Table of Contents
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):
February 8, 2006
Fidelity National Title Group, Inc.
(Exact name of Registrant as Specified in its Charter)
001-32630
(Commission File Number)
| Delaware | 16-1725106 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (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)) | |
TABLE OF CONTENTS
| Item 2.02. Results of Operations and Financial Condition | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EXHIBIT 99.1 | ||||||||
Table of Contents
Item 2.02. Results of Operations and Financial Condition
On February 8, 2006, Fidelity National Title Group, Inc. issued an earnings release announcing its financial results for the three months and twelve months ended December 31, 2005. 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 Title Group, Inc. Reports Fourth Quarter 2005 EPS of $0.73. |
Table of Contents
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: February 14, 2006 | By: | /s/ Anthony J. Park | ||
| Name: Anthony J. Park Title: Chief Financial Officer |
||||
Table of Contents
EXHIBIT INDEX
| Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Title Group, Inc. Reports Fourth Quarter 2005 EPS of $0.73. |
Exhibit 99.1
Fidelity National Title Group, Inc. Reports Fourth Quarter 2005 EPS of $0.73
Jacksonville, Fla. — (February 8, 2006) — Fidelity National Title Group, Inc. (NYSE: FNT), the
nation’s largest title insurance company and a majority-owned, publicly-traded subsidiary of
Fidelity National Financial, Inc. (NYSE: FNF), today reported operating results for the
three-month and twelve-month periods ended December 31, 2005.
| 4th Quarter 2005 | Full Year 2005 | |||||||
Total revenue
|
$1.587 billion | $6.316 billion | ||||||
Pre-tax margin
|
12.9 | % | 13.7 | % | ||||
Net earnings
|
$126.4 million | $539.0 million | ||||||
Net earnings per share — diluted
|
$0.73 per diluted share | $3.11 per diluted share | ||||||
Cash flow from operations
|
$102.0 million | $697.5 million | ||||||
Return on average equity
|
20.7 | % | 20.9 | % | ||||
| 4th Quarter 2004 | Full Year 2004 | |||||||
Total revenue
|
$1.411 billion | $5.889 billion | ||||||
Pre-tax margin
|
16.3 | % | 15.0 | % | ||||
Net earnings
|
$145.0 million | $558.2 million | ||||||
Net earnings per share — diluted
|
$0.84 per diluted share | $3.22 per diluted share | ||||||
“We had some significant accomplishments at Fidelity National Title Group during 2005,” said
Chairman of the Board William P. Foley, II. “In FNF’s continuing efforts to maximize the value of
its assets, create shareholder value and provide greater transparency to the investment community,
we completed the distribution of the stock of Fidelity National Title Group to FNF
shareholders in October. FNF distributed 17.5 percent of the stock, or approximately 30.4
million shares, of FNT to existing FNF shareholders, while retaining the remaining 82.5% ownership
stake. FNT is now operating as a majority-owned, publicly-traded subsidiary of FNF. We have also
made FNT unique among its title insurance peers by paying a significant cash dividend. Today, the
FNT Board of Directors authorized a 16% increase in the annual cash dividend to $1.16, a 4.9%
current yield. We believe this significant dividend increase is a strong statement about the
future earnings power of FNT, particularly heading into what most expect to be a slowing mortgage
market in 2006.
“This quarter was a solid finish to an exciting year for Fidelity National Title Group,”
said Chief Executive Officer Raymond R. Quirk. “Our full-year 2005 revenue of more than $6.3
billion was a record performance, exceeding both the significant refinance driven years of 2003
and 2004. We also broadened our capabilities through two significant acquisitions in 2005. The
first, Service Link, provides FNT and its title insurance subsidiaries with centralized title and
closing capabilities and improved direct access to national lender accounts for both refinance
transactions and emerging lender-driven purchase transactions. The second, the Land Trust
business assets of LaSalle Bank, made us the largest provider of land trustee services in the
Eastern United States through our subsidiary Chicago Title Land Trust Company. Land trusts are
trust arrangements utilized in the ownership of real estate.”
“Operationally, we focused on headcount reductions in the second half of 2005, reducing
headcount by nearly 1,300 employees during the fourth quarter, as we saw open order levels
seasonally slow down as year-end approached. From early August through year-end, we reduced
headcount by nearly 1,400 employees, or approximately 9% of our title workforce. As we head into
2006, we know that the first quarter is usually the slowest quarter for the title industry so we
will remain focused on maintaining our operating margins and returns through further headcount
reductions and strict operating cost controls.”
The following table depicts monthly direct orders opened and closed in the title and escrow
business for the fourth quarter of both 2005 and 2004:
| Direct Orders Opened | Direct Orders Closed | Closing % | ||||||||||
Month |
||||||||||||
October 2005 |
242,800 | 181,900 | 75 | % | ||||||||
November 2005 |
221,300 | 168,400 | 76 | % | ||||||||
December 2005 |
189,800 | 167,600 | 88 | % | ||||||||
Fourth Quarter 2005 |
653,900 | 517,900 | 79 | % | ||||||||
| Direct Orders Opened | Direct Orders Closed | Closing % | ||||||||||
Month |
||||||||||||
October 2004 |
247,600 | 177,300 | 72 | % | ||||||||
November 2004 |
234,900 | 176,000 | 75 | % | ||||||||
December 2004 |
214,700 | 188,400 | 88 | % | ||||||||
Fourth Quarter 2004 |
697,200 | 541,700 | 78 | % | ||||||||
The following table depicts monthly commercial direct orders opened and closed in the title
and escrow business for the fourth quarter of both 2005 and 2004:
| Open | Closed | Commercial | ||||||||||||||
| Commercial | Commercial | Revenue | Commercial | |||||||||||||
| Orders | Orders | (In thousands) | Fee Per File | |||||||||||||
4th Quarter 2005 |
13,503 | 9,110 | $ | 80,849 | $ | 8,875 | ||||||||||
4th Quarter 2004 |
14,943 | 9,754 | $ | 71,147 | $ | 7,157 | ||||||||||
Fidelity National Title Group, Inc. is the nation’s largest title insurance company. The
Company’s title insurance underwriters ¾ Fidelity National Title, Chicago Title, Ticor Title,
Security Union Title and Alamo Title ¾ issue approximately 31 percent of all title insurance
policies in the United States. Through its direct operations and agencies, the Company provides
title insurance in 49 states, the District of Columbia, Guam, Mexico, Puerto Rico, the U.S. Virgin
Islands and Canada. In 2005, FNT also acquired Service Link, a leading provider of title and
closing services to major financial institutions and lenders, including six of the top 10 lending
institutions in the United States ranked by loan origination volume. More information about
Fidelity National Title Group can be found at www.fntg.com
FNT is a majority-owned subsidiary of Fidelity National Financial Inc., number 261 on the
Fortune 500 and a provider of products and outsourced services and solutions to a variety of
industries. More information about FNF can be found at www.fnf.com.
This press release contains statements related to future events and expectations and, as such,
constitutes forward-looking statements. These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause actual results, performance or
achievements of the Company to be different from those expressed or implied above. The Company
expressly disclaims any duty to update or revise forward-looking statements. The risks and
uncertainties which forward-looking statements are subject to include, but are not limited to, the
effect of governmental regulations, the economy, competition and other risks detailed from time to
time in the “Management’s Discussion and Analysis” section of the Company’s Form 10-K and other
reports and filings with the Securities and Exchange Commission.
SOURCE: Fidelity National Title Group, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President, Finance and Investor Relations, Fidelity National Financial, Inc., 904-854-8120, dkmurphy@fnf.com
FIDELITY NATIONAL TITLE GROUP, INC.
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Direct title premiums |
$ | 541,419 | $ | 512,072 | $ | 2,184,993 | $ | 2,003,447 | ||||||||
Agency title premiums |
680,656 | 604,628 | 2,763,973 | 2,714,770 | ||||||||||||
Total title premiums |
1,222,075 | 1,116,700 | 4,948,966 | 4,718,217 | ||||||||||||
Escrow and other title-related fees |
293,969 | 259,925 | 1,162,344 | 1,039,835 | ||||||||||||
Total title and escrow |
1,516,044 | 1,376,625 | 6,111,310 | 5,758,052 | ||||||||||||
Interest and investment income |
41,018 | 19,336 | 118,084 | 64,885 | ||||||||||||
Realized gains and losses |
19,179 | 5,353 | 44,684 | 22,948 | ||||||||||||
Other |
10,302 | 9,221 | 41,783 | 43,528 | ||||||||||||
Total revenue |
1,586,543 | 1,410,535 | 6,315,861 | 5,889,413 | ||||||||||||
Personnel costs |
481,976 | 412,934 | 1,897,904 | 1,680,805 | ||||||||||||
Other operating expenses |
235,419 | 209,264 | 935,263 | 849,554 | ||||||||||||
Agent commissions |
523,652 | 466,056 | 2,140,912 | 2,117,122 | ||||||||||||
Depreciation and amortization |
28,898 | 26,618 | 102,105 | 95,718 | ||||||||||||
Claim loss expense |
100,421 | 64,897 | 354,710 | 259,402 | ||||||||||||
Interest expense |
11,270 | 799 | 16,663 | 3,885 | ||||||||||||
Total expenses |
1,381,636 | 1,180,568 | 5,447,557 | 5,006,486 | ||||||||||||
Earnings before income taxes |
204,907 | 229,967 | 868,304 | 882,927 | ||||||||||||
Income tax expense |
78,577 | 84,615 | 327,351 | 323,598 | ||||||||||||
Minority interest |
(20 | ) | 356 | 1,972 | 1,165 | |||||||||||
Net earnings |
$ | 126,350 | $ | 144,996 | $ | 538,981 | $ | 558,164 | ||||||||
Net earnings per share — basic |
$ | 0.73 | $ | 0.84 | $ | 3.11 | $ | 3.22 | ||||||||
Net earnings per share — diluted |
$ | 0.73 | $ | 0.84 | $ | 3.11 | $ | 3.22 | ||||||||
Weighted average shares — basic (1) |
173,463 | 173,520 | 173,463 | 173,520 | ||||||||||||
Weighted average shares — diluted (1) |
173,575 | 173,520 | 173,575 | 173,520 | ||||||||||||
Direct operations orders opened |
653,900 | 697,200 | 3,052,800 | 3,142,900 | ||||||||||||
Direct operations orders closed |
517,900 | 541,700 | 2,169,700 | 2,249,800 | ||||||||||||
Fee Per File |
$ | 1,542 | $ | 1,397 | $ | 1,487 | $ | 1,324 | ||||||||
| (1) | For the 2004 periods, net earnings per share is a pro forma presentation based on the distribution of 173,520 shares on October 17, 2005 |
FIDELITY NATIONAL TITLE GROUP, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
| December 31, | December 31, | |||||||
| 2005 | 2004 | |||||||
| Unaudited | ||||||||
Cash and investment portfolio |
$ | 3,762,895 | $ | 3,087,903 | ||||
Goodwill |
1,051,526 | 959,600 | ||||||
Title plants |
308,675 | 301,610 | ||||||
Total assets |
5,900,533 | 5,074,091 | ||||||
Notes payable |
603,262 | 22,390 | ||||||
Reserve for claim losses |
1,063,857 | 980,746 | ||||||
Secured trust deposits |
882,602 | 735,295 | ||||||
Total stockholders’ equity |
2,480,037 | 2,676,756 | ||||||
Book value per share (1) |
14.23 | 15.43 | ||||||
| (1) | Book value per share at December 31, 2004 is a pro forma presentation based on the distribution of 173,520 shares on October 17, 2005 |