EXHIBIT 99
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THE FIRST AMERICAN CORPORATION REPORTS RECORD RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2002
- Net Income for the Quarter Increases 58 Percent -
SANTA ANA, Calif., Feb. 12, 2003 - The First American Corporation (NYSE: FAF),
the nation's leading diversified provider of business information and related
products and services, today announced all-time record results for the fourth
quarter and year ended Dec. 31, 2002:
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
---------------------- ------------------- -------------------- ---------------------
2002 2001 2002 2001
---------------------- ------------------- -------------------- ---------------------
Revenues $ 1.37 billion $ 1.07 billion $ 4.70 billion $ 3.75 billion
Net income $ 82.8 million $ 52.3 million $ 234.4 million $ 167.3 million
Net income per
diluted share $1.01 $.68 $2.92 $2.27
Summary of Operations
"2002 was a banner year," stated Parker S. Kennedy, president of The First
American Corporation. "Record levels of home purchases and refinancings, spurred
by historically low interest rates, produced record-high transaction volume in
2002 and contributed to impressive financial results in the real estate-related
segments of our Financial Services and Information Technology groups."
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Quarterly Financial Highlights
Financial Services Group:
Record operating revenues for the fourth quarter 2002 were $1.05 billion,
an increase of 28 percent when compared with $817.3 million for the fourth
quarter of 2001.
Pretax income was a record $110.8 million, an increase of 83 percent when
compared with $60.4 million in the prior year quarter.
Pretax margins improved to 10.4 percent compared with 7.3 percent for the
fourth quarter 2001 and 9.6 percent for the third quarter 2002.
Information Technology Group:
Record operating revenues for the fourth quarter 2002 were $300.4 million,
an increase of 28 percent compared with $234.7 million for the prior year
quarter.
Pretax income was a record $77.0 million, an increase of 31 percent when
compared with $58.9 million in the prior year quarter.
Pretax margins improved to 24.7 percent compared with 24.2 percent for the
fourth quarter 2001.
2003 Outlook
Kennedy continued: "Order counts in our real estate-related businesses
remain at elevated levels, which should bode well for the company's results
during the first half of 2003. Our focus continues to be on steady margin
improvement through technology initiatives, back-office consolidation and solid
expense controls. In addition, we are excited about our merger with US Search,
which is expected to close in the second quarter 2003. This new public entity,
which will be named First Advantage Corporation, will provide significant growth
opportunities in the rapidly expanding screening services industry."
Teleconference/Webcast
First American's fourth-quarter and year-end results will be discussed in
more detail on Wednesday, Feb.12, 2003, at 11:30 a.m. EST via teleconference.
The dial-in number is (888) 396-9928 and the pass code is FIRST AMERICAN. The
live audio webcast of the call will be available on First American's Web Site at
www.firstam.com/investor. An audio replay of the conference call will be
available through Feb. 16, 2003, by dialing (402) 998-1118. An audio archive of
the call will also be available for replay on First American's Web site.
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About First American
The First American Corporation is a Fortune 500 company that traces its
history to 1889. As the nation's leading diversified provider of business
information, the company supplies businesses and consumers with the information
resources that affect the major economic events of people's lives, such as
getting a job; renting an apartment; buying a car, house, boat or airplane;
securing a mortgage; opening or buying a business; and planning for retirement.
The First American Family of Companies, many of which command leading market
share positions in their respective industries, operate within seven primary
business segments including: Title Insurance and Services, Specialty Insurance,
Trust and Other Services, Mortgage Information, Property Information, Credit
Information and Screening Information. With revenues of $4.70 billion in 2002,
First American has approximately 25,000 employees in more than 1,300 offices
throughout the United States and abroad. More information about the company and
an archive of its press releases can be found at www.firstam.com.
Forward Looking Statements
Certain statements made in this press release, including those relating to
2003 first-half results, margin improvements and growth opportunities in
the screening services industry 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; access to public records and other data;
general volatility in the capital markets; changes in applicable government
regulations; consolidation among the company's significant customers and
competitors; 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, 2001, 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.
(Additional Financial Data Follows)
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Summary of Earnings
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
--------------------------------------- --------------------------------------
2002 2001 2002 2001
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Revenues $ 1,374,391,000 $ 1,072,932,000 $ 4,704,209,000 $ 3,750,723,000
Income before income taxes and minority interests $ 152,272,000 $ 100,655,000 $ 449,907,000 $ 329,540,000
Income taxes $ 49,800,000 $ 34,300,000 $ 149,900,000 $ 117,500,000
Minority interests $ 19,660,000 $ 14,075,000 $ 65,640,000 $ 44,772,000
Net income $ 82,812,000 $ 52,280,000 $ 234,367,000 $ 167,268,000
Net income per share:
Basic $1.13 $0.76 $3.27 $2.51
Diluted $1.01 $0.68 $2.92 $2.27
Weighted average shares outstanding:
Basic 73,101,000 68,641,000 71,594,000 66,568,000
Diluted 83,935,000 79,667,000 82,567,000 75,834,000
Cash Provided by Operating Activities
For the Three Months Ended For the Twelve Months Ended
December 31 December 31
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2002 2001 2002 2001
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Cash provided by operating activities $ 210,089,000 $ 106,039,000 $ 540,607,000 $ 388,247,000
Summary Balance Sheet Information
December 31 December 31
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2002 2001
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Total stockholders' equity $1,364,589,000 $1,104,452,000
Book value per share $18.53 $16.08
Summary Title Insurance Order Counts
From Direct Operations
For the Three Months Ended
December 31
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2002 2001
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Title orders opened:
October 236,400 227,500
November 195,600 204,600
December 174,700 146,900
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Fourth quarter total 606,700 579,000
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Title orders closed:
October 176,500 135,200
November 154,800 134,700
December 165,300 150,400
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Fourth quarter total 496,600 420,300
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(Additional Financial Data Follows)
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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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2002 2001 2002 2001
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RESULTS OF OPERATIONS
Revenues
Operating revenues $ 1,346,241,000 $ 1,052,017,000 $ 4,633,278,000 $ 3,662,986,000
Investment and other income 28,586,000 22,204,000 89,823,000 81,093,000
Net realized investment gains (losses) (436,000) (1,289,000) (18,892,000) 6,644,000
---------------- ---------------- ---------------- -----------------
1,374,391,000 1,072,932,000 4,704,209,000 3,750,723,000
---------------- ---------------- ---------------- -----------------
Expenses
Salaries and other personnel costs 432,878,000 345,509,000 1,523,195,000 1,263,451,000
Premiums retained by agents 377,016,000 299,009,000 1,292,297,000 960,215,000
Other operating expenses 303,480,000 231,231,000 1,049,125,000 853,604,000
Provision for title losses and other claims 66,578,000 50,970,000 224,589,000 180,646,000
Depreciation and amortization 23,935,000 30,423,000 96,829,000 108,348,000
Premium taxes 10,177,000 7,370,000 34,658,000 24,840,000
Interest 8,055,000 7,765,000 33,609,000 30,079,000
---------------- ---------------- ---------------- -----------------
1,222,119,000 972,277,000 4,254,302,000 3,421,183,000
---------------- ---------------- ---------------- -----------------
Income before income taxes and minority interests $ 152,272,000 $ 100,655,000 $ 449,907,000 $ 329,540,000
================ ================ ================ =================
OPERATING REVENUES
Financial Services
Title Insurance and Services:
Direct operations $ 532,105,000 $ 412,588,000 $ 1,803,775,000 $ 1,463,303,000
Agency operations 461,364,000 366,361,000 1,589,817,000 1,185,691,000
---------------- ---------------- ---------------- -----------------
993,469,000 778,949,000 3,393,592,000 2,648,994,000
Specialty Insurance 42,989,000 27,806,000 143,307,000 112,054,000
Trust and Other Services 9,396,000 10,577,000 41,737,000 39,882,000
---------------- ---------------- ---------------- -----------------
1,045,854,000 817,332,000 3,578,636,000 2,800,930,000
---------------- ---------------- ---------------- -----------------
Information Technology
Mortgage Information 142,910,000 111,453,000 479,288,000 407,006,000
Property Information 75,728,000 56,869,000 259,315,000 210,975,000
Credit Information 55,148,000 52,856,000 215,337,000 194,981,000
Screening Information 26,601,000 13,507,000 100,702,000 49,094,000
---------------- ---------------- ---------------- -----------------
300,387,000 234,685,000 1,054,642,000 862,056,000
---------------- ---------------- ---------------- -----------------
Total operating revenues $ 1,346,241,000 $ 1,052,017,000 $ 4,633,278,000 $ 3,662,986,000
================ ================ ================ =================
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Financial Services
Title Insurance and Services $ 101,932,000 $ 52,391,000 $ 271,720,000 $ 173,654,000
Specialty Insurance 6,610,000 4,174,000 24,465,000 11,929,000
Trust and Other Services 2,293,000 3,846,000 13,548,000 12,269,000
---------------- ---------------- ---------------- -----------------
110,835,000 60,411,000 309,733,000 197,852,000
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Information Technology
Mortgage Information 46,604,000 39,608,000 146,849,000 129,751,000
Property Information 23,389,000 11,518,000 71,459,000 35,321,000
Credit Information 8,439,000 8,881,000 39,266,000 30,062,000
Screening Information (1,409,000) (1,155,000) 2,459,000 (286,000)
---------------- ---------------- ---------------- -----------------
77,023,000 58,852,000 260,033,000 194,848,000
---------------- ---------------- ---------------- -----------------
Total before corporate expenses and
minority interest 187,858,000 119,263,000 569,766,000 392,700,000
Corporate expense 35,586,000 18,608,000 119,859,000 63,160,000
---------------- ---------------- ---------------- -----------------
Income before income taxes and minority interests $ 152,272,000 $ 100,655,000 $ 449,907,000 $ 329,540,000
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