EXHIBIT 99
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CONTACT:
Thomas A. Klemens
Executive Vice President &
Chief Financial Officer
(714) 800-4401
THE FIRST AMERICAN CORPORATION REPORTS OPERATING RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2000
SANTA ANA, CALIF., FEB. 20, 2001 - THE FIRST AMERICAN CORPORATION (NYSE: FAF),
the nation's leading diversified provider of business information and related
products and services, announced today operating results for the fourth quarter
and 12 months ended Dec. 31, 2000.
Net income for the fourth quarter 2000 was $31.8 million, or 47 cents per
diluted share, which includes a pre-tax, non-recurring net benefit of $22.1
million resulting from modifications to the company's pension plan (included as
a benefit in salaries and other personnel costs) and realized pre-tax investment
losses of $4.3 million. These items totaled a net benefit of $10.7 million on an
after-tax basis, or 16 cents per diluted share. The resulting operational net
income for the quarter was $21.1 million, or 31 cents per diluted share,
compared with a net loss of $2.2 million, or 3 cents per diluted share, for the
same period in 1999. Revenues for the fourth quarter of 2000 were $761.9
million, an increase of 9 percent when compared with revenues of $700.4 million
reported for the same period last year.
The company's full year 2000 operating earnings were $71.5 million, or
$1.08 per diluted share (excluding the net effect of the fourth quarter items
noted above). This compares with operating earnings of $88.6 million, or $1.34
per diluted share, for the prior year 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 full year
2000 totaled $2.93 billion, a decrease of 2 percent when compared with revenues
of $2.99 billion in the prior year.
"During 2000, we continued extensive cost-containment measures that were
initiated in 1999, which included streamlining and consolidating back office
operations and providing technology enhancements across The First American
Family of Companies," stated Parker S. Kennedy, president of The First American
Corporation. "These efforts have positioned all of our real estate related
businesses to take full advantage of the projected increase in mortgage
originations that is forecasted for 2001.
"Highlights of 2000 included aggressive moves to create a fully automated
and centralized title searching capability, which will help increase
efficiencies and improve operating margins; the launch of the EAGLE 9(TM) UCC
Insurance Policy for commercial loans secured by personal property that will add
a new, non-real estate revenue stream and provide significant opportunities to
cross-sell products and services; and the building of the default management
group, which provides important counter-cyclical revenue in a high
mortgage-default environment. Lastly, during 2000, we continued to build and
enhance our fast-growing and profitable consumer information and services
segment, which provides an extensive menu of business information and consumer
products. Our outlook for 2001 is to keep growing and improving through
strategic acquisitions, market share expansion and technology enhancements,
while continuing to deliver impressive financial performance."
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 cost and production efficiencies gained through the
integration of technologies, improved opportunities to
cross-market products, the impact on efficiency and operating
margins resulting from efforts to create a fully automated and
centralized title searching capability, the effects on revenues
resulting from the launch of the EAGLE 9 policy and expectations
of growth, market share expansion, technology enhancements and
financial performance in 2001 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 the company's Annual Report on Form 10-K for the
year ended Dec. 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.
THE FIRST AMERICAN CORPORATION
SUMMARY OF EARNINGS
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
-------------------------------------- -------------------------------------
2000 1999 2000 1999
-------------------------------------- -------------------------------------
Revenues $ 761,896,000 $ 700,393,000 $ 2,934,255,000 $ 2,988,169,000
Income before income taxes, minority
interests and cumulative effect of
a change in accounting principle $ 52,888,000 $ 3,436,000 $ 153,876,000 $ 169,972,000
Income Taxes $ 15,500,000 $ 4,834,000 $ 54,700,000 $ 62,300,000
Minority interests $ 5,598,000 $ 846,000 $ 16,953,000 $ 19,029,000
Net income (loss) before cumulative
effect of a change in accounting
principle $ 31,790,000 $ (2,244,000) $ 82,223,000 $ 88,643,000
Cumulative effect of a change in
accounting for tax service
contracts, net of income taxes and
minority interests -- -- -- $ (55,640,000)
Net income (loss) $ 31,790,000 $ (2,244,000) $ 82,223,000 $ 33,003,000
Per share amounts:
Basic:
Income (loss) before cumulative
effect of a change in accounting
for tax service contracts $ 0.50 $ (0.03) $ 1.29 $ 1.37
Cumulative effect of a change in
accounting for tax service
contracts -- -- -- $ (0.86)
Net income (loss) $ 0.50 $ (0.03) $ 1.29 $ 0.51
Diluted:
Income (loss) before cumulative
effect of a change in accounting
for tax service contracts $ 0.47 $ (0.03) $ 1.24 $ 1.34
Cumulative effect of a change in
accounting for tax service
contracts -- -- -- $ (0.84)
Net income (loss) $ 0.47 $ (0.03) $ 1.24 $ 0.50
Weighted average shares outstanding:
Basic 63,654,000 65,210,000 63,680,000 64,669,000
Diluted 67,086,000 66,357,000 66,050,000 66,351,000
THE FIRST AMERICAN CORPORATION
SUMMARY BALANCE SHEET INFORMATION
December 31,
-------------------------------------
2000 1999
------------------ ------------------
Total assets $ 2,199,737,000 $ 2,116,414,000
Total equity $ 870,237,000 $ 815,991,000
Book value per share $ 13.62 $ 12.54
(Additional Financial Data to Follow)
SELECTED FINANCIAL DATA
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
----------------------------------------- ---------------------------------------------
2000 1999 2000 1999
----------------------------------------- ---------------------------------------------
RESULTS OF OPERATIONS
Revenues
Operating revenues $ 750,957,000 $ 689,670,000 $ 2,877,528,000 $ 2,936,196,000
Investment and other income 10,939,000 10,723,000 56,727,000 51,973,000
----------------- ----------------- ----------------- -----------------
761,896,000 700,393,000 2,934,255,000 2,988,169,000
----------------- ----------------- ----------------- -----------------
Expenses
Salaries and other personnel costs 241,253,000 254,948,000 1,014,766,000 1,034,772,000
Premiums retained by agents 206,542,000 202,290,000 791,940,000 871,036,000
Other operating expenses 185,678,000 176,256,000 697,672,000 678,856,000
Provision for title losses and other
claims 37,305,000 30,669,000 141,632,000 116,218,000
Depreciation and amortization 25,224,000 21,457,000 86,336,000 77,031,000
Premium taxes 6,255,000 5,772,000 22,573,000 22,897,000
Interest 6,751,000 5,565,000 25,460,000 17,387,000
------------------ ------------------- -------------------- --------------------
709,008,000 696,957,000 2,780,379,000 2,818,197,000
------------------ ------------------- -------------------- --------------------
Income before income taxes, minority
interests and cumulative effect of a
change in accounting principle $ 52,888,000 $ 3,436,000 $ 153,876,000 $ 169,972,000
================== =================== ==================== ====================
OPERATING REVENUES
Title Isurance:
Direct operations $ 283,527,000 $ 253,493,000 $ 1,083,112,000 $ 1,067,133,000
Agency operations 256,264,000 255,156,000 983,937,000 1,086,746,000
------------------ ------------------- -------------------- --------------------
539,791,000 508,649,000 2,067,049,000 2,153,879,000
Real Estate Information 149,996,000 124,466,000 558,147,000 575,694,000
Consumer Information 61,170,000 56,555,000 252,332,000 206,623,000
------------------ ------------------- -------------------- --------------------
Total operating revenues $ 750,957,000 $ 689,670,000 $ 2,877,528,000 $ 2,936,196,000
================== =================== ==================== ====================
INCOME BEFORE INCOME TAXES, MINORITY
INTERESTS AND CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE
Title Insurance $ 19,453,000 $ 12,555,000 $ 93,205,000 $ 128,738,000
Real Estate Information 22,080,000 2,328,000 58,110,000 65,342,000
Consumer Information 6,322,000 5,474,000 35,198,000 27,652,000
------------------ ------------------- -------------------- --------------------
Total before corporate expenses and
minority interests 47,855,000 20,357,000 186,513,000 221,732,000
Corporate expenses (5,033,000) 16,921,000 32,637,000 51,760,000
------------------ ------------------- -------------------- --------------------
Income before income taxes, minority
interests and cumulative effect of
a change in accounting principle $ 52,888,000 $ 3,436,000 $ 153,876,000 $ 169,972,000
================== =================== ==================== ====================
TITLE INSURANCE ORDER COUNTS FROM
DIRECT OPERATIONS
Title orders opened 289,300 264,700 1,240,800 1,334,100
Title orders closed 237,300 229,100 975,000 1,119,900