Exhibit 99.1
![]() | PRESS RELEASE |
Fidelity National Financial, Inc. Reports Fourth Quarter 2008 EPS of ($0.01)
Jacksonville, Fla. — (February 4, 2009) — 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 and twelve-month periods ended December 31, 2008. These reported results include the impact of Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation and United Capital Title Insurance Company from their acquisition date of December 22, 2008.
Three Months | Three Months | Three Months | ||||||||||
Ended | Ended | Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2008* | 2007 | ||||||||||
Total revenue | $1.02 billion | $978.8 million | $1.30 billion | |||||||||
Net earnings (loss) | $(1.7 million) | $1.2 million | $(44.9 million) | |||||||||
Net earnings (loss) per diluted share | $ | (0.01 | ) | $ | 0.01 | $ | (0.21 | ) | ||||
Cash flow from operations | $60.5 million | N/A | $37.4 million |
* | This column represents the results for the three months ended December 31, 2008, excluding the impact of Commonwealth Land Title, Lawyers Title and United Capital Title from their acquisition date of December 22, 2008. Those operations contributed $46 million in revenue and a net loss of $2.8 million that have been excluded from the results in this column. |
Twelve Months Ended | Twelve Months Ended | |||||||
December 31, 2008 | December 31, 2007 | |||||||
Total revenue | $4.33 billion | $5.52 billion | ||||||
Net earnings (loss) | $(165.8 million) | $129.8 million | ||||||
Net earnings (loss) per diluted share | $ | (0.79 | ) | $ | 0.59 | |||
Cash flow from operations | $4.6 million | $341.9 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, 2008 and 2007:
Fidelity National Title Group (“FNT”)
Three Months Ended | Three Months Ended | |||||||
December 31, 2008 | December 31, 2007 | |||||||
Total revenue | $898.6 million | $1.17 billion | ||||||
Pre-tax earnings (loss) | $7.0 million | $(66.4 million) | ||||||
Pre-tax margin | 0.8 | % | N/A |
Twelve Months Ended | Twelve Months Ended | |||||||
December 31, 2008 | December 31, 2007 | |||||||
Total revenue | $3.82 billion | $5.00 billion | ||||||
Pre-tax earnings (loss) | $(214.3 million) | $183.5 million | ||||||
Pre-tax margin | N/A | 3.7 | % |
Month** | Direct Orders Opened | Direct Orders Closed | Closing % | |||||||||
October 2008 | 122,700 | 89,300 | 73 | % | ||||||||
November 2008 | 101,400 | 66,800 | 66 | % | ||||||||
December 2008 | 204,100 | 89,100 | 44 | % | ||||||||
Fourth Quarter 2008 | 428,200 | 245,200 | 57 | % | ||||||||
Month | Direct Orders Opened | Direct Orders Closed | Closing % | |||||||||
October 2007 | 172,000 | 105,500 | 61 | % | ||||||||
November 2007 | 155,700 | 92,700 | 60 | % | ||||||||
December 2007 | 134,300 | 98,400 | 73 | % | ||||||||
Fourth Quarter 2007 | 462,000 | 296,600 | 64 | % | ||||||||
Open | Closed | Commercial | ||||||||||||||
Commercial | Commercial | Revenue | Commercial | |||||||||||||
Orders | Orders | (In thousands) | Fee Per File | |||||||||||||
4th Quarter 2008** | 13,800 | 8,000 | $ | 39,200 | $ | 4,900 | ||||||||||
4th Quarter 2007 | 17,100 | 11,200 | $ | 107,000 | $ | 9,500 |
** | The order count and commercial data do not include the impact of Commonwealth Land Title, Lawyers Title and United Capital Title from their acquisition date of December 22, 2008 |
Specialty Insurance
Three Months Ended | Three Months Ended | |||||||
December 31, 2008 | December 31, 2007 | |||||||
Total revenue | $97.3 million | $92.9 million | ||||||
Pre-tax earnings | $18.2 million | $3.4 million | ||||||
Pre-tax margin | 18.7 | % | 3.7 | % |
Twelve Months Ended | Twelve Months Ended | |||||||
December 31, 2008 | December 31, 2007 | |||||||
Total revenue | $383.3 million | $402.7 million | ||||||
Pre-tax earnings | $35.0 million | $53.0 million | ||||||
Pre-tax margin | 9.1 | % | 13.2 | % |
“We continued to operate in challenging markets during the fourth quarter as low order volumes in October and November caused us to continue to aggressively reduce expenses in our title operations,” said Chairman William P. Foley, II. “However, there were two positive events which occurred during the month of December that provide momentum and renewed optimism as we enter 2009.
First, we closed on the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title on December 22, 2008. The acquisition of these underwriters makes FNF the nation’s largest title insurer by market share. We now have reserve for claim losses of more than $2.6 billion, which are approximately twice that of any other title company, reserves plus stockholders’ equity of approximately $5.4 billion and a cash and investment portfolio of more than $4.7 billion. In the first month since the acquisition, we have been very aggressive on reducing costs in those underwriters. Through the end of January, we have eliminated approximately 1,500 of the 5,500 employees that we inherited at closing, a reduction of approximately 27 percent of the existing workforce. We have also closed about 125 offices in
the first month of ownership. In total, we have eliminated run-rate savings of approximately $180 million. We will continue to evaluate the cost structure of the acquired underwriters in the first quarter, but we believe the largest costs have been taken out in the first month of ownership.
The second positive event was the significant increase in open order counts in the months of December and January. Absolute total open order counts more than doubled in December versus their November level, with per day open orders of 9,300 increasing by approximately 65 percent. January open order counts improved further from the significant December increase, as we opened approximately 14,200 orders per day in the month of January, more than a fifty percent increase over December. The significantly stronger order count levels and the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title both provide significant opportunities for our title business as we move into 2009.”
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, 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: the possibility that the increased volume of open orders will not continue; the possibility that the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title will have unforeseen negative effects, including if those companies have undisclosed liabilities, if we are not successful in retaining key producers or if we are not able to reach desired levels of cost savings; 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
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, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Direct title premiums | $ | 227,896 | $ | 343,602 | $ | 1,140,266 | $ | 1,601,768 | ||||||||
Agency title premiums | 383,623 | 521,084 | 1,554,743 | 2,198,690 | ||||||||||||
Total title premiums | 611,519 | 864,686 | 2,695,009 | 3,800,458 | ||||||||||||
Escrow, title-related and other fees | 291,467 | 295,935 | 1,148,539 | 1,132,415 | ||||||||||||
Total title and escrow | 902,986 | 1,160,621 | 3,843,548 | 4,932,873 | ||||||||||||
Specialty insurance | 94,502 | 88,854 | 373,392 | 386,427 | ||||||||||||
Interest and investment income | 31,419 | 44,403 | 134,370 | 185,417 | ||||||||||||
Realized gains and losses | (4,062 | ) | 6,009 | (19,824 | ) | 18,458 | ||||||||||
Total revenue | 1,024,845 | 1,299,887 | 4,331,486 | 5,523,175 | ||||||||||||
Personnel costs | 289,904 | 385,240 | 1,355,845 | 1,700,935 | ||||||||||||
Other operating expenses | 297,599 | 294,848 | 1,194,377 | 1,109,438 | ||||||||||||
Agent commissions | 306,352 | 399,875 | 1,218,044 | 1,698,215 | ||||||||||||
Depreciation and amortization | 34,449 | 37,198 | 141,128 | 130,092 | ||||||||||||
Claim loss expense | 82,808 | 240,381 | 630,404 | 653,876 | ||||||||||||
Interest expense | 14,416 | 17,747 | 65,351 | 54,941 | ||||||||||||
Total expenses | 1,025,528 | 1,375,289 | 4,605,149 | 5,347,497 | ||||||||||||
Earnings (loss) before income taxes | (683 | ) | (75,402 | ) | (273,663 | ) | 175,678 | |||||||||
Income tax expense | (5,529 | ) | (34,665 | ) | (117,675 | ) | 46,776 | |||||||||
Earnings (loss) before equity investments and minority interest | 4,846 | (40,737 | ) | (155,988 | ) | 128,902 | ||||||||||
Earnings (loss) from equity investments | (5,990 | ) | (3,785 | ) | (13,375 | ) | 835 | |||||||||
Minority interest | 513 | 415 | (3,574 | ) | (32 | ) | ||||||||||
Net earnings (loss) | $ | (1,657 | ) | $ | (44,937 | ) | $ | (165,789 | ) | $ | 129,769 | |||||
Net earnings (loss) per share — basic | $ | (0.01 | ) | $ | (0.21 | ) | $ | (0.79 | ) | $ | 0.60 | |||||
Net (loss) earnings per share — diluted | $ | (0.01 | ) | $ | (0.21 | ) | $ | (0.79 | ) | $ | 0.59 | |||||
Weighted average shares — basic | 209,283 | 212,363 | 209,974 | 216,583 | ||||||||||||
Weighted average shares — diluted | 209,283 | 212,363 | 209,974 | 219,989 | ||||||||||||
Direct operations orders opened | 428,200 | 462,000 | 1,860,400 | 2,259,800 | ||||||||||||
Direct operations orders closed | 245,200 | 296,600 | 1,121,200 | 1,434,800 | ||||||||||||
Fee per file | $ | 1,455 | $ | 1,693 | $ | 1,503 | $ | 1,635 | ||||||||
Actual title claims paid | $ | 50,331 | $ | 95,450 | $ | 278,162 | $ | 303,061 |
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended | Specialty | Corporate | |||||||||||||||
December 31, 2008 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 997,488 | $ | 872,614 | $ | 94,502 | $ | 30,372 | |||||||||
Interest and investment income | 31,419 | 28,978 | 2,662 | (221 | ) | ||||||||||||
Realized gains and losses | (4,062 | ) | (2,975 | ) | 102 | (1,189 | ) | ||||||||||
Total revenue | 1,024,845 | 898,617 | 97,266 | 28,962 | |||||||||||||
Personnel costs | 289,904 | 266,865 | 10,775 | 12,264 | |||||||||||||
Other operating expenses | 297,599 | 238,279 | 37,088 | 22,232 | |||||||||||||
Agent commissions | 306,352 | 306,352 | — | — | |||||||||||||
Depreciation and amortization | 34,449 | 27,319 | 671 | 6,459 | |||||||||||||
Claim loss expense | 82,808 | 52,251 | 30,557 | — | |||||||||||||
Interest expense | 14,416 | 581 | 24 | 13,811 | |||||||||||||
Total expenses | 1,025,528 | 891,647 | 79,115 | 54,766 | |||||||||||||
Earnings (loss) before income taxes | (683 | ) | 6,970 | 18,151 | (25,804 | ) | |||||||||||
Income tax expense | (5,529 | ) | (97 | ) | 3,915 | (9,347 | ) | ||||||||||
Earnings (loss) before equity investments and minority interest | 4,846 | 7,067 | 14,236 | (16,457 | ) | ||||||||||||
Earnings (loss) from equity investments | (5,990 | ) | (1,910 | ) | — | (4,080 | ) | ||||||||||
Minority interest | 513 | 959 | — | (446 | ) | ||||||||||||
Net earnings (loss) | $ | (1,657 | ) | $ | 4,198 | $ | 14,236 | $ | (20,091 | ) | |||||||
Open orders | 428,200 | 428,200 | — | — | |||||||||||||
Closed orders | 245,200 | 245,200 | — | — |
Three Months Ended | Specialty | Corporate | |||||||||||||||
December 31, 2007 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 1,249,475 | $ | 1,129,064 | $ | 88,854 | $ | 31,557 | |||||||||
Interest and investment income | 44,403 | 39,691 | 3,979 | 733 | |||||||||||||
Realized gains and losses | 6,009 | 2,934 | 26 | 3,049 | |||||||||||||
Total revenue | 1,299,887 | 1,171,689 | 92,859 | 35,339 | |||||||||||||
Personnel costs | 385,240 | 358,216 | 11,252 | 15,772 | |||||||||||||
Other operating expenses | 294,848 | 242,466 | 36,484 | 15,898 | |||||||||||||
Agent commissions | 399,875 | 399,875 | — | — | |||||||||||||
Depreciation and amortization | 37,198 | 33,545 | 1,623 | 2,030 | |||||||||||||
Claim loss expense | 240,381 | 200,588 | 39,793 | — | |||||||||||||
Interest expense | 17,747 | 3,382 | 281 | 14,084 | |||||||||||||
Total expenses | 1,375,289 | 1,238,072 | 89,433 | 47,784 | |||||||||||||
Earnings (loss) before income taxes | (75,402 | ) | (66,383 | ) | 3,426 | (12,445 | ) | ||||||||||
Income tax expense | (34,665 | ) | (30,925 | ) | 1,165 | (4,905 | ) | ||||||||||
Earnings (loss) before equity investments and minority interest | (40,737 | ) | (35,458 | ) | 2,261 | (7,540 | ) | ||||||||||
Earnings from equity investments | (3,785 | ) | 520 | — | (4,305 | ) | |||||||||||
Minority interest | 415 | 1,534 | — | (1,119 | ) | ||||||||||||
Net earnings (loss) | $ | (44,937 | ) | $ | (36,472 | ) | $ | 2,261 | $ | (10,726 | ) | ||||||
Open orders | 462,000 | 462,000 | — | — | |||||||||||||
Closed orders | 296,600 | 296,600 | — | — |
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Twelve Months Ended | Specialty | Corporate | |||||||||||||||
December 31, 2008 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 4,216,940 | $ | 3,729,259 | $ | 373,392 | $ | 114,289 | |||||||||
Interest and investment income | 134,370 | 120,157 | 12,929 | 1,284 | |||||||||||||
Realized gains and losses | (19,824 | ) | (30,498 | ) | (3,007 | ) | 13,681 | ||||||||||
Total revenue | 4,331,486 | 3,818,918 | 383,314 | 129,254 | |||||||||||||
Personnel costs | 1,355,845 | 1,253,563 | 45,228 | 57,054 | |||||||||||||
Other operating expenses | 1,194,377 | 950,006 | 158,269 | 86,102 | |||||||||||||
Agent commissions | 1,218,044 | 1,218,044 | — | — | |||||||||||||
Depreciation and amortization | 141,128 | 114,989 | 4,896 | 21,243 | |||||||||||||
Claim loss expense | 630,404 | 490,952 | 139,452 | — | |||||||||||||
Interest expense | 65,351 | 5,657 | 487 | 59,207 | |||||||||||||
Total expenses | 4,605,149 | 4,033,211 | 348,332 | 223,606 | |||||||||||||
Earnings (loss) before income taxes | (273,663 | ) | (214,293 | ) | 34,982 | (94,352 | ) | ||||||||||
Income tax expense | (117,675 | ) | (87,408 | ) | 11,658 | (41,925 | ) | ||||||||||
Earnings (loss) before equity investments and minority interest | (155,988 | ) | (126,885 | ) | 23,324 | (52,427 | ) | ||||||||||
Earnings (loss) from equity investments | (13,375 | ) | 1,073 | — | (14,448 | ) | |||||||||||
Minority interest | (3,574 | ) | 1,518 | — | (5,092 | ) | |||||||||||
Net earnings (loss) | $ | (165,789 | ) | $ | (127,330 | ) | $ | 23,324 | $ | (61,783 | ) | ||||||
Open orders | 1,860,400 | 1,860,400 | — | — | |||||||||||||
Closed orders | 1,121,200 | 1,121,200 | — | — |
Twelve Months Ended | Specialty | Corporate | |||||||||||||||
December 31, 2007 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 5,319,300 | $ | 4,835,032 | $ | 386,427 | $ | 97,841 | |||||||||
Interest and investment income | 185,417 | 164,874 | 16,231 | 4,312 | |||||||||||||
Realized gains and losses | 18,458 | 5,080 | 23 | 13,355 | |||||||||||||
Total revenue | 5,523,175 | 5,004,986 | 402,681 | 115,508 | |||||||||||||
Personnel costs | 1,700,935 | 1,594,516 | 45,499 | 60,920 | |||||||||||||
Other operating expenses | 1,109,438 | 891,838 | 144,992 | 72,608 | |||||||||||||
Agent commissions | 1,698,215 | 1,698,085 | — | 130 | |||||||||||||
Depreciation and amortization | 130,092 | 120,223 | 6,046 | 3,823 | |||||||||||||
Claim loss expense | 653,876 | 502,250 | 151,626 | — | |||||||||||||
Interest expense | 54,941 | 14,597 | 1,478 | 38,866 | |||||||||||||
Total expenses | 5,347,497 | 4,821,509 | 349,641 | 176,347 | |||||||||||||
Earnings (loss) before income taxes | 175,678 | 183,477 | 53,040 | (60,839 | ) | ||||||||||||
Income tax expense | 46,776 | 49,275 | 19,271 | (21,770 | ) | ||||||||||||
Earnings (loss) before equity investments and minority interest | 128,902 | 134,202 | 33,769 | (39,069 | ) | ||||||||||||
Earnings from equity investments | 835 | 2,467 | — | (1,632 | ) | ||||||||||||
Minority interest | (32 | ) | 2,889 | — | (2,921 | ) | |||||||||||
Net earnings (loss) | $ | 129,769 | $ | 133,780 | $ | 33,769 | $ | (37,780 | ) | ||||||||
Open orders | 2,259,800 | 2,259,800 | — | — | |||||||||||||
Closed orders | 1,434,800 | 1,434,800 | — | — |
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, | |||||||
2008* | 2007 | |||||||
(unaudited) | ||||||||
Cash and investment portfolio | $ | 4,705,227 | $ | 4,671,383 | ||||
Goodwill | 1,355,250 | 1,339,705 | ||||||
Title Plant | 427,971 | 331,888 | ||||||
Total assets | 8,257,116 | 7,587,853 | ||||||
Notes payable | 1,350,849 | 1,167,739 | ||||||
Reserve for claim losses | 2,607,180 | 1,419,910 | ||||||
Secured trust deposits | 474,073 | 689,935 | ||||||
Total stockholders’ equity | 2,816,842 | 3,244,088 | ||||||
Book value per share | 13.11 | 15.23 |
* | Balance sheet amounts are preliminary and may change subject to the completion of the purchase accounting analysis for the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title |
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