Fidelity National Financial, Inc. Reports First Quarter 2009 EPS of ($0.06)
Jacksonville, Fla. -- (April 27, 2009) -- Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, specialty insurance, claims management services and information services, today reported operating results for the three-month period ended March 31, 2009.
The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended March 31, 2009 and 2008:
- 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.
"The highlight of the first quarter was the continuation of the strong open order volumes that began in very late 2008," said Chairman William P. Foley, II. "The significant strength in refinance volumes has, however, caused an increase in the time it takes to close an order, as we really only began to see an increase in closed order volumes during the later part of the quarter. We expect that trend in increased closed orders to continue as we head into the second quarter. Additionally, we saw a surge in open order volumes in the first three weeks of April, nearing their highest levels of 2009."
"We also made significant strides on the integration of the Lawyers and Commonwealth operations during the quarter, realizing run-rate cost savings of more than $231 million as of March 31, 2009, versus our original synergy estimate of $150 million and our revised synergy estimate of $225 million. Most importantly, the Lawyers and Commonwealth operations returned to profitability for the month of March, before the impact of the synergy bonus, and these underwriters are positioned to generate increasing profit margins as we enter the second quarter and beyond."
"As we discussed during our recent equity offering, operating performance in our title business began the quarter slowly, but picked up as we got into the month of March. In January, we recorded a pre-tax loss of approximately $11 million, as the legacy FNF business was profitable, but the Lawyers and Commonwealth operations lost more than $17 million on a pre-tax basis. In February we recorded a pre-tax loss of approximately $5 million, as legacy FNF was again slightly profitable and the Lawyers and Commonwealth operations improved to a pre-tax loss of only $5 million. In March, we recorded $15 million in pre-tax earnings, but those results included a $20 million synergy bonus and approximately $6 million in other than temporary impairments related to several equity securities. Before those two items, we generated approximately $41 million in pre-tax earnings, which we believe to be a more meaningful representation of our operating performance in March, as legacy FNF generated a high single digit margin for the month and the Lawyers and Commonwealth operations recorded a mid-single digit margin."
"Finally, on April 20, 2009, we closed on a public offering of our common stock for net proceeds of approximately $331 million. There were two primary reasons for the issuance of stock. First, we will repay $135 million under our existing credit facility on April 30, 2009. We are also examining the option of repurchasing a meaningful amount of our existing bonds, both of which will reduce our debt to total capital ratio from approximately 32% to somewhere near 25%, a level more in-line with our historic debt to cap targets. This reduction in leverage will provide increased financial flexibility for FNF. Second, as the leading title insurance company in the country, we believe the strength of our balance sheet, including unrivaled claims reserves, shareholders' equity, investment portfolio and modest financial leverage, will allow us to differentiate ourselves in the marketplace, particularly in the commercial area."
"Overall, we believe we accomplished many things in the first quarter that have us well prepared for the future. We quickly rationalized and integrated the Lawyers and Commonwealth operations and returned them to operational profitability in March, claims trends continued to be extremely positive and the equity offering will reduce leverage on our balance sheet. In addition, order counts continue to surge and we feel well positioned to take advantage of a stronger market as we enter the second quarter."
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, 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: the possibility that the increased volume of open orders will not continue; the possibility that the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title will have unforeseen negative effects, including if those companies have undisclosed liabilities or if we are not successful in retaining key producers; 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.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President and Treasurer, 904-854-8120,