EXHIBIT 99.1
![]() | PRESS RELEASE |
Fidelity National Financial, Inc. Reports First Quarter 2008 EPS of $0.13
Jacksonville, Fla. — (April 23, 2008) — Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, specialty insurance, claims management services and information services, today reported operating results for the three-month period ended March 31, 2008.
1st Quarter 2008 | 1st Quarter 2007 | |||||||
Total revenue | $1.14 billion | $1.37 billion | ||||||
Pre-tax margin | 3.3 | % | 9.3 | % | ||||
Net earnings | $27.2 million | $83.4 million | ||||||
Net earnings per diluted share | $ | 0.13 | $ | 0.37 | ||||
Cash flow from (used in) operations | ($74.9 million) | $84.1 million | ||||||
Return on average equity | 3.4 | % | 9.6 | % |
The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended March 31, 2008 and 2007:
Fidelity National Title Group (“FNT”)
1st Quarter 2008 | 1st Quarter 2007 | |||||||
Total revenue | $1.01 billion | $1.25 billion | ||||||
Pre-tax earnings | $54.0 million | $114.8 million | ||||||
Pre-tax margin | 5.3 | % | 9.2 | % |
Month | Direct Orders Opened | Direct Orders Closed | Closing % | |||||||||
January 2008 | 201,100 | 88,000 | 44 | % | ||||||||
February 2008 | 188,900 | 108,000 | 57 | % | ||||||||
March 2008 | 172,200 | 111,800 | 65 | % | ||||||||
First Quarter 2008 | 562,200 | 307,800 | 55 | % | ||||||||
Month | Direct Orders Opened | Direct Orders Closed | Closing % | |||||||||
January 2007 | 212,900 | 128,700 | 60 | % | ||||||||
February 2007 | 202,000 | 120,300 | 60 | % | ||||||||
March 2007 | 237,500 | 141,400 | 60 | % | ||||||||
First Quarter 2007 | 652,400 | 390,400 | 60 | % | ||||||||
Open | Closed | Commercial | ||||||||||||||
Commercial | Commercial | Revenue | Commercial | |||||||||||||
Orders | Orders | (In thousands) | Fee Per File | |||||||||||||
1st Quarter 2008 | 12,300 | 7,400 | $ | 66,600 | $ | 9,000 | ||||||||||
1st Quarter 2007 | 15,100 | 7,300 | $ | 75,400 | $ | 10,400 |
- 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
1st Quarter 2008 | 1st Quarter 2007 | |||||||
Total revenue | $88.5 million | $99.0 million | ||||||
Pre-tax earnings | $9.4 million | $25.4 million* | ||||||
Pre-tax margin | 10.6 | % | 25.7 | % |
* | The 1st quarter 2007 Specialty Insurance results include a $12.2 million benefit from an adjustment related to the deferral and amortization of certain costs over the life of a policy, consistent with the recognition of the premiums. The adjustment represents costs deferred as of March 31, 2007, on policies issued over the prior twelve months. |
“We continue to navigate through difficult economic conditions, particularly in the mortgage and real estate markets,” said Chairman William P. Foley, II. “We did see a surge in open order volumes after the 75 basis point inter-meeting Fed rate cut, but those elevated levels did not continue through the rest of the quarter. While we peaked above 11,000 open orders per
day for a few weeks in late January and early February, open orders have settled down closer to 8,000 to 8,500 per day over the last six weeks. Even that order volume is the highest level we have seen since the summer of 2007, right before the credit crisis hit the mortgage markets. We have definitely seen a better start to 2008, particularly given that the first quarter is generally the weakest quarter of the year and the fact that we now have our cost structure better aligned with that level of order volumes. On the claims front, we were encouraged by our performance in the first quarter and continue to be confident in our reserve position, as no single calendar year showed more than a 10 basis point positive or negative change in the ultimate expected loss experience. This was the best quarterly performance versus the actuarial model since the first quarter of 2007. Overall, we are prepared for the operating environment to remain challenging and we will continue to seek out ways to maximize the profitability of our title insurance operations, even if it is in the face of continued difficult mortgage and real estate markets.”
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, specialty insurance, claims management services and information services. FNF is one of the nation’s largest title insurance companies through its title insurance underwriters — Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title — that issue approximately 28 percent of all title insurance policies 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; 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, Finance and Investor Relations,
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 | ||||||||
March 31, | ||||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
Direct title premiums | $ | 304,779 | $ | 418,597 | ||||
Agency title premiums | 423,436 | 542,146 | ||||||
Total title premiums | 728,215 | 960,743 | ||||||
Escrow, title-related and other fees | 273,621 | 256,980 | ||||||
Total title and escrow | 1,001,836 | 1,217,723 | ||||||
Specialty insurance | 84,827 | 94,998 | ||||||
Interest and investment income | 43,701 | 49,959 | ||||||
Realized gains and losses | 8,477 | 6,382 | ||||||
Total revenue | 1,138,841 | 1,369,062 | ||||||
Personnel costs | 361,878 | 435,260 | ||||||
Other operating expenses | 267,870 | 234,441 | ||||||
Agent commissions | 328,009 | 420,157 | ||||||
Depreciation and amortization | 36,895 | 29,354 | ||||||
Claim loss expense | 87,505 | 110,986 | ||||||
Interest expense | 18,636 | 11,977 | ||||||
Total expenses | 1,100,793 | 1,242,175 | ||||||
Earnings before income taxes | 38,048 | 126,887 | ||||||
Income tax expense | 12,175 | 45,045 | ||||||
Minority interest | (1,372 | ) | (1,557 | ) | ||||
Net earnings | $ | 27,245 | $ | 83,399 | ||||
Net earnings per share — basic | $ | 0.13 | $ | 0.38 | ||||
Net earnings per share — diluted | $ | 0.13 | $ | 0.37 | ||||
Weighted average shares — basic | 211,110 | 219,014 | ||||||
Weighted average shares — diluted | 213,528 | 222,912 | ||||||
Direct operations orders opened | 562,200 | 652,400 | ||||||
Direct operations orders closed | 307,800 | 390,400 | ||||||
Fee per file | $ | 1,447 | $ | 1,557 | ||||
Actual title claims paid | $ | 75,675 | $ | 55,275 |
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended | Specialty | Corporate | ||||||||||||||||
March 31, 2008 | Consolidated | FNT | Insurance | and Other | ||||||||||||||
Gross operating revenue | $ | 1,086,663 | $ | 970,717 | 84,827 | 31,119 | ||||||||||||
Interest and investment income | 43,701 | 38,392 | 3,579 | 1,730 | ||||||||||||||
Realized gains and losses | 8,477 | 2,453 | 93 | 5,931 | ||||||||||||||
Total revenue | 1,138,841 | 1,011,562 | 88,499 | 38,780 | ||||||||||||||
Personnel costs | 361,878 | 334,321 | 11,340 | 16,217 | ||||||||||||||
Other operating expenses | 267,870 | 208,075 | 33,154 | 26,641 | ||||||||||||||
Agent commissions | 328,009 | 328,009 | — | — | ||||||||||||||
Depreciation and amortization | 36,895 | 30,089 | 1,510 | 5,296 | ||||||||||||||
Claim loss expense | 87,505 | 54,613 | 32,892 | — | ||||||||||||||
Interest expense | 18,636 | 2,410 | 184 | 16,042 | ||||||||||||||
Total expenses | 1,100,793 | 957,517 | 79,080 | 64,196 | ||||||||||||||
Pretax earnings | 38,048 | 54,045 | 9,419 | (25,416 | ) | |||||||||||||
Pretax margin | 3.3 | % | 5.3 | % | 10.6 | % | — | |||||||||||
Open orders | 562,200 | 562,200 | — | — | ||||||||||||||
Closed orders | 307,800 | 307,800 | — | — |
Three Months Ended | Specialty | Corporate | ||||||||||||||||
March 31, 2007 | Consolidated | FNT | Insurance | and Other | ||||||||||||||
Gross operating revenue | $ | 1,312,721 | $ | 1,200,916 | $ | 94,998 | $ | 16,807 | ||||||||||
Interest and investment income | 49,959 | 42,009 | 4,003 | 3,947 | ||||||||||||||
Realized gains and losses | 6,382 | 3,161 | (31 | ) | 3,252 | |||||||||||||
Total revenue | 1,369,062 | 1,246,086 | 98,970 | 24,006 | ||||||||||||||
Personnel costs | 435,260 | 410,573 | 11,599 | 13,088 | ||||||||||||||
Other operating expenses | 234,441 | 198,408 | 21,052 | 14,981 | ||||||||||||||
Agent commissions | 420,157 | 420,051 | — | 106 | ||||||||||||||
Depreciation and amortization | 29,354 | 26,917 | 1,558 | 879 | ||||||||||||||
Claim loss expense | 110,986 | 72,056 | 38,930 | — | ||||||||||||||
Interest expense | 11,977 | 3,309 | 405 | 8,263 | ||||||||||||||
Total expenses | 1,242,175 | 1,131,314 | 73,544 | 37,317 | ||||||||||||||
Pretax earnings | 126,887 | 114,772 | 25,426 | (13,311 | ) | |||||||||||||
Pretax margin | 9.3 | % | 9.2 | % | 25.7 | % | — | |||||||||||
Open orders | 652,400 | 652,400 | — | — | ||||||||||||||
Closed orders | 390,400 | 390,400 | — | — |
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
March 31, | December 31, | |||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
Cash and investment portfolio | $ | 4,532,380 | $ | 4,671,383 | ||||
Goodwill | 1,338,571 | 1,339,705 | ||||||
Title Plant | 332,768 | 331,888 | ||||||
Total assets | 7,475,348 | 7,587,853 | ||||||
Notes payable | 1,182,299 | 1,167,739 | ||||||
Reserve for claim losses | 1,395,858 | 1,419,910 | ||||||
Secured trust deposits | 702,265 | 689,935 | ||||||
Total stockholders’ equity | 3,231,074 | 3,244,088 | ||||||
Book value per share | 15.11 | 15.23 |
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