Fidelity National Financial, Inc. - FORM 10-Q - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - Fidelity National Financial, Inc.	exhibit3111q2016.htm
EX-32.1 - EXHIBIT 32.1 - Fidelity National Financial, Inc.	exhibit3211q2016.htm
EX-31.2 - EXHIBIT 31.2 - Fidelity National Financial, Inc.	exhibit3121q2016.htm
EX-32.2 - EXHIBIT 32.2 - Fidelity National Financial, Inc.	exhibit3221q2016.htm
10-Q - 10-Q - Fidelity National Financial, Inc.	fnf03311610q.htm
EX-99.1 - EXHIBIT 99.1 - Fidelity National Financial, Inc.	exhibit991fnfgroup1q2016.htm

EXHIBIT 99.2

Unaudited Attributed Financial Information for Fidelity National Financial Ventures Group Tracking Stock

The following tables present our assets, liabilities, revenue, expenses and cash flows that are attributed to our Fidelity National Financial Ventures business (“we,” “our,” "FNFV Group," or “FNFV”). The financial information in this Exhibit should be read in conjunction with our unaudited condensed consolidated financial statements for the period ended March 31, 2016 included in this Quarterly Report on Form 10-Q.

FNFV Group common stock is intended to reflect the separate performance of our FNFV Group. We own majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC ("ABRH"), Ceridian HCM, Inc. ("Ceridian") and Digital Insurance, Inc. ("Digital Insurance").

FNFV Group is comprised of two operating segments as follows:

•

Restaurant Group. This segment consists of the operations of ABRH, in which we have a 55% ownership interest. ABRH and its affiliates are the owners and operators of the O'Charley's, Ninety Nine Restaurants, Village Inn, Bakers Square, and Legendary Baking concepts. As of and for the three months ended March 31, 2015, this segment also included the results of J. Alexander's, Inc. ("J. Alexander's"), which was distributed to FNFV shareholders on September 28, 2015, and the Max & Erma's concept, which was sold pursuant to an Asset Purchase Agreement on January 25, 2016.


•	FNFV Corporate and Other. This segment primarily consists of our share in the operations of certain equity investments, including Ceridian, as well as consolidated investments, including Digital Insurance, in which we own 96%, and other smaller operations which are not title related.

We have adopted certain expense allocation policies, each of which are reflected in the attributed financial information of the FNF Group (see Exhibit 99.1) and the FNFV Group. In general, corporate overhead is allocated to each group based upon the use of services by that group where practicable. Corporate overhead primarily includes costs of personnel and employee benefits, legal, accounting and auditing, insurance, investor relations and stockholder services and services related to FNF’s board of directors. We allocate in a similar manner a portion of costs of administrative shared services, such as information technology services. Where determinations based on use alone are not practical, we use other methods and criteria that we believe are equitable and that provide a reasonable estimate of the cost attributable to each group.

Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to FNFV, Fidelity National Financial, Inc.'s ("FNF, Inc.") tracking stock structure does not affect the ownership or the respective legal title to FNF, Inc.'s assets or responsibility for FNF, Inc.'s liabilities. FNF, Inc. and its subsidiaries are each responsible for their respective liabilities. Holders of FNFV Group common stock are subject to risks associated with an investment in FNF, Inc. and all of its businesses, assets and liabilities. The issuance of FNFV Group common stock does not affect the rights of FNF, Inc.'s creditors or creditors of its subsidiaries. See "Item 1A. Risk Factors - Risks Relating to the Ownership of Our FNFV Group Common Stock due to our Tracking Stock Capitalization" in our Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion of risks associated with our tracking stock structure.

FIDELITY NATIONAL FINANCIAL VENTURES GROUP

Balance Sheet Information

(In millions, except share data)



	March 31, 2016			December 31, 2015
	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value	$	22		$	—
Equity securities available for sale, at fair value	50			36
Investments in unconsolidated affiliates	456			396
Other long-term investments	28			27
Short-term investments	107			244
Total investments	663			703
Cash and cash equivalents	38			31
Trade and notes receivables, net of allowance	35			43
Income taxes receivable	1			—
Goodwill	187			188
Prepaid expenses and other assets	60			64
Capitalized software, net	11			11
Other intangible assets, net	164			166
Property and equipment, net	261			233
Deferred tax asset	60			75
Total assets	$	1,480		$	1,514

LIABILITIES AND EQUITY
Liabilities:
Accounts payable and other accrued liabilities	$	181		$	191
Income taxes payable	—			6
Deferred revenue	16			24
Notes payable	207			200
Due to affiliates	9			10
Total liabilities	413			431
Equity:
FNFV Group common stock, $0.0001 par value; authorized 113,000,000 shares as of March 31, 2016 and December 31, 2015; outstanding of 69,016,364 and 72,217,882 as of March 31, 2016 and December 31, 2015, respectively, and issued of 80,581,466 as of both March 31, 2016 and December 31, 2015	—			—
Additional paid-in capital	1,158			1,156
Retained earnings	(2		)	(3		)
Accumulated other comprehensive loss	(64		)	(76		)
Less: treasury stock, 11,565,102 and 8,363,584 shares as of March 31, 2016 and December 31, 2015, respectively	(141		)	(108		)
Total Fidelity National Financial Ventures shareholders’ equity	951			969
Noncontrolling interests	116			114
Total equity	1,067			1,083
Total liabilities and equity	$	1,480		$	1,514

See Notes to Unaudited Attributed Financial Information for FNFV

FIDELITY NATIONAL FINANCIAL VENTURES GROUP

Statements of Operations Information

(In millions, except per share data)



	Three months ended March 31,
	Three months ended March 31,
	2016			2015
	(Unaudited)
Revenues:
Operating revenue	$	331		$	477
Interest and investment income	1			1
Realized gains and losses, net	(3		)	—
Total revenues	329			478
Expenses:
Personnel costs	38			38
Other operating expenses	27			94
Cost of restaurant revenue	245			306
Depreciation and amortization	15			17
Interest expense	3			2
Total expenses	328			457
Earnings from continuing operations before income taxes and equity in losses of unconsolidated affiliates	1			21
Income tax (benefit) expense	(1		)	3
Earnings from continuing operations before equity in losses of unconsolidated affiliates	2			18
Equity in losses of unconsolidated affiliates	(1		)	(3		)
Net earnings	1			15
Less: Net earnings attributable to non-controlling interests	—			15
Net earnings attributable to FNFV Group common shareholders	$	1		$	—
Earnings Per Share
Basic
Net earnings per share from continuing operations attributable to FNFV Group common shareholders	$	0.01		$	—
Diluted
Net loss per share attributable to FNFV Group common shareholders	$	0.01		$	—

Weighted average shares outstanding FNFV Group common stock, basic basis	70			90
Weighted average shares outstanding FNFV Group common stock, diluted basis	72			92

See Notes to Unaudited Attributed Financial Information for FNFV

FIDELITY NATIONAL FINANCIAL VENTURES GROUP

Statement of Cash Flows Information

(In millions)



	Three months ended March 31,

	2016			2015
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	1		$	15
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	15			17
Equity in losses of unconsolidated affiliates	1			3
Loss on sales of investments and other assets, net	3			—
Gain on sale of Cascade Timberlands	—			(12		)
Stock-based compensation cost	2			3
Changes in assets and liabilities, net of effects from acquisitions:
Net decrease in trade receivables	8			8
Net decrease in prepaid expenses and other assets	3			1
Net decrease in accounts payable, accrued liabilities, deferred revenue and other	(13		)	(34		)
Net change in amount due to affiliates	(1		)	8
Net change in income taxes	—			(2		)
Net cash provided by operating activities	19			7
Cash flows from investing activities:
Proceeds from the sale of cost method and other investments	—			6
Additions to property and equipment and capitalized software	(13		)	(10		)
Contributions to investments in unconsolidated affiliates	(48		)	—
Net proceeds from short-term investment securities	137			140
Purchases of investment securities available for sale	(37		)	—
Distributions from investments in unconsolidated affiliates	4			—
Proceeds from sale of Cascade Timberlands	—			56
Other acquisitions/disposals of businesses, net of cash acquired	(27		)	—
Net cash provided by investing activities	16			192
Cash flows from financing activities:
Borrowings	18			81
Debt service payments	(12		)	(2		)
Purchases of treasury stock	(34		)	(191		)
Net cash used in financing activities	(28		)	(112		)
Net increase in cash and cash equivalents	7			87
Cash and cash equivalents at beginning of period	31			39
Cash and cash equivalents at end of period	$	38		$	126

See Notes to Unaudited Attributed Financial Information for FNFV

Notes to Unaudited Attributed Financial Information for Fidelity National Financial Ventures Group

Period Ended March 31, 2016

(unaudited)

Note A. Basis of Presentation

Description of the Business

Through our FNFV group, we own majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC ("ABRH"), Ceridian HCM, Inc. and Fleetcor Technologies, Inc. (collectively "Ceridian") and Digital Insurance, Inc. ("Digital Insurance").

Recent Developments

On March 30, 2016, Ceridian HCM Holding, Inc., a wholly-owned subsidiary of Ceridian, completed its offering (the "Offering") of senior convertible preferred shares for an aggregate of $150 million. As part of the Offering, FNF purchased an amount equal to its pro rata ownership in Ceridian for $47 million. FNF's ownership percentage in Ceridian did not change as a result of the transaction.

On February 18, 2016 our Board of Directors approved a new FNFV Group three-year stock repurchase program, effective March 1, 2016, under which we may repurchase up to 15 million shares of FNFV Group common stock. Purchases may be made from time to time by us in the open market at prevailing market prices or in privately negotiated transactions through February 28, 2019.

EPS

Included in the calculation of diluted earnings per share are convertible senior notes (the “Notes”) issued on August 2, 2011 by Fidelity National Financial, Inc. Under the terms of the indenture, if converted, a portion of the settlement may include shares of FNFV common stock. As the debt is the obligation of FNF Group, if FNF were to settle a portion of the Notes with FNFV common stock, FNF Group would reimburse FNFV Group for the shares issued upon settlement.

Note B. Investments in Consolidated and Unconsolidated Affiliates

The following table provides information about our investments in consolidated and unconsolidated affiliates attributable to FNFV, including non-GAAP adjustments:



	March 31, 2016		December 31, 2015

Majority Owned Subsidiaries consolidated into the results of FNFV:
American Blue Ribbon Holdings, LLC	$	169	$	169
Digital Insurance, LLC	74		73
Minority Owned Subsidiaries or other ventures:
Ceridian/Fleetcor (32% minority equity interest)	420		363
Del Frisco's Restaurant Group	48		34
Holding Company cash and short term investments	112		245
Financial investments	43		44
Real estate investments	47		35
Other ventures	38		6
Total FNFV Book Value	$	951	$	969

Note C. FNFV Common Stock

FNFV Group common stock has voting and redemption rights. Holders of FNFV Group common stock are entitled to one vote for each share of such stock held. Holders of FNFV Group common stock will vote as one class with holders of FNF Group common stock on all matters that are submitted to a vote of its stockholders unless a separate class vote is required by the terms of the current charter or Delaware law. In connection with certain dispositions of FNFV Group assets, the FNF board of directors may determine to seek approval of the holders of FNFV common stock, voting together as a separate class, to avoid effecting a mandatory dividend, redemption or conversion under the restated charter.

FNF may not redeem outstanding shares of FNFV Group common stock for shares of common stock of a subsidiary that holds assets and liabilities attributed to the FNFV Group unless its board of directors seeks and receives the approval to such redemption of holders of FNFV common stock, voting together as a separate class, and, if such subsidiary also holds assets and liabilities of the FNF Group, the approval of holders of FNF Group common stock to the corresponding FNF Group common stock redemption, with each affected group voting as a separate class. FNF can convert each share of FNFV Group common stock

into a number of shares of the FNF Group common stock at a ratio that provides FNFV stockholders with the applicable Conversion Premium to which they are entitled.

Fidelity National Financial, Inc. - FORM 10-Q - EX-99.2 - EXHIBIT 99.2 - May 2, 2016

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Fidelity National Financial, Inc. Reports