue
      5,828,376         5,393,585       380,255       54,536  
 
                                   
Personnel costs
      1,649,775         1,565,295       45,349       39,131  
Other operating expenses
      1,343,452         1,140,669       158,277       44,506  
Agent commissions
      1,951,732         1,951,732              
Depreciation and amortization
      109,206         100,476       5,118       3,612  
Claim loss expense
      392,577         264,674       127,903        
Interest expense
      36,675         753       30       35,892  
             
Total expenses
      5,483,417         5,023,599       336,677       123,141  
 
                                   
Pretax earnings from continuing operations
      344,959         369,986       43,578       (68,605 )
 
                                   
Pretax margin
      5.9 %       6.9 %     11.5 %      
 
                                   
Open orders
      2,611,400         2,611,400              
Closed orders
      1,792,000         1,792,000              
                                     
Twelve Months Ended                       Specialty   Corporate
December 31, 2008     Consolidated     FNT   Insurance   and Other
Gross operating revenue
    $ 4,139,678       $ 3,729,259     $ 373,392     $ 37,027  
 
                                   
Interest and investment income
      133,964         120,157       12,929       878  
Realized gains and losses
      (22,453 )       (32,889 )     (3,007 )     13,443  
             
Total revenue
      4,251,189         3,816,527       383,314       51,348  
 
                                   
Personnel costs
      1,321,964         1,253,563       45,228       23,173  
Other operating expenses
      1,179,853         964,282       158,269       57,302  
Agent commissions
      1,218,044         1,218,044              
Depreciation and amortization
      122,100         114,989       4,896       2,215  
Claim loss expense
      630,404         490,952       139,452        
Interest expense
      58,580         5,657       487       52,436  
             
Total expenses
      4,530,945         4,047,487       348,332       135,126  
 
                                   
Pretax earnings (loss) from continuing operations
      (279,756 )       (230,960 )     34,982       (83,778 )
 
                                   
Pretax margin
                    9.1 %      
 
                                   
Open orders
      1,860,400         1,860,400              
Closed orders
      1,121,200         1,121,200              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
                 
    December 31,   December 31,
    2009   2008
    (Unaudited)        
 
Cash and investment portfolio
  $ 4,887,411     $ 4,691,790  
Goodwill
    1,455,237       1,581,658  
Title plant
    407,495       431,591  
Total assets
    7,942,071       8,368,240  
Notes payable
    861,878       1,350,849  
Reserve for claim losses
    2,541,420       2,738,625  
Secured trust deposits
    373,339       474,073  
Total equity
    3,315,749       2,856,772  
Book value per share
  $ 14.41     $ 13.29  
###