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 30, 2014
Fidelity National Financial, Inc.
(Exact name of Registrant as Specified in its Charter)
001-32630
(Commission File Number)
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 16-1725106 (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 30, 2014, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the First Quarter of 2014. 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 2014 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 30, 2014 | 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 2014 Earnings. | ||||
Exhibit 99.1
Fidelity National Financial, Inc. Reports First Quarter 2014 Adjusted Core EPS of $0.26; Adjusted Pre-Tax Title Margin of 5.5%; Black Knight Adjusted EBITDA Margin of 35.9%; Increased LPS Total Synergy Target to $290 Million
Jacksonville, Fla. - (April 30, 2014) - Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries, today reported operating results for the three-month periods ended March 31, 2014.
Consolidated
• | Total revenue of $2.1 billion in the first quarter versus $2.0 billion in the first quarter of 2013 |
• | Adjusted net earnings of $84 million, or $0.30 per diluted share, for the first quarter versus adjusted net earnings of $102 million, or $0.44 per diluted share, in the first quarter of 2013; first quarter 2014 adjusted net earnings exclude $106 million of after-tax, unusual or one-time items, primarily related to the acquisition of Lender Processing Services, Inc. (“LPS”) and a one-time Ceridian legal settlement |
• | GAAP net loss of $22 million, or ($0.08) per diluted share, for the first quarter versus net earnings of $90 million, or $0.39 per diluted share in the first quarter of 2013 |
Core Operations
• | Total revenue of $1.4 billion in the first quarter versus $1.4 billion in the first quarter of 2013 |
• | Adjusted EBITDA of $148 million for the first quarter versus adjusted EBITDA of $179 million for the first quarter of 2013 |
• | Adjusted net earnings of $74 million, or $0.26 per diluted share, for the first quarter versus adjusted net earnings of $98 million, or $0.42 per diluted share, in the first quarter of 2013; adjusted first quarter 2014 net earnings exclude $80 million of unusual or one-time items, including $117 million of costs and expenses related to the acquisition of LPS, $75 million in purchase price amortization and a legal accrual of $2 million, less a $51 million non-controlling interest credit related to the LPS items, a $61 million tax impact from the adjustments and $2 million of realized gains |
• | First quarter free cash flow used of $39 million versus $36 million used in the first quarter of 2013 |
Fidelity National Financial Ventures (“FNFV”)
• | Total revenue of $686 million in the first quarter versus $656 million in the first quarter of 2013 |
• | EBITDA of $58 million in the first quarter versus adjusted EBITDA of $41 million in the first quarter of 2013 |
• | Adjusted net earnings of $10 million, or $0.04 per diluted share, for the first quarter versus $4 million, or $0.02 per diluted share, in the first quarter of 2013; first quarter 2014 adjusted net earnings exclude $26 million of unusual and one-time items, including $21 million in expense from a one-time Ceridian legal settlement and $12 million in purchase price amortization, less a $3 million non-controlling interest credit related to the purchase price amortization and a $4 million tax impact from the adjustments |
• | Book value attributable to FNF common shareholders of approximately $1.3 billion, or $4.72 per share |
Core Operations
Title
• | Adjusted pre-tax title margin of 5.5% for the first quarter versus 12.5% in the first quarter of 2013; adjusted EBITDA margin of 6.8% for the first quarter versus 13.5% in the first quarter of 2013 |
• | Open title orders of 469,000 for the first quarter, a decrease of 174,000, or 27%, compared with the first quarter of 2013; open orders per day of 7,700 for the first quarter versus 10,500 open orders per day for the first quarter of 2013; 55% of first quarter open title orders were purchase related versus 38% in the first quarter of 2013 |
• | Closed title orders of 295,000 for the first quarter, a decrease of 192,000, or 39%, compared with the first quarter of 2013; closed orders per day of 4,800 for the first quarter versus 8,000 closed orders per day for the first quarter of 2013; 52% of first quarter closed title orders were purchase related versus 31% in the first quarter of 2013 |
• | First quarter purchase orders opened increased by nearly 1.5% and closed purchase orders decreased by 6% versus the first quarter of 2013; purchase open orders increased by more than 3% for the first three weeks of April 2014 |
• | First quarter commercial title revenue of $104 million, an 18% increase from the first quarter of 2013, driven by a 23% improvement in the commercial fee per file slightly offset by a 4% decrease in closed orders; open commercial orders increased by 5% over the prior year |
• | Overall first quarter average fee per file of $1,858, a 35% increase over the first quarter of 2013 |
• | ServiceLink total revenue of $215 million, adjusted pre-tax earnings of $10 million and an adjusted pre-tax margin of 4.7%; the adjusted pre-tax earnings exclude $60 million of costs and expenses related to the acquisition of LPS and $22 million of purchase price amortization |
Black Knight
• | Total revenue of $187 million, led by mortgage servicing technology revenue of $120 million |
• | Adjusted EBITDA of $69 million and adjusted EBITDA margin of 35.9% |
Core Operations - Total ($ in millions except per share amounts)
Three Months Ended | Three Months Ended | |||
March 31, 2014 | March 31, 2013 | |||
Total revenue | $1,403 | $1,385 | ||
Net earnings (loss) | (6) | 96 | ||
Net earnings (loss) per diluted share | (0.02) | 0.42 | ||
Merger transaction costs | 41 | — | ||
Severance expense | 39 | — | ||
Synergy bonus accrual | 32 | — | ||
Purchase price amortization | 75 | 3 | ||
Deferred revenue adjustment | 5 | — | ||
Legal accrual | 2 | — | ||
Realized gains | (2) | — | ||
Non-controlling interest on non-GAAP adjustments | (51) | — | ||
Tax impact of adjustments | (61) | (1) | ||
Adjusted net earnings | 74 | 98 | ||
Adjusted net earnings per diluted share | $0.26 | $0.42 | ||
Free cash flow | $(39) | $(36) | ||
Title ($ in millions)
Three Months Ended | Three Months Ended | |||
March 31, 2014 | March 31, 2013 | |||
Total revenue | $1,208 | $1,375 | ||
Pre-tax earnings (loss) | (15) | 169 | ||
Merger transaction costs | 32 | — | ||
Severance expense | 15 | — | ||
Synergy bonus accrual | 13 | — | ||
Purchase price amortization | 23 | 3 | ||
Realized gains | (2) | — | ||
Adjusted pre-tax earnings | 66 | 172 | ||
Adjusted pre-tax margin | 5.5% | 12.5% | ||
Direct Orders Opened * | Direct Orders Closed * | |||||||
Month | / (% Purchased) | / (% Purchased) | ||||||
January 2014 | 150,000 | (53%) | 99,000 | (47%) | ||||
February 2014 | 150,000 | (51%) | 92,000 | (51%) | ||||
March 2014 | 169,000 | (60%) | 104,000 | (58%) | ||||
First Quarter 2014 | 469,000 | (55%) | 295,000 | (52%) | ||||
Direct Orders Opened * | Direct Orders Closed * | |||||||
Month | / (% Purchased) | / (% Purchased) | ||||||
January 2013 | 218,000 | (35%) | 167,000 | (28%) | ||||
February 2013 | 203,000 | (38%) | 155,000 | (30%) | ||||
March 2013 | 222,000 | (41%) | 165,000 | (36%) | ||||
First Quarter 2013 | 643,000 | (38%) | 487,000 | (31%) | ||||
* Includes an immaterial number of non-purchase and non-refinance orders
Open | Closed | Commercial | |||||||||||||
Commercial | Commercial | Revenue | Commercial | ||||||||||||
Orders | Orders | (In millions) | Fee Per File | ||||||||||||
First Quarter 2014 | 19,600 | 10,200 | $104 | $10,200 | |||||||||||
First Quarter 2013 | 18,700 | 10,600 | $88 | $8,300 | |||||||||||
- The preceding table only includes commercial activity from FNF’s commercial offices in the national commercial division and does not attempt to capture potential commercial activity in our local offices.
Black Knight ($ in millions)
Three Months Ended | ||
March 31, 2014 | ||
Total revenue | $187 | |
Pre-tax earnings (loss) | (74) | |
Depreciation & amortization | 61 | |
Interest expense | 5 | |
EBITDA | (8) | |
Merger transaction costs | 35 | |
Severance expense | 24 | |
Synergy bonus accrual | 13 | |
Deferred revenue adjustment | 5 | |
Adjusted EBITDA | 69 | |
Adjusted EBITDA margin | 35.9% | |
FNFV - Total ($ in millions except per share amounts)
Three Months Ended | Three Months Ended | |||
March 31, 2014 | March 31, 2013 | |||
Total revenue | $686 | $656 | ||
Pre-tax earnings (loss) | 21 | (9) | ||
Depreciation & amortization | 31 | 34 | ||
Interest expense | 6 | 7 | ||
EBITDA | 58 | 32 | ||
Remy severance expense | — | 7 | ||
Realized losses | — | 2 | ||
Adjusted EBITDA | 58 | 41 | ||
Adjusted EBITDA margin | 8.5% | 6.3% | ||
Free cash flow | (59) | (23) | ||
Book value | 1,307 | — | ||
Book value per share attributable to FNF common shareholders | $4.72 | — | ||
Restaurant Group ($ in millions)
Three Months Ended | Three Months Ended | |||
March 31, 2014 | March 31, 2013 | |||
Operating revenue | $354 | $354 | ||
Realized losses | — | (2) | ||
Total revenue | 354 | 352 | ||
Pre-tax earnings | 9 | — | ||
Depreciation & amortization | 13 | 13 | ||
Interest expense | 2 | 2 | ||
EBITDA | 24 | 15 | ||
Realized losses | — | 2 | ||
Adjusted EBITDA | 24 | 17 | ||
Adjusted EBITDA margin | 6.8% | 4.8% | ||
Remy ($ in millions)
Three Months Ended | Three Months Ended | |||
March 31, 2014 | March 31, 2013 | |||
Total revenue | $302 | $285 | ||
Pre-tax earnings (loss) | 10 | (1) | ||
Depreciation & amortization | 15 | 19 | ||
Interest expense | 5 | 7 | ||
EBITDA | 30 | 25 | ||
Severance expense | — | 7 | ||
Adjusted EBITDA | 30 | 32 | ||
Adjusted EBITDA margin | 9.9% | 11.2% | ||
“This quarter was a return to more normal first quarter seasonality in our title insurance business where we experience seasonally lower purchase activity compared to other quarters during the year,” said Chairman William P. Foley, II. “Purchase orders increased approximately 1.5% for the first quarter of 2014 versus the prior year first quarter and increased by more than 3% in the first three weeks of April. Despite a slower purchase market and refinance order volumes that declined by 48%, we were able to generate a 5.5% adjusted pre-tax title margin and an adjusted EBITDA title margin of 6.8%. Our title business will benefit from a continued improvement in the residential purchase market.
“Black Knight had a strong first quarter under our ownership. Total revenue was $187 million with adjusted EBITDA of $69 million, an adjusted EBITDA margin of 35.9%. We are experiencing strong demand for our industry standard loan origination and servicing technology products and are excited about the growing and recurring revenue, improving operating margins and strong free cash flow at Black Knight.
“The integration of LPS has progressed smoothly and we uncovered further cost synergies during the first quarter. We are now confident in raising our total cost synergy target to $290 million, with $215 million of that target already achieved by the end of the first quarter.
“Overall, we expect margins to improve in all of our core businesses as we move through the year, as the impact of the increased synergies become apparent in those core businesses and we also enter the traditionally stronger spring and summer real estate seasons.
“Finally, we continue to work through the process of setting up FNFV as a tracking stock for our portfolio company investments. The stockholder vote is set for June 18, 2014, and we hope to close the transaction and distribute the shares of FNFV to FNF stockholders on a 1-for-3 basis on or near June 30, 2014.”
Conference Call
FNF will host a call with investors and analysts to discuss first quarter 2014 results on Thursday, May 1, 2014, beginning at 12:00 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 2:00 p.m. Eastern time on May 1, 2014, through May 8, 2014, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 323968.
About FNF
Fidelity National Financial, Inc. (NYSE: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. In addition, FNF owns majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC, J. Alexander’s, LLC, Remy International, Inc., Ceridian HCM, Inc., Comdata Inc. and Digital Insurance, Inc. More information about FNF 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
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; 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.
CONSOLIDATED SUMMARY OF EARNINGS
(In millions, except per share amounts, order information and fee per file)
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
(Unaudited) | |||||||||
Direct title premiums | $ | 351 | $ | 413 | |||||
Agency title premiums | 404 | 524 | |||||||
Total title premiums | 755 | 937 | |||||||
Escrow, title-related and other fees | 646 | 435 | |||||||
Total title and escrow and other | 1,401 | 1,372 | |||||||
Restaurant revenue | 354 | 354 | |||||||
Remy revenue | 302 | 284 | |||||||
Interest and investment income | 30 | 33 | |||||||
Realized gains and losses | 2 | (2 | ) | ||||||
Total revenue | 2,089 | 2,041 | |||||||
Personnel costs | 671 | 519 | |||||||
Other operating expenses | 429 | 325 | |||||||
Cost of restaurant revenue | 300 | 302 | |||||||
Cost of Remy revenue (includes $14 and $18, respectively of D&A) | 254 | 240 | |||||||
Agent commissions | 307 | 397 | |||||||
Depreciation and amortization | 118 | 33 | |||||||
Title claim loss expense | 53 | 65 | |||||||
Interest expense | 36 | 23 | |||||||
Total expenses | 2,168 | 1,904 | |||||||
Earnings (loss) from continuing operations before taxes | (79 | ) | 137 | ||||||
Income tax expense | (37 | ) | 46 | ||||||
Earnings from continuing operations before equity investments | (42 | ) | 91 | ||||||
Loss from equity investments | (31 | ) | (3 | ) | |||||
Net earnings (loss) from continuing operations | (73 | ) | 88 | ||||||
Loss from discontinued operations, net of tax | — | (1 | ) | ||||||
Net earnings (loss) | (73 | ) | 89 | ||||||
Non-controlling interests | (51 | ) | (1 | ) | |||||
Net earnings (loss) attributable to common shareholders | $ | (22 | ) | $ | 90 | ||||
Earnings per share: | |||||||||
Net (loss) earnings attributable to common shareholders - basic | $ | (0.08 | ) | $ | 0.40 | ||||
Net earnings (loss) attributable to common shareholders - diluted | $ | (0.08 | ) | $ | 0.39 | ||||
Weighted average shares - basic | 274 | 225 | |||||||
Weighted average shares - diluted | 282 | 231 | |||||||
Direct operations orders opened (000’s) | 469 | 643 | |||||||
Direct operations orders closed (000’s) | 295 | 487 | |||||||
Fee per file | $ | 1,858 | $ | 1,373 | |||||
Actual title claims paid | $ | 67 | $ | 91 | |||||
FIDELITY NATIONAL FINANCIAL, INC.
FIRST QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Consolidated | Total FNF Core | Title | BKFS | FNF Corporate and Other | Total FNFV | Remy | Restaurant Group | FNFV Other | ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||
March 31, 2014 | ||||||||||||||||||||||||||||||||||||
Direct title premiums | $ | 351 | $ | 351 | $ | 351 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Agency title premiums | 404 | 404 | 404 | — | $ | — | — | — | — | — | ||||||||||||||||||||||||||
Escrow, title related and other fees | 646 | 618 | 423 | 187 | $ | 8 | 28 | — | — | 28 | ||||||||||||||||||||||||||
Total Title and Escrow | 1,401 | 1,373 | 1,178 | 187 | 8 | 28 | — | — | 28 | |||||||||||||||||||||||||||
Restaurant revenue | 354 | — | — | — | — | 354 | — | 354 | — | |||||||||||||||||||||||||||
Remy revenue | 302 | — | — | — | — | 302 | 302 | — | — | |||||||||||||||||||||||||||
Interest and investment income | 30 | 28 | 28 | — | — | 2 | — | — | 2 | |||||||||||||||||||||||||||
Realized gains and losses | 2 | 2 | 2 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total Revenue | 2,089 | 1,403 | 1,208 | 187 | 8 | 686 | 302 | 354 | 30 | |||||||||||||||||||||||||||
Personnel costs | 671 | 613 | 466 | 133 | 14 | 58 | 22 | 16 | 20 | |||||||||||||||||||||||||||
Agent commissions | 307 | 307 | 307 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Other operating expenses | 429 | 399 | 358 | 62 | (21 | ) | 30 | 10 | 14 | 6 | ||||||||||||||||||||||||||
Cost of revenue | 554 | — | — | — | — | 554 | 254 | 300 | — | |||||||||||||||||||||||||||
Depreciation and amortization | 118 | 101 | 39 | 61 | 1 | 17 | 1 | 13 | 3 | |||||||||||||||||||||||||||
Title claim loss expense | 53 | 53 | 53 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Interest expense | 36 | 30 | — | 5 | 25 | 6 | 5 | 2 | (1 | ) | ||||||||||||||||||||||||||
Total expenses | 2,168 | 1,503 | 1,223 | 261 | 19 | 665 | 292 | 345 | 28 | |||||||||||||||||||||||||||
Pre-tax earnings from continuing operations | $ | (79 | ) | $ | (100 | ) | $ | (15 | ) | $ | (74 | ) | $ | (11 | ) | $ | 21 | $ | 10 | $ | 9 | $ | 2 | |||||||||||||
Adjusted pre-tax earnings | $ | 125 | $ | 92 | $ | 66 | $ | 55 | $ | (29 | ) | $ | 33 | $ | 19 | $ | 9 | $ | 5 | |||||||||||||||||
Adjusted pre-tax margin | 6.0 | % | 6.5 | % | 5.5 | % | 28.6 | % | — | 4.8 | % | 6.3 | % | 2.5 | % | 16.7 | % | |||||||||||||||||||
Adjusted EBITDA | $ | 206 | $ | 148 | $ | 82 | $ | 69 | $ | (3 | ) | $ | 58 | $ | 30 | $ | 24 | $ | 4 | |||||||||||||||||
Adjusted EBITDA margin | 9.8 | % | 10.5 | % | 6.8 | % | 35.9 | % | — | 8.5 | % | 9.9 | % | 6.8 | % | 13.3 | % | |||||||||||||||||||
Open orders | 469 | 469 | 469 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Closed orders | 295 | 295 | 295 | — | — | — | — | — | — | |||||||||||||||||||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
FIRST QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Consolidated | Total FNF Core | Title | BKFS | FNF Corporate and Other | Total FNFV | Remy | Restaurant Group | FNFV Other | ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Direct title premiums | $ | 413 | $ | 413 | $ | 413 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Agency title premiums | 524 | 524 | 524 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Escrow, title related and other fees | 435 | 416 | 406 | — | 10 | 19 | — | — | 19 | |||||||||||||||||||||||||||
Total Title and Escrow | 1,372 | 1,353 | 1,343 | — | 10 | 19 | — | — | 19 | |||||||||||||||||||||||||||
Restaurant revenue | 354 | — | — | — | — | 354 | — | 354 | — | |||||||||||||||||||||||||||
Remy revenue | 284 | — | — | — | — | 284 | 284 | — | — | |||||||||||||||||||||||||||
Interest and investment income | 33 | 32 | 32 | — | — | 1 | 1 | — | — | |||||||||||||||||||||||||||
Realized gains and losses | (2 | ) | — | — | — | — | (2 | ) | — | (2 | ) | — | ||||||||||||||||||||||||
Total Revenue | 2,041 | 1,385 | 1,375 | — | 10 | 656 | 285 | 352 | 19 | |||||||||||||||||||||||||||
Personnel costs | 519 | 456 | 451 | — | 5 | 63 | 27 | 15 | 21 | |||||||||||||||||||||||||||
Agent commissions | 397 | 397 | 397 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Other operating expenses | 325 | 288 | 277 | — | 11 | 37 | 11 | 20 | 6 | |||||||||||||||||||||||||||
Cost of revenue | 542 | — | — | — | — | 542 | 240 | 302 | — | |||||||||||||||||||||||||||
Depreciation and amortization | 33 | 17 | 16 | — | 1 | 16 | 1 | 13 | 2 | |||||||||||||||||||||||||||
Title claim loss expense | 65 | 65 | 65 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Interest expense | 23 | 16 | — | — | 16 | 7 | 7 | 2 | (2 | ) | ||||||||||||||||||||||||||
Total expenses | 1,904 | 1,239 | 1,206 | — | 33 | 665 | 286 | 352 | 27 | |||||||||||||||||||||||||||
Pretax earnings (loss) from continuing operations | $ | 137 | $ | 146 | $ | 169 | $ | — | $ | (23 | ) | $ | (9 | ) | $ | (1 | ) | $ | — | $ | (8 | ) | ||||||||||||||
Adjusted pre-tax earnings | $ | 164 | $ | 149 | $ | 172 | $ | — | $ | (23 | ) | $ | 15 | $ | 18 | $ | 2 | $ | (5 | ) | ||||||||||||||||
Adjusted pre-tax margin | 8.0 | % | 10.8 | % | 12.5 | % | — | — | 2.3 | % | 6.3 | % | 0.6 | % | — | |||||||||||||||||||||
Adjusted EBITDA | $ | 220 | $ | 179 | $ | 185 | $ | — | $ | (6 | ) | $ | 41 | $ | 32 | $ | 17 | $ | (8 | ) | ||||||||||||||||
Adjusted EBITDA margin | 10.8 | % | 12.9 | % | 13.5 | % | — | — | 6.3 | % | 11.2 | % | 4.8 | % | — | |||||||||||||||||||||
Open orders | 643 | 643 | 643 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Closed orders | 487 | 487 | 487 | — | — | — | — | — | — | |||||||||||||||||||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
YTD QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Q1 2014 | Q4 2013 | Q3 2013 | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||||||||||||
Quarterly Open Orders ('000's except % data) | ||||||||||||||||||||||||||||||||||||
Total open orders* | 469 | 392 | 474 | 672 | 643 | 677 | 707 | 667 | 651 | |||||||||||||||||||||||||||
Total open orders per day* | 7.7 | 6.2 | 7.4 | 10.5 | 10.5 | 10.7 | 11.2 | 10.4 | 10.5 | |||||||||||||||||||||||||||
Purchase % of open orders | 55 | % | 55 | % | 56 | % | 42 | % | 38 | % | 32 | % | 33 | % | 38 | % | 36 | % | ||||||||||||||||||
Refinance % of open orders | 45 | % | 45 | % | 44 | % | 58 | % | 62 | % | 68 | % | 67 | % | 62 | % | 64 | % | ||||||||||||||||||
Total closed orders* | 295 | 307 | 410 | 504 | 487 | 518 | 480 | 459 | 410 | |||||||||||||||||||||||||||
Total closed orders per day* | 4.8 | 4.9 | 6.4 | 7.9 | 8.0 | 8.2 | 7.6 | 7.2 | 6.6 | |||||||||||||||||||||||||||
Purchase % of closed orders | 52 | % | 56 | % | 50 | % | 40 | % | 31 | % | 33 | % | 37 | % | 40 | % | 34 | % | ||||||||||||||||||
Refinance % of closed orders | 48 | % | 44 | % | 50 | % | 60 | % | 69 | % | 67 | % | 63 | % | 60 | % | 66 | % | ||||||||||||||||||
Commercial (millions, except orders in '000's) | ||||||||||||||||||||||||||||||||||||
Revenue | $ | 104 | $ | 146 | $ | 120 | $ | 112 | $ | 88 | $ | 149 | $ | 96 | $ | 103 | $ | 83 | ||||||||||||||||||
Open Orders | 19.6 | 19.3 | 19.9 | 20.3 | 18.7 | 18.9 | 18.9 | 20.3 | 19.8 | |||||||||||||||||||||||||||
Closed Orders | 10.2 | 12.8 | 12.6 | 12.3 | 10.6 | 13.6 | 12.2 | 13.1 | 11.7 | |||||||||||||||||||||||||||
Total Fee Per File | ||||||||||||||||||||||||||||||||||||
Fee per file | $ | 1,858 | $ | 2,082 | $ | 1,807 | $ | 1,562 | $ | 1,373 | $ | 1,565 | $ | 1,467 | $ | 1,497 | $ | 1,398 | ||||||||||||||||||
Residential and local commercial fee per file | $ | 1,559 | $ | 1,676 | $ | 1,562 | $ | 1,373 | $ | 1,219 | $ | 1,312 | $ | 1,300 | $ | 1,310 | $ | 1,231 | ||||||||||||||||||
National commercial fee per file | $ | 10,200 | $ | 11,400 | $ | 9,500 | $ | 9,100 | $ | 8,300 | $ | 10,900 | $ | 7,800 | $ | 7,900 | $ | 7,100 | ||||||||||||||||||
Total Staffing | ||||||||||||||||||||||||||||||||||||
Total field operations employees | 10,300 | 9,900 | 10,600 | 12,000 | 12,000 | 11,600 | 11,300 | 11,000 | 10,600 | |||||||||||||||||||||||||||
* Includes an immaterial number of non-purchase and non-refinance orders
FIDELITY NATIONAL FINANCIAL, INC.
QUARTERLY OPERATING STATISTICS
(Unaudited)
Q1 2014 | Q4 2013 | Q3 2013 | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | |||||||||||||||||||
FNT Only Quarterly Operating Statistics ('000's except fee per file and staffing) | |||||||||||||||||||||||||||
Total open orders* | 349 | 331 | 391 | 516 | 481 | 497 | 525 | 524 | 485 | ||||||||||||||||||
Total open orders per day* | 5.7 | 5.3 | 6.1 | 8.1 | 7.9 | 7.9 | 8.3 | 8.2 | 7.8 | ||||||||||||||||||
Purchase % of open orders | 71 | % | 65 | % | 68 | % | 56 | % | 58 | % | — | % | — | % | — | % | — | % | |||||||||
Purchase % of open orders | 29 | % | 35 | % | 32 | % | 44 | % | 42 | % | — | % | — | % | — | % | — | % | |||||||||
Total closed orders* | 219 | 263 | 323 | 387 | 354 | 396 | 381 | 353 | 323 | ||||||||||||||||||
Total closed orders per day* | 3.6 | 4.2 | 5.0 | 6.0 | 5.8 | 6.3 | 6.1 | 5.5 | 5.2 | ||||||||||||||||||
Purchase % of closed orders | 68 | % | 67 | % | 64 | % | 52 | % | 44 | % | — | % | — | % | — | % | — | % | |||||||||
Refinance % of closed orders | 32 | % | 33 | % | 36 | % | 48 | % | 56 | % | — | % | — | % | — | % | — | % | |||||||||
Fee per file | 2,151 | 2,260 | 2,028 | 1,747 | 1,537 | 1,756 | 1,602 | 1,664 | 1,510 | ||||||||||||||||||
Total tile field operations employees | 8,621 | 8,928 | 9,274 | 10,097 | 9,881 | 9,529 | 9,352 | 9,148 | 8,673 | ||||||||||||||||||
ServiceLink Only Quarterly Operating Statistics ('000's except fee per file and staffing) | |||||||||||||||||||||||||||
Total Open Orders* | 120 | 61 | 83 | 156 | 162 | 180 | 182 | 143 | 166 | ||||||||||||||||||
Total open orders per day* | 2.0 | 1.0 | 1.3 | 2.4 | 2.7 | 2.9 | 2.9 | 2.2 | 2.7 | ||||||||||||||||||
Purchase % of open orders | 7 | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||
Purchase % of open orders | 93 | % | 100 | % | 100 | % | 100 | % | 100 | % | — | % | — | % | — | % | — | % | |||||||||
Total closed orders | 76 | 44 | 87 | 117 | 133 | 122 | 99 | 106 | 87 | ||||||||||||||||||
Total closed orders per day* | 1.2 | 0.7 | 1.4 | 1.8 | 2.2 | 1.9 | 1.6 | 1.7 | 1.4 | ||||||||||||||||||
Purchase % of closed orders | 6 | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||
Refinance % of closed orders | 94 | % | 100 | % | 100 | % | 100 | % | 100 | % | — | % | — | % | — | % | — | % | |||||||||
Fee per file | 1,009 | 1,013 | 989 | 951 | 936 | 946 | 945 | 937 | 988 | ||||||||||||||||||
Total ServiceLink operating employees | 1,704 | 972 | 1,326 | 1,903 | 2,119 | 2,071 | 1,948 | 1,852 | 1,927 | ||||||||||||||||||
* Includes an immaterial number of non-purchase and non-refinance orders
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In millions, except per share amounts)
FNF Core | FNFV | Intercompany Eliminations | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
Cash and investment portfolio | $ | 4,297 | $ | 480 | $ | (33 | ) | $ | 4,744 | $ | 5,761 | |||||||||||||||
Goodwill | 4,180 | 477 | — | 4,657 | 1,901 | |||||||||||||||||||||
Title plant | 395 | — | — | 395 | 370 | |||||||||||||||||||||
Total assets | 12,096 | 2,630 | (33 | ) | 14,693 | 10,498 | ||||||||||||||||||||
Notes payable | 3,001 | 376 | (33 | ) | 3,344 | 1,323 | ||||||||||||||||||||
Reserve for title claim losses | 1,680 | — | — | 1,680 | 1,636 | |||||||||||||||||||||
Secured trust deposits | 507 | — | — | 507 | 588 | |||||||||||||||||||||
Non-controlling interest | 642 | 467 | — | 1,109 | 474 | |||||||||||||||||||||
Total equity | 5,189 | 1,774 | — | 6,963 | 5,542 | |||||||||||||||||||||
Book value per share | $ | 18.75 | $ | 6.41 | $ | — | $ | 25.16 | $ | 22.14 | ||||||||||||||||
FIDELITY NATIONAL FINANCIAL, INC.
NON-GAAP RECONCILIATIONS - unaudited
(In millions, except per share amounts)
Three Months Ended | Consolidated | Total FNF Core | Total FNFV | ||||||||||||
March 31, 2014 | |||||||||||||||
Pre-tax (loss) earnings | $ | (79 | ) | $ | (100 | ) | $ | 21 | |||||||
Interest Expense | 36 | 30 | 6 | ||||||||||||
Depreciation & amortization | 132 | 101 | 31 | ||||||||||||
EBITDA | $ | 89 | $ | 31 | $ | 58 | |||||||||
Non-GAAP adjustments before taxes: | |||||||||||||||
Realized (gain) loss, net adjustment | (2 | ) | (2 | ) | — | ||||||||||
Deferred revenue adjustment for BKFS | 5 | 5 | — | ||||||||||||
Transaction costs related to acquisition of LPS | 41 | 41 | — | ||||||||||||
Severance costs related to acquisition of LPS | 39 | 39 | — | ||||||||||||
Synergy accrual | 32 | 32 | — | ||||||||||||
Other legal matters | 2 | 2 | — | ||||||||||||
Purchase price amortization | 87 | 75 | 12 | ||||||||||||
204 | 192 | 12 | |||||||||||||
Adjusted pre-tax earnings | $ | 125 | $ | 92 | $ | 33 | |||||||||
Adjusted pre-tax margin | 6.0 | % | 6.5 | % | 4.8 | % | |||||||||
Adjusted EBITDA | $ | 206 | $ | 148 | $ | 58 | |||||||||
Adjusted EBITDA margin | 9.8 | % | 10.5 | % | 8.5 | % | |||||||||
Net loss attributable to FNF common shareholders | $ | (22 | ) | $ | (6 | ) | $ | (16 | ) | ||||||
EPS | $ | (0.08 | ) | $ | (0.02 | ) | $ | (0.06 | ) | ||||||
Non-GAAP adjustments: | |||||||||||||||
Realized (gain) loss, net adjustment | (2 | ) | (2 | ) | — | ||||||||||
Deferred revenue adjustment for BKFS | 5 | 5 | — | ||||||||||||
Transaction costs related to acquisition of LPS | 41 | 41 | — | ||||||||||||
Severance costs related to acquisition of LPS | 39 | 39 | — | ||||||||||||
Synergy accrual | 32 | 32 | — | ||||||||||||
Other legal matters | 2 | 2 | — | ||||||||||||
Ceridian legal settlement, net of tax | 21 | — | 21 | ||||||||||||
Purchase price amortization | 87 | 75 | 12 | ||||||||||||
Income taxes on non-GAAP adjustments | (65 | ) | (61 | ) | (4 | ) | |||||||||
160 | 131 | 29 | |||||||||||||
Less: noncontrolling interest on non-GAAP adjustments | (54 | ) | (51 | ) | (3 | ) | |||||||||
Adjusted net earnings attributable to FNF common shareholders | $ | 84 | $ | 74 | $ | 10 | |||||||||
Adjusted EPS | $ | 0.30 | $ | 0.26 | $ | 0.04 | |||||||||
Net cash flows used in operations | $ | (161 | ) | $ | (114 | ) | $ | (47 | ) | ||||||
Non-GAAP adjustments: | |||||||||||||||
Transaction costs related to acquisition of LPS | 41 | 41 | — | ||||||||||||
Severance costs related to acquisition of LPS | 39 | 39 | — | ||||||||||||
Other executive severance payment | 9 | 9 | — | ||||||||||||
Other legal matters | 2 | 2 | — | ||||||||||||
Adjusted cash flows from operations | (70 | ) | (23 | ) | (47 | ) | |||||||||
Less: Capital expenditures | 28 | 16 | 12 | ||||||||||||
Free cash flow | $ | (98 | ) | $ | (39 | ) | $ | (59 | ) | ||||||
FIDELITY NATIONAL FINANCIAL, INC.
NON-GAAP RECONCILIATIONS - unaudited
(In millions, except per share amounts)
Three Months Ended | Consolidated | Total FNF Core | Total FNFV | ||||||||||||
March 31, 2013 | |||||||||||||||
Pre-tax earnings (loss) | $ | 137 | $ | 146 | $ | (9 | ) | ||||||||
Interest Expense | 23 | 16 | 7 | ||||||||||||
Depreciation & amortization | 51 | 17 | 34 | ||||||||||||
EBITDA | $ | 211 | $ | 179 | $ | 32 | |||||||||
Non-GAAP adjustments before taxes: | |||||||||||||||
Realized (gain) loss, net adjustment | 2 | — | 2 | ||||||||||||
Executive severance | 7 | — | 7 | ||||||||||||
Purchase price amortization | 18 | 3 | 15 | ||||||||||||
27 | 3 | 24 | |||||||||||||
Adjusted pre-tax earnings | $ | 164 | $ | 149 | $ | 15 | |||||||||
Adjusted pre-tax margin | 8.0 | % | 10.8 | % | 2.3 | % | |||||||||
Adjusted EBITDA | $ | 220 | $ | 179 | $ | 41 | |||||||||
Adjusted EBITDA margin | 10.8 | % | 12.9 | % | 6.3 | % | |||||||||
Net earnings (loss) attributable to FNF common shareholders | $ | 90 | $ | 96 | $ | (6 | ) | ||||||||
EPS | $ | 0.39 | $ | 0.42 | $ | (0.03 | ) | ||||||||
Non-GAAP adjustments: | |||||||||||||||
Realized (gain) loss, net adjustment | 2 | — | 2 | ||||||||||||
Executive severance | 7 | — | 7 | ||||||||||||
Purchase price amortization | 18 | 3 | 15 | ||||||||||||
Income taxes on non-GAAP adjustments | (9 | ) | (1 | ) | (8 | ) | |||||||||
18 | 2 | 16 | |||||||||||||
Less: noncontrolling interest on non-GAAP adjustments | (6 | ) | — | (6 | ) | ||||||||||
Adjusted net earnings attributable to FNF common shareholders | $ | 102 | $ | 98 | $ | 4 | |||||||||
Adjusted EPS | $ | 0.44 | $ | 0.42 | $ | 0.02 | |||||||||
Net cash flows used in operations | $ | (36 | ) | $ | (21 | ) | $ | (15 | ) | ||||||
Non-GAAP adjustments: | |||||||||||||||
Executive severance | 7 | — | 7 | ||||||||||||
Adjusted cash flows from operations | (29 | ) | (21 | ) | (8 | ) | |||||||||
Less: Capital expenditures | 30 | 15 | 15 | ||||||||||||
Free cash flow | $ | (59 | ) | $ | (36 | ) | $ | (23 | ) | ||||||
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