Fidelity National Financial, Inc.

Fidelity National Financial, Inc.

Press Release

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Jul 29, 2015

FNF Group Reports Second Quarter 2015 Adjusted EPS of $0.65, Adjusted Pre-Tax Title Margin of 16.2%, BKFS Adjusted Revenue Growth of 7% and Adjusted EBITDA Margin of 43.5%

FNF Group Reports Second Quarter 2015 Adjusted EPS of $0.65, Adjusted Pre-Tax Title Margin of 16.2%, BKFS Adjusted Revenue Growth of 7% and Adjusted EBITDA Margin of 43.5%

Jacksonville, Fla. - (July 29, 2015) - Fidelity National Financial, Inc. today reported the operating results of FNF Group (NYSE:FNF), a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries, for the three and six-month periods ended June 30, 2015.

  • Total revenue of approximately $2.0 billion in the second quarter versus $1.7 billion in the second quarter of 2014
  • Adjusted second quarter net earnings of $187 million versus adjusted net earnings of $141 million for the second quarter of 2014
  • Adjusted second quarter diluted EPS of $0.65 versus adjusted diluted EPS of $0.50 in the second quarter of 2014
  • Second quarter free cash flow provided of $289 million versus $223 million provided in the second quarter of 2014

Title

  • Approximately $1.8 billion in total revenue, adjusted pre-tax earnings of $286 million and adjusted pre-tax title margin of 16.2% for the second quarter versus approximately $1.5 billion in total revenue, adjusted pre-tax earnings of $208 million and an adjusted pre-tax title margin of 14.2% in the second quarter of 2014
  • Adjusted pre-tax title margin of 16.2% was a 200 basis point improvement over the second quarter 2014 adjusted pre-tax title margin of 14.2%
  • ServiceLink generated $224 million in revenue, adjusted EBITDA of $34 million, an adjusted EBITDA margin of 15%, adjusted pre-tax earnings of $29 million and an adjusted pre-tax margin of 13% for the second quarter
  • Open orders per day of 8,750 for the second quarter versus 8,031 open orders per day for the second quarter of 2014
  • Closed orders per day of 6,375 for the second quarter versus 5,344 closed orders per day for the second quarter of 2014
  • Second quarter purchase orders opened and closed increased by 7% and 12%, respectively, versus the second quarter of 2014; purchase orders opened and closed increased by 7% and 11%, respectively, versus the second quarter of 2014 excluding ServiceLink default related purchase orders
  • Total commercial revenue of $258 million, a 41% increase over total commercial revenue in the second quarter of 2014; second quarter national commercial title revenue of $150 million, a 30% increase from the second quarter of 2014, driven by a 22% improvement in the commercial fee per file and a 6% increase in closed orders; open national commercial orders decreased by 5% over the prior year
  • Overall second quarter average fee per file of $2,026, a 2% increase versus the second quarter of 2014
  • Title claims paid of $70 million, a decrease of $9 million, or 11%, from the second quarter of 2014

Title Orders

BKFS

  • Adjusted revenue of $235 million, led by Servicing Technology revenue of approximately $160 million
  • Adjusted revenue growth of 7% for the second quarter compared to the second quarter of 2014, led by strong growth in Origination Technology and Data & Analytics
  • Adjusted EBITDA of $102 million and adjusted EBITDA margin of 43.5%

"We generated a 16.2% adjusted pre-tax title margin this quarter in a strong commercial environment and a steadily improving residential real estate market," said Chairman William P. Foley, II. "The performance of our title business this quarter gives us further confidence that we can continue to generate pre-tax title margins in the 15%-20% range as we experience further strength in the residential purchase market. We remain the most profitable title insurance company and believe our financial performance should warrant a premium market multiple versus our title company peers.

"Black Knight continues to perform to our high expectations, generating 7% adjusted revenue growth and a 43.5% adjusted EBITDA margin in the second quarter. We completed the Black Knight IPO in May and look forward to FNF shareholders sharing in the benefit of Black Knight trading as a stand-alone, public company.

"In conjunction with the IPO, Black Knight repaid FNF $1.5 billion in intercompany and mirror notes and FNF utilized $1.1 billion of those proceeds to fully repay the term loan that was borrowed in conjunction with the January 2014 LPS acquisition. Additionally, we repurchased 1.3 million shares of FNF common stock between June 1st and the first week of July and we expect to continue repurchasing FNF shares throughout the remainder of 2015."

Conference Call
We will host a call with investors and analysts to discuss second quarter 2015 FNF Core results on Thursday, July 30, 2015, 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 1:00 p.m. Eastern time on July 30, 2015, through August 6, 2015, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 362665.

About Fidelity National Financial, Inc.
Fidelity National Financial, Inc. is organized into two groups, FNF Group (NYSE: FNF) and FNFV Group (NYSE: FNFV). FNF is a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries. FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides industry-leading mortgage technology solutions and transaction services, including MSP®, the leading residential mortgage servicing technology platform in the U.S., through its majority-owned subsidiaries, Black Knight Financial Services, LLC and ServiceLink Holdings, LLC. FNFV holds majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC, J. Alexander's, LLC , Ceridian HCM, Inc., Fleetcor Technologies, Inc. and Digital Insurance, Inc. More information about FNF and FNFV can be found at www.fnf.com.

Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and depreciation and amortization (EBITDA), adjusted earnings before interest, taxes and depreciation and amortization (Adjusted EBITDA), adjusted earnings before interest, taxes and depreciation as a percent of adjusted revenue (Adjusted EBITDA margin), adjusted net earnings, adjusted EPS and free cash flow.

Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided below.

Forward-Looking Statements and Risk Factors
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.

This press release should be read in conjunction with the press release filed for the results of FNFV on this same date as well as the risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10-Q,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

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