EXHIBIT 99
THE FIRST AMERICAN CORPORATION REPORTS OPERATING RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2001
SANTA ANA, Calif., Feb. 13, 2002 - The First American Corporation (NYSE: FAF),
the nation's leading, diversified provider of business information and related
products and services, today announced operating results for the fourth quarter
and year ended Dec. 31, 2001.
Net income for the fourth quarter of 2001 was $52.3 million, or 68 cents
per diluted share. This represents a 148 percent increase when compared with
2000 fourth quarter net income of $21.1 million, or 31 cents per diluted share.
Fourth-quarter 2000 results exclude a pretax, nonrecurring net benefit of $22.1
million resulting from modifications to the company's pension plan and realized
pretax investment losses of $4.3 million. These items totaled a net after-tax
benefit of $10.7 million, or 16 cents per diluted share. Revenues for the fourth
quarter of 2001 were a record setting $1.07 billion, a 41 percent increase when
compared with revenues of $761.9 million for the same period last year.
The company's full-year 2001 operating earnings were $173.0 million, or
$2.35 per diluted share, which compares with the full-year 2000 results of $71.5
million, or $1.08 per diluted share. These operating results exclude any
one-time items as previously announced in the respective quarters. Revenues for
the full year 2001 totaled a record breaking $3.75 billion, an increase of 28
percent when compared with revenues of $2.93 billion in the prior year.
"2001 was a great year," stated Parker S. Kennedy, president of The First
American Corporation. "Mortgage originations reached an all-time high, fueled in
part by interest rate cuts by the Federal Reserve. This transaction volume
contributed to impressive financial results in our title insurance and real
estate information and services segments. Also during the year we continued to
roll out our industry leading FAST suite of technology solutions, which will
result in increased labor efficiencies and margin improvement. Acquisitions and
joint ventures in our real
First American Reports Operating Results for the Fourth Quarter and Full Year
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2001
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estate-related businesses served to strengthen market share, expand geographic
reach and build a larger platform of data and information to facilitate the real
estate transaction process.
"We remain focused and committed to our strategy of diversification via our
consumer information and services segment," Kennedy continued. "Our recent key
acquisitions of Credit Management Solutions, Inc., Substance Abuse Management,
Inc. and American Driving Records strengthened our position as a leading
provider of credit data and technology for vehicle purchasing and financing
activities and as a significant player in the pre-employment screening process.
"Our outlook for 2002 and the years ahead is to remain focused on our
strategies of diversification and overall margin improvement. This will provide
a broad platform for future growth and will differentiate First American as a
diversified provider of business information. Future margin improvement will be
delivered by the successful implementation of our technology initiatives that
will lower operating costs, enhance the service we provide our customers and
allow for the creation of new information products derived from First American's
rich and extensive databases."
Tracing its history to 1889, The First American Corporation (NYSE: FAF) is
the nation's leading, diversified provider of business information and related
products and services. The corporation's three primary business segments
include: title information 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; direct-to-consumer public
records reporting; resident screening; pre-employment screening; automobile
title administration; 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
the company's strategy and outlook for the future, are forward-looking.
Risks and uncertainties exist that 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, 2000, 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.
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First American Reports Operating Results for the Fourth Quarter and Full Year
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The First American Corporation
Summary of Earnings
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
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2001 2000 2001 2000
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Revenues $1,072,932,000 $761,896,000 $3,750,723,000 $2,934,255,000
Income before income taxes and minority interests $ 100,655,000 $ 52,888,000 $ 329,540,000 $ 153,876,000
Income taxes $ 34,300,000 $ 15,500,000 $ 117,500,000 $ 54,700,000
Minority interests $ 14,075,000 $ 5,598,000 $ 44,772,000 $ 16,953,000
Net income $ 52,280,000 $ 31,790,000 $ 167,268,000 $ 82,223,000
Net income per share:
Basic $0.76 $0.50 $2.51 $1.29
Diluted $0.68 $0.47 $2.27 $1.24
Weighted average shares outstanding:
Basic 68,641,000 63,654,000 66,568,000 63,680,000
Diluted 79,667,000 67,086,000 75,834,000 66,050,000
The First American Corporation
Summary Balance Sheet Information
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December 31, 2001 December 31, 2000
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Total stockholders' equity $1,104,452,000 $870,237,000
Book value per share $16.08 $13.62
(Additional Financial Data to Follow)
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First American Reports Operating Results for the Fourth Quarter and Full Year
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2001
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Selected Financial Data
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
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2001 2000 2001 2000
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RESULTS OF OPERATIONS
Revenues
Operating revenues $ 1,052,017,000 $ 750,957,000 $ 3,662,986,000 $ 2,877,528,000
Investment and other income 20,915,000 10,939,000 87,737,000 56,727,000
------------------- --------------- ----------------- -----------------
1,072,932,000 761,896,000 3,750,723,000 2,934,255,000
------------------- --------------- ----------------- -----------------
Expenses
Salaries and other personnel costs 345,509,000 241,253,000 1,263,451,000 1,014,766,000
Premiums retained by agents 299,009,000 206,542,000 960,215,000 791,940,000
Other operating expenses 231,231,000 185,678,000 853,604,000 697,672,000
Provision for title losses and other claims 50,970,000 37,305,000 180,646,000 141,632,000
Depreciation and amortization 30,423,000 25,224,000 108,348,000 86,336,000
Premium taxes 7,370,000 6,255,000 24,840,000 22,573,000
Interest 7,765,000 6,751,000 30,079,000 25,460,000
------------------- --------------- ----------------- -----------------
972,277,000 709,008,000 3,421,183,000 2,780,379,000
------------------- --------------- ----------------- -----------------
Income before income taxes and minority interests $ 100,655,000 $ 52,888,000 $ 329,540,000 $ 153,876,000
=================== =============== ================= ==================
OPERATING REVENUES
Title Insurance:
Direct operations $ 412,588,000 $ 283,527,000 $ 1,463,303,000 $ 1,083,112,000
Agency operations 366,361,000 256,264,000 1,185,691,000 983,937,000
------------------- --------------- ----------------- -----------------
778,949,000 539,791,000 2,648,994,000 2,067,049,000
Real Estate Information 196,104,000 149,996,000 723,840,000 558,147,000
Consumer Information 76,964,000 61,170,000 290,152,000 252,332,000
------------------- --------------- ----------------- -----------------
Total operating revenues $ 1,052,017,000 $ 750,957,000 $ 3,662,986,000 $ 2,877,528,000
=================== =============== ================= ==================
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Title Insurance $ 50,552,000 $ 19,453,000 $ 170,737,000 $ 93,205,000
Real Estate Information 57,744,000 22,080,000 184,042,000 58,110,000
Consumer Information 8,676,000 6,322,000 32,954,000 35,198,000
------------------- --------------- ----------------- -----------------
Total before corporate expenses and
minority interests 116,972,000 47,855,000 387,733,000 186,513,000
Corporate expenses 16,317,000 (5,033,000) 58,193,000 32,637,000
------------------- --------------- ----------------- -----------------
Income before income taxes and minority interests $ 100,655,000 $ 52,888,000 $ 329,540,000 $ 153,876,000
=================== =============== ================= ==================
TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened 579,000 289,300 1,930,300 1,240,800
Title orders closed 420,300 237,300 1,404,600 975,000
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