Fidelity National Financial, Inc. Reports Fourth Quarter 2009 EPS of $0.30
JACKSONVILLE, Fla., Feb. 3 /PRNewswire-FirstCall/ -- Fidelity National Financial, Inc. (NYSE: FNF), a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services, today reported operating results for the three-month and twelve-month periods ended December 31, 2009.
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
------------------ ------------------
Total revenue $1.46 billion $998.8 million
Net earnings (loss) attributable
to common shareholders $69.3 million ($14.9 million)
Net earnings (loss) per diluted
share attributable to common
shareholders $0.30 ($0.07)
Cash flow from operations $12.6 million $60.5 million
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
------------------- -------------------
Total revenue $5.83 billion $4.25 billion
Net earnings (loss) attributable
to common shareholders $222.3 million ($179.0 million)
Net earnings (loss) per diluted
share attributable to common
shareholders $0.97 ($0.85)
Cash flow from operations $380.3 million $4.6 million
The following are summary financial and operational results for the operating segments of FNF for the three-month and twelve-month periods ended December 31, 2009 and 2008:
Fidelity National Title Group ("FNT")
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
------------------ ------------------
Total revenue $1.34 billion $896.2 million
Pre-tax earnings (loss) $109.6 million ($9.7 million)
Pre-tax margin 8.2% N/A
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
------------------- --------------------
Total revenue $5.39 billion $3.82 billion
Pre-tax earnings (loss) $370.0 million ($231.0 million)
Pre-tax margin 6.9% N/A
Month Direct Orders Opened Direct Orders Closed
----- -------------------- --------------------
October 2009 207,300 133,700
November 2009 172,400 127,100
December 2009 170,900 139,800
------- -------
Fourth Quarter 2009 550,600 400,600
======= =======
Month Direct Orders Opened Direct Orders Closed
----- -------------------- --------------------
October 2008 122,700 89,300
November 2008 101,400 66,800
December 2008 204,100 89,200
------- ------
Fourth Quarter 2008 428,200 245,300
======= =======
Open Closed Commercial
Commercial Commercial Revenue Commercial Fee
Orders Orders (In thousands) Per File
---------- ---------- -------------- ---------------
4th Quarter 2009 19,200 13,700 $62,700 $4,600
4th Quarter 2008 13,600 7,900 $38,300 $4,800
- 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.
Specialty Insurance
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
------------------ ------------------
Total revenue $92.8 million $97.3 million
Pre-tax earnings $8.7 million $18.2 million
Pre-tax margin 9.4% 18.7%
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
------------------- -------------------
Total revenue $380.3 million $383.3 million
Pre-tax earnings $43.6 million $35.0 million
Pre-tax margin 11.5% 9.1%
"Despite operating against a difficult economic backdrop, 2009 was a year of significant accomplishments that has Fidelity National Financial well positioned as we enter 2010," said Chairman William P. Foley, II. "We generated total revenue of $5.8 billion, pre-tax profits of $345 million, net earnings of $222 million and cash flow from operations of $380 million. All of these were significant increases over our 2008 results."
"The December 2008 acquisition of Lawyers Title and Commonwealth Title was fully integrated during the first half of 2009. From January through March, we aggressively removed costs from those operations and were able to return them to operational profitability by the month of March. The integration of Lawyers and Commonwealth was completed during the second quarter, with an overall total cost reduction of nearly $265 million. We eliminated approximately 2,300 positions, more than 40% of the employees transferred at closing, and more than 240 offices as part of the aggressive integration. These underwriters are fully integrated into the FNF family and we look forward to their continued significant contribution to our market-leading title insurance business in 2010 and beyond."
"In April, we were successful in issuing 18.2 million shares of our common stock for approximately $331 million in proceeds to further strengthen our balance sheet. Those proceeds were primarily used to reduce the outstanding balance on our credit facility, repurchase our existing public debt and to make a capital infusion into Lawyers Title to bolster that underwriter's balance sheet. Throughout 2009, we reduced our outstanding debt by nearly $490 million, while also growing our equity by almost $460 million. As a result, our debt to capital ratio ended the year at 21%, after beginning 2009 at more than 32% and book value per share increased by more than $1.10, or 8%, from the beginning of 2009, ending at $14.41 on December 31, 2009."
"We are proud of our accomplishments in 2009, but we are never satisfied. We will continue to manage our title business as we always have, with continued dedication to our weekly operating metrics as we seek to maximize profitability in any market environment. As always, we remain committed to our ultimate goal of continuing to create value for our shareholders."
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services. FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Security Union Title and Alamo Title - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides flood insurance, personal lines insurance and home warranty insurance through its specialty insurance business. FNF also is a leading provider of outsourced claims management services to large corporate and public sector entities through its minority-owned subsidiary, Sedgwick CMS. FNF is also a leading information services company in the human resource, retail and transportation markets through another minority-owned subsidiary, Ceridian Corporation. More information about FNF can be found at www.fnf.com.
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, 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 economic performance 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 operating subsidiaries as a 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 thousands, except per share amounts and order information)
Three months ended Twelve months ended
December 31, December 31,
--------- ---------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Direct title premiums $353,250 $227,896 $1,475,303 $1,140,266
Agency title premiums 638,187 383,623 2,452,253 1,554,743
------- ------- --------- ---------
Total title premiums 991,437 611,519 3,927,556 2,695,009
Escrow, title-related
and other fees 323,464 268,007 1,352,876 1,071,277
------- ------- --------- ---------
Total title and
escrow 1,314,901 879,526 5,280,432 3,766,286
Specialty insurance 89,470 94,502 366,036 373,392
Interest and
investment income 41,548 31,401 154,456 133,964
Realized gains and
losses 9,368 (6,585) 27,452 (22,453)
----- ------ ------ -------
Total revenue 1,455,287 998,844 5,828,376 4,251,189
Personnel costs 389,384 282,520 1,649,775 1,321,964
Other operating expenses 319,409 305,110 1,343,452 1,179,853
Agent commissions 505,272 306,352 1,951,732 1,218,044
Depreciation and
amortization 24,555 28,407 109,206 122,100
Claim loss expense 102,343 82,808 392,577 630,404
Interest expense 8,320 14,633 36,675 58,580
----- ------ ------ ------
Total expenses 1,349,283 1,019,830 5,483,417 4,530,945
Earnings (loss)
from continuing
operations before taxes 106,004 (20,986) 344,959 (279,756)
Income tax expense 38,759 (12,962) 106,839 (119,944)
------ ------- ------- --------
Earnings (loss)
from continuing
operations before
equity investments 67,245 (8,024) 238,120 (159,812)
Earnings (loss)
from equity investments 2,291 (5,990) (11,704) (13,375)
----- ------ ------- -------
Net earnings (loss)
from continuing
operations 69,536 (14,014) 226,416 (173,187)
Discontinued
operations, net of tax -- (993) (1,881) (10,039)
--- ---- ------ -------
Net earnings (loss) 69,536 (15,007) 224,535 (183,226)
Non-controlling
interest earnings
(loss) 214 (123) 2,224 (4,210)
--- ---- ----- ------
Net earnings (loss)
attributable to
common
shareholders $69,322 ($14,884) $222,311 ($179,016)
======= ======== ======== =========
Earnings per share:
Net earnings (loss)
from continuing
operations
attributable to
common
shareholders -
basic $0.30 ($0.07) $0.99 ($0.85)
===== ====== ===== ======
Net earnings (loss)
from continuing
operations
attributable to
common
shareholders -
diluted $0.30 ($0.07) $0.97 ($0.85)
===== ====== ===== ======
Weighted average
shares – basic 228,502 209,283 224,674 209,974
======= ======= ======= =======
Weighted average
shares – diluted 231,676 209,283 228,485 209,974
======= ======= ======= =======
Direct operations
orders opened 550,600 428,200 2,611,400 1,860,400
Direct operations
orders closed 400,600 245,300 1,792,000 1,121,200
Fee per file $1,368 $1,455 $1,248 $1,503
Actual title claims paid $148,864 $50,331 $388,101 $278,162
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Specialty Corporate
Three Months Ended Consolidated FNT Insurance and Other
December 31, 2009 ------------ --- --------- ---------
Gross operating revenue $1,404,371 $1,296,225 $89,470 $18,676
Interest and investment
income 41,548 33,391 2,892 5,265
Realized gains and
losses 9,368 9,043 470 (145)
----- ----- --- ----
Total revenue 1,455,287 1,338,659 92,832 23,796
Personnel costs 389,384 366,075 11,197 12,112
Other operating expenses 319,409 267,330 37,389 14,690
Agent commissions 505,272 505,272 -- --
Depreciation and
amortization 24,555 22,277 1,194 1,084
Claim loss expense 102,343 67,983 34,360 --
Interest expense 8,320 104 3 8,213
----- --- --- -----
Total expenses 1,349,283 1,229,041 84,143 36,099
Pretax earnings from
continuing operations 106,004 109,618 8,689 (12,303)
Pretax margin 7.3% 8.2% 9.4% --
Open orders 550,600 550,600 -- --
Closed orders 400,600 400,600 -- --
Specialty Corporate
Three Months Ended Consolidated FNT Insurance and Other
December 31, 2008 ------------ --- ---------- ---------
Gross operating revenue $974,028 $872,614 $94,502 $6,912
Interest and investment
income 31,401 28,978 2,662 (239)
Realized gains and
losses (6,585) (5,366) 102 (1,321)
------ ------ --- ------
Total revenue 998,844 896,226 97,266 5,352
Personnel costs 282,520 266,865 10,775 4,880
Other operating
expenses 305,110 252,555 37,088 15,467
Agent commissions 306,352 306,352 -- --
Depreciation and
amortization 28,407 27,319 671 417
Claim loss expense 82,808 52,251 30,557 --
Interest expense 14,633 581 24 14,028
------ --- --- ------
Total expenses 1,019,830 905,923 79,115 34,792
Pretax earnings (loss)
from continuing
operations (20,986) (9,697) 18,151 (29,440)
Pretax margin -- -- 18.7% --
Open orders 428,200 428,200 -- --
Closed orders 245,300 245,300 -- --
FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Specialty Corporate
Twelve Months Ended Consolidated FNT Insurance and Other
December 31, 2009 ------------ --- --------- ---------
Gross operating revenue $5,646,468 $5,228,194 $366,036 $52,238
Interest and investment
income 154,456 138,339 12,293 3,824
Realized gains and
losses 27,452 27,052 1,926 (1,526)
------ ------ ----- ------
Total revenue 5,828,376 5,393,585 380,255 54,536
Personnel costs 1,649,775 1,565,295 45,349 39,131
Other operating
expenses 1,343,452 1,140,669 158,277 44,506
Agent commissions 1,951,732 1,951,732 -- --
Depreciation and
amortization 109,206 100,476 5,118 3,612
Claim loss expense 392,577 264,674 127,903 --
Interest expense 36,675 753 30 35,892
------ --- --- ------
Total expenses 5,483,417 5,023,599 336,677 123,141
Pretax earnings from
continuing operations 344,959 369,986 43,578 (68,605)
Pretax margin 5.9% 6.9% 11.5% --
Open orders 2,611,400 2,611,400 -- --
Closed orders 1,792,000 1,792,000 -- --
Specialty Corporate
Twelve Months Ended Consolidated FNT Insurance and Other
December 31, 2008 ------------ --- ---------- ---------
Gross operating revenue $4,139,678 $3,729,259 $373,392 $37,027
Interest and investment
income 133,964 120,157 12,929 878
Realized gains and
losses (22,453) (32,889) (3,007) 13,443
------- ------- ------ ------
Total revenue 4,251,189 3,816,527 383,314 51,348
Personnel costs 1,321,964 1,253,563 45,228 23,173
Other operating
expenses 1,179,853 964,282 158,269 57,302
Agent commissions 1,218,044 1,218,044 -- --
Depreciation and
amortization 122,100 114,989 4,896 2,215
Claim loss expense 630,404 490,952 139,452 --
Interest expense 58,580 5,657 487 52,436
------ ----- --- ------
Total expenses 4,530,945 4,047,487 348,332 135,126
Pretax earnings (loss)
from continuing
operations (279,756) (230,960) 34,982 (83,778)
Pretax margin -- -- 9.1% --
Open orders 1,860,400 1,860,400 -- --
Closed orders 1,121,200 1,121,200 -- --
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
December 31, December 31,
2009 2008
----------- ------------
(Unaudited)
Cash and investment portfolio $4,887,411 $4,691,790
Goodwill 1,455,237 1,581,658
Title plant 407,495 431,591
Total assets 7,942,071 8,368,240
Notes payable 861,878 1,350,849
Reserve for claim losses 2,541,420 2,738,625
Secured trust deposits 373,339 474,073
Total equity 3,315,749 2,856,772
Book value per share $14.41 $13.29
SOURCE Fidelity National Financial, Inc.
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