Fidelity National Financial, Inc. Reports Second Quarter 2007 EPS of $0.38
Jacksonville, Fla. -- (July 25, 2007) -- Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, specialty insurance and claims management services, today reported operating results for the three-month and six-month periods ended June 30, 2007.
* The three-month and six-month periods ended June 30, 2006, include the results of Fidelity National Information Services, Inc. (“FIS”), which was a majority-owned subsidiary of FNF during those periods in 2006.
** A complete pro forma summary of earnings excluding FIS and the minority interest expense related to Fidelity National Title Group, Inc. (“FNT”) for the three-month and six month periods ended June 30, 2006, is included later in this press release.
The following are summary financial and operational results for the current operating segments of FNF for the three-month and six-month periods ended June 30, 2007, and 2006:
- 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.
“Higher interest rates and the slowdown in the mortgage and real estate markets had a dampening effect on the normal seasonal improvement in the title business during the second quarter,” said Chairman of the Board William P. Foley, II. “However, we continue to run our title business through a strict adherence to operating metrics, allowing us to generate a 9.6% pre-tax margin, despite the difficult operating environment. We expect the second half of 2007 to remain a challenge and we will continue to monitor order counts and employee headcount in our quest to maximize earnings from our title business.”
“Our specialty insurance business performed well during the quarter, as flood insurance contributed nearly 10% revenue growth and the homeowner’s business posted a 62% loss ratio. Additionally, Sedgwick generated $164 million in revenue, while continuing to produce its consistent EBITDA margin. Finally, we continue to move forward on our Ceridian acquisition, in partnership with Thomas H. Lee Partners. Ceridian shareholders will vote on the acquisition at the Ceridian annual shareholders meeting, which has been set for September 12, 2007.”
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, specialty insurance and claims management services. FNF is one of the nation’s largest title insurance companies through its title insurance underwriters - Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title - that issue approximately 28 percent of all title insurance policies 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. 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; 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.
NOTES TO UNAUDITED PRO FORMA SUMMARY OF EARNINGS
Notes to Unaudited Pro Forma Summary of Earnings for the Three-Month and Six-Month Periods Ended June 30, 2006
This pro forma summary of earnings includes the historical statements of continuing operations of FNF and removes the results of operations of FIS, FNF Capital and FNF minority interest expense relating to FIS and FNT, as though the reorganization transaction that occurred in the fourth quarter of 2006 had occurred on January 1, 2006.
- This column represents the historical results of operations of FIS as included in FNF’s consolidated results of operations for the periods presented.
- This column represents the historical results of operations of FNF Capital as included in FNF’s consolidated results of operations for the periods presented.
- This represents the intercompany revenues relating to various agreements recorded on FIS’ income statement that had already been eliminated from the consolidated results of operations of FNF. These revenues amounted to $45.6 million and $103.4 million, respectively, for the three-month and six-month periods ended June 30, 2006.
- This represents the intercompany expenses related to various agreements that were eliminated in the consolidated results of operations of FNF, but are third-party expenses subsequent to the reorganization transaction. These expenses amounted to $27.4 million and $66.5 million, respectively, for the three-month and six-month periods ended June 30, 2006.
- This represents transaction costs related to the reorganization, all of which have been excluded from the pro forma summary of earnings. These costs amounted to $6.7 million for the three-month and six-month periods ended June 30, 2006.
- This represents the additional agent commissions paid by FNF to FIS that were previously eliminated in the consolidated results of FNF, but are a third-party expense subsequent to the reorganization transaction. These commissions amounted to $18.3 million and $36.9 million, respectively, for the three-month and six-month periods ended June 30, 2006.
- This represents intercompany interest expense that is a third-party expense subsequent to the reorganization transaction. These expenses amounted to $0.2 million and $0.4 million, respectively, for the three-month and six-month periods ended June 30, 2006.
- This represents the elimination of the minority interest expense recorded by FNF relating to its earnings in FIS and FNT. Minority interest expense relating to FIS was $31.9 million and $48.3 million, respectively, for the three-month and six-month periods ended June 30, 2006. Minority interest relating to FNT was $20.4 million and $34.2 million, respectively, for the three-month and six-month periods ended June 30, 2006.
- Amounts presented approximate the actual number of basic and diluted weighted average shares outstanding subsequent to the reorganization transaction.
CONTACT:
Daniel Kennedy Murphy
Senior Vice President
Finance and Investor Relations
904-854-8120
dkmurphy@fnf.com