` EXHIBIT 99.1
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THE FIRST AMERICAN CORPORATION REPORTS
RESULTS FOR THE FIRST QUARTER 2004
SANTA ANA, Calif., April 21, 2004 - The First American Corporation (NYSE: FAF),
the nation's largest data provider, today announced results for the first
quarter ended March 31, 2004:
For the Three Months Ended
March 31
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2004 2003 (A)
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Total revenues $ 1.47 billion $ 1.34 billion
Income before income taxes and minority interests $111.1 million $163.5 million
Net income $ 55.0 million $ 87.6 million
Net income per diluted share $.62 $1.05
(A) Includes a pretax gain on the merger of the company's Credit Online business
with DealerTrack, Inc. of $13.1 million, $8.0 million on an after-tax basis, or
9 cents per diluted share.
Summary of Operations
"We are pleased with the company's performance during the first quarter of
2004, especially in light of the substantial slowdown in mortgage activity
during November and December of 2003," stated Parker S. Kennedy, president of
The First American Corporation. "This, coupled with weather conditions affecting
home sales in December, January and February, provided a typical seasonal
pattern of activity for the first quarter not seen in the past 2 1/2 years.
March new order counts in our direct title operations and our other real
estate-related businesses improved significantly and should provide for good
second quarter results."
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First American Reports Results for the First Quarter 2004
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Quarterly Financial Highlights
Financial Services Group:
o Revenues for the first quarter 2004 were $1.1 billion, an increase of
10 percent when compared with $1.0 billion for the first quarter of
2003.
o Pretax income was $71.0 million, a decrease of 25 percent when
compared with $95.0 million in the prior year quarter.
o Pretax margins were 6.5 percent compared with 9.5 percent for the
first quarter 2003.
Information Technology Group:
o Revenues for the first quarter 2004 were $375.8 million, an increase
of 11 percent when compared with $339.0 million for the first quarter
of 2003.*
o Pretax income was $74.0 million, a decrease of 23 percent when
compared with $96.4 million in the prior year quarter.*
o Pretax margins were 19.7 percent compared with 28.4 percent for the
first quarter 2003.*
* Includes for the prior-year quarter a pretax gain on the merger of the
company's Credit Online business with DealerTrack, Inc. of $13.1 million,
$8.0 million on an after-tax basis, or 9 cents per diluted share.
2004 Outlook and Strategic Focus
Kennedy continued: "Recently, interest rates have been increasing due to
inflationary fears. We will continue to monitor our productivity ratios and
manage our expenses in line with new order counts to maintain margins and
profitability in our real estate-related businesses. Despite mortgage rate
increases, we continue to see strength in home sales. First American's real
estate-related businesses are expertly positioned to meet the challenges of any
economic cycle. Strategies such as technology solutions, data leverage, and
bundling of products and services are in place to sustain the company's
performance during a higher interest rate environment. Additionally, many of the
company's businesses, such as subprime credit information, screening
information, homeowner's and home warranty insurance, auto and consumer credit,
and our subscription-based data products, are less dependent on the real estate
cycle, or respond to different cycles, and generally will experience stronger
sales as the national economy improves."
Teleconference/Webcast
First American's first quarter results will be discussed in more detail on
Wednesday, April 21, 2004, at 10 a.m. EDT (7 a.m. PDT), via teleconference. The
dial-in number is (888)
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First American Reports Results for the First Quarter 2004
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955-3516 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 April 27, 2004, by
dialing (402) 344-6811. An audio archive of the call will also be available for
replay on First American's Web site.
About First American
The First American Corporation is a Fortune 500 company that traces its
history to 1889. As the nation's largest data provider, the company supplies
businesses and consumers with information resources in connection with 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 six primary business segments including: Title
Insurance and Services, Specialty Insurance, Mortgage Information, Property
Information, Credit Information and Screening Information. With revenues of
$6.21 billion in 2003, First American has 29,000 employees in approximately
1,800 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 related to
2004 second quarter results and businesses that are less dependent on the
real estate cycle, 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; 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, 2003, as 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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First American Reports Results for the First Quarter 2004
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Summary of Earnings
(in thousands, except per share amounts)
For the Three Months Ended
March 31
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2004 2003
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Total revenues $1,473,771 $1,341,975
Income before income taxes and minority interests $ 111,130 $ 163,493
Income taxes $ 37,400 $ 56,000
Minority interests $ 18,774 $ 19,913
Net income $ 54,956 $ 87,580
Net income per share:
Basic $.69 $1.18
Diluted $.62 $1.05
Weighted average shares outstanding:
Basic 79,323 74,159
Diluted 90,652 85,098
Cash Provided by Operating Activities
(in thousands)
For the Three Months Ended
March 31
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2004 2003
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Cash provided by operating activities $26,535 $82,840
Summary Balance Sheet Information
(in thousands, except per share amounts)
March 31 December 31
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2004 2003
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Total stockholders' equity $1,989,849 $1,879,520
Book value per share $24.43 $23.84
Summary Title Insurance Order Counts
From Direct Operations
For the Three Months Ended
March 31
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2004 2003
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Title orders opened:
January 170,500 203,500
February 189,600 189,000
March 263,700 238,600
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First quarter total 623,800 631,100
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Title orders closed:
January 114,000 153,100
February 128,100 141,700
March 168,200 160,900
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First quarter total 410,300 455,700
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(Additional Financial Data Follows)
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First American Reports Results for the First Quarter 2004
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Selected Financial Data
(Unaudited)
(in thousands)
Three Months Ended
March 31
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2004 2003
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RESULTS OF OPERATIONS
Revenues
Operating revenues $ 1,445,533 $ 1,294,958
Investment and other income 26,907 34,472
Net realized investment gains 1,331 12,545
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1,473,771 1,341,975
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Expenses
Salaries and other personnel costs 473,775 407,217
Premiums retained by agents 424,234 365,709
Other operating expenses 340,839 293,387
Provision for title losses and other claims 71,421 67,239
Depreciation and amortization 29,370 26,015
Premium taxes 12,540 10,456
Interest 10,462 8,459
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1,362,641 1,178,482
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Income before income taxes and minority interests $ 111,130 $ 163,493
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OPERATING REVENUES
Financial Services
Title Insurance and Services:
Direct operations $ 515,506 $ 484,308
Agency operations 516,810 448,996
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1,032,316 933,304
Specialty Insurance 46,492 46,144
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1,078,808 979,448
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Information Technology
Mortgage Information 154,935 139,108
Property Information 91,977 82,280
Credit Information 62,452 62,528
Screening Information 57,361 31,594
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366,725 315,510
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Total operating revenues $ 1,445,533 $ 1,294,958
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INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Financial Services
Title Insurance and Services $ 58,577 $ 89,207
Specialty Insurance 12,444 5,839
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71,021 95,046
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Information Technology
Mortgage Information 30,347 45,797
Property Information 27,518 23,443
Credit Information 14,998 26,607
Screening Information 1,102 515
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73,965 96,362
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Total before corporate expenses and
minority interest 144,986 191,408
Corporate expense 33,856 27,915
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Income before income taxes and minority interests $ 111,130 $ 163,493
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First American Reports Results for the First Quarter 2004
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Segment Margins
For the Three Months Ended March 31
(in thousands, except percentages
Three Months Ended March 31
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Total revenues Pretax (A) Margins
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2004 2003 2004 2003 2004 2003
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Financial Services
Title Insurance and Services $1,047,922 $ 954,242 $ 58,577 $ 89,207 5.6% 9.3%
Specialty Insurance 50,726 48,584 12,444 5,839 24.5% 12.0%
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$1,098,648 $1,002,826 $ 71,021 $ 95,046 6.5% 9.5%
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Information Technology
Mortgage Information $ 156,625 $ 141,877 $ 30,347 $ 45,797 19.4% 32.3%
Property Information 97,293 87,441 27,518 23,443 28.3% 26.8%
Credit Information 64,392 78,046 14,998 26,607 23.3% 34.1%
Screening Information 57,443 31,618 1,102 515 1.9% 1.6%
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$ 375,753 $ 338,982 $ 73,965 $ 96,362 19.7% 28.4%
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