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Three Months Ended Three Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
Total revenue $1.47 billion $969.8 million
----------------------- ------------------ ------------------
Net earnings (loss)
attributable to common
shareholders $73.4 million ($198.3 million)
----------------------- ------------------ ------------------
Net earnings (loss) per
diluted share attributable
to common shareholders $0.32 ($0.95)
----------------------- ------------------ ------------------
Cash flow from operations $84.5 million $6.2 million
----------------------- ------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2008
------------------- -------------------
Total revenue $4.37 billion $3.25 billion
----------------------- ------------------ ------------------
Net earnings (loss)
attributable to common
shareholders $153.0 million ($164.1 million)
----------------------- ------------------ ------------------
Net earnings (loss) per
diluted share attributable
to common shareholders $0.67 ($0.78)
----------------------- ------------------ ------------------
Cash flow from (used in)
Operations $367.7 million ($55.9 million)
----------------------- ------------------ ------------------
The following are summary financial and operational results for the
operating segments of FNF for the three-month and nine-month periods
ended September 30, 2009 and 2008:
Fidelity National Title Group ("FNT")
Three Months Ended Three Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
Total revenue $1.35 billion $872.6 million
----------------------- ------------------ ------------------
Pre-tax earnings (loss) $119.8 million ($279.4 million)
----------------------- ------------------ ------------------
Pre-tax margin 8.9% N/A
----------------------- ------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
Total revenue $4.05 billion $2.92 billion
----------------------- ------------------ ------------------
Pre-tax earnings (loss) $260.4 million ($221.3 million)
----------------------- ------------------ ------------------
Pre-tax margin 6.4% N/A
----------------------- ------------------ ------------------
Month Direct Orders Opened Direct Orders Closed
------------------ -------------------- --------------------
July 2009 191,100 166,000
------------------ -------------------- --------------------
August 2009 181,100 137,200
------------------ -------------------- -------------------- September 2009 196,400 135,500
------------------ -------------------- --------------------
Third Quarter 2009 568,600 438,700
------------------ ==================== ====================
Month Direct Orders Opened Direct Orders Closed
------------------ -------------------- --------------------
July 2008 135,500 90,600
------------------ -------------------- --------------------
August 2008 128,900 87,300
------------------ -------------------- --------------------
September 2008 143,000 82,700
------------------ -------------------- --------------------
Third Quarter 2008 407,400 260,600
------------------ ==================== ====================
Open Closed Commercial Commercial
Commercial Commercial Revenue Fee Per File
Orders Orders (In thousands)
----------- ----------- -------------- -------------
3rd Quarter 2009 21,300 14,200 $61,000 $4,300
---------------- ----------- ----------- -------------- -------------
3rd Quarter 2008 14,600 9,000 $59,400 $6,600
---------------- ----------- ----------- -------------- -------------
- 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
September 30, 2009 September 30, 2008
------------------ ------------------
Total revenue $102.5 million $100.4 million
---------------------- ------------------ ------------------
Pre-tax earnings (loss) $7.2 million ($5.8 million)
---------------------- ------------------ ------------------
Pre-tax margin 7.0% N/A
---------------------- ------------------ ------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
Total revenue $287.4 million $286.0 million
---------------------- ------------------ ------------------
Pre-tax earnings $34.9 million $16.8 million
---------------------- ------------------ ------------------
Pre-tax margin 12.1% 5.9%
---------------------- ------------------ ------------------
"This was another solid financial quarter for our company," said Chairman William P. Foley, II. "Title order volumes increased nicely versus the prior year and showed a modest overall sequential decline from the second quarter of this year, as refinance volumes slowed from their accelerated pace early in the year. However, we were able to reduce costs throughout the quarter and our title business produced nearly a 9% pre-tax margin, almost equal to our second quarter performance. We did see strength in open order counts as the quarter progressed, as September showed the strongest open order volumes during the quarter. Additionally, open order volumes continued to accelerate in October, reaching their highest levels in the last four months. These elevated open order levels have us well positioned as we enter the normally seasonally slower fourth quarter and first quarter of next year."
"We did release approximately $74 million in title reserves during the quarter, as we reached the conclusion that the consistently lower claims payments we have seen for the last four quarters had caused a redundant title reserve situation. We offset much of the benefit of this reserve release through the reversal of an insurance receivable associated with a fraud claim that was previously paid in 2007 and 2008. Recent court rulings relating to specific insurance coverage have caused us to reassess our accounting position with respect to this insurance receivable and we, therefore, have reversed approximately $63 million of the recorded balance as a charge to claim loss expense."
"Finally, we announced the sale of our small leasing company, Fidelity National Capital, during the quarter for total net proceeds of approximately $50 million. While Fidelity National Capital was a relatively small business for FNF, its strong growth had resulted in more than $200 million of primarily non-recourse debt on our consolidated balance sheet and we believe this sale was a great opportunity to continue to delever our balance sheet and to monetize an investment. Our debt to total capital ratio ended the quarter at 21% as a result of the sale of this asset."
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.
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
Three months ended Nine months ended
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Direct title premiums $379,396 $286,551 $1,122,053 $912,370
Agency title premiums 603,572 323,769 1,814,066 1,171,120
----------- ----------- ----------- -----------
Total title premiums 982,968 610,320 2,936,119 2,083,490
Escrow, title-related
and other fees 337,602 270,898 1,029,412 803,270
----------- ----------- ----------- -----------
Total title and
escrow 1,320,570 881,218 3,965,531 2,886,760
Specialty insurance 99,279 99,902 276,566 278,890
Interest and investment
income 36,623 30,789 112,908 102,563
Realized gains and
losses 10,621 (42,136) 18,084 (15,868)
----------- ----------- ----------- -----------
Total revenue 1,467,093 969,773 4,373,089 3,252,345
Personnel costs 410,536 328,905 1,260,391 1,039,444
Other operating
expenses 343,874 300,880 1,024,043 874,743
Agent commissions 480,787 254,883 1,446,460 911,692
Depreciation and
amortization 23,119 29,237 84,651 93,693
Claim loss expense 92,540 359,664 290,234 547,596
Interest expense 7,938 13,451 28,355 43,947
----------- ----------- ----------- -----------
Total expenses 1,358,794 1,287,020 4,134,134 3,511,115
Earnings (loss)
from continuing
operations
before taxes 108,299 (317,247) 238,955 (258,770)
Income tax expense 34,307 (123,440) 68,080 (106,982)
----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before equity
investments 73,992 (193,807) 170,875 (151,788)
Earnings (loss)from
equity investments 2,737 (2,717) (13,995) (7,385)
----------- ----------- ----------- -----------
Net earnings (loss)
from continuing
operations 76,729 (196,524) 156,880 (159,173)
Discontinued
operations, net of tax (1,848) (3,579) (1,881) (9,046)
----------- ----------- ----------- -----------
Net earnings (loss) 74,881 (200,103) 154,999 (168,219)
Non-controlling
Interests expense 1,437 (1,801) 2,010 (4,087)
----------- ----------- ----------- -----------
Net earnings (loss)
attributable to
common shareholders $73,444 ($198,302) $152,989 ($164,132)
=========== =========== =========== ===========
Earnings per share:
Net earnings (loss)
from continuing
operations
attributable
to common
shareholders -
basic $0.32 ($0.95) $0.68 ($0.78)
=========== =========== =========== ===========
Net earnings (loss)
from continuing
operations
attributable
to common
shareholders -
diluted $0.32 ($0.95) $0.67 ($0.78)
=========== =========== =========== ===========
Weighted average
shares - basic 228,741 208,710 223,384 210,206
=========== =========== =========== ===========
Weighted average
shares - diluted 232,141 208,710 227,410 210,206
=========== =========== =========== ===========
Direct operations
orders opened 568,600 407,400 2,060,800 1,432,200
Direct operations
orders closed 438,700 260,600 1,391,400 875,900
Fee per file $1,309 $1,636 $1,214 $1,516
Actual title claims
paid $106,006 $84,668 $239,237 $227,831
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended Specialty Corporate
September 30, 2009 Consolidated FNT Insurance and Other
------------ ---------- ---------- ----------Gross operating revenue $1,419,849 $1,304,293 $99,279 $16,277
Interest and investment
income 36,623 34,001 3,049 (427)
Realized gains and
losses 10,621 10,457 156 8
------------ ---------- ---------- ---------- Total revenue 1,467,093 1,348,751 102,484 15,858
Personnel costs 410,536 387,266 10,635 12,635
Other operating expenses 343,874 284,666 46,208 13,000
Agent commissions 480,787 480,787 -- --
Depreciation and
amortization 23,119 20,742 1,279 1,098
Claim loss expense 92,540 55,383 37,157 --
Interest expense 7,938 89 4 7,845
------------ ---------- ---------- ----------
Total expenses 1,358,794 1,228,933 95,283 34,578
Pretax earnings from
continuing operations 108,299 119,818 7,201 (18,720)
Pretax margin 7.4% 8.9% 7.0% --
Open orders 568,600 568,600 -- --
Closed orders 438,700 438,700 -- --
Three Months Ended Specialty Corporate
September 30, 2008 Consolidated FNT Insurance and Other
------------ ---------- ---------- ----------
Gross operating revenue $981,120 $872,855 $99,902 $8,363
Interest and investment
income 30,789 27,354 3,263 172
Realized gains and
losses (42,136) (27,562) (2,750) (11,824)
------------ ---------- ---------- ----------
Total revenue 969,773 872,647 100,415 (3,289)
Personnel costs 328,905 311,856 11,766 5,283
Other operating expenses 300,880 242,996 46,952 10,932
Agent commissions 254,883 254,883 -- --
Depreciation and
amortization 29,237 27,523 1,207 507
Claim loss expense 359,664 313,483 46,181 --
Interest expense 13,451 1,321 124 12,006
------------ ---------- ---------- ----------
Total expenses 1,287,020 1,152,062 106,230 28,728
Pretax earnings (loss)
from continuing
operations (317,247) (279,415) (5,815) (32,017)
Pretax margin -- -- -- --
Open orders 407,400 407,400 -- --
Closed orders 260,600 260,600 -- --
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Nine Months Ended Specialty Corporate
September 30, 2009 Consolidated FNT Insurance and Other
------------ ---------- ---------- ----------
Gross operating revenue $4,242,097 $3,931,969 $276,566 $33,562
Interest and investment
income 112,908 104,948 9,401 (1,441)
Realized gains and
losses 18,084 18,009 1,456 (1,381)
------------ ---------- ---------- ----------
Total revenue 4,373,089 4,054,926 287,423 30,740
Personnel costs 1,260,391 1,199,220 34,152 27,019
Other operating expenses 1,024,043 873,399 120,888 29,816
Agent commissions 1,446,460 1,446,460 -- --
Depreciation and
amortization 84,651 78,199 3,924 2,528
Claim loss expense 290,234 196,691 93,543 --
Interest expense 28,355 649 27 27,679
------------ ---------- ---------- ----------
Total expenses 4,134,134 3,794,558 252,534 87,042
Pretax earnings from
continuing operations 238,955 260,368 34,889 (56,302)
Pretax margin 5.5% 6.4% 12.1% --
Open orders 2,060,800 2,060,800 -- --
Closed orders 1,391,400 1,391,400 -- --
Nine Months Ended Specialty Corporate
September 30, 2008 Consolidated FNT Insurance and Other
------------ ---------- ---------- ----------
Gross operating revenue $3,165,650 $2,856,645 $278,890 $30,115
Interest and investment
income 102,563 91,179 10,267 1,117
Realized gains and
losses (15,868) (27,523) (3,109) 14,764
------------ ---------- ---------- ----------
Total revenue 3,252,345 2,920,301 286,048 45,996
Personnel costs 1,039,444 986,698 34,453 18,293
Other operating expenses 874,743 711,727 121,181 41,835
Agent commissions 911,692 911,692 -- --
Depreciation and
amortization 93,693 87,670 4,225 1,798
Claim loss expense 547,596 438,701 108,895 --
Interest expense 43,947 5,076 463 38,408
------------ ---------- ---------- ----------
Total expenses 3,511,115 3,141,564 269,217 100,334
Pretax earnings (loss)
from continuing
operations (258,770) (221,263) 16,831 (54,338)
Pretax margin -- -- 5.9% --
Open orders 1,432,200 1,432,200 -- --
Closed orders 875,900 875,900 -- --
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
September 30, December 31,
2009 2008
------------- -------------
(Unaudited)
Cash and investment portfolio $4,988,911 $4,691,790
Goodwill 1,523,492 1,581,658
Title plant 437,124 431,591
Total assets 8,053,335 8,368,240
Notes payable 867,971 1,350,849
Reserve for claim losses 2,623,897 2,738,625
Secured trust deposits 437,975 474,073
Total stockholders' equity 3,248,943 2,856,772
Book value per share $14.09 $13.29
SOURCE Fidelity National Financial, Inc.
http://www.fnf.com
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