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):
April 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 April 27, 2009, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the three-month period ended March 31, 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 First 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: April 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 First Quarter 2009 Earnings.

 

EX-99.1
Exhibit 99.1
     
(FIDELITY LOGO)   PRESS RELEASE
Fidelity National Financial, Inc. Reports First Quarter 2009 EPS of ($0.06)
Jacksonville, Fla. — (April 27, 2009) — 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 period ended March 31, 2009.
         
    Three Months Ended   Three Months Ended
    March 31, 2009   March 31, 2008
Total revenue
  $1.36 billion   $1.13 billion
Net earnings (loss) attributable to common shareholders
  ($12.4 million)   $27.2 million
Net earnings (loss) per diluted share attributable to common shareholders
  ($0.06)   $0.13
Cash flow from (used in) operations
  $128.3 million   ($74.9 million)
     The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended March 31, 2009 and 2008:
     Fidelity National Title Group (“FNT”)
         
    Three Months Ended   Three Months Ended
    March 31, 2009   March 31, 2008
Total revenue
  $1.26 billion   $1.01 billion
Pre-tax earnings
  $7.3 million   $53.1 million
Pre-tax margin
  0.6%   5.3%
                 
Month   Direct Orders Opened   Direct Orders Closed
January 2009
    279,700       120,500  
 
February 2009
    206,400       141,900  
 
March 2009
    260,300       166,200  
 
 
               
First Quarter 2009
    746,400       428,600  
 
               

 


 

                 
Month   Direct Orders Opened   Direct Orders Closed
January 2008
    201,100       88,000  
 
February 2008
    188,900       108,000  
 
March 2008
    172,200       111,800  
 
               
 
First Quarter 2008
    562,200       307,800  
 
               
                                 
    Open   Closed   Commercial    
    Commercial   Commercial   Revenue   Commercial
    Orders   Orders   (In thousands)   Fee Per File
1st Quarter 2009
    21,300       11,300     $ 49,700     $ 4,400  
 
1st Quarter 2008
    16,100       9,600     $ 72,400     $ 7,500  
  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
    March 31, 2009   March 31, 2008
Total revenue
  $86.8 million   $88.5 million
 
Pre-tax earnings
  $13.2 million   $9.4 million
 
Pre-tax margin
  15.2%   10.6%
     “The highlight of the first quarter was the continuation of the strong open order volumes that began in very late 2008,” said Chairman William P. Foley, II. “The significant strength in refinance volumes has, however, caused an increase in the time it takes to close an order, as we really only began to see an increase in closed order volumes during the later part of the quarter. We expect that trend in increased closed orders to continue as we head into the second quarter. Additionally, we saw a surge in open order volumes in the first three weeks of April, nearing their highest levels of 2009.”

 


 

     “We also made significant strides on the integration of the Lawyers and Commonwealth operations during the quarter, realizing run-rate cost savings of more than $231 million as of March 31, 2009, versus our original synergy estimate of $150 million and our revised synergy estimate of $225 million. Most importantly, the Lawyers and Commonwealth operations returned to profitability for the month of March, before the impact of the synergy bonus, and these underwriters are positioned to generate increasing profit margins as we enter the second quarter and beyond.”
     “As we discussed during our recent equity offering, operating performance in our title business began the quarter slowly, but picked up as we got into the month of March. In January, we recorded a pre-tax loss of approximately $11 million, as the legacy FNF business was profitable, but the Lawyers and Commonwealth operations lost more than $17 million on a pre-tax basis. In February we recorded a pre-tax loss of approximately $5 million, as legacy FNF was again slightly profitable and the Lawyers and Commonwealth operations improved to a pre-tax loss of only $5 million. In March, we recorded $15 million in pre-tax earnings, but those results included a $20 million synergy bonus and approximately $6 million in other than temporary impairments related to several equity securities. Before those two items, we generated approximately $41 million in pre-tax earnings, which we believe to be a more meaningful representation of our operating performance in March, as legacy FNF generated a high single digit margin for the month and the Lawyers and Commonwealth operations recorded a mid-single digit margin.”
     “Finally, on April 20, 2009, we closed on a public offering of our common stock for net proceeds of approximately $331 million. There were two primary reasons for the issuance of stock. First, we will repay $135 million under our existing credit facility on April 30, 2009. We are also examining the option of repurchasing a meaningful amount of our existing bonds, both of which will reduce our debt to total capital ratio from approximately 32% to somewhere near 25%, a level more in-line with our historic debt to cap targets. This reduction in leverage will

 


 

provide increased financial flexibility for FNF. Second, as the leading title insurance company in the country, we believe the strength of our balance sheet, including unrivaled claims reserves, shareholders’ equity, investment portfolio and modest financial leverage, will allow us to differentiate ourselves in the marketplace, particularly in the commercial area.”
     “Overall, we believe we accomplished many things in the first quarter that have us well prepared for the future. We quickly rationalized and integrated the Lawyers and Commonwealth operations and returned them to operational profitability in March, claims trends continued to be extremely positive and the equity offering will reduce leverage on our balance sheet. In addition, order counts continue to surge and we feel well positioned to take advantage of a stronger market as we enter the second quarter.”
     Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, 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 increased volume of open orders will not continue; 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  
    March 31,  
    2009     2008  
    (Unaudited)  
Direct title premiums
  $ 333,588     $ 304,779  
Agency title premiums
    575,690       423,436  
 
           
Total title premiums
    909,278       728,215  
Escrow, title-related and other fees
    333,355       261,744  
 
           
Total title and escrow
    1,242,633       989,959  
 
               
Specialty insurance
    83,384       84,827  
Interest and investment income
    36,775       41,846  
Realized gains and losses
    (5,309 )     8,477  
 
           
Total revenue
    1,357,483       1,125,109  
 
               
Personnel costs
    422,127       354,116  
Other operating expenses
    326,905       261,081  
Agent commissions
    461,518       328,009  
Depreciation and amortization
    36,415       33,670  
Claim loss expense
    95,611       87,505  
Interest expense
    14,766       18,623  
 
           
Total expenses
    1,357,342       1,083,004  
 
               
Earnings from continuing operations before income taxes
    141       42,105  
Income tax expense
    (11 )     14,256  
 
           
Earnings from continuing operations before equity investments
    152       27,849  
 
           
Earnings (loss) from equity investments
    (12,130 )     1,681  
 
           
Net earnings (loss) from continuing operations
    (11,978 )     29,530  
Discontinued operations, net of tax
    (327 )     (2,231 )
 
           
Net earnings (loss)
    (12,305 )     27,299  
Non-controlling interests
    93       54  
 
           
Net earnings (loss) attributable to common shareholders
    ($12,398 )   $ 27,245  
 
           
Earnings per share — basic and diluted:
               
Net earnings (loss) from continuing operations attributable to common shareholders
    ($0.06 )   $ 0.14  
Net earnings (loss) from discontinued operations
          (0.01 )
 
           
Net earnings (loss) attributable to common shareholders
    ($0.06 )   $ 0.13  
 
           
 
               
Weighted average shares — basic
    213,184       211,110  
 
           
Weighted average shares — diluted
    213,184       213,528  
 
           
Direct operations orders opened
    746,400       562,200  
Direct operations orders closed
    428,600       307,800  
Fee per file
  $ 1,166     $ 1,447  
Actual title claims paid
  $ 56,010     $ 75,675  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
                                   
Three Months Ended                     Specialty     Corporate  
March 31, 2009   Consolidated       FNT     Insurance     and Other  
Gross operating revenue
  $ 1,326,017       $ 1,226,767     $ 83,384     $ 15,866  
 
                                 
Interest and investment income
    36,775         33,733       3,154       (112 )
Realized gains and losses
    (5,309 )       (4,412 )     290       (1,187 )
 
         
Total revenue
    1,357,483         1,256,088       86,828       14,567  
 
                                 
Personnel costs
    422,127         404,385       11,912       5,830  
Other operating expenses
    326,905         284,760       32,973       9,172  
Agent commissions
    461,518         461,518              
Depreciation and amortization
    36,415         29,238       1,291       5,886  
Claim loss expense
    95,611         68,196       27,415        
Interest expense
    14,766         699       18       14,049  
 
         
Total expenses
    1,357,342         1,248,796       73,609       34,937  
 
                                 
Pretax earnings from continuing operations
    141         7,292       13,219       (20,370 )
 
                                 
Pretax margin
    N/A             0.6 %     15.2 %      
 
                                 
Open orders
    746,400         746,400              
Closed orders
    428,600         428,600              
                                   
Three Months Ended                     Specialty     Corporate  
March 31, 2008   Consolidated       FNT     Insurance     and Other  
Gross operating revenue    
  $ 1,074,786       $ 970,717       84,827       19,242  
 
                                 
Interest and investment income
    41,846         37,428       3,579       839  
Realized gains and losses
    8,477         2,453       93       5,931  
 
         
Total revenue
    1,125,109         1,010,598       88,499       26,012  
 
                                 
Personnel costs
    354,116         334,321       11,340       8,455  
Other operating expenses
    261,081         208,075       33,154       19,852  
Agent commissions
    328,009         328,009              
Depreciation and amortization
    33,670         30,089       1,510       2,071  
Claim loss expense
    87,505         54,613       32,892        
Interest expense
    18,623         2,410       184       16,029  
 
         
Total expenses
    1,083,004         957,517       79,080       46,407  
 
                                 
Pretax earnings from continuing operations
    42,105         53,081       9,419       (20,395 )
 
                                 
Pretax margin
    3.2 %       5.3 %     10.6 %      
 
                                 
Open orders
    562,200         562,200              
Closed orders
    307,800         307,800              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
                 
    March 31,     December 31,  
    2009     2008  
    (Unaudited)          
Cash and investment portfolio
  $ 4,644,270     $ 4,691,790  
Goodwill
    1,584,794       1,581,658  
Title plant
    430,227       431,591  
Total assets
    8,166,243       8,368,240  
Notes payable
    1,304,496       1,350,849  
Reserve for claim losses
    2,740,059       2,738,625  
Secured trust deposits
    478,670       474,073  
Total stockholders’ equity
    2,754,486       2,856,772  
Book value per share
  $ 12.72     $ 13.29  
###