2014

Fidelity National Financial, Inc. Reports First Quarter 2013 EPS of $0.39 and Pre-Tax Title Margin of 12.3%; Strongest First Quarter Title Results Since 2004

JACKSONVILLE, Fla., May 1, 2013 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE: FNF), a leading provider of title insurance, mortgage services and diversified services, today reported operating results for the three-month period ended March 31, 2013.

  • Adjusted pre-tax title margin of 12.3% for the first quarter versus 10.7% in the first quarter of 2012, nearly a 170 basis point, or 16%, increase over the prior year; highest first quarter pre-tax title margin since 2004 
  • Open title orders of 643,000 for the first quarter, a decrease of 8,000, or 1%, from the first quarter of 2012; open orders per day of 10,540 for the first quarter versus 10,500 open orders per day for the first quarter of 2012; closed orders of 487,000 increased by 19% over the first quarter of 2012
  • Purchase orders opened and closed per day increased by 7% and 14%, respectively, versus the first quarter of 2012
  • First quarter commercial title revenue of $88 million, a 6% increase over the first quarter of 2012, primarily driven by a 16% increase in the commercial fee per file offset by a 9% decline in closed orders
  • Restaurant group total revenue of $351 million, adjusted EBITDA of $19 million, adjusted EBITDA margin of 5.3% and a pre-tax loss of $4 million, which includes $5 million in impairments related to the closing of three unprofitable J. Alexander's locations and one Max & Erma's location, for a ($0.01) impact on earnings per share
  • Remy total revenue of $285 million, adjusted EBITDA of $33 million, adjusted EBITDA margin of 11.6% and pre-tax loss of $1 million, which includes a one-time $7 million executive separation expense for a ($0.02) impact on earnings per share

   

Consolidated ($ in millions except per share amounts)


Three Months Ended

March 31, 2013

Three Months Ended

March 31, 2012

Total revenue

$2,050

$1,190

Net earnings attributable to common shareholders

$90

$74

Net earnings per diluted share attributable

to common shareholders

$0.39

$0.33

Cash flow used in operations

($36)

($45)

The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended March 31, 2013 and 2012:

Fidelity National Title Group ("FNT") ($ in millions)


Three Months Ended

March 31, 2013

Three Months Ended

March 31, 2012

Total revenue

$1,385

$1,175

Pre-tax earnings

$171

$129

Realized gains

--

($4)

Adjusted pre-tax earnings

$171

$125

Adjusted pre-tax margin

12.3%

10.7%




Month

Direct Orders Opened

Direct Orders Closed

January 2013

218,000

167,000

February 2013

203,000

155,000

March 2013

222,000

165,000

First Quarter 2013

643,000

487,000




January 2012

205,000

121,000

February 2012

230,000

135,000

March 2012

216,000

154,000

First Quarter 2012

651,000

410,000




 


Open

Commercial

Orders

Closed

Commercial

Orders

Commercial

Revenue

(millions)

Commercial

Fee Per File

1st Quarter 2013

18,700

10,600

$88

$8,300

1st Quarter 2012

19,800

11,700

$83

$7,100

- The preceding table only includes commercial activity from FNF's commercial offices in the national commercial division and does not attempt to capture potential commercial activity in our local offices.

 

Restaurant Group ($ in millions)*



Three Months Ended 

March 31, 2013


Operating revenue

$356


Realized losses

($5)


Total revenue

$351


Pre-tax loss

($4)


Depreciation & amortization

$13


Interest expense

$2


EBITDA

$11


Realized losses

$5


Transaction and integration costs

$3


Adjusted EBITDA

$19


Adjusted EBITDA margin

5.3%





*Consolidation of Restaurant Group results began May 11, 2012


 

Remy ($ in millions)*

Three Months Ended 

March 31, 2013


Operating revenue

$284


Interest and investment income

$1


Total revenue

$285


Pre-tax loss

($1)


Depreciation & amortization

$19


Interest expense

$7


EBITDA

$25


Executive severance

$7


Stock compensation

$1


Adjusted EBITDA

$33


Adjusted EBITDA margin

11.6%


*Consolidation of Remy results began August 15, 2012


"The first quarter was a great start to the year, with a continuation of the momentum we built in 2012," said Chief Executive Officer George P. Scanlon.  "We achieved our strongest first quarter in the title business since 2004, producing pre-tax earnings of $171 million and a pre-tax title margin of 12.3%.  Title operating revenue grew by 19% over the first quarter of 2012, with pre-tax earnings increasing by 33% and the pre-tax margin improving by nearly 170 basis points.  The commercial title business continued to perform solidly, with $88 million in revenue, a 6% increase over the first quarter of 2012.  While we continue to operate in a refinance driven marketplace, we are continuing to see a growing percentage of our open orders coming from purchase transactions.  During the first quarter, 38% of total title orders opened were purchase transactions, versus 36% in the first quarter of 2012, with the purchase mix increasing each month during the first quarter, peaking at nearly 41% of open orders in March.  Overall, purchase orders opened and closed per day increased by 7% and 14%, respectively, in the first quarter versus the prior year.  With an improving purchase market, continued low mortgage rates and a stabilizing economy, we are confident in our ability to continue to produce industry-leading earnings in our title business."

"Remy continues to make significant investments in a global growth strategy that are expected to benefit future performance, including improved coverage in the light duty aftermarket business and the launch of a new plant and engineering center in Wuhan, China that recently opened," said Chairman William P. Foley, II.  "Additionally, the company secured new business with key Asian customers, launched new products across the globe and continues its operational restructuring efforts.  We believe Remy is positioning itself to take advantage of both an improving global economy and a growing automotive marketplace.

"Our restaurant operations remain focused on continually improving financial performance, most specifically through the continued integration, redesign and update of the O'Charley's concept.  The restaurant group generated a 5.3% adjusted EBITDA margin, a 20 basis point sequential improvement from the fourth quarter of 2012, despite a seasonally slow and challenging first quarter.  We remain confident that we will continue to show improved financial performance in our restaurant operations as we move through 2013."

Conference Call
FNF will host a call with investors and analysts to discuss first quarter 2013 results on Thursday, May 2, 2013, beginning at 11:00 a.m. Eastern Time.  The dial-in number is 800-230-1074.  A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at www.fnf.com.  The conference call replay will be available via webcast through the FNF Investor Relations website at www.fnf.com.  The telephone replay will be available from 1:00 p.m. Eastern time on May 2, 2013, through May 9, 2013, by dialing 800-475-6701 (USA) or 320-365-3844 (International).  The access code will be 287981.

About FNF
Fidelity National Financial, Inc. (NYSE: FNF), is a leading provider of title insurance, mortgage services and diversified services.  FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title - that collectively issue more title insurance policies than any other title company in the United States.  FNF owns a 55% stake in American Blue Ribbon Holdings, LLC, a family and casual dining restaurant owner and operator of the O'Charley's, Ninety Nine Restaurant, Max & Erma's, Village Inn, and Bakers Square concepts.  FNF also owns an 87% stake in J. Alexander's, LLC, an upscale dining restaurant owner and operator of the J. Alexander's and Stoney River Legendary Steaks concepts.  In addition, FNF also owns a 51% stake in Remy International, Inc., a leading designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles.  FNF also owns a minority interest in Ceridian Corporation, a leading provider of global human capital management and payment solutions.  More information about FNF can be found at www.fnf.com.

Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and depreciation and amortization (EBITDA) and adjusted earnings before interest, taxes and depreciation and amortization (Adjusted EBITDA).

Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided above.

Forward Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.  The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U. S. economy; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.

 

 

FIDELITY NATIONAL FINANCIAL, INC.

SUMMARY OF EARNINGS

(In millions, except order information in 000's)

(Unaudited)



      Three Months Ended



       March 31,



2013


2012


Direct title premiums

$414


$354


Agency title premiums

524


414


  Total title premiums

938


768


Escrow, title-related and other fees

443


382


  Total title and escrow

1,381


1,150


Restaurant revenue

356


--


Remy revenue

284


--


Interest and investment income

33


36


Realized gains and losses

(4)


4


  Total revenue

2,050


1,190







Personnel costs

521


408


Other operating expenses

327


275


Cost of restaurant revenue

305


--


Cost of Remy revenue (includes $18 million of D&A)

240


--


Agent commissions

397


316


Depreciation and amortization

34


17


Title claim loss expense

65


54


Interest expense

23


15


  Total expenses

1,912


1,085







Earnings from continuing operations before taxes

138


105


Income tax expense

46


37


Earnings from continuing operations before equity investments

92


68


Earnings from equity investments

(3)


6


Net earnings from continuing operations

89


74


Income from discontinued operations, net of tax

--


3


 Net earnings

89


77


Non-controlling interests

(1)


3


Net earnings attributable to common shareholders

$90


$74


Earnings per share:





      Net earnings attributable to common shareholders - basic

$0.40


$0.34


      Net earnings attributable to common shareholders -diluted

$0.39


$0.33


Weighted average shares – basic

225


219


Weighted average shares – diluted

231


223







Direct operations orders opened (000's)

643


651


Direct operations orders closed (000's)

487


410


Fee per file

$1,373


$1,398


Actual title claims paid

$91


$103








              

FIDELITY NATIONAL FINANCIAL, INC.

FIRST QUARTER SEGMENT INFORMATION

(In millions, except order information in 000's)

(Unaudited)


Three Months Ended  

March 31, 2013

   Consolidated

FNT

Restaurant Group

Remy

   Corporate

   and Other


Gross operating revenue

$2,021

$1,352

$356

$284

$29









Interest and investment income

33

33

--

1

(1)


Realized gains and losses

(4)

--

(5)

--

1


  Total revenue

2,050

1,385

351

285

29









Personnel costs

521

454

15

27

25


Other operating expenses

327

281

20

11

15


Cost of revenue

545

--

305

240

--


Agent commissions

397

397

--

--

--


Depreciation and amortization

34

17

13

1

3


Title claim loss expense

65

65

--

--

--


Interest expense

23

--

2

7

14


  Total expenses

1,912

1,214

355

286

57


Pre-tax earnings from continuing operations

138

171

(4)

(1)

(28)









Pre-tax margin

6.7%

12.3%

--

--

--


Pre-tax margin, excluding realized gains and losses

6.9%

12.3%

--

--

--









Open orders

643

643

--

--

--


Closed orders

487

487

--

--

--









Three Months Ended  

March 31, 2012

   Consolidated

FNT

Restaurant Group

Remy

   Corporate

   and Other


Gross operating revenue

$1,150

$1,136

--

--

$14


Interest and investment income

36

35

--

--

1


Realized gains and losses

4

4

--

--

--


  Total revenue

1,190

1,175

--

--

15









Personnel costs

408

401

--

--

7


Other operating expenses

275

259

--

--

16


Agent commissions

316

316

--

--

--


Depreciation and amortization

17

16

--

--

1


Title claim loss expense

54

54

--

--

--


Interest expense

15

--

--

--

15


  Total expenses

1,085

1,046

--

--

39


Pre-tax earnings from continuing operations

105

129

--

--

(24)









Pre-tax margin

8.8%

11.0%

--

--

--


Pre-tax margin, excluding realized gains and losses

8.5%

10.7%

--

--

--









Open orders

651

651

--

--

--


Closed orders

410

410

--

--

--


 

FIDELITY NATIONAL FINANCIAL, INC.

SUMMARY BALANCE SHEET INFORMATION

(In millions, except per share amounts)



March 31,


December 31,



2013


2012



 (Unaudited)



Cash and investment portfolio


$4,989


$5,185

Goodwill


1,883


1,909

Title plant


374


374

Total assets


9,682


9,903

Notes payable


1,354


1,344

Reserve for title claim losses


1,723


1,748

Secured trust deposits


468


528

Total equity


4,773


4,749

Book value per share


$20.99


$20.78

 

SOURCE Fidelity National Financial, Inc.



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