2014

Fidelity National Financial, Inc. Reports Second Quarter 2012 EPS of $0.65 and Pre-Tax Title Margin of 14.4%

JACKSONVILLE, Fla., July 23, 2012 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE: FNF), a leading provider of title insurance, mortgage services and restaurant and other diversified services, today reported operating results for the three-month and six-month periods ended June 30, 2012.

  • Pre-tax title margin, excluding realized gains and a claims recoupment impairment, of 14.4% versus 11.6% in the second quarter of 2011, a 280 basis point, or 24%, increase over the prior year 
  • Commercial revenue of $98.3 million; 4% growth versus the second quarter of 2011
  • Open orders of 667,500 for the second quarter, an increase of 153,500, or 30%, over the second quarter of 2011; open orders per day of 10,400 for the second quarter versus 8,000 open orders per day for the second quarter of 2011
  • The agency commission split was 76% / 24% versus 78% / 22% in the second quarter of 2011, an improvement of approximately 185 basis points
  • O'Charley's operating results are included beginning April 9, 2012; consolidation of American Blue Ribbon Holdings ("ABRH") results (which include O'Charley's) began on May 11, 2012; third quarter 2012 will mark the first full quarter of financial results from the consolidated restaurant group
  • Recognized a gross $71.4 million pre-tax gain (pre-tax gain was $61.5 million, net of $9.9 million in acquisition and restructuring expenses) on the consolidations of O'Charley's and ABRH, partially offset by a $10.8 million claims recoupment impairment in the title business (recorded in title claim loss) and a $5.9 million impairment in Cascade Timberlands due to the signing of a definitive agreement to sell all of its land holdings (recorded in realized gains/losses); total net effect was a $28.5 million after-tax, or $0.13 per diluted share, contribution to second quarter results
  • Announced signing of a definitive agreement to acquire J. Alexander's Corporation on June 25, 2012

       Consolidated     

Three Months Ended
June 30, 2012

Three Months Ended

June 30, 2011

Total revenue

$1.74 billion

$1.23 billion

Net earnings attributable to common shareholders

$147.0 million

$80.0 million

Net earnings per diluted share attributable

 to common shareholders

$0.65

$0.36

Cash flow from operations

$237.5 million

$53.4 million





Six Months Ended   
June 30, 2012

Six Months Ended

June 30, 2011

Total revenue

$2.93 billion

$2.37 billion

Net earnings attributable to common shareholders

$221.4 million

$122.5 million

Net earnings per diluted share attributable

 to common shareholders

$0.99

$0.55

Cash flow from (used in) operations

$192.5 million

($13.1 million)

The following are summary financial and operational results for the operating segments of FNF for the three-month and six-month periods ended June 30, 2012 and 2011:

Fidelity National Title Group ("FNT")


Three Months Ended
June 30, 2012

Three Months Ended
June 30, 2011

Total revenue

$1.40 billion

$1.22 billion

Pre-tax earnings

$192.1 million

$143.7 million

Realized gains

$0.6 million

$2.3 million

Claims recoupment impairment

$10.8 million

--

Pre-tax earnings (excluding realized gains

and claims recoupment impairment)

$202.3 million

$141.4 million

Pre-tax margin (excluding realized gains

and claims recoupment impairment)

14.4%

11.6%





Six Months Ended   

June 30, 2012

Six Months Ended

June 30, 2011

Total revenue

$2.58 billion

$2.34 billion

Pre-tax earnings

$321.6 million

$250.0 million

Realized gains

$4.6 million

$20.7 million

Claims recoupment impairment

$10.8 million

--

Pre-tax earnings (excluding realized gains

and claims recoupment impairment)

$327.8 million

$229.3 million

Pre-tax margin (excluding realized gains

and claims recoupment impairment)

12.7%

9.9%




Month

Direct Orders Opened

Direct Orders Closed

April 2012

201,800

149,600

May 2012

228,300

156,300

June 2012

237,400

153,400

Second Quarter 2012

667,500

459,300




April 2011

160,400

115,300

May 2011

169,600

113,400

June 2011

184,000

124,500

Second Quarter 2011

514,000

353,200


Open

Commercial

Orders

Closed
Commercial
Orders

Commercial
Revenue

(millions)

Commercial

Fee Per File

2nd Quarter 2012

19,700

12,500

$98.3

$7,900

2nd Quarter 2011

19,100

12,000

$94.9

$7,900

  • 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    

Three Months Ended
June 30, 2012


Operating revenue

$252.9 million


Total revenue

$324.3 million


Pre-tax earnings

$62.7 million


Depreciation & amortization

$9.3 million


Interest expense

$0.8 million


EBITDA

$72.8 million


Realized gain

($71.4 million)


EBITDA, excluding realized gain

$1.4 million


Acquisition and restructuring expenses

$9.9 million


Adjusted EBITDA

$11.3 million


Adjusted EBITDA margin

4.5%


 

"This quarter clearly demonstrates the operating leverage in our title business," said Chief Executive Officer George P. Scanlon.  "We generated a 14.4% pre-tax title margin because of increased refinance orders and improving seasonal resale volumes.  While refinance volumes are grabbing the headlines, we also saw a 7% increase in purchase orders in the second quarter versus the prior year period.  Our balance sheet and cash flow strengthened as our cost containment initiatives for legal and claims handling costs continue to yield improvement.  We are confident in further margin expansion as we experience continued improvement in what remains a difficult real estate market.

"We are also excited to begin to consolidate our restaurant operations and report them as a distinct segment.  For the partial quarter, we reported operating revenue of approximately $253 million, adjusted EBITDA of $11 million and an adjusted EBITDA margin of 4.5%.  The integration of O'Charley's into ABRH has begun and we look forward to reporting improving margins as we move forward with our integration plans.  We are confident that the increased transparency of the separate segment disclosure of a consolidated restaurant group will allow investors to more easily derive the fair value of our restaurant operations."

"During the second quarter, we entered into two acquisitions in our growing restaurant segment," said Chairman William P. Foley, II.  "In April, we completed the acquisition of O'Charley's, adding more than $800 million in annual revenue.  In May, we merged O'Charley's with our existing restaurant operation, American Blue Ribbon Holdings, creating a majority-owned restaurant entity with $1.25 billion in annual revenue.  In June, we announced our agreement to acquire J. Alexander's for $72 million.  We are excited about the future of American Blue Ribbon Holdings and are confident that we can create significant value for our shareholders through this company."

Conference Call
FNF will host a call with investors and analysts to discuss second quarter 2012 results on Tuesday, July 24, 2012, beginning at 11:00 a.m. Eastern Time.  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 July 24, 2012, through July 31, 2012, by dialing 800-475-6701 (USA) or 320-365-3844 (International).  The access code will be 253284.

About FNF
Fidelity National Financial, Inc. (NYSE: FNF), is a leading provider of title insurance, mortgage services and restaurant and other 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 also owns a 55% stake in American Blue Ribbon Holdings, LLC, an owner and operator of the O'Charley's, Ninety Nine Restaurant, Max & Erma's, Village Inn, Bakers Square and Stoney River Legendary Steaks concepts.  In addition, among other operations, FNF owns minority interests in Ceridian Corporation, a leading provider of global human capital management and payment solutions and 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.  More information about FNF can be found at www.fnf.com.

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)





Three Months Ended


Six Months Ended


June 30,


June 30,


2012


2011


2012


2011


(Unaudited)


(Unaudited)

Direct title premiums

$427.5


$357.2


$781.5


$680.1

Agency title premiums

518.5


484.7


932.4


908.0

Total title premiums

946.0


841.9


1,713.9


1,588.1

Escrow, title-related and other fees

434.9


353.8


816.5


686.3

    Total title and escrow

1,380.9


1,195.7


2,530.4


2,274.4









Restaurant revenue

252.9


--


252.9


--

Interest and investment income

37.0


37.3


73.4


71.0

Realized gains and losses

66.1


0.7


70.1


20.2

    Total revenue

1,736.9


1,233.7


2,926.8


2,365.6









Personnel costs

450.0


389.2


857.6


772.8

Other operating expenses

334.3


266.6


609.5


525.3

Cost of restaurant revenue

215.4


--


215.4


--

Agent commissions

395.9


379.1


711.5


706.8

Depreciation and amortization

25.9


18.4


42.9


38.1

Title claim loss expense

77.0


57.4


130.8


108.2

Interest expense

15.4


13.8


30.5


28.1

    Total expenses

1,513.9


1,124.5


2,598.2


2,179.3









Earnings from continuing operations before taxes

223.0


109.2


328.6


186.3

Income tax expense

81.3


40.4


118.2


68.4

Earnings from continuing operations before equity

investments

141.7


68.8


210.4


117.9

Earnings from equity investments

2.0


12.6


7.8


4.0

Net earnings from continuing operations

143.7


81.4


218.2


121.9

Income from discontinued operations, net of tax

3.2


1.6


5.9


5.2

   Net earnings

146.9


83.0


224.1


127.1

Non-controlling interests

(0.1)


3.0


2.7


4.6

Net earnings attributable to common shareholders

$147.0


$80.0


$221.4


$122.5

Earnings per share:








   Net earnings attributable to common

    shareholders - basic

$0.67


$0.36


$1.01


$0.56

   Net earnings attributable to common

    shareholders - diluted

$0.65


$0.36


$0.99


$0.55









Weighted average shares - basic

220.5


220.7


219.6


220.7

Weighted average shares - diluted

225.4


224.5


224.3


224.0









Direct operations orders opened (000's)

667.5


514.0


1,318.6


1,002.1

Direct operations orders closed (000's)

459.3


353.2


868.8


724.0

Fee per file

$1,497


$1,569


$1,451


$1,468

Actual title claims paid

$101.3


$147.5


$204.8


$236.3

 

FIDELITY NATIONAL FINANCIAL, INC.
SECOND QUARTER SEGMENT INFORMATION
(In millions, except order information in 000's)
(Unaudited)







Three Months Ended  

June 30, 2012

   Consolidated

FNT

Restaurant Group

   Corporate

   and Other


Gross operating revenue

$1,633.8

$1,365.7

$252.9

$15.2








Interest and investment income

37.0

35.3

--

1.7


Realized gains and losses

66.1

0.6

71.4

(5.9)


  Total revenue

1,736.9

1,401.6

324.3

11.0








Personnel costs

450.0

431.5

8.3

10.2


Other operating expenses

334.3

289.2

27.8

17.3


Cost of restaurant revenue

215.4

--

215.4

--


Agent commissions

395.9

395.9

--

--


Depreciation and amortization

25.9

15.8

9.3

0.8


Title claim loss expense

77.0

77.0

--

--


Interest expense

15.4

0.1

0.8

14.5


  Total expenses

1,513.9

1,209.5

261.6

42.8


Pre-tax earnings from continuing operations

223.0

192.1

62.7

(31.8)








Pre-tax margin

12.8%

13.7%

19.3%

--


Pre-tax margin, excluding
realized gains and claims
recoupment impairment

10.0%

14.4%

--

 

--








Open orders

667.5

667.5

--

--


Closed orders

459.3

459.3

--

--








Three Months Ended  

June 30, 2011

   Consolidated

FNT

Restaurant Group

   Corporate

   and Other


Gross operating revenue

$1,195.7

$1,182.4

--

$13.3


Interest and investment income

37.3

37.2

--

0.1


Realized gains and losses

0.7

2.3

--

(1.6)


  Total revenue

1,233.7

1,221.9

--

11.8








Personnel costs

389.2

373.9

--

15.3


Other operating expenses

266.6

250.2

--

16.4


Agent commissions

379.1

379.1

--

--


Depreciation and amortization

18.4

17.6

--

0.8


Title claim loss expense

57.4

57.4

--

--


Interest expense

13.8

--

--

13.8


  Total expenses

1,124.5

1,078.2

--

46.3


Pre-tax earnings from continuing operations

109.2

143.7

--

(34.5)








Pre-tax margin

8.9%

11.8%

--

--


Pre-tax margin, excluding realized gains

8.8%

11.6%

--

--








Open orders

514.0

514.0

--

--


Closed orders

353.2

353.2

--

--


 

FIDELITY NATIONAL FINANCIAL, INC.
YTD SEGMENT INFORMATION
(In millions, except order information in 000's)
(Unaudited)







Six Months Ended  

June 30, 2012

   Consolidated

FNT

Restaurant Group

 

Corporate

and Other


Gross operating revenue

$2,783.3

$2,502.0

$252.9

$28.4








Interest and investment income

73.4

70.0

--

3.4


Realized gains and losses

70.1

4.6

71.4

(5.9)


  Total revenue

2,926.8

2,576.6

324.3

25.9








Personnel costs

857.6

832.1

8.3

17.2


Other operating expenses

609.5

548.2

27.8

33.5


Cost of restaurant revenue

215.4

--

215.4

--


Agent commissions

711.5

711.5

--

--


Depreciation and amortization

42.9

32.1

9.3

1.5


Title claim loss expense

130.8

130.8

--

--


Interest expense

30.5

0.3

0.8

29.4


  Total expenses

2,598.2

2,255.0

261.6

81.6


Pre-tax earnings from continuing operations

328.6

321.6

62.7

(55.7)








Pre-tax margin

11.2%

12.5%

19.3%

--


Pre-tax margin, excluding
realized gains and claims
recoupment impairment

9.4%

12.7%

--

 

--








Open orders

1,318.6

1,318.6

--

--


Closed orders

868.8

868.8

--

--








Six Months Ended  

June 30, 2011

   Consolidated

FNT

Restaurant Group

 

   Corporate

   and Other


Gross operating revenue

$2,274.4

$2,252.6

--

$21.8


Interest and investment income

71.0

70.8

--

0.2


Realized gains and losses

20.2

20.7

--

(0.5)


  Total revenue

2,365.6

2,344.1

--

21.5








Personnel costs

772.8

743.6

--

29.2


Other operating expenses

525.3

498.1

--

27.2


Agent commissions

706.8

706.8

--

--


Depreciation and amortization

38.1

36.6

--

1.5


Title claim loss expense

108.2

108.2

--

--


Interest expense

28.1

0.8

--

27.3


  Total expenses

2,179.3

2,094.1

--

85.2


Pre-tax earnings from continuing operations

186.3

250.0

--

(63.7)








Pre-tax margin

7.9%

10.7%

--

--


Pre-tax margin, excluding realized gains

7.1%

9.9%

--

--








Open orders

1,002.1

1,002.1

--

--


Closed orders

724.0

724.0

--

--


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In millions, except per share amounts)



June 30,


December 31,



2012


2011



 (Unaudited)








Cash and investment portfolio


$5,028.5


$4,717.4

Goodwill


1,568.9


1,452.2

Title plant


386.6


386.7

Total assets


8,472.0


7,862.1

Notes payable


952.4


915.8

Reserve for claim losses


1,827.9


1,912.8

Secured trust deposits


561.7


419.9

Total equity


4,052.8


3,655.9

Book value per share


$18.07


$16.57


 

SOURCE Fidelity National Financial, Inc.



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