United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
July 25, 2011
Fidelity National Financial, Inc.
(Exact name of Registrant as Specified in its Charter)
001-32630
(Commission File Number)
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 16-1725106 (IRS Employer Identification Number) | |
601 Riverside Avenue
Jacksonville, Florida 32204
(Addresses of Principal Executive Offices)
(904) 854-8100
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. | Results of Operations and Financial Condition | |
On July 25, 2011, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the Second Quarter of 2011. The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
A copy of the earnings release is attached as Exhibit 99.1.
Item 9.01. | Financial Statements and Exhibits | |
(c) Exhibits
Exhibit | Description | ||||
99.1 | Press release announcing Fidelity National Financial, Inc. Reports Second Quarter 2011 Earnings. | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Fidelity National Financial, Inc. | |||||
Date: | July 25, 2011 | By: | /s/ Anthony J. Park | ||
Name: | Anthony J. Park | ||||
Title: | Chief Financial Officer | ||||
EXHIBIT INDEX
Exhibit | Description | ||||
99.1 | Press release announcing Fidelity National Financial, Inc. Reports Second Quarter 2011 Earnings. | ||||
Exhibit 99.1
Fidelity National Financial, Inc. Reports Second Quarter 2011 EPS of $0.36
Jacksonville, Fla. - (July 25, 2011) - Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, mortgage services, specialty insurance and diversified services, today reported operating results for the three-month and six-month periods ended June 30, 2011.
Three Months Ended | Three Months Ended | |||
June 30, 2011 | June 30, 2010 | |||
Total revenue | $1.32 billion | $1.50 billion | ||
Net earnings attributable to common shareholders | $80.0 million | $139.6 million* | ||
Net earnings per diluted share attributable to common shareholders | $0.36 | 0.61* | ||
Cash flow from operations | $30.2 million | $136.0 million | ||
*Includes approximately a $63.0 million after-tax gain, or $0.27 per diluted share, from the sale of Sedgwick CMS in May 2010
The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended June 30, 2011 and 2010:
Fidelity National Title Group (“FNT”)
Three Months Ended | Three Months Ended | |||
June 30, 2011 | June 30, 2010 | |||
Total revenue | $1.20 billion | $1.28 billion | ||
Pre-tax earnings | $140.6 million | $124.0 million | ||
Pre-tax margin | 11.7% | 9.7% | ||
Month | Direct Orders Opened | Direct Orders Closed | |||||
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 | |||||
Month | Direct Orders Opened | Direct Orders Closed | |||||
April 2010 | 185,300 | 121,700 | |||||
May 2010 | 168,800 | 113,600 | |||||
June 2010 | 197,000 | 126,600 | |||||
Second Quarter 2010 | 551,100 | 361,900 | |||||
Open | Closed | Commercial | |||||||||||||
Commercial | Commercial | Revenue | Commercial | ||||||||||||
Orders | Orders | (In millions) | Fee Per File | ||||||||||||
2nd Quarter 2011 | 19,100 | 12,000 | 93.8 | 7,800 | |||||||||||
2nd Quarter 2010 | 18,400 | 11,000 | 68.1 | 6,200 | |||||||||||
• | 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 | |||
June 30, 2011 | June 30, 2010 | |||
Total revenue | $110.9 million | $104.3 million | ||
Pre-tax earnings | $4.1 million | $11.1 million | ||
Pre-tax margin | 3.7% | 10.6% | ||
“We are pleased with our financial results this quarter, particularly in our title insurance business,” said Chairman William P. Foley, II. “Despite a continued sluggish real estate environment, we were able to generate an impressive 11.7% pre-tax margin in our title business, a 200 basis point increase over the prior year and a sequential increase of 240 basis points from the first quarter of this year. While refinance orders represented 51% of closed order volumes this quarter versus 46% in the prior year, we still produced a 5% increase in the fee per file. Much of this can be attributed to the strength of our commercial business, as we generated nearly $94 million in commercial revenue in the second quarter, a 38% increase over the prior year and a sequential increase of 43% from the first quarter of this year. The commercial business produced a fee per file increase of 26% over both the prior year quarter and the first quarter of this year. The impact of cost reduction initiatives also contributed to our strong 11.7% pre-tax title margin. On a sequential basis from the first quarter, title segment personnel costs and other operating expenses increased by less than 1%, while title gross operating revenue grew by nearly 11%. We will continue to manage our title business with the same discipline, seeking to maximize profitability in any market environment.
“In mid-July, we announced the sale of our flood insurance business for approximately $210 million. That flood business has been the nation's largest flood insurance provider and a very profitable and consistent business for FNF for nearly ten years. We feel this transaction is a great opportunity to realize the value of the business we have created and redeploy the capital into other uses that can continue to create increased value for our shareholders. We are proud of the flood insurance business we created and we wish them future success with their new investment partners.”
Conference Call
FNF will host a call with investors and analysts to discuss second quarter 2011 results on Tuesday, July 26, 2011, 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 2:00 p.m. Eastern time on July 26, 2011, through August 2, 2011, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 210285.
About FNF
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, mortgage services, specialty insurance 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 also provides personal lines insurance and home warranty insurance through its specialty insurance business. In addition, among other operations, FNF owns minority interests in Ceridian Corporation, a leading provider of global human resources, payroll, benefits 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.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President and Treasurer, 904-854-8120, dkmurphy@fnf.com
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY OF EARNINGS
(In millions, except per share amounts, order information, and fee per file)
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||
Direct title premiums | $ | 357.2 | $ | 344.6 | $ | 680.1 | $ | 626.0 | |||||||||||
Agency title premiums | 484.7 | 552.8 | 908.0 | 1,036.6 | |||||||||||||||
Total title premiums | 841.9 | 897.4 | 1,588.1 | 1,662.6 | |||||||||||||||
Escrow, title-related and other fees | 334.2 | 336.5 | 647.4 | 631.0 | |||||||||||||||
Total title and escrow | 1,176.1 | 1,233.9 | 2,235.5 | 2,293.6 | |||||||||||||||
Specialty insurance | 106.8 | 101.0 | 199.6 | 187.3 | |||||||||||||||
Interest and investment income | 39.7 | 36.4 | 75.8 | 75.2 | |||||||||||||||
Realized gains and losses | 1.9 | 124.2 | 21.8 | 152.8 | |||||||||||||||
Total revenue | 1,324.5 | 1,495.5 | 2,532.7 | 2,708.9 | |||||||||||||||
Personnel costs | 396.8 | 397.7 | 788.1 | 768.4 | |||||||||||||||
Other operating expenses | 300.9 | 316.9 | 586.3 | 615.9 | |||||||||||||||
Agent commissions | 379.1 | 435.9 | 706.8 | 820.3 | |||||||||||||||
Depreciation and amortization | 19.3 | 22.5 | 39.8 | 45.5 | |||||||||||||||
Claim loss expense | 104.6 | 96.9 | 191.3 | 183.2 | |||||||||||||||
Interest expense | 13.8 | 12.5 | 28.1 | 19.6 | |||||||||||||||
Total expenses | 1,214.5 | 1,282.4 | 2,340.4 | 2,452.9 | |||||||||||||||
Earnings before taxes | 110.0 | 213.1 | 192.3 | 256.0 | |||||||||||||||
Income tax expense | 39.6 | 76.3 | 69.2 | 89.6 | |||||||||||||||
Earnings before equity investments | 70.4 | 136.8 | 123.1 | 166.4 | |||||||||||||||
Earnings (loss) from equity investments | 12.6 | 3.6 | 4.0 | (7.1 | ) | ||||||||||||||
Net earnings | 83.0 | 140.4 | 127.1 | 159.3 | |||||||||||||||
Non-controlling interests | 3.0 | 0.8 | 4.6 | 3.2 | |||||||||||||||
Net earnings attributable to common shareholders | $ | 80.0 | $ | 139.6 | $ | 122.5 | $ | 156.1 | |||||||||||
Earnings per share: | |||||||||||||||||||
Net earnings attributable to common shareholders - basic | $ | 0.36 | $ | 0.61 | $ | 0.56 | $ | 0.69 | |||||||||||
Net earnings attributable to common shareholders - diluted | $ | 0.36 | $ | 0.61 | $ | 0.55 | $ | 0.68 | |||||||||||
Weighted average shares - basic | 220.7 | 227.5 | 220.7 | 227.6 | |||||||||||||||
Weighted average shares - diluted | 224.5 | 230.5 | 224.0 | 230.5 | |||||||||||||||
Direct operations orders opened (000's) | 514.0 | 551.1 | 1,002.1 | 1,062.2 | |||||||||||||||
Direct operations orders closed (000's) | 353.2 | 361.9 | 724.0 | 694.4 | |||||||||||||||
Fee per file | $ | 1,569 | $ | 1,499 | $ | 1,468 | $ | 1,422 | |||||||||||
Actual title claims paid | $ | 147.5 | $ | 122.1 | $ | 236.3 | $ | 217.6 | |||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
FOURTH QUARTER SEGMENT INFORMATION
(In millions, except order information)
(Unaudited)
Three Months Ended | Specialty | Corporate | |||||||||||||||
June 30, 2011 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 1,282.9 | $ | 1,162.8 | $ | 106.8 | $ | 13.3 | |||||||||
Interest and investment income | 39.7 | 36.8 | 2.7 | 0.2 | |||||||||||||
Realized gains and losses | 1.9 | 2.1 | 1.4 | (1.6 | ) | ||||||||||||
Total revenue | 1,324.5 | 1,201.7 | 110.9 | 11.9 | |||||||||||||
Personnel costs | 396.8 | 369.7 | 11.8 | 15.3 | |||||||||||||
Other operating expenses | 300.9 | 237.4 | 46.8 | 16.7 | |||||||||||||
Agent commissions | 379.1 | 379.1 | — | — | |||||||||||||
Depreciation and amortization | 19.3 | 17.5 | 1.0 | 0.8 | |||||||||||||
Claim loss expense | 104.6 | 57.4 | 47.2 | — | |||||||||||||
Interest expense | 13.8 | — | — | 13.8 | |||||||||||||
Total expenses | 1,214.5 | 1,061.1 | 106.8 | 46.6 | |||||||||||||
Pretax earnings (loss) | 110.0 | 140.6 | 4.1 | (34.7 | ) | ||||||||||||
Pretax margin | 8.3 | % | 11.7 | % | 3.7 | % | — | ||||||||||
Open orders | 514.0 | 514.0 | — | — | |||||||||||||
Closed orders | 353.2 | 353.2 | — | — | |||||||||||||
Three Months Ended | Specialty | Corporate | |||||||||||||||
June 30, 2010 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 1,334.9 | $ | 1,223.1 | $ | 101.0 | $ | 10.8 | |||||||||
Interest and investment income | 36.4 | 33.8 | 2.8 | (0.2 | ) | ||||||||||||
Realized gains and losses | 124.2 | 24.4 | 0.5 | 99.3 | |||||||||||||
Total revenue | 1,495.5 | 1,281.3 | 104.3 | 109.9 | |||||||||||||
Personnel costs | 397.7 | 378.1 | 12.2 | 7.4 | |||||||||||||
Other operating expenses | 316.9 | 261.0 | 44.5 | 11.4 | |||||||||||||
Agent commissions | 435.9 | 435.9 | — | — | |||||||||||||
Depreciation and amortization | 22.5 | 20.9 | 0.9 | 0.7 | |||||||||||||
Claim loss expense | 96.9 | 61.3 | 35.6 | — | |||||||||||||
Interest expense | 12.5 | 0.1 | — | 12.4 | |||||||||||||
Total expenses | 1,282.4 | 1,157.3 | 93.2 | 31.9 | |||||||||||||
Pretax earnings | 213.1 | 124.0 | 11.1 | 78.0 | |||||||||||||
Pretax margin | 14.2 | % | 9.7 | % | 10.6 | % | 71.0 | % | |||||||||
Open orders | 551.1 | 551.1 | — | — | |||||||||||||
Closed orders | 361.9 | 361.9 | — | — | |||||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
FULL-YEAR SEGMENT INFORMATION
(In millions, except order information)
(Unaudited)
Six Months Ended | Specialty | Corporate | |||||||||||||||
June 30, 2011 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 2,435.1 | $ | 2,213.7 | $ | 199.6 | $ | 21.8 | |||||||||
Interest and investment income | 75.8 | 70.0 | 5.6 | 0.2 | |||||||||||||
Realized gains and losses | 21.8 | 20.5 | 1.8 | (0.5 | ) | ||||||||||||
Total revenue | 2,532.7 | 2,304.2 | 207.0 | 21.5 | |||||||||||||
Personnel costs | 788.1 | 735.1 | 23.7 | 29.3 | |||||||||||||
Other operating expenses | 586.3 | 473.8 | 85.1 | 27.4 | |||||||||||||
Agent commissions | 706.8 | 706.8 | — | — | |||||||||||||
Depreciation and amortization | 39.8 | 36.2 | 2.1 | 1.5 | |||||||||||||
Claim loss expense | 191.3 | 108.2 | 83.1 | — | |||||||||||||
Interest expense | 28.1 | 0.8 | — | 27.3 | |||||||||||||
Total expenses | 2,340.4 | 2,060.9 | 194.0 | 85.5 | |||||||||||||
Pretax earnings (loss) | 192.3 | 243.3 | 13.0 | (64.0 | ) | ||||||||||||
Pretax margin | 7.6 | % | 10.6 | % | 6.3 | % | — | ||||||||||
Open orders | 1,002.1 | 1,002.1 | — | — | |||||||||||||
Closed orders | 724.0 | 724.0 | — | — | |||||||||||||
Six Months Ended | Specialty | Corporate | |||||||||||||||
June 30, 2010 | Consolidated | FNT | Insurance | and Other | |||||||||||||
Gross operating revenue | $ | 2,480.9 | $ | 2,261.7 | $ | 187.3 | $ | 31.9 | |||||||||
Interest and investment income | 75.2 | 68.2 | 5.7 | 1.3 | |||||||||||||
Realized gains and losses | 152.8 | 27.1 | 0.6 | 125.1 | |||||||||||||
Total revenue | 2,708.9 | 2,357.0 | 193.6 | 158.3 | |||||||||||||
Personnel costs | 768.4 | 728.9 | 24.0 | 15.5 | |||||||||||||
Other operating expenses | 615.9 | 503.7 | 80.5 | 31.7 | |||||||||||||
Agent commissions | 820.3 | 820.3 | — | — | |||||||||||||
Depreciation and amortization | 45.5 | 42.5 | 2.0 | 1.0 | |||||||||||||
Claim loss expense | 183.2 | 113.4 | 69.8 | — | |||||||||||||
Interest expense | 19.6 | 0.2 | — | 19.4 | |||||||||||||
Total expenses | 2,452.9 | 2,209.0 | 176.3 | 67.6 | |||||||||||||
Pretax earnings | 256.0 | 148.0 | 17.3 | 90.7 | |||||||||||||
Pretax margin | 9.5 | % | 6.3 | % | 8.9 | % | 57.3 | % | |||||||||
Open orders | 1,062.2 | 1,062.2 | — | — | |||||||||||||
Closed orders | 694.4 | 694.4 | — | — | |||||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In millions, except per share amounts)
June 30, 2011 | December 31, 2010 | |||||||||
(Unaudited) | ||||||||||
Cash and investment portfolio | $ | 4,980.8 | $ | 4,939.3 | ||||||
Goodwill | 1,472.6 | 1,470.7 | ||||||||
Title plant | 390.0 | 390.8 | ||||||||
Total assets | 7,835.3 | 7,887.5 | ||||||||
Notes payable | 951.8 | 952.0 | ||||||||
Reserve for claim losses | 2,154.8 | 2,272.7 | ||||||||
Secured trust deposits | 444.5 | 388.4 | ||||||||
Total equity | 3,532.2 | 3,444.4 | ||||||||
Book value per share | $ | 15.80 | $ | 15.39 | ||||||
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