8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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) March 22, 2010

THE FIRST AMERICAN CORPORATION

(Exact Name of the Registrant as Specified in Charter)

California	001-13585	95-1068610
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1 First American Way, Santa Ana, California	92707-5913
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (714) 250-3000

Not Applicable.

(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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

On January 15, 2008, The First American Corporation (FAC, First American or the Company) announced its intention to separate its financial services companies from its information solutions companies, resulting in two separate publicly traded entities. The Company continues to prepare for the anticipated separation, and currently expects the separation to occur during the first half of 2010, with a target date of June 1, 2010. The post-separation information solutions companies will remain as The First American Corporation under a new corporate name, which we refer to herein as “InfoCo” for ease of reference. In connection with the separation, the Company’s subsidiary, First American Financial Corporation (FAFC), which will be the parent company for the financial services company, has filed a Form 10 Registration Statement with the Securities and Exchange Commission. The transaction remains subject to the satisfaction of customary conditions, including final approval by the Board of Directors, additional amendments to and effectiveness of the Form 10 Registration Statement, receipt of a tax ruling from the Internal Revenue Service and the approval of applicable regulatory authorities. No assurances can be given as to whether or when such conditions will be satisfied.

On March 4, 2010, the Company filed a Current Report on Form 8-K containing unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2009 and the years ended December 31, 2008 and 2007 presenting InfoCo’s results of operations assuming the separation had been completed based upon a January 1, 2007 separation date. In addition, the March 4, 2010 Form 8-K included unaudited pro forma condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008 and 2007 presenting InfoCo’s consolidated financial position assuming that the separation had been completed on those three dates, respectively.

On March 22, 2010, FAFC filed Amendment #2 to its Form 10 Registration Statement with the Securities and Exchange Commission reflecting its combined statement of income for the year ended December 31, 2009 and its combined balance sheet as of December 31, 2009. The Company is filing this Current Report on Form 8-K to provide our unaudited pro forma condensed consolidated financial statements as of and for the year ended December 31, 2009.

Included in this Current Report as Exhibit 99.1 are unaudited pro forma condensed consolidated financial statements of InfoCo. The statements were derived from, and should be read together with, First American’s historical consolidated financial statements including the accompanying notes, included in the Company’s Annual Report on Form 10-K, and FAFC’s historical combined financial statements including the accompanying notes included in FAFC’s Form 10 Registration Statement, as amended.

The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2009 presents our results of operations assuming the separation had been completed based upon a January 1, 2009 separation date. The unaudited pro forma condensed consolidated balance sheet at December 31, 2009 presents our consolidated financial position assuming that the separation had been completed on that date as well. Specifically, the pro forma adjustments include giving effect to the following:

• The elimination of FAFC’s historical financial results and the pro forma adjustments that are directly attributable to the transaction and factually supportable.

• The pro forma impact on our financial statements of the buy-in of the publicly held shares of First Advantage Corporation, which closed in November 2009. For purposes of the pro forma condensed consolidated income statement, we have assumed the FADV transaction closed on January 1, 2009.

These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of our results of operations or financial condition had the separation been completed on the date assumed. Additionally, these pro forma financial statements are not necessarily indicative of our future results of operations or financial condition. Specifically:

• The pro forma financial statements do not reflect adjustments that are based on judgmental estimates because such amounts are not appropriately included as pro forma adjustments. For example, the Company expects that it will no longer incur the same level of corporate infrastructure that currently supports the Company. The pro forma

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financial statements include general unallocated corporate costs of $103 million (excluding interest expense) for the year ended December 31, 2009. We estimate that our recurring annual stand-alone corporate costs will be approximately $40 to $45 million (excluding interest expense). The pro forma financial statements do not reflect a reduction of these costs and expenses.

• Included in the pro forma condensed consolidated income statements are certain non-recurring charges not associated with the separation for severance and restructuring, totaling $39 million for the year ended December 31, 2009.

• The pro forma condensed consolidated balance sheet does not reflect any pro forma adjustments for future projected costs related to the separation.

• We have not included any adjustment to the pro forma condensed consolidated balance sheet for the approximately $250 million investment in our company that we expect FAFC and an FAFC affiliate will hold in connection with the separation, as we do not anticipate that it will have an impact on our consolidated equity balance and the impact on the number of shares expected to be outstanding cannot reasonably be determined at this date.

• As part of the separation, we will enter into transition services agreements with FAFC for the provision of certain corporate level services. There is uncertainty regarding how much, if any, those service agreements will be utilized and therefore the level of expected costs (the fees to be paid will be predominantly based on usage, such as hourly rates or per item costs, as opposed to predetermined fees). Given these factors, we have not included any amounts related to the agreements in the pro forma condensed combined financial statements, as we do not believe that any such amounts would meet the “factually supportable” and “ongoing impact on the financial statements” criteria established for pro forma adjustments. As it relates to the ongoing commercial relationships that will be in place between us and FAFC (primarily related to purchases and sales of data and other settlement services), the terms and conditions of the ongoing commercial relationships are expected to be materially consistent with the terms and conditions currently in place between the two organizations and reflected in our historical combined financial statements. As a result, we do not anticipate any material changes to our results of operations and therefore do not believe any adjustment to the pro forma condensed combined income statement is required.

We believe the assumptions used and pro forma adjustments derived from such assumptions, are reasonable under the circumstances and are based upon currently available information. While such adjustments are subject to change based upon the finalization of the terms of the separation and the underlying separation agreements, in management’s opinion the pro forma adjustments have been developed on a reasonable and rational basis.

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this Current Report on Form 8-K and the accompanying Exhibit, including but not limited to those relating to:

• The Company’s intention to separate its financial services companies from its information solutions companies;

• The timing of the separation;

• The satisfaction of various conditions to the separation;

• The anticipated structure, terms and conditions of the separation including the allocation of various assets and liabilities between FAFC and InfoCo;

• Pre- and post-separation corporate expenses;

• Severance and restructuring-related expenses;

• Future separation-related costs;

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• The investment that FAFC and an FAFC-affiliate are expected to hold in shares of InfoCo;

• Transition services agreements and ongoing commercial relationships between FAFC and InfoCo;

• The cash payment InfoCo anticipates receiving from FAFC;

• The transfer of certain investments to FAFC and the anticipated financial effects thereof;

• The transfer of certain investments from FAFC to InfoCo and the anticipated financial effects thereof;

• The transfer of certain notes receivable from the Company to FAFC and the expected financial effects thereof;

• The expected receipt by InfoCo from FAFC of certain real estate assets in connection with the separation and the anticipated financial effects thereof;

• The transfer of certain software assets to FAFC as part of the separation and the anticipated financial effects thereof;

• The transfer to FAFC of the Company’s defined benefit plans and the expected financial effects thereof;

• The projected size, anticipated terms and financial effects of the pension note InfoCo expects to issue to FAFC;

• The pay-down by FAFC of a portion of the Company’s existing credit facility;

• The impact of elimination of intercompany sales between InfoCo and FAFC;

• The expectation regarding legal, accounting and tax fees associated with the separation;

• The terms and financial effects of the anticipated amended InfoCo credit facility; and

• Other assumptions used to derive the pro forma financial statements;

are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may contain the words “believe,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely” or other similar words and phrases.

Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include:

• Changes in the performance of the real estate markets;

• Interest rate fluctuations;

• Unfavorable economic conditions;

• General volatility in the capital markets;

• Limitations on access to public records and other data;

• Changes in applicable government regulations;

• The inability to consummate the separation or to consummate it in the form currently proposed as a result of, among other factors, the inability to obtain necessary regulatory approvals, the failure to obtain the final approval of the Company’s Board of Directors, the inability to obtain third-party consents or undesirable concessions or accommodations required to be made to obtain such consents, the condition of the real estate and mortgage credit markets, other market conditions, the inability to transfer assets into FAFC or other unfavorable reactions from customers, ratings agencies, investors or other stakeholders;

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• The inability to realize the benefits of the separation as a result of the factors described immediately above, as well as, among other factors, increased borrowing costs, competition between the resulting companies, unfavorable reactions from employees, the triggering of rights and obligations by the transaction or any litigation arising out of or related to the separation;

• Decisions by the Company’s Board or management to alter the anticipated structure and terms and conditions of the separation transaction including the division of assets and liabilities, the transition services and the ongoing commercial relationships between FAFC and InfoCo post-separation;

• Consolidation among the Company’s significant customers and competitors;

• Unfavorable economic conditions;

• Impairments in the Company’s goodwill or other intangible assets;

• Losses in the Company’s investment portfolio;

• Expenses of and funding obligations to the Company’s pension plan;

• Weakness in the commercial real estate market and increases in the amount or severity of commercial real estate transaction claims; and

• Other factors described in the Company’s most recent Annual Report on Form 10-K and in FAFC’s Form 10 Registration Statement, as amended.

The forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is filed as part of this report.

Exhibit No.	Description
99.1	Unaudited Pro Forma Condensed Consolidated Financial Statements.

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SIGNATURES

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 hereunto duly authorized.

	THE FIRST AMERICAN CORPORATION
Date: March 22, 2010	By:	/s/    ANTHONY S. PISZEL
	Name:	Anthony S. Piszel
	Title:	Chief Financial Officer and Treasurer

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EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On January 15, 2008, The First American Corporation (FAC, First American or the Company) announced its intention to separate its financial services companies from its information solutions companies, resulting in two separate publicly traded entities. The Company continues to prepare for the anticipated separation, and currently expects the separation to occur during the first half of 2010, with a target date of June 1, 2010. The post-separation information solutions companies will remain as The First American Corporation under a new corporate name, which we refer to herein as “InfoCo” for ease of reference. In connection with the separation, the Company’s subsidiary, First American Financial Corporation (FAFC), which will be the parent company for the financial services company, has filed a Form 10 Registration Statement with the Securities and Exchange Commission. The transaction remains subject to the satisfaction of customary conditions, including final approval by the Board of Directors, additional amendments to and effectiveness of the Form 10 Registration Statement, receipt of a tax ruling from the Internal Revenue Service and the approval of applicable regulatory authorities. No assurances can be given as to whether or when such conditions will be satisfied.

On March 4, 2010, the Company filed a Current Report on Form 8-K containing unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2009 and the years ended December 31, 2008 and 2007 presenting InfoCo’s results of operations assuming the separation had been completed based upon a January 1, 2007 separation date. In addition, the March 4, 2010 Form 8-K included unaudited pro forma condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008 and 2007 presenting InfoCo’s consolidated financial position assuming that the separation had been completed on those three dates, respectively.

On March 22, 2010, FAFC filed Amendment #2 to its Form 10 Registration Statement with the Securities and Exchange Commission reflecting its combined statement of income for the year ended December 31, 2009 and its combined balance sheet as of December 31, 2009. The Company is filing this Current Report on Form 8-K to provide our unaudited pro forma condensed consolidated financial statements as of and for the year ended December 31, 2009.

The following unaudited pro forma condensed consolidated financial statements of InfoCo were derived from, and should be read together with, FAC’s historical consolidated financial statements including the accompanying notes, included in the Company’s Annual Report on Form 10-K, and FAFC’s historical combined financial statements including the accompanying notes included in FAFC’s Form 10 Registration Statement, as amended.

The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2009 presents our results of operations assuming the separation had been completed based upon a January 1, 2009 separation date. The unaudited pro forma condensed consolidated balance sheet at December 31, 2009 presents our consolidated financial position assuming that the separation had been completed on that date as well. Specifically, the pro forma adjustments include giving effect to the following:

• The elimination of FAFC’s historical financial results and the pro forma adjustments that are directly attributable to the transaction and factually supportable.

• The pro forma impact on our financial statements of the buy-in of the publicly held shares of First Advantage Corporation, which closed in November 2009. For purposes of the pro forma condensed consolidated income statement, we have assumed the FADV transaction closed on January 1, 2009.

These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of our results of operations or financial condition had the separation been completed on the date assumed. Additionally, these pro forma financial statements are not necessarily indicative of our future results of operations or financial condition. Specifically:

• The pro forma financial statements do not reflect adjustments that are based on judgmental estimates because such amounts are not appropriately included as pro forma adjustments. For example, the Company expects that it will no longer incur the same level of corporate infrastructure that currently supports the Company. The pro forma financial statements include general unallocated corporate costs of $103 million (excluding interest expense) for the year ended December 31, 2009. We estimate that our recurring annual stand-alone corporate costs will be approximately $40 to $45 million (excluding interest expense). The pro forma financial statements do not reflect a reduction of these costs and expenses.

• Included in the pro forma condensed consolidated income statements are certain non-recurring charges not associated with the separation for severance and restructuring, totaling $39 million for the year ended December 31, 2009.

• The pro forma condensed consolidated balance sheet does not reflect any pro forma adjustments for future projected costs related to the separation.

• We have not included any adjustment to the pro forma condensed consolidated balance sheet for the approximately $250 million investment in our company that we expect FAFC and an FAFC affiliate will hold in connection with the separation, as we do not anticipate that it will have an impact on our consolidated equity balance and the impact on the number of shares expected to be outstanding cannot reasonably be determined at this date.

• As part of the separation, we will enter into transition services agreements with FAFC for the provision of certain corporate level services. There is uncertainty regarding how much, if any, those service agreements will be utilized and therefore the level of expected costs (the fees to be paid will be predominantly based on usage, such as hourly rates or per item costs, as opposed to predetermined fees). Given these factors, we have not included any amounts related to the agreements in the pro forma condensed combined financial statements, as we do not believe that any such amounts would meet the “factually supportable” and “ongoing impact on the financial statements” criteria established for pro forma adjustments. As it relates to the ongoing commercial relationships that will be in place between us and FAFC (primarily related to purchases and sales of data and other settlement services), the terms and conditions of the ongoing commercial relationships are expected to be materially consistent with the terms and conditions currently in place between the two organizations and reflected in our historical combined financial statements. As a result, we do not anticipate any material changes to our results of operations and therefore do not believe any adjustment to the pro forma condensed combined income statement is required.

We believe the assumptions used and pro forma adjustments derived from such assumptions, are reasonable under the circumstances and are based upon currently available information. While such adjustments are subject to change based upon the finalization of the terms of the separation and the underlying separation agreements, in management’s opinion the pro forma adjustments have been developed on a reasonable and rational basis.

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Unaudited Pro Forma Condensed Consolidated Balance Sheet

December 31, 2009

(in thousands)

	As Reported FAC 10-K			FAFC Historical			As Adjusted InfoCo			Pro Forma Adjustments			Pro Forma InfoCo
Assets
Cash and cash equivalents	$	982,448		$	583,028		$	399,420		$	100,000	(1)	$	499,420
Accounts receivable		491,539			239,166			252,373			—			252,373
Income tax receivable		97,989			27,265			70,724			—			70,724
Investments:
Deposits with banks		124,553			123,774			779			—			779
Debt securities		1,868,413			1,838,719			29,694			—			29,694
Equity securities		99,167			51,020			48,147			—			48,147
Other long term investments		374,862			275,275			99,587			80,295	(2)		179,882
Related party accounts and note receivable		—			187,825			(187,825	)		200,089	(3),(8)		12,264
Loans receivable, net		161,897			161,897			—			—			—
Property and equipment, net		591,782			358,571			233,211			16,254	(4)		249,465
Title plants and other indexes		692,359			488,135			204,224			—			204,224
Deferred income taxes, net		13,255			101,818			(88,563	)		88,563	(5),(8)		—
Goodwill		2,617,577			800,986			1,816,591			—			1,816,591
Other intangible assets, net		257,526			78,892			178,634			—			178,634
Other assets		349,730			213,910			135,820			—			135,820
Total Assets	$	8,723,097		$	5,530,281		$	3,192,816		$	485,201		$	3,678,017
Liabilities & Stockholders’ Equity
Demand deposits		1,153,574			1,153,574			—		$	—		$	—
Accounts payable and accrued liabilities		1,085,031			699,766			385,265			(16,247	)(5)		369,018
Due to related party		—			12,264			(12,264	)		12,264	(8)		—
Deferred revenues		710,217			144,756			565,461			—			565,461
Reserve known and IBNR claims		1,255,088			1,227,757			27,331			—			27,331
Income taxes payable		—			—			—			—			—
Deferred income taxes, net		—			—			—			100,767	(8)		100,767
Notes and contracts payable		791,083			259,313			531,770			(37,000	)(5),(6)		494,770
Deferred interest subordinated notes		100,000			—			100,000			—			100,000
Total liabilities	$	5,094,993		$	3,497,430		$	1,597,563			59,784			1,657,347
Commitments and contingencies
Redeemable noncontrolling interests		458,847			—			458,847			—			458,847
FAC invested equity		3,322,093			2,167,291			1,154,802			407,263	(7)		1,562,065
Accumulated comprehensive income/(loss)		(167,798	)		(147,491	)		(20,307	)		18,154	(5)		(2,153	)
Noncontrolling Interest		14,962			13,051			1,911			—			1,911
Total equity		3,169,257			2,032,851			1,136,406			425,417			1,561,823
Total liabilities and stockholders’ equity	$	8,723,097		$	5,530,281		$	3,192,816		$	485,201		$	3,678,017

(1) In connection with the separation, we expect we will purchase the noncontrolling interest in a joint venture. We expect that FAFC will fund a portion of the buy-out. This represents the cash payment of $100 million that we anticipate receiving from FAFC to fund their share of the purchase of the noncontrolling interest in the joint venture.

(2) The pro forma adjustments to the other long term investments balance is comprised of two items.

a. There are approximately $9.7 million of investments at December 31, 2009 that have not been attributed to FAFC for purposes of the historical financial statements as they were held for general investment purposes and not specifically for FAFC’s benefit. The investments are expected to be transferred to FAFC as part of the separation and we are therefore excluding those investment assets.

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b. There are approximately $90.0 million of investments in affiliates at December 31, 2009 which FAFC is expected to transfer to us upon the consummation of the separation transaction and we are reflecting the contribution of those investment assets.

(3) There are approximately $187.8 million of notes payable from First American to subsidiaries of FAFC which are recorded in our historical financial statements and a corresponding receivable recorded by FAFC in their historical financial statements. At the separation, these notes payable are expected to be transferred to FAFC and eliminated against the subsidiaries’ notes receivable.

(4) The pro forma adjustments to property and equipment, net are comprised of two items.

a. There is certain real estate property, net, that we expect to receive from FAFC in connection with the separation. The property has a net book value of approximately $16.6 million at December 31, 2009.

b. There are certain software assets with a net book value of $0.4 million at December 31, 2009 that have not been attributed to FAFC for purposes of the historical financial statements as they were held for general investment purposes and not specifically for FAFC’s benefit. We expect the assets will be transferred to FAFC as part of the separation and we are therefore excluding those assets.

(5) It is contemplated that as part of the separation, First American’s defined benefit plans, which are currently underfunded, will be assumed by FAFC along with the obligation related to our employees. Upon the consummation of the separation, we expect to issue a note payable to FAFC for approximately $23 million that represents the anticipated net present value of the unfunded portion of liability associated with the InfoCo employees as well as the related administrative costs. We anticipate the note will bear interest at a fixed rate approximating the market rate for similar instruments, expected to be approximately 7%, and have a maturity date to be established. In addition to recording the pro forma impact of issuing the note payable to FAFC, this entry also eliminates the accrued pension liability of $16.2 million, deferred income tax asset of $12.2 million and other comprehensive income balances related to our participation in the defined benefit plans of $18.2 million at December 31, 2009.

(6) In connection with the separation, we anticipate that FAFC will pay down $200 million of our existing credit facility. We currently have attributed $140 million of the First American credit facility to FAFC in their historical financial statements at December 31, 2009. This pro forma adjustment represents the allocation of the $60 million in debt that we drew down in 2007 that FAFC will incur as part of the separation.

(7) The pro forma adjustment represents the net impact of the pro forma entries on our total equity balance. The impact of issuing approximately $250 million in the Company’s shares to FAFC and an FAFC affiliate in connection with the separation have been excluded as they are currently not determinable.

(8) Certain financial statement balances have been reclassified as assets or liabilities, as appropriate, after the effect of the pro forma entries has been included.

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The First American Corporation

Unaudited Pro Forma Condensed Consolidated Income Statement

Twelve Months Ended December 31, 2009

(in thousands, except per share amounts)

	As Reported FAC 10K		FAFC Pro Historical		As Adjusted InfoCo		Pro Forma Adjustments			Pro Forma InfoCo
Operating revenue	$	5,791,304	$	3,938,616	$	1,852,688	$	52,320	(1)	$	1,905,008
Investment		181,473		108,218		73,255		13,267	(2)		86,522
Total Revenues		5,972,777		4,046,834		1,925,943		65,587			1,991,530
Salaries and other operating expense		5,272,296		3,740,195		1,532,101		82,774	(1),(3),(4),(5)		1,614,875
Depreciation and amortization		219,922		82,475		137,447		463	(6)		137,910
Interest		56,762		19,819		36,943		2,269	(7)		39,212
Total Expenses		5,548,980		3,842,489		1,706,491		85,506			1,791,997
Income before income taxes		423,797		204,345		219,452		(19,919	)		199,533
Income tax provision (benefit)		154,621		70,068		84,553		(8,167	)(8)		76,386
Net income		269,176		134,277		134,899		(11,752	)		123,147
Less: Net income attributable to noncontrolling interests		69,525		11,888		57,637		(9,921	)(9)		47,716
Net (loss) income attributable to FAC	$	199,651	$	122,389	$	77,262	$	(1,831	)	$	75,431
Net income (loss) attributable to FAC stockholders:
Basic (10)	$	2.11			$	0.82				$	0.73
Diluted (10)	$	2.09			$	0.81				$	0.73
Weighted-average number of shares:
Basic (10)		94,551				94,551					102,903
Diluted (10)		95,478				95,478					103,830

(1) InfoCo and FAFC have historically had a level of normal and customary intercompany sales between the two companies that were eliminated upon consolidation. Upon consummation of the separation, these eliminations will not be recorded as the two companies will no longer be part of the same consolidated financial statements. The impact on operating revenues and salaries and other operating expenses for the year ended December 31, 2009 was $52.3 million. We anticipate that these types of sales will be ongoing after the separation is consummated.

(2) The pro forma adjustment to investment income is comprised of several items.

a. First, there are several notes payable from First American to subsidiaries of FAFC which are recorded in our historical financial statements and a corresponding receivable recorded by FAFC in their historical financial statements. At the separation, these notes payable are expected to be transferred to FAFC and eliminated against the subsidiaries’ notes receivable. The pro forma entries include an adjustment to eliminate the interest income in the FAFC historical financial statement balances associated with these notes receivable aggregating $11.0 million for the year ended December 31, 2009.

b. An adjustment for lease income of $2.0 million for the year ended December 31, 2009 associated with real estate property that we expect will be transferred to us upon the separation. The lease income is properly eliminated in the FAC historical financial statement balances but included as investment income in the FAFC historical financial statement balances. Therefore, the adjustment is reflected as an addition to our investment income in that the income balance has been reduced by that amount.

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c. An adjustment to reflect the inclusion of the historical equity in earnings from affiliates totaling $0.3 million for the year ended December 31, 2009 for certain investments in affiliates that we expect we will receive from FAFC upon consummation of the separation.

(3) The pro forma adjustment to salaries and other operating expenses includes an adjustment for the elimination of the pension expense related to our participation in First American’s defined benefit pension plan. Upon separation, we expect that the plan (and the expense associated with our employees) will be assumed by FAFC. The pro forma adjustment to reflect the impact of this change is $1.5 for the year ended December 31, 2009.

(4) Generally accepted accounting principles provide that a parent company should not reflect an allocation of general corporate expenses and overhead to the subsidiary to be spun-off. This pro forma entry adds back to InfoCo’s condensed consolidated income statement the $40.5 million of general corporate costs that were allocated to FAFC for the year ended December 31, 2009.

(5) During the year ended December 31, 2009, we incurred approximately $8.6 million of costs, primarily legal, accounting and tax fees, associated with the separation transaction that are non-recurring expenses. This pro forma entry eliminates those expenses.

(6) As discussed in adjustment 4a to the pro forma condensed consolidated balance sheet, as part of the separation, we expect we will receive certain real estate assets from FAFC. This pro forma entry gives effect to the $0.5 million of depreciation and amortization related to those real estate assets for the year ended December 31, 2009.

(7) The pro forma adjustment to interest expense is comprised of three items.

a. As discussed in adjustment 6 to the pro forma condensed consolidated balance sheet, it is contemplated that FAFC will be allocated an incremental $60 million of debt as part of the separation agreement. This pro forma adjustment gives consideration to the incremental interest expense that will be allocated to FAFC’s portion of the credit facility. Interest expense of $2.8 million (using the historical effective interest rate of 4.7%) has been reflected for the year ended December 31, 2009.

b. As noted in adjustment 3 above, as part of the separation, it is anticipated that FAFC will assume all the expenses and obligations associated with the Company’s pension plan. We expect that InfoCo will issue a note payable to FAFC of approximately $23 million that represents the anticipated net present value of the unfunded portion of liability associated with the InfoCo employees and the related administrative costs. The note will bear interest at a fixed rate approximating the market rate for similar instruments, expected to be approximately 7%, and have a maturity date to be established. The pro forma adjustment to interest expense gives effect to the anticipated annual interest expense associated with the note of $1.6 million for the year ended December 31, 2009.

c. On or prior to the separation, we expect to amend the existing First American credit facility, which will then serve as InfoCo’s facility. We expect the amended facility to be secured, contain covenants customary for the industry and be scheduled to expire in July 2012. We anticipate that the interest rate charged on the facility will be increased and therefore are including a pro forma entry for incremental interest expense of $3.4 million for the year ended December 31, 2009. This adjustment is based on an anticipated increase in the interest

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rate on the line of 245 basis points. A change of one-eighth of 1% (12.5 basis points) in the interest rate associated with these borrowings would result in additional annual interest expense of approximately $0.2 million (in the case of an increase to the rate) or an annual reduction to interest expense of approximately $0.2 million (in the case of a decrease in the rate).

(8) This amount represents the estimated income tax impact of the pro forma adjustments using the statutory rate of 41%.

(9) The pro forma adjustment to net income attributable to noncontrolling interests relates to the buy-in of the publicly held shares of First Advantage Corporation in November 2009 in a stock-for-stock transaction. A pro forma adjustment in the amount of $9.9 million for the year ended December 31, 2009 represents the impact to the net income attributable to noncontrolling interests of completing that transaction.

(10) Basic and diluted net income (loss) attributable to FAC stockholders and basic and fully diluted weighted average number of shares outstanding are calculated using the historical FAC share counts, adjusted to reflect the pro forma impact of the buy-in of the publicly held shares of First Advantage Corporation. Additional share impacts as a result of the separation and expected issuance of approximately $250 million in the Company’s shares to FAFC and an FAFC affiliate have been excluded as they are not currently determinable.

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