EX-99.1 2 a13781exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1
(FIDELITY PRESS RELEASE)
Fidelity National Financial, Inc. Reports Third Quarter 2005 EPS of $1.21
Jacksonville, Fla. — (October 26, 2005) — Fidelity National Financial, Inc. (NYSE:FNF), a Fortune 500 provider of products and outsourced services and solutions to financial institutions and the real estate industry, today reported operating results for the three-month and nine-month periods ended September 30, 2005.
     
3rd Quarter 2005   3rd Quarter 2004
Net Earnings   Net Earnings
$214.4 million   $193.8 million
$1.21 per diluted share   $1.09 per diluted share
     
Nine Months Ended September 30, 2005   Nine Months Ended September 30, 2004
Net Earnings   Net Earnings
$848.9 million   $566.1 million
$4.79 per diluted share   $3.23 per diluted share
    Total revenue for the third quarter of 2005 was $2.53 billion, compared with $2.16 billion for the third quarter of 2004
 
    Total title and escrow revenue was $1.73 billion for the third quarter of 2005 versus $1.53 billion in the third quarter of 2004
 
    Direct title premiums were $642 million for the third quarter of 2005 compared with direct title premiums of $525 million for the third quarter of 2004
 
    Escrow and other title related fees were $324 million for the third quarter of 2005 versus $265 million for the third quarter of 2004

 


 

    Agency title premiums were $763 million for the third quarter of 2005 compared with agency title premiums of $744 million for the third quarter of 2004
         
(In thousands)   3rd Quarter 2005   3rd Quarter 2004
Agency Title Premiums   $763,242   $744,193
Agent Commissions   590,876   580,241
Net   172,366   163,952
Agent Commission %   77.4%   78.0%
    Specialty Insurance contributed $95 million in revenue for the third quarter of 2005 versus $64 million in the third quarter of 2004
 
    Revenue from Financial Institution Software and Services (“FISS”), was $372 million for the third quarter of 2005 versus $307 million for the third quarter of 2004; FISS gross revenue was $393 million for the third quarter of 2005 versus $324 million in the prior year quarter
 
    Lender Outsourcing Solutions (“LOS”) revenue was $81 million for the third quarter of 2005 compared to $79 million for the third quarter of 2004
 
    Information Services (“IS”) revenue was $194 million for the third quarter of 2005 compared with $144 million for the third quarter of 2004
 
    FIS organic revenue growth was 6.6 percent for the third quarter of 2005 versus the third quarter of 2004
 
    The total provision for claim losses was $135 million for the third quarter of 2005 compared with $82 million for the third quarter of 2004
 
    Interest expense for the third quarter of 2005 was $48 million compared with $11 million for the third quarter of 2004
 
    Cash flow from operations was $467 million for the third quarter of 2005 compared with $402 million for the third quarter of 2004

 


 

     “This was a very successful quarter for FNF on a number of fronts,” said Chairman and Chief Executive Officer William P. Foley, II. “We posted very strong financial results, including $1.21 in earnings per share and $467 million in cash flow from operations. We also announced the merger between Fidelity National Information Services and Certegy and are now actively involved in the integration process for those businesses. Finally, we completed the distribution of Fidelity National Title Group stock to FNF shareholders on October 17th and FNT is now trading as a majority-owned, publicly traded subsidiary of FNF.”
     The following table depicts monthly direct orders opened and closed for the third quarter of both 2005 and 2004:
             
Month   Direct Orders Opened   Direct Orders Closed   Closing %
July 2005   313,600   219,300   70%
August 2005   350,800   252,600   72%
September 2005   312,200   222,100   71%
             
Third Quarter 2005   976,600   694,000   71%
             
             
Month   Direct Orders Opened   Direct Orders Closed   Closing %
July 2004   280,100   203,500   73%
August 2004   295,500   201,800   68%
September 2004   298,300   199,400   67%
             
Third Quarter 2004   873,900   604,700   69%
             
     The following table depicts monthly commercial direct orders opened and closed in the title and escrow business for the third quarter of both 2005 and 2004:

 


 

                 
    Open Commercial   Closed Commercial   Commercial Revenue   Commercial Fee Per
    Orders   Orders   (In thousands)   File
3rd Quarter 2005   15,100   9,000   $73,200   $8,100
3rd Quarter 2004   14,000   9,100   $58,800   $6,400
     Fidelity National Financial, Inc. (NYSE:FNF), number 261 on the Fortune 500, is a provider of products and outsourced services and solutions to financial institutions and the real estate industry. Through its majority-owned, publicly traded subsidiary, Fidelity National Title Group, Inc. (NYSE:FNT), FNF is the nation’s largest title insurance company, with nearly 31 percent national market share. Through its majority-owned subsidiary Fidelity National Information Services, Inc. (“FIS”), the Company is a leading provider of core financial institution processing, mortgage loan processing and related information products and outsourcing services to financial institutions, mortgage lenders and real estate professionals. FNF is also provider of specialty insurance products, including flood insurance, homeowners insurance and home warranty insurance. More information about the FNF family of companies can be found at www.fnf.com, www.fntg.com and www.fidelityinfoservices.com.
     This press release contains statements related to future events and expectations and, as such, constitutes forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be different from those expressed or implied above. The Company expressly disclaims any duty to update or revise forward-looking statements. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, the effect of governmental regulations, the economy, competition and other risks detailed from time to time in the “Management’s Discussion and Analysis” section of the Company’s Form 10-K and other reports and filings with the Securities and Exchange Commission.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President, Finance and Investor Relations,
904-854-8120, dkmurphy@fnf.com

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY OF EARNINGS
(In thousands, except per share amounts and order information)
                                 
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2005     2004     2005     2004  
    (Unaudited)     (Unaudited)  
Direct title premiums
  $ 641,542     $ 524,829     $ 1,702,397     $ 1,591,221  
Agency title premiums
    763,242       744,193       2,024,188       2,031,018  
 
                       
Total title premiums
    1,404,784       1,269,022       3,726,585       3,622,239  
Escrow and other title-related fees
    323,506       265,192       864,472       779,032  
 
                       
Total title and escrow
    1,728,290       1,534,214       4,591,057       4,401,271  
 
                               
Financial Institution Software and Services
    371,665       306,829       1,157,244       846,397  
Lender Outsourcing Solutions
    80,594       79,057       229,565       241,360  
Information Services
    194,188       144,119       525,359       433,959  
Specialty Insurance
    95,448       64,161       248,276       171,249  
Interest and investment income
    38,706       18,919       96,420       49,470  
Realized gains and losses
    8,699       (2,025 )     34,281       19,126  
Gain on sale of minority interest in FIS
    0       0       318,209       0  
Other
    12,937       14,605       36,645       38,103  
 
                       
 
                               
Total revenue
    2,530,527       2,159,879       7,237,056       6,200,935  
 
                               
Personnel costs
    841,051       700,308       2,396,243       2,058,441  
Other operating expenses
    444,643       403,541       1,288,167       1,161,624  
Agent commissions
    590,876       580,241       1,558,547       1,584,579  
Depreciation and amortization
    95,619       82,674       298,178       232,590  
Claim loss expense
    135,354       82,373       333,320       230,689  
Interest expense
    48,466       11,116       120,001       30,493  
 
                       
 
                               
Total expenses
    2,156,009       1,860,253       5,994,456       5,298,416  
 
                               
Earnings before income taxes
    374,518       299,626       1,242,600       902,519  
Income tax expense
    144,189       104,833       354,577       333,932  
Minority interest
    15,926       991       39,081       2,491  
 
                       
 
                               
Net earnings
  $ 214,403     $ 193,802     $ 848,942     $ 566,096  
 
                       
 
                               
Net earnings per share – basic
  $ 1.24     $ 1.12     $ 4.92     $ 3.33  
 
                       
Net earnings per share – diluted
  $ 1.21     $ 1.09     $ 4.79     $ 3.23  
 
                       
 
                               
Weighted average shares – basic
    172,515       173,369       172,686       170,187  
 
                       
Weighted average shares – diluted
    177,540       177,976       177,254       175,287  
 
                       
 
                               
Direct operations orders opened
    976,600       873,900       2,843,600       2,854,700  
Direct operations orders closed
    694,000       604,700       1,891,100       2,019,700  
Fee Per File
  $ 1,370     $ 1,300     $ 1,341     $ 1,190  

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
                                                                 
Three Months Ended                   Title and     Specialty                             Corporate  
September 30, 2005   Consolidated     Elimination     Escrow     Insurance     FISS     LOS     IS     and Other  
Gross operating revenue
  $ 2,483,122       ($59,796 )   $ 1,728,290     $ 95,448     $ 393,046     $ 103,485     $ 209,712     $ 12,937  
 
                                                               
Interest and investment income
    38,706       0       31,139       2,393       835       505       384       3,450  
Realized gains and losses
    8,699       0       3,594       (6 )     4,028       90       30       963  
     
 
                                                               
Total revenue
    2,530,527       (59,796 )     1,763,023       97,835       397,909       104,080       210,126       17,350  
 
                                                               
Personnel costs
    841,051       0       505,331       10,492       220,836       37,344       49,506       17,542  
Other operating expenses
    444,643       (36,905 )     240,243       39,096       60,588       40,722       86,647       14,252  
Agent commissions
    590,876       (22,891 )     614,317       0       0       (550 )     0       0  
Depreciation
    35,507       0       16,647       187       14,332       1,330       2,883       128  
Amortization
    60,112       0       7,006       776       42,083       2,069       8,060       118  
Claim loss expense
    135,354       0       103,371       31,730       0       233       20       0  
Interest expense
    48,466       0       1,319       145       112       3       14       46,873  
     
 
                                                               
Total expenses
    2,156,009       (59,796 )     1,488,234       82,426       337,951       81,151       147,130       78,913  
 
                                                               
Pretax earnings
    374,518       0       274,789       15,409       59,958       22,929       62,996       (61,563 )
 
                                                               
Pretax margin
    14.8 %           15.6 %     15.7 %     15.1 %     22.0 %     30.0 %      
 
                                                               
Open orders
    976,600             821,700                   154,900              
Closed orders
    694,000             602,900                   91,100              
                                                                 
Three Months Ended                   Title and     Specialty                             Corporate  
September 30, 2004   Consolidated     Elimination     Escrow     Insurance     FISS     LOS     IS     and Other  
Gross operating revenue
  $ 2,142,985       ($51,550 )   $ 1,530,616     $ 64,161     $ 323,990     $ 102,542     $ 158,621     $ 14,605  
 
                                                               
Interest and investment income
    18,919       0       14,508       819       51       70       228       3,243  
Realized gains and losses
    (2,025 )     0       (1,514 )     126       (249 )     76       62       (526 )
     
 
                                                               
Total revenue
    2,159,879       (51,550 )     1,543,610       65,106       323,792       102,688       158,911       17,322  
 
                                                               
Personnel costs
    700,308       0       421,664       7,965       182,996       36,110       40,907       10,666  
Other operating expenses
    403,541       (31,663 )     220,905       35,912       51,915       41,593       73,333       11,546  
Agent commissions
    580,241       (19,887 )     597,501       0       0       2,627       0       0  
Depreciation
    30,997       0       16,704       17       11,996       351       2,151       (222 )
Amortization
    51,677       0       8,450       458       31,422       1,961       9,347       39  
Claim loss expense
    82,373       0       68,622       12,577       0       1,156       18       0  
Interest expense
    11,116       0       159       0       215       6       53       10,683  
     
 
                                                               
Total expenses
    1,860,253       (51,550 )     1,334,005       56,929       278,544       83,804       125,809       32,712  
 
                                                               
Pretax earnings
    299,626       0       209,605       8,177       45,248       18,884       33,102       (15,390 )
 
                                                               
Pretax margin
    13.9 %           13.6 %     12.6 %     14.0 %     18.4 %     20.8 %      
 
                                                               
Open orders
    873,900             756,500                   117,400              
Closed orders
    604,700             542,200                   62,500              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SEGMENT INFORMATION
(In thousands)
                                                                 
Nine Months Ended                   Title and     Specialty                             Corporate  
September 30, 2005   Consolidated     Elimination     Escrow     Insurance     FISS     LOS     IS     and Other  
Gross operating revenue
  $ 6,788,146       ($154,772 )   $ 4,591,057     $ 248,276     $ 1,212,520     $ 290,142     $ 564,278     $ 36,645  
 
                                                               
Interest and investment income
    96,420       0       75,804       5,470       2,216       1,237       1,212       10,481  
Realized gains and losses
    352,490       0       25,953       62       4,447       245       (110 )     321,893  
     
 
                                                               
Total revenue
    7,237,056       (154,772 )     4,692,814       253,808       1,219,183       291,624       565,380       369,019  
 
                                                               
Personnel costs
    2,396,243       0       1,393,576       28,044       671,776       106,022       138,349       58,476  
Other operating expenses
    1,288,167       (94,195 )     686,805       103,470       196,685       126,229       233,750       35,423  
Agent commissions
    1,558,547       (60,577 )     1,619,674       0       0       (550 )     0       0  
Depreciation
    101,527       0       51,437       261       41,628       2,263       5,673       265  
Amortization
    196,651       0       21,463       2,669       131,536       14,621       26,128       234  
Claim loss expense
    333,320       0       254,289       78,778       0       233       20       0  
Interest expense
    120,001       0       1,380       168       3,187       6       233       115,027  
     
 
                                                               
Total expenses
    5,994,456       (154,772 )     4,028,624       213,390       1,044,812       248,824       404,153       209,425  
 
                                                               
Pretax earnings
    1,242,600       0       664,190       40,418       174,371       42,800       161,227       159,594  
 
                                                               
Pretax margin
    17.2 %           14.2 %     15.9 %     14.3 %     14.7 %     28.5 %      
 
                                                               
Open orders
    2,843,600             2,398,900                   444,700              
Closed orders
    1,891,100             1,651,800                   239,300              
                                                                 
Nine Months Ended                   Title and     Specialty                             Corporate  
September 30, 2004   Consolidated     Elimination     Escrow     Insurance     FISS     LOS     IS     and Other  
Gross operating revenue
  $ 6,132,339       ($167,682 )   $ 4,381,852     $ 171,249     $ 892,664     $ 346,237     $ 469,916     $ 38,103  
 
                                                               
Interest and investment income
    49,470       0       40,856       2,120       125       216       431       5,722  
Realized gains and losses
    19,126       0       16,729       251       (557 )     277       2,706       (280 )
     
 
                                                               
Total revenue
    6,200,935       (167,682 )     4,439,437       173,620       892,232       346,730       473,053       43,545  
 
                                                               
Personnel costs
    2,058,441       0       1,247,803       22,281       507,911       114,162       123,864       42,420  
Other operating expenses
    1,161,624       (82,224 )     633,789       90,805       136,122       126,119       221,583       35,430  
Agent commissions
    1,584,579       (85,458 )     1,654,804       0       0       15,233       0       0  
Depreciation
    87,927       0       46,827       68       33,687       1,099       6,185       61  
Amortization
    144,663       0       22,250       2,576       87,200       6,313       26,051       273  
Claim loss expense
    230,689       0       194,500       35,010       0       1,156       18       5  
Interest expense
    30,493       0       827       1       425       24       169       29,047  
     
 
                                                               
Total expenses
    5,298,416       (167,682 )     3,800,800       150,741       765,345       264,106       377,870       107,236  
 
                                                               
Pretax earnings
    902,519       0       638,637       22,879       126,887       82,624       95,183       (63,691 )
 
                                                               
Pretax margin
    14.6 %           14.4 %     13.2 %     14.2 %     23.8 %     20.1 %      
 
                                                               
Open orders
    2,854,700             2,445,700                   409,000              
Closed orders
    2,019,700             1,708,100                   311,600              

 


 

FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)
                 
    September 30,     December 31,  
    2005     2004  
    Unaudited          
Cash and investment portfolio
  $ 4,974,666     $ 3,677,498  
Goodwill
    2,876,782       2,798,249  
Capitalized software
    509,174       440,780  
Other intangible assets
    651,552       672,185  
Total assets
    10,909,779       9,270,535  
Notes payable
    3,114,003       1,370,556  
Reserve for claim losses
    1,061,321       998,170  
Secured trust deposits
    1,004,121       735,295  
Total stockholders’ equity
    3,637,612       4,700,091  
Book value per share
    20.96       27.24  
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