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8-K - FORM 8-K - Fidelity National Financial, Inc. | g21992e8vk.htm |
Exhibit 99.1
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 FNFs 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
underwriters 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 nations 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
managements 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 Companys 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
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)
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)
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)
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)
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 |
###