FNFV Reports Second Quarter 2017 Results With $1.02 Billion Book Value of Portfolio Company Investments, or $15.70 Per Share

July 19, 2017 at 4:15 PM EDT

FNFV Reports Second Quarter 2017 Results With $1.02 Billion Book Value of Portfolio Company Investments, or $15.70 Per Share 89.6 KB

JACKSONVILLE, Fla., July 19, 2017 /PRNewswire/ -- Fidelity National Financial, Inc. today reported the operating results for FNFV Group (NYSE: FNFV), a tracking stock established to highlight the inherent value of the portfolio companies of Fidelity National Financial, Inc., for the three and six-month periods ended June 30, 2017.

Total revenue of $599 million in the second quarter versus $348 million in the second quarter of 2016
Pre-tax gain of $269 million from the June closing of the sale of One Digital Health and Benefits
Second quarter diluted EPS of $1.81 versus diluted EPS of $0.14 in the second quarter of 2016
Pretax earnings of $237 million and EBITDA of $256 million for the second quarter versus pretax earnings of $19 million and EBITDA of $35 million for the second quarter of 2016
$354 million in holding company cash on June 30, 2017

Restaurant Group

$287 million in total revenue, pretax loss of $2 million, EBITDA of $10 million, and an EBITDA margin of 3.5% for the second quarter, versus $292 million in total revenue, pretax earnings of $6 million, EBITDA of $17 million, and an EBITDA margin of 5.8% in the second quarter of 2016
Same store sales decreased 1.6% in the second quarter, as a Ninety Nine same stores sales increase of 0.6% was offset by an O'Charley's decline of 2.6%, a Village Inn decrease of 3.2% and a Bakers Square decline of 0.7%

Ceridian HCM

Second quarter total revenue of approximately $177 million, a 6.3% increase over the second quarter of 2016, pretax loss of $20.9 million, EBITDA of $15.2 million, a 60% increase over the second quarter of 2016, and an EBITDA margin of 8.6%

Monetization and Investment Initiatives

On June 2, completed the sale of One Digital Health and Benefits for $560 million in an all-cash transaction; after repayment of debt, payout to option holders and a minority equity investor and other transaction related payments, we received $331 million; after-tax proceeds were approximately $219 million
During the second quarter, we repurchased 1,295,800 shares of FNFV stock for approximately $19.6 million; since the formation of FNFV in July 2014, 27.6 million shares of FNFV stock have been repurchased for a total of $374 million; approximately 31% of the shares of FNFV stock distributed in July 2014 have been repurchased

"We were excited to monetize One Digital at an attractive price for our shareholders and recognize a pre-tax cash monetization of $331 million," said Chairman William P. Foley, II. "This represented a 4.6x cash on cash multiple on our original equity investment and a 41% IRR. We experienced tremendous growth in One Digital in our 4 1/2 year ownership and are proud of the success the company and FNFV enjoyed together.

"We also made significant progress on the FNFV exchange during the second quarter, with several milestones achieved. We announced the receipt of the private letter ruling on May 10, filed the preliminary Registration Statement on Form S-4 with the SEC on May 11, received comments from the SEC on June 6 and responded to those comments on June 22. We are continuing to work through the SEC review and are in the process of responding to additional comments received on July 14. Once the SEC declares the Registration Statement on S-4 effective, we can mail the proxy to shareholders and then have the shareholder vote, at the earliest, twenty business days after the mailing. We still expect a late third quarter closing for the exchange of the FNFV tracking stock for the new Cannae Holdings common stock that we plan to have trade on the NYSE under the ticker symbol CNNE."

Conference Call
We will host a call with investors and analysts to discuss second quarter 2017 results of FNFV on Thursday, July 20, 2017, beginning at 12:30 p.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 2:30 p.m. Eastern time on July 20, 2017, through July 27, 2017, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 426237.

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, Inc. and ServiceLink Holdings, LLC. FNFV holds majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC, Ceridian HCM, Inc. and Del Frisco's Restaurant Group, 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), and earnings before interest, taxes and depreciation as a percent of revenue (EBITDA margin).

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: our ability to successfully achieve the conditions to and consummate the plan to redeem and exchange the FNFV tracking stock with the result being an independent, publicly-traded FNFV common stock; 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 FNF Group 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.

FNF-E

FIDELITY NATIONAL FINANCIAL VENTURES SECOND QUARTER SEGMENT INFORMATION (In millions) (Unaudited)

	Total FNFV			Restaurant Group			FNFV Corporate and Other
*Three Months Ended*
*June 30, 2017*
Operating revenue	$	330		$	288		$	42
Interest and investment income	1			—			1
Realized gains and losses, net	268			(1)			269
Total revenue	599			287			312

Personnel costs	65			13			52
Other operating expenses	29			15			14
Cost of restaurant revenue	249			249			—
Depreciation and amortization	16			11			5
Interest expense	3			1			2
Total expenses	362			289			73

Pre-tax earnings (loss) from continuing operations	$	237		$	(2)		$	239

Income tax expense	$	113		$	—		$	113
Loss from equity investments	(4)			—			(4)
Non-controlling interests	(1)			(1)			—

Net earnings (loss) attributable to FNFV common shareholders	$	121		$	(1)		$	122

EPS attributable to FNFV common shareholders - basic	$	1.83		$	(0.02)		$	1.85
EPS attributable to FNFV common shareholders - diluted	$	1.81		$	(0.02)		$	1.83

FNFV weighted average shares - basic	66
FNFV weighted average shares - diluted	67

Pre-tax earnings (loss) from continuing operations	$	237		$	(2)		$	239

Interest expense	$	3		$	1		$	2
Depreciation and amortization	16			11			5

EBITDA	$	256		$	10		$	246
EBITDA margin	42.7		%	3.5		%	78.8		%

FIDELITY NATIONAL FINANCIAL VENTURES SECOND QUARTER SEGMENT INFORMATION (In millions) (Unaudited)

	Total FNFV				Restaurant Group			FNFV Corporate and Other
*Three Months Ended*
*June 30, 2016*
Operating revenue	$	332			$	292		$	40
Interest and investment income	1				—			1
Realized gains and losses, net	15				—			15
Total revenue	348				292			56

Personnel costs	40				14			26
Other operating expenses	28				16			12
Cost of restaurant revenue	245				245			—
Depreciation and amortization	15				10			5
Interest expense	1				1			—
Total expenses	329				286			43

Pre-tax earnings from continuing operations	$	19			$	6		$	13

Income tax expense	$	3			$	—		$	3
Loss from equity investments	(4)				—			(4)
Non-controlling interests	2				2			—

Net earnings attributable to FNFV common shareholders	$	10			$	4		$	6

EPS attributable to FNFV common shareholders - basic	$	0.15			$	0.06		$	0.09
EPS attributable to FNFV common shareholders - diluted	$	0.14			$	0.06		$	0.08

FNFV weighted average shares - basic	67
FNFV weighted average shares - diluted	70

Pre-tax earnings from continuing operations	$	19			$	6		$	13

Interest expense	$	1			$	1		$	—
Depreciation and amortization	15					10			5

EBITDA	$	35			$	17		$	18
EBITDA margin	10.1		%	5.8			%		32.1	%

FIDELITY NATIONAL FINANCIAL VENTURES YTD SEGMENT INFORMATION (In millions) (Unaudited)

	Total FNFV			Restaurant Group			FNFV Corporate and Other
*Six Months Ended*
*June 30, 2017*
Operating revenue	$	652		$	561		$	91
Interest and investment income	2			—			2
Realized gains and losses, net	273			(1)			274
Total revenue	927			560			367

Personnel costs	111			26			85
Other operating expenses	54			30			24
Cost of restaurant revenue	485			485			—
Depreciation and amortization	32			22			10
Interest expense	7			3			4
Total expenses	689			566			123

Pre-tax earnings (loss) from continuing operations	$	238		$	(6)		$	244

Income tax expense	111			—			111
Loss from equity investments	(8)			—			(8)
Non-controlling interests	(3)			(3)			—

Net earnings (loss) attributable to FNFV common shareholders	$	122		$	(3)		$	125

EPS attributable to FNFV common shareholders - basic	$	1.85		$	(0.05)		$	1.90
EPS attributable to FNFV common shareholders - diluted	$	1.79		$	(0.05)		$	1.84

FNFV weighted average shares - basic	66
FNFV weighted average shares - diluted	68

Pre-tax earnings (loss) from continuing operations	$	238		$	(6)		$	244

Interest expense	$	7		$	3		$	4
Depreciation and amortization	32			22			10

EBITDA	$	277		$	19		$	258
EBITDA margin	29.9		%	3.4		%	70.3		%

FIDELITY NATIONAL FINANCIAL VENTURES YTD SEGMENT INFORMATION (In millions) (Unaudited)

	Total FNFV			Restaurant Group			FNFV Corporate and Other
*Six Months Ended*
*June 30, 2016*
Operating revenue	$	663		$	585		$	78
Interest and investment income	2			—			2
Realized gains and losses, net	12			(3)			15
Total revenue	677			582			95

Personnel costs	78			27			51
Other operating expenses	55			37			18
Cost of restaurant revenue	490			490			—
Depreciation and amortization	30			20			10
Interest expense	4			2			2
Total expenses	657			576			81

Pre-tax earnings from continuing operations	$	20		$	6		$	14

Income tax expense	$	2		$	—		$	2
Loss from equity investments	(5)			—			(5)
Non-controlling interests	2			2			—

Net earnings attributable to FNFV common shareholders	$	11		$	4		$	7

EPS attributable to FNFV common shareholders - basic	$	0.16		$	0.06		$	0.10
EPS attributable to FNFV common shareholders - diluted	$	0.15		$	0.06		$	0.09

FNFV weighted average shares - basic	69
FNFV weighted average shares - diluted	71

Pre-tax earnings from continuing operations	$	20		$	6		$	14

Interest expense	$	4		$	2		$	2
Depreciation and amortization	30			20			10

EBITDA	$	54		$	28		$	26
EBITDA margin	8.0		%	4.8		%	27.4		%

FIDELITY NATIONAL FINANCIAL VENTURES

SUMMARY BALANCE SHEET AND BOOK VALUE SUMMARY

(In millions)

FNFV

June 30,
2017

FNFV

December 31,
2016

(Unaudited)

Cash and investment portfolio

850

642

Goodwill

102

206

Total assets

1,354

1,400

Notes payable

118

233

Non-controlling interest

108

116

Total equity and redeemable non-controlling interests

1,130

1,032

Total equity attributable to common shareholders

1,022

916

FNF Group

June 30, 2017

FNFV

June 30, 2017

Consolidated

June 30,
2017

Consolidated

December 31,
2016

(Unaudited)

(Unaudited)

Cash and investment portfolio

4,705

850

5,555

5,607

Goodwill

4,905

102

5,007

5,065

Title plant

395

—

395

Total assets

12,848

1,354

14,202

14,463

Notes payable

2,320

118

2,438

2,746

Reserve for title claim losses

1,492

—

1,492

1,487

Secured trust deposits

892

—

892

860

Redeemable non-controlling interests

344

—

344

Non-redeemable non-controlling interests

770

108

878

902

Total equity and redeemable non-controlling interests

6,133

1,130

7,263

7,242

Total equity attributable to common shareholders

5,019

1,022

6,041

5,996

Adjusted Book Value Summary

FNFV

June 30,

2017

FNFV

December 31,
2016

(Unaudited)

Ceridian/Fleetcor

399

386

American Blue Ribbon Holdings

173

One Digital

—

Del Frisco's Restaurant Group

Holding Company Cash

354

129

Other

104

FNFV Book Value

1,022

916

Outstanding FNFV shares

65.1

66.4

FNFV Book Value per Share

15.70

13.78

Fidelity National Financial, Inc. CONSOLIDATED SUMMARY OF EARNINGS (In millions) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2017						June 30, 2017
	Consolidated		Core		FNFV		Consolidated		Core		FNFV
Direct title premiums	$	575	$	575	$	—	$	1,040	$	1,040	$	—
Agency title premiums	726		726		—		1,309		1,309		—
Total title premiums	1,301		1,301		—		2,349		2,349		—
Escrow, title-related and other fees	1,008		966		42		1,876		1,785		91
Total title and escrow and other	2,309		2,267		42		4,225		4,134		91

Restaurant revenue	288		—		288		561		—		561
Interest and investment income	34		33		1		63		61		2
Realized gains and losses, net	256		(12)		268		255		(18)		273
Total revenue	2,887		2,288		599		5,104		4,177		927

Personnel costs	788		723		65		1,503		1,392		111
Other operating expenses	558		529		29		1,018		964		54
Cost of restaurant revenue	249		—		249		485		—		485
Agent commissions	558		558		—		1,004		1,004		—
Depreciation and amortization	110		94		16		222		190		32
Title claim loss expense	65		65		—		117		117		—
Interest expense	29		26		3		64		57		7
Total expenses	2,357		1,995		362		4,413		3,724		689

Earnings from continuing operations before taxes	530		293		237		691		453		238
Income tax expense	226		113		113		304		193		111
Earnings from continuing operations before equity investments	304		180		124		387		260		127
(Loss) earnings from equity investments	(2)		2		(4)		(4)		4		(8)
Net earnings from continuing operations	302		182		120		383		264		119
Non-controlling interests	6		7		(1)		15		18		(3)
Net earnings attributable to common shareholders	$	296	$	175	$	121	$	368	$	246	$	122

Cash flows provided by (used in) operations	287		401		(114)		291		389		(98)

Fidelity National Financial, Inc. CONSOLIDATED SUMMARY OF EARNINGS (In millions) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2016						June 30, 2016
	Consolidated		Core		FNFV		Consolidated		Core		FNFV
Direct title premiums	$	540	$	540	$	—	$	962	$	962	$	—
Agency title premiums	691		691		—		1,221		1,221		—
Total title premiums	1,231		1,231		—		2,183		2,183		—
Escrow, title-related and other fees	907		867		40		1,686		1,608		78
Total title and escrow and other	2,138		2,098		40		3,869		3,791		78

Restaurant revenue	292		—		292		585		—		585
Interest and investment income	37		36		1		67		65		2
Realized gains and losses, net	15		—		15		9		(3)		12
Total revenue	2,482		2,134		348		4,530		3,853		677

Personnel costs	707		667		40		1,359		1,281		78
Other operating expenses	493		465		28		925		870		55
Cost of restaurant revenue	245		—		245		490		—		490
Agent commissions	526		526		—		928		928		—
Depreciation and amortization	102		87		15		202		172		30
Title claim loss expense	68		68		—		120		120		—
Interest expense	33		32		1		67		63		4
Total expenses	2,174		1,845		329		4,091		3,434		657

Earnings from continuing operations before taxes	308		289		19		439		419		20
Income tax expense	101		98		3		150		148		2
Earnings from continuing operations before equity investments	207		191		16		289		271		18
(Loss) earnings from equity investments	(1)		3		(4)		1		6		(5)
Net earnings from continuing operations	206		194		12		290		277		13
Non-controlling interests	9		7		2		19		17		2
Net earnings attributable to common shareholders	$	197	$	187	$	10	$	271	$	260	$	11

Cash flows provided by operations	282		277		5		374		349		25

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SOURCE Fidelity National Financial, Inc.

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FNFV Reports Second Quarter 2017 Results With $1.02 Billion Book Value of Portfolio Company Investments, or $15.70 Per Share

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