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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):
April 25, 2007

Fidelity National Financial, 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


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Item 2.02. Results of Operations and Financial Condition

On April 25, 2007, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the three-month period ended March 31, 2007. 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 First Quarter 2007 EPS of $0.37.

 


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: April 27, 2007  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 Financial, Inc. Reports First Quarter 2007 EPS of $0.37.

 

exv99w1
 

Exhibit 99.1
(Fidelity Press Release Logo)
Fidelity National Financial, Inc. Reports First Quarter 2007 EPS of $0.37
Jacksonville, Fla. — (April 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 period ended March 31, 2007.
             
            Pro Forma
    1st Quarter 2007   1st Quarter 2006*   1st Quarter 2006**
Total revenue
  $1.37 billion   $2.35 billion   $1.51 billion
Pre-tax margin
  9.3%   9.3%   10.3%
Net earnings
  $83.4 million   $106.4 million   $98.8 million
Net earnings per diluted share
  $0.37   $0.61   $0.45
Cash flow from operations
  $85.1 million   $8.0 million   N/A
Return on average equity
  9.6%   11.3%   N/A
* The 1st quarter 2006 figures include the results of Fidelity National Information Services, Inc. (“FIS”), which was a majority-owned subsidiary of FNF during the 1st quarter of 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 1st quarter 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 periods ended March 31, 2007 and 2006:
     Fidelity National Title Group (“FNT”)
         
    1st Quarter 2007   1st Quarter 2006
Total revenue
  $1.25 billion   $1.39 billion
Pre-tax earnings
  $114.8 million   $132.5 million
Pre-tax margin
  9.2%   9.5%

 


 

             
Month   Direct Orders Opened   Direct Orders Closed   Closing %
January 2007
  212,900   128,700   60%
February 2007
  202,000   120,300   60%
March 2007
  237,500   141,400   60%
First Quarter 2007
  652,400   390,400   60%
             
Month   Direct Orders Opened   Direct Orders Closed   Closing %
January 2006
  215,000   134,200   62%
February 2006
  213,200   133,500   63%
March 2006
  255,600   168,600   66%
First Quarter 2006
  683,800   436,300   64%
                 
    Open   Closed   Commercial    
    Commercial   Commercial   Revenue   Commercial
    Orders   Orders   (In thousands)   Fee Per File
1st Quarter 2007
  15,020   7,213   $74,504   $10,329
1st Quarter 2006
  14,345   8,147   $65,339   $8,020
- 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
         
    1st Quarter 2007   1st Quarter 2006
Total revenue
  $99.0 million   $110.4 million
Pre-tax earnings
  $25.4 million***   $32.5 million
Pre-tax margin
  25.7%   29.4%
*** The 1st quarter 2007 Specialty Insurance results include a $12.2 million benefit from an adjustment related to the deferral and amortization of certain costs over the life of a policy, consistent with the

 


 

recognition of the premiums. The adjustment represents costs that should have been deferred as of March 31, 2007 on policies issued over the prior twelve months. Excluding this adjustment, diluted net earnings per share were $0.34 for the first quarter of 2007.
     “The first quarter of 2007 was a period where we were primarily focused on managing our existing businesses as efficiently and profitably as possible,” said Chairman and Chief Executive Officer William P. Foley, II. “The first quarter is normally the most difficult in the title business. Even with this seasonal lull, we were able to generate a 9.2% pre-tax margin in the title business by remaining focused on employee counts and efficiency metrics. This was nearly equal to the title pre-tax margin in the first quarter of 2006, despite a 10.5% decline in title segment revenue from the prior year. Additionally, all three specialty insurance businesses had successful quarters on a number of fronts. Flood insurance continues to provide a steady, recurring stream of revenue and earnings. Personal lines revenue grew by 12% with a 68% loss ratio, down from 85% in the fourth quarter of 2006, while home warranty continued to generate its consistent pre-tax margin of approximately 20%. Finally, Sedgwick, our 40% owned subsidiary, continues to grow profitably, generating $160 million in revenue and a 15% EBITDA margin during the first quarter.”
     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 29 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.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President, Finance and Investor Relations, 904-854-8120, dkmurphy@fnf.com

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
                 
    Three months ended  
    March 31,  
    2007     2006  
    (Unaudited)  
Direct title premiums
  $ 418,597     $ 468,922  
Agency title premiums
    542,146       606,054  
 
           
Total title premiums
    960,743       1,074,976  
Escrow and other title-related fees
    244,806       253,527  
 
           
Total title and escrow
    1,205,549       1,328,503  
 
               
Transaction processing services
          843,199  
Specialty insurance
    94,998       106,743  
Interest and investment income
    49,959       51,363  
Realized gains and losses
    6,382       11,930  
Other
    12,174       12,761  
 
           
 
               
Total revenue
    1,369,062       2,354,499  
 
               
Personnel costs
    435,260       877,931  
Other operating expenses
    234,441       493,344  
Agent commissions
    420,157       469,707  
Depreciation and amortization
    29,354       124,631  
Claim loss expense
    110,986       114,492  
Interest expense
    11,977       54,645  
 
           
 
               
Total expenses
    1,242,175       2,134,750  
 
               
Earnings before income taxes
    126,887       219,749  
Income tax expense
    45,045       81,747  
Minority interest
    (1,557 )     31,631  
 
           
Net earnings
  $ 83,399     $ 106,371  
 
           
 
               
Net earnings per share — basic
  $ 0.38     $ 0.61  
 
           
Net earnings per share — diluted
  $ 0.37     $ 0.61  
 
           
 
               
Weighted average shares — basic
    219,014       173,473  
 
           
Weighted average shares — diluted
    222,912       173,654  
 
           
 
               
Direct operations orders opened
    652,400       831,400  
Direct operations orders closed
    390,400       526,700  
Fee per file
  $ 1,557     $ 1,337  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                 
Three Months Ended                   Specialty     Corporate  
March 31, 2007   Consolidated     FNT     Insurance     and Other  
Gross operating revenue
  $ 1,312,721     $ 1,200,916     $ 94,998       16,807  
 
                               
Interest and investment income
    49,959       42,009       4,003       3,947  
Realized gains and losses
    6,382       3,161       (31 )     3,252  
     
 
                               
Total revenue
    1,369,062       1,246,086       98,970       24,006  
 
                               
Personnel costs
    435,260       410,573       11,599       13,088  
Other operating expenses
    234,441       198,408       21,052       14,981  
Agent commissions
    420,157       420,051             106  
Depreciation and amortization
    29,354       26,917       1,558       879  
Claim loss expense
    110,986       72,056       38,930        
Interest expense
    11,977       3,309       405       8,263  
     
 
                               
Total expenses
    1,242,175       1,131,314       73,544       37,317  
 
                               
Pretax earnings
    126,887       114,772       25,426       (13,311 )
 
                               
Pretax margin
    9.3 %     9.2 %     25.7 %      
 
                               
Open orders
    652,400       652,400              
Closed orders
    390,400       390,400              
                                                 
Three Months Ended                                   Specialty     Corporate  
March 31, 2006   Consolidated     Eliminations     FNT     FIS     Insurance     and Other  
Gross operating revenue
  $ 2,291,206       ($57,736 )   $ 1,340,746     $ 900,935     $ 106,743     $ 518  
 
                                               
Interest and investment income
    51,363             38,617       1,709       3,656       7,381  
Realized gains and losses
    11,930             12,629       1,023       (4 )     (1,718 )
     
 
                                               
Total revenue
    2,354,499       (57,736 )     1,391,992       903,667       110,395       6,181  
Personnel costs
    877,931       (5,235 )     452,435       413,220       11,315       6,196  
Other operating expenses
    493,344       (33,886 )     209,621       286,064       31,027       518  
Agent commissions
    469,707       (18,615 )     488,368                   (46 )
Depreciation and amortization
    124,631             26,237       96,795       1,470       129  
Claim loss expense
    114,492             80,721       65       33,869       (163 )
Interest expense
    54,645             2,082       43,268       256       9,039  
     
 
                                               
Total expenses
    2,134,750       (57,736 )     1,259,464       839,412       77,937       15,673  
 
                                               
Pretax earnings
    219,749             132,528       64,255       32,458       (9,492 )
 
                                               
Pretax margin
    9.3 %           9.5 %     7.1 %     29.4 %      
 
                                               
Open orders
    831,400             683,800       147,600              
Closed orders
    526,700             436,300       90,400              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
                 
    March 31,     December 31,  
    2007     2006  
    (Unaudited)          
Cash and investment portfolio
  $ 4,489,527     $ 4,798,195  
Goodwill
    1,201,832       1,154,298  
Title Plant
    328,494       324,155  
Total assets
    7,015,576       7,259,559  
Notes payable
    502,132       491,167  
Reserve for claim losses
    1,237,496       1,220,636  
Secured trust deposits
    756,264       905,461  
Total stockholders’ equity
    3,493,773       3,474,368  
Book value per share
    15.77       15.75  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
UNAUDITED PRO FORMA SUMMARY OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2006
(In thousands except per share amounts)
                                             
                    FNF Capital                  
                    pro forma     Other Pro            
    Historical     FIS pro forma     adjustments     Forma         FNF  
    FNF     adjustments(1)     (2)     Adjustments     Notes   Pro Forma  
     
Total title and escrow
  $ 1,328,503       ($18,615 )         $ 18,615     (3)   $ 1,328,503  
Transaction processing
    843,199       (882,320 )           39,121     (3)      
Specialty insurance
    106,743                             106,743  
Interest and investments income
    51,363       (1,709 )     (19 )               49,635  
Realized gains and losses
    11,930       (1,023 )                     10,907  
Other income
    12,761             (2,263 )               10,498  
     
Total revenue
  $ 2,354,499       ($903,667 )     (2,282 )   $ 57,736         $ 1,506,286  
 
                                           
Personnel costs
    877,931       (413,220 )     (870 )     5,235     (4)     469,076  
Other operating expenses
    493,344       (286,064 )     (163 )     33,886     (4)     241,003  
Agent commissions
    469,707                   18,615     (5)     488,322  
Depreciation and amortization
    124,631       (96,795 )     (7 )               27,829  
Provision for claim losses
    114,492       (65 )                     114,427  
Interest expense
    54,645       (43,268 )     (843 )     159     (6)     10,693  
     
Total expenses
    2,134,750       (839,412 )     (1,883 )     57,895           1,351,350  
 
                                           
Earnings before income taxes
    219,749       (64,255 )     (399 )     (159 )         154,936  
Income tax expense
    81,747       (24,586 )     (172 )     (1,987 )         55,002  
Minority interest
    31,631       (311 )           (30,214 )   (7)     1,106  
     
Net income
  $ 106,371       ($39,358 )     (227 )   $ 32,042         $ 98,828  
     
 
                                           
Net income per share-basic
                                      $ 0.45  
 
                                         
Pro forma weighted average shares-basic
                                        219,000 (8)
 
                                         
 
                                           
Net income per share-diluted
                                      $ 0.45  
 
                                         
Pro forma weighted average shares-diluted
                                        222,000 (8)
 
                                         

 


 

FIDELITY NATIONAL FINANCIAL, INC.
NOTES TO UNAUDITED PRO FORMA SUMMARY OF EARNINGS
Notes to Unaudited Pro Forma Summary of Earnings for the Three-Month Period Ended March 31, 2006
     This pro forma summary of earnings includes the historical statements of continuing operations of FNF and removes the results of operations of FIS and FNF minority interest expense relating to FIS and FNT as though the reorganization transaction had occurred on January 1, 2006.
(1)   This column represents the historical results of operations of FIS as included in FNF’s consolidated results of operations for the period presented.
 
(2)   This column represents the historical results of operations of FNF Capital as included in FNF’s consolidated results of operations for the period presented.
 
(3)   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 $57.7 million for the three-month period ended March 31, 2006.
 
(4)   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 $39.1 million for the three-month period ended March 31, 2006.
 
(5)   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 $18.6 million for the three-month period ended March 31, 2006.
 
(6)   This represents intercompany interest expense that is a third-party expense subsequent to the reorganization transaction. These expenses amounted to $0.2 million for the three-month period ended March 31, 2006.
 
(7)   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 $16.4 million for the three-month period ended March 31, 2006. Minority interest relating to FNT was $13.8 million for the three-month period ended March 31, 2006.
 
(8)   Amounts presented approximate the actual number of basic and diluted weighted average shares outstanding subsequent to the reorganization transaction.
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