FORM 8-K


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):
July 27, 2009

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))



 


 

Item 2.02. Results of Operations and Financial Condition

On July 27, 2009, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the three-month period ended June 30, 2009. 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 Second Quarter 2009 Earnings.

 


 

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: July 28, 2009  By:   /s/ Anthony J. Park  
    Name: Anthony J. Park
Title: Chief Financial Officer
 
       
 

 


 

EXHIBIT INDEX

     
Exhibit
  Description
99.1
  Press release announcing Fidelity National Financial, Inc. Reports Second Quarter 2009 Earnings.

 

EX-99.1
Exhibit 99.1
     
(FIDELITY LOGO)
  PRESS RELEASE
Fidelity National Financial, Inc. Reports Second Quarter 2009 EPS of $0.40
Jacksonville, Fla. — (July 27, 2009) — Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services, today reported operating results for the three-month and six-month periods ended June 30, 2009.
                 
    Three Months Ended   Three Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 1.57  billion   $ 1.17  billion
Net earnings attributable to common shareholders
  $ 91.9  million   $ 6.9  million
Net earnings per diluted share attributable to common shareholders
  $ 0.40     $ 0.03  
Cash flow from operations
  $ 154.8  million   $ 12.8  million
                 
    Six Months Ended   Six Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 2.93  billion   $ 2.29  billion
Net earnings attributable to common shareholders
  $ 79.5  million   $ 34.2  million
Net earnings per diluted share attributable to common shareholders
  $ 0.35     $ 0.16  
Cash flow from (used in) operations
  $ 283.2  million   $ 62.0  (million)
     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, 2009 and 2008:
     Fidelity National Title Group (“FNT”)
                 
    Three Months Ended   Three Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 1.45  billion   $ 1.04  billion
Pre-tax earnings
  $ 133.3  million   $ 5.1  million
Pre-tax margin
    9.2 %     0.5 %

 


 

                 
    Six Months Ended   Six Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 2.71  billion   $ 2.05  billion
Pre-tax earnings
  $ 140.6  million   $ 58.2  million
Pre-tax margin
    5.2 %     2.8 %
                 
Month   Direct Orders Opened   Direct Orders Closed
April 2009
    300,400       172,500  
May 2009
    243,200       171,300  
June 2009
    202,200       180,300  
 
               
 
Second Quarter 2009
    745,800       524,100  
 
               
                 
Month   Direct Orders Opened   Direct Orders Closed
April 2008
    168,900       113,200  
May 2008
    156,900       99,800  
June 2008
    136,800       94,500  
 
               
 
Second Quarter 2008
    462,600       307,500  
 
               
                                 
    Open   Closed   Commercial    
    Commercial   Commercial   Revenue   Commercial
    Orders   Orders   (In thousands)   Fee Per File
2nd Quarter 2009
    23,200       13,300     $ 52,200     $ 3,900  
2nd Quarter 2008
    16,000       9,300     $ 59,600     $ 6,400  
– 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
                 
    Three Months Ended   Three Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 98.1  million   $ 97.1  million
Pre-tax earnings
  $ 14.5  million   $ 13.2  million
Pre-tax margin
    14.7 %     13.6 %

 


 

                 
    Six Months Ended   Six Months Ended
    June 30, 2009   June 30, 2008
Total revenue
  $ 184.9  million   $ 185.6  million
Pre-tax earnings
  $ 27.7  million   $ 22.6  million
Pre-tax margin
    15.0 %     12.2 %
     “The second quarter was successful on a number of fronts,” said Chairman William P. Foley, II. “First, we achieved a significant increase in revenue and earnings in the title business as we began to close a meaningful number of the orders we opened in the first quarter and early second quarter, producing a 9.2% pre-tax margin for the full quarter. Additionally, we exceeded a 10% pre-tax title margin for the month of June.”
     “We effectively completed the integration of Lawyers and Commonwealth during the second quarter, generating an additional $32 million in cost synergies, in addition to the $231 million in cost synergies previously realized, for a total cost reduction of $263 million. These underwriters are now fully integrated into the FNF family and we look forward to their continued significant contribution to our market-leading title insurance business in the future.”
     “In April we were successful in issuing 18.2 million shares of our common stock for approximately $331 million in proceeds to further strengthen our balance sheet. The proceeds were primarily used to reduce the outstanding balance on our credit facility and to repurchase some of our existing public debt, resulting in a 22% debt to capital ratio at the end of the second quarter versus our credit facility limit of 35%.”
     “Overall, the title insurance market has improved considerably in the first half of 2009, albeit with some volatility, as the significant increase in open order volumes slowed down late in the second quarter as mortgage rates increased. Order counts in July have been consistent with the levels we experienced for most of the month of June and we believe we are in a position to continue to generate solid profitability in today’s market environment.”
     Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, mortgage services, specialty insurance, claims management services and information services.

 


 

FNF is the nation’s largest title insurance company through its title insurance underwriters — Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Security Union Title and Alamo Title — that collectively issue more title insurance policies than any other title company 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: the possibility that the acquisition of Commonwealth Land Title, Lawyers Title and United Capital Title will have unforeseen negative effects, including if those companies have undisclosed liabilities or if we are not successful in retaining key producers; 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 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 and Treasurer, 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     Six months ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
    (Unaudited)     (Unaudited)  
Direct title premiums
  $ 409,069     $ 321,040     $ 742,657     $ 625,819  
Agency title premiums
    634,804       423,915       1,210,494       847,351  
 
                       
Total title premiums
    1,043,873       744,955       1,953,151       1,473,170  
Escrow, title-related and other fees
    379,240       281,211       712,595       542,955  
 
                       
Total title and escrow
    1,423,113       1,026,166       2,665,746       2,016,125  
 
                               
Specialty insurance
    93,903       94,161       177,287       178,988  
Interest and investment income
    39,514       29,950       76,289       71,796  
Realized gains and losses
    13,182       17,791       7,873       26,268  
 
                       
Total revenue
    1,569,712       1,168,068       2,927,195       2,293,177  
 
                               
Personnel costs
    430,128       358,597       852,255       712,713  
Other operating expenses
    353,919       313,718       680,824       574,799  
Agent commissions
    504,155       328,800       965,673       656,809  
Depreciation and amortization
    36,606       33,844       73,021       67,514  
Claim loss expense
    102,083       100,427       197,694       187,932  
Interest expense
    11,630       16,207       26,396       34,830  
 
                       
Total expenses
    1,438,521       1,151,593       2,795,863       2,234,597  
 
                               
Earnings from continuing operations before taxes
    131,191       16,475       131,332       58,580  
Income tax expense
    34,053       2,243       34,042       16,499  
 
                       
Earnings from continuing operations before equity investments
    97,138       14,232       97,290       42,081  
Loss from equity investments
    (4,602 )     (6,349 )     (16,732 )     (4,668 )
 
                       
Net earnings from continuing operations
    92,536       7,883       80,558       37,413  
Discontinued operations, net of tax
          (1,872 )     (440 )     (5,529 )
 
                       
Net earnings
    92,536       6,011       80,118       31,884  
Non-controlling interests
    593       (914 )     573       (2,286 )
 
                       
Net earnings attributable to common shareholders
  $ 91,943     $ 6,925     $ 79,545     $ 34,170  
 
                       
 
                               
Earnings per share:
                               
Net earnings from continuing operations attributable to common shareholders — basic
  $ 0.40     $ 0.03     $ 0.36     $ 0.16  
 
                       
Net earnings from continuing operations attributable to common shareholders — diluted
  $ 0.40     $ 0.03     $ 0.35     $ 0.16  
 
                       
Weighted average shares — basic
    228,056       210,814       220,661       210,962  
 
                       
Weighted average shares — diluted
    232,078       213,107       225,006       213,318  
 
                       
 
                               
Direct operations orders opened
    745,800       462,600       1,492,200       1,024,800  
Direct operations orders closed
    524,100       307,500       952,700       615,300  
Fee per file
  $ 1,173     $ 1,484     $ 1,170     $ 1,466  
Actual title claims paid
  $ 76,999     $ 67,488     $ 133,231     $ 143,163  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                   
Three Months Ended                     Specialty     Corporate  
June 30, 2009   Consolidated       FNT     Insurance     and Other  
Gross operating revenue
  $ 1,517,016       $ 1,400,909     $ 93,903     $ 22,204  
 
                                 
Interest and investment income
    39,514         37,214       3,198       (898 )
Realized gains and losses
    13,182         11,964       1,010       208  
           
Total revenue
    1,569,712         1,450,087       98,111       21,514  
 
                                 
Personnel costs
    430,128         407,569       11,605       10,954  
Other operating expenses
    353,919         303,913       41,707       8,299  
Agent commissions
    504,155         504,155              
Depreciation and amortization
    36,606         28,219       1,354       7,033  
Claim loss expense
    102,083         73,112       28,971        
Interest expense
    11,630         (139 )     5       11,764  
           
Total expenses
    1,438,521         1,316,829       83,642       38,050  
 
                                 
Pretax earnings from continuing operations
    131,191         133,258       14,469       (16,536 )
 
                                 
Pretax margin
    8.4 %       9.2 %     14.7 %      
 
                                 
Open orders
    745,800         745,800              
Closed orders
    524,100         524,100              
                                   
Three Months Ended                     Specialty     Corporate  
June 30, 2008   Consolidated       FNT     Insurance     and Other  
Gross operating revenue
  $ 1,120,327       $ 1,013,073     $ 94,161     $ 13,093  
 
                                 
Interest and investment income
    29,950         26,397       3,425       128  
Realized gains and losses
    17,791         (2,414 )     (452 )     20,657  
           
Total revenue
    1,168,068         1,037,056       97,134       33,878  
 
                                 
Personnel costs
    358,597         340,521       11,347       6,729  
Other operating expenses
    313,718         260,656       41,075       11,987  
Agent commissions
    328,800         328,800              
Depreciation and amortization
    33,844         30,058       1,508       2,278  
Claim loss expense
    100,427         70,605       29,822        
Interest expense
    16,207         1,345       155       14,707  
           
Total expenses
    1,151,593         1,031,985       83,907       35,701  
 
                                 
Pretax earnings from continuing operations
    16,475         5,071       13,227       (1,823 )
 
                                 
Pretax margin
    1.4 %       0.5 %     13.6 %      
 
                                 
Open orders
    462,600         462,600              
Closed orders
    307,500         307,500              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                   
Six Months Ended                     Specialty     Corporate  
June 30, 2009   Consolidated       FNT     Insurance     and Other  
Gross operating revenue
  $ 2,843,033       $ 2,627,676     $ 177,287     $ 38,070  
 
                                 
Interest and investment income
    76,289         70,947       6,352       (1,010 )
Realized gains and losses
    7,873         7,552       1,300       (979 )
           
Total revenue
    2,927,195         2,706,175       184,939       36,081  
 
                                 
Personnel costs
    852,255         811,954       23,517       16,784  
Other operating expenses
    680,824         588,673       74,680       17,471  
Agent commissions
    965,673         965,673              
Depreciation and amortization
    73,021         57,457       2,645       12,919  
Claim loss expense
    197,694         141,308       56,386        
Interest expense
    26,396         560       23       25,813  
           
Total expenses
    2,795,863         2,565,625       157,251       72,987  
 
                                 
Pretax earnings from continuing operations
    131,332         140,550       27,688       (36,906 )
 
                                 
Pretax margin
    4.5 %       5.2 %     15.0 %      
 
                                 
Open orders
    1,492,200         1,492,200              
Closed orders
    952,700         952,700              
                                   
Six Months Ended                     Specialty     Corporate  
June 30, 2008   Consolidated       FNT     Insurance     and Other  
Gross operating revenue
  $ 2,195,113       $ 1,983,790     $ 178,988     $ 32,335  
 
                                 
Interest and investment income
    71,796         63,825       7,004       967  
Realized gains and losses
    26,268         39       (359 )     26,588  
           
Total revenue
    2,293,177         2,047,654       185,633       59,890  
 
                                 
Personnel costs
    712,713         674,842       22,687       15,184  
Other operating expenses
    574,799         468,731       74,229       31,839  
Agent commissions
    656,809         656,809              
Depreciation and amortization
    67,514         60,147       3,018       4,349  
Claim loss expense
    187,932         125,218       62,714        
Interest expense
    34,830         3,755       339       30,736  
           
Total expenses
    2,234,597         1,989,502       162,987       82,108  
 
                                 
Pretax earnings from continuing operations
    58,580         58,152       22,646       (22,218 )
 
                                 
Pretax margin
    2.6 %       2.8 %     12.2 %      
 
                                 
Open orders
    1,024,800         1,024,800              
Closed orders
    615,300         615,300              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
                 
    June 30,   December 31,
    2009   2008
    (Unaudited)        
Cash and investment portfolio
  $ 4,865,972     $ 4,691,790  
Goodwill
    1,569,641       1,581,658  
Title plant
    430,510       431,591  
Total assets
    8,334,181       8,368,240  
Notes payable
    1,088,115       1,350,849  
Reserve for claim losses
    2,736,999       2,738,625  
Secured trust deposits
    473,245       474,073  
Total stockholders’ equity
    3,133,190       2,856,772  
Book value per share
  $ 13.56     $ 13.29  
###