EXHIBIT 99
Contact:
Thomas A. Klemens
Executive Vice President &
Chief Financial Officer
(714) 800-4401
THE FIRST AMERICAN CORPORATION REPORTS
OPERATING RESULTS FOR THIRD QUARTER 2000
SANTAANA, Calif., Nov. 1, 2000 - The First American Corporation (NYSE: FAF), the
leading provider of business information and related products and services,
announced today operating results for the third quarter and nine months ended
Sept. 30, 2000.
Net income for the third quarter of 2000 was $24.4 million, or 37 cents per
diluted share. This compares with 1999 third-quarter net income of $28.0
million, or 42 cents per diluted share. Revenues for the third quarter of 2000
were $750.3 million, a 3 percent decrease when compared with revenues of $775.1
million for the same period last year.
Net income for the nine-month period of 2000 was $50.4 million, or 77 cents
per diluted share. This compares with $90.9 million, or $1.37 per diluted share,
for the nine-month period of 1999, which excludes the cumulative effect of a
change in accounting for tax service contracts of $55.6 million, or 84 cents per
diluted share, charged in the first quarter of 1999. Revenues for the nine-month
period of 2000 totaled $2.17 billion, a decrease of 5 percent when compared with
revenues of $2.29 billion for the same period in 1999.
"We are pleased with our third-quarter results, which reflect our success
in implementing a focused strategy of profitable growth through market share
expansion and our commitment to operational efficiencies in both the title and
real estate information and services segments," said Parker S. Kennedy,
president of The First American Corporation. "Technology solutions, including
leveraging our databases and automating delivery platforms, continue to drive
product expansion and improve efficiencies across all company segments. We are
particularly pleased with the results to date of our joint venture with
LandAmerica for an advanced title information delivery system, and our progress
in combining the Intellitech real estate information business of Transamerica
with that of our First American Real Estate Solutions division."
Kennedy added: "As we enter the fourth quarter and the inevitable seasonal
slowdown in new home sales and residential resales, we will continue to focus on
labor efficiencies in the title and real estate information and services
segments. This, coupled with the continued growth of our less cyclical consumer
information and services segment, should result in favorable comparisons from a
year ago."
The First American Corporation, based in Santa Ana, Calif., is the nation's
leading provider of business information and related products and services. The
corporation's three primary business segments include: title insurance and
services; real estate information and services, which includes mortgage
information services and database information and services; and consumer
information and services, which provides automotive, subprime and
direct-to-consumer credit reporting; resident screening; pre-employment
screening; property and automotive insurance tracking services; property and
casualty insurance; home warranties; investment advisory; and trust and banking
services. Information about the company and an archive of its press releases can
be found on the Internet at www.firstam.com.
Certain statements made in this press release,
including those relating to labor efficiencies, the
growth in our consumer and information services segment
and expectations for the fourth quarter, are
forward-looking. Risks and uncertainties exist which
may cause results to differ materially from those set
forth in these forward-looking statements. Factors that
could cause the anticipated results to differ from
those described in the forward-looking statements
include: interest rate fluctuations; changes in the
performance of the real estate markets; general
volatility in the capital markets; changes in
applicable government regulations; consolidation among
the company's significant customers and competitors;
legal proceedings commenced by the California attorney
general and related litigation; the company's continued
ability to identify businesses to be acquired; changes
in the company's ability to integrate businesses which
it acquires; and other factors described in our Annual
Report on Form 10-K for the year ended December 31,
1999, filed with the Securities and Exchange
Commission. The forward-looking statements speak only
as of the date they are made. The company does not
undertake to update forward-looking statements to
reflect circumstances or events that occur after the
date the forward-looking statements are made.
(Financial Data to Follow)
For the Three Months Ended For the Nine Months ended
September 30 September 30
2000 1999 2000 1999
Revenues $ 750,260,000 $ 775,054,000 $2,172,359,000 $2,287,776,000
Income before income taxes, minority interests
and cumulative effect of a change in
accounting principle $ 48,757,000 $ 50,840,000 $ 100,988,000 $ 166,536,000
Income taxes $ 19,000,000 $ 17,766,000 $ 39,200,000 $ 57,466,000
Minority interests $ 5,358,000 $ 5,081,000 $ 11,355,000 $ 18,183,000
Net income before cumulative effect of a
change in accounting principle $ 24,399,000 $ 27,993,000 $ 50,433,000 $ 90,887,000
Cumulative effect of a change in accounting for
tax service contracts, net of income taxes
and minority interests -- -- -- $ (55,640,000)
Net income $ 24,399,000 $ 27,993,000 $ 50,433,000 $ 35,247,000
Per share amounts:
Basic:
Income before cumulative effect of a
change in accounting for tax service contracts $ 0.38 $ 0.43 $ 0.79 $ 1.41
Cumulative effect of a change in accounting
for tax service contracts -- -- -- $ (0.86)
Net inome $ 0.38 $ 0.43 $ 0.79 $ 0.55
Diluted:
Income before cumulative effect of a
change in accounting for tax service contracts $ 0.37 $ 0.42 $ 0.77 $ 1.37
Cumulative effect of a change in accounting
for tax service contracts -- -- -- $ (0.84)
Net inome $ 0.37 $ 0.42 $ 0.77 $ 0.53
Average shares outstanding:
Basic 63,526,000 65,213,000 63,689,000 64,564,000
Diluted 66,088,000 66,166,000 65,700,000 66,296,000
(Additional Financial Data to Follow)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30 September 30
2000 1999 2000 1999
RESULTS OF OPERATIONS
Revenues
Operating revenues $ 730,490,000 $ 757,729,000 $ 2,126,571,000 $ 2,246,526,000
Investment and other income 19,770,000 17,325,000 45,788,000 41,250,000
-------------- -------------- ---------------- ----------------
750,260,000 775,054,000 2,172,359,000 2,287,776,000
-------------- -------------- ---------------- ----------------
Expenses
Salaries and other personnel
costs 260,250,000 264,809,000 773,513,000 779,824,000
Premiums retained by agents 192,803,000 229,966,000 585,398,000 668,746,000
Other operating expenses 176,845,000 169,994,000 511,994,000 502,600,000
Provision for title losses and
other claims 36,764,000 30,108,000 104,327,000 85,549,000
Depreciation and amortization 22,790,000 19,507,000 61,112,000 55,574,000
Premium taxes 5,396,000 5,829,000 16,318,000 17,125,000
Interest 6,655,000 4,001,000 18,709,000 11,822,000
-------------- -------------- ---------------- ----------------
701,503,000 724,214,000 2,071,371,000 2,121,240,000
-------------- -------------- ---------------- ----------------
Income before income taxes,
minority interests and
cumulative effect of a
change in accounting principle $ 48,757,000 $ 50,840,000 $ 100,988,000 $ 166,536,000
============== ============== ================ ================
OPERATING REVENUES
Title Insurance:
Direct operations $ 280,152,000 $ 273,310,000 $ 799,585,000 $ 813,640,000
Agency operations 241,846,000 286,077,000 727,673,000 831,590,000
-------------- -------------- ---------------- ----------------
521,998,000 559,387,000 1,527,258,000 1,645,230,000
Real Estate Information 141,501,000 143,220,000 408,151,000 451,228,000
Consumer Information 66,991,000 55,122,000 191,162,000 150,068,000
-------------- -------------- ---------------- ----------------
Total operating revenues $ 730,490,000 $ 757,729,000 $ 2,126,571,000 $ 2,246,526,000
============== ============== ================ ================
INCOME BEFORE INCOME TAXES,
MINORITY INTERESTS AND
CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLE
Title Insurance $ 30,543,000 $ 31,946,000 $ 73,752,000 $ 116,183,000
Real Estate Information 19,915,000 17,574,000 36,030,000 63,014,000
Consumer Information 10,347,000 8,955,000 28,876,000 22,178,000
-------------- -------------- ---------------- ----------------
Total before corporate expenses
and minority interests 60,805,000 58,475,000 138,658,000 201,375,000
Corporate expenses 12,048,000 7,635,000 37,670,000 34,839,000
-------------- -------------- ---------------- ----------------
Income before income taxes,
minority interests and
cumulative effect of a change
in accounting principle $ 48,757,000 $ 50,840,000 $ 100,988,000 $ 166,536,000
============== ============== ================ ================
TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened 312,000 322,900 951,500 1,069,400
Title orders closed 246,500 276,700 737,700 890,800