Fidelity National Financial, Inc. Reports Second Quarter 2008 EPS of $0.03
Jacksonville, Fla. — (July 23, 2008) — 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 and six-month periods ended June 30, 2008.
The following are summary financial and operational results for the operating segments of FNF for the three-month and six-month periods ended June 30, 2008 and 2007:
Fidelity National Title Group ("FNT")
— 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.
"We continued to navigate our way through an extremely challenging market during the second quarter," said Chairman William P. Foley, II. "Order counts weakened throughout the quarter, despite the fact that we were operating in the normally seasonally strong spring and summer months. In the midst of this difficult operating environment, we remained focused on the cost side of the equation, eliminating more than 1,200 positions in our title field operations and an additional 400 positions in other areas of the company. Nearly all of those cuts came in June so our reported earnings do not reflect any real benefit from those late quarter staffing reductions. Additionally, we continued to close title and escrow offices throughout the quarter, incurring $10 million in accelerated lease termination costs from the closing of nearly 90 branches. Finally, we decided to increase our provision for losses to 8.5% for the full-year 2008, resulting in a 9.5% provision in the second quarter that moves our provision up to that 8.5% target for the first six months of the year. We expect to provide an 8.5% provision for the last two quarters of 2008. With respect to our other businesses, we continue to make progress on monetizing the value of some of those assets, most notably the sale of a portion of our investment in Sedgwick. In early June, we announced the sale of 20% of our 40% ownership stake in Sedgwick to UnitedHealth Group, receiving approximately $54 million in proceeds. Our investment related to this 20% stake was approximately $29 million, which includes our share of income since our original investment of $26 million in January 2006. This sale resulted in more than a double on our original investment and we recorded a $25 million pre-tax gain in the quarter. We believe the sale of this portion of our Sedgwick ownership stake provides another example of our ability to create significant value for our shareholders. Our ownership percentage in Sedgwick is now 32%. We also continue to move through the process on the specialty insurance sale, as multiple parties have expressed interest, and we expect to be in a position to announce the signing of a definitive agreement in the upcoming months. Finally, we continued to consistently repurchase stock during the second quarter, buying 2.2 million shares from late April through June at a total cost of approximately $33 million. As we move through the second half of 2008, we will remain focused on maximizing the profitability of our title business through continued cost reductions throughout our operations, as well as monetizing the value of some of our other assets, most notably the completion of the sale of our specialty insurance business."
Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, specialty insurance, claims management services and information 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 27 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. 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; 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.
Daniel Kennedy Murphy
Senior Vice President,
Finance and Investor Relations