-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JgFH2VxMrnl2Dn0xM2PP6DS8bZUpz134peh6AYWQbZlgPz0/s9wlgkQqOUMPwIzX UT+inmrpvIeyVxZIennAJg== 0000892569-99-003308.txt : 19991222 0000892569-99-003308.hdr.sgml : 19991222 ACCESSION NUMBER: 0000892569-99-003308 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY NATIONAL FINANCIAL INC /DE/ CENTRAL INDEX KEY: 0000809398 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 860498599 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-09396 FILM NUMBER: 99778322 BUSINESS ADDRESS: STREET 1: 17911 VON KARMAN AVE STREET 2: STE 300 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9496225000 MAIL ADDRESS: STREET 1: MLISS JONES KANE STREET 2: 17911 VON KARMAN AVE STE 300 CITY: IRVINE STATE: CA ZIP: 92614 10-Q/A 1 AMENDMENT #1 TO 9/30/99 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A No. 1 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1999 Commission File Number 1-9396 FIDELITY NATIONAL FINANCIAL, INC. (Exact name of registrant as specified in its charter) Delaware 86-0498599 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 17911 Von Karman Avenue, Suite 300, Irvine, California 92614 (Address of principal executive offices) (Zip Code) (949) 622-4333 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ( X ) NO ( ) Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. $.0001 par value Common Stock 28,493,667 shares as of November 10, 1999 2 INTRODUCTORY STATEMENT We are filing this Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999 to include segment disclosures in response to comments received from the Securities and Exchange Commission regarding our Registration Statement on Form S-3 (Registration No. 333-65837). Please refer to Note G of Notes to Condensed Consolidated Financial Statements filed herewith. 3 FORM 10-Q QUARTERLY REPORT Quarter Ended September 30, 1999 TABLE OF CONTENTS -----------------
Part I: FINANCIAL INFORMATION Page Number ----------- Item 1. Condensed Consolidated Financial Statements A. Condensed Consolidated Balance Sheets as of September 30, 1999 3 and December 31, 1998 B. Condensed Consolidated Statements of Earnings for the three- month and nine-month periods ended September 30, 1999 and 1998 4 C. Condensed Consolidated Statements of Comprehensive Earnings for the three-month and nine-month periods ended September 30, 1999 and 1998 5 D. Condensed Consolidated Statements of Cash Flows for the nine-month 6 periods ended September 30, 1999 and 1998 E. Notes to Condensed Consolidated Financial Statements 8
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 thereunto duly authorized. FIDELITY NATIONAL FINANCIAL, INC. (Registrant) By: /s/ Alan L. Stinson ------------------------------ Alan L. Stinson Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) Date: December 21, 1999 2 4 Part I: FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
September 30, December 31, 1999 1998 ------------- ------------ (Unaudited) ASSETS Investments: Fixed maturities available for sale, at fair value ................ $ 339,730 $330,068 Equity securities, at fair value .................................. 33,259 50,191 Other long-term investments, at cost, which approximates fair value 42,353 40,278 Short-term investments, at cost, which approximates fair value .... 71,496 94,122 Investments in real estate and partnerships, net .................. 3,815 4,673 ----------- -------- Total investments ............................................. 490,653 519,332 Cash and cash equivalents .............................................. 46,209 42,492 Leases and residual interests in securitizations ....................... 128,394 93,507 Trade receivables, net ................................................. 69,186 75,940 Notes receivable, net .................................................. 18,060 10,761 Prepaid expenses and other assets ...................................... 112,270 111,471 Title plants ........................................................... 59,666 58,932 Property and equipment, net ............................................ 51,685 46,070 Deferred tax asset ..................................................... 23,927 10,965 ----------- -------- $ 1,000,050 $969,470 =========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable and accrued liabilities .......................... $ 121,942 $123,357 Notes payable ..................................................... 190,295 214,624 Reserve for claim losses .......................................... 239,254 224,534 Income taxes payable .............................................. 1,556 8,683 ----------- -------- 553,047 571,198 Minority interests ................................................ 803 1,532 Stockholders' equity: Preferred stock, $.0001 par value; authorized, 3,000,000 shares; issued and outstanding, none .................................... -- -- Common stock, $.0001 par value; authorized, 50,000,000 shares in 1999 and 1998; issued, 39,213,197 as of September 30, 1999 and 35,540,036 as of December 31, 1998 .............................. 4 3 Additional paid-in capital ........................................ 246,945 173,888 Retained earnings ................................................. 321,759 265,567 ----------- -------- 568,708 439,458 Accumulated other comprehensive earnings (loss) ................... (5,860) 11,657 Less treasury stock, 10,676,602 shares as of September 30, 1999 and 6,645,487 shares as of December 31, 1998, at cost ............... 116,648 54,375 ----------- -------- 446,200 396,740 ----------- -------- $ 1,000,050 $969,470 =========== ========
See Notes to Condensed Consolidated Financial Statements. 3 5 FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data)
Three months ended Nine months ended September 30, September 30, ---------------------- ---------------------- 1999 1998 1999 1998 -------- ---------- ---------- -------- (Unaudited) (Unaudited) REVENUE: Title insurance premiums ................... $236,895 $ 238,207 $ 726,869 $642,726 Escrow fees ................................ 29,865 33,915 96,873 92,850 Other fees and revenue ..................... 69,116 50,866 200,441 149,089 Interest and investment income, including realized gains (losses) .................. 5,961 6,428 19,747 28,405 -------- ---------- ---------- -------- 341,837 329,416 1,043,930 913,070 -------- ---------- ---------- -------- EXPENSES: Personnel costs ............................ 96,831 102,464 311,137 284,031 Other operating expenses ................... 85,930 62,373 248,359 177,634 Agent commissions .......................... 109,638 101,003 325,235 268,148 Provision for claim losses ................. 14,864 14,626 45,194 41,383 Interest expense ........................... 4,358 2,740 10,047 9,414 -------- ---------- ---------- -------- 311,621 283,206 939,972 780,610 -------- ---------- ---------- -------- Earnings before income taxes .................. 30,216 46,210 103,958 132,460 Income tax expense ............................ 11,609 19,409 41,843 55,540 -------- ---------- ---------- -------- Net earnings ........................... $ 18,607 $ 26,801 $ 62,115 $ 76,920 ======== ========== ========== ======== Basic net earnings ......................... $ 18,607 $ 26,801 $ 62,115 $ 76,920 ======== ========== ========== ======== Basic earnings per share ................... $ .62 $ .94 $ 2.05 $ 2.78 ======== ========== ========== ======== Weighted average shares outstanding, basic basis .................................... 29,861 28,382 30,353 27,653 ======== ========== ========== ======== Diluted net earnings ....................... $ 18,607 $ 27,461 $ 62,378 $ 78,803 ======== ========== ========== ======== Diluted earnings per share ................. $ .60 $ .81 $ 1.95 $ 2.36 ======== ========== ========== ======== Weighted average shares outstanding, diluted basis .................................... 31,169 33,727 32,037 33,347 ======== ========== ========== ======== Cash dividends per share ................... $ .07 $ .06 $ .21 $ .19 ======== ========== ========== ========
See Notes to Condensed Consolidated Financial Statements. 4 6 FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (In thousands)
Three months ended Nine months ended September 30, September 30, --------------------- --------------------- 1999 1998 1999 1998 -------- -------- -------- -------- (Unaudited) (Unaudited) Net earnings ............................. $ 18,607 $ 26,801 $ 62,115 $ 76,920 Other comprehensive earnings (loss): Unrealized losses on investments, net (1) ............................. (7,379) (11,680) (17,378) (5,391) Reclassification adjustments for (gains) losses included in net earnings (2) .. 692 (1,139) (139) (7,930) -------- -------- -------- -------- Other comprehensive loss ................. (6,687) (12,819) (17,517) (13,321) -------- -------- -------- -------- Comprehensive earnings ................... $ 11,920 $ 13,982 $ 44,598 $ 63,599 ======== ======== ======== ========
(1) Net of income tax expense (benefit) of ($4,600) and ($8,458), and ($11,682) and ($3,888) for the three-month and nine-month periods ended September 30, 1999 and 1998, respectively. (2) Net of income tax expense (benefit) of ($431) and $825, and $93 and $5,787 for the three-month and nine-month periods ended September 30, 1999 and 1998, respectively. See Notes to Condensed Consolidated Financial Statements. 5 7 FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Nine months ended September 30, ----------------------- 1999 1998 --------- --------- (Unaudited) Cash flows from operating activities: Net earnings ............................................................... $ 62,115 $ 76,920 Reconciliation of net earnings to net cash provided by operating activities: Depreciation and amortization .......................................... 21,425 15,268 Net increase in reserve for claim losses ............................... 19,031 13,937 Net increase in provision for possible losses other than claims ........ 89 288 Gain on sales of assets ................................................ (232) (13,717) Equity in gains of unconsolidated partnerships ......................... (729) (86) Amortization of LYONs original issue discount .......................... 552 3,337 Change in assets and liabilities, net of effects from acquisition of subsidiaries: Net increase in leases and lease securitization residual interest ...... (34,887) (27,131) Net (increase) decrease in trade receivables ........................... 6,751 (12,812) Net increase in prepaid expenses and other assets ...................... (9,246) (15,518) Net increase (decrease) in accounts payable and accrued liabilities .... (1,788) 21,912 Net increase (decrease) in income taxes ................................ (9,631) 10,621 --------- --------- Net cash provided by operating activities ....................................... 53,450 73,019 --------- --------- Cash flows from investing activities: Proceeds from sales of property and equipment .............................. -- 6,968 Proceeds from sale of title plant .......................................... 1,100 405 Proceeds from sale of real estate .......................................... 946 -- Proceeds from sales and maturities of investments .......................... 339,396 162,949 Collections of notes receivable ............................................ 2,116 3,598 Additions to title plants .................................................. (1,799) (678) Additions to property and equipment ........................................ (19,233) (16,483) Additions to investments ................................................... (345,710) (223,641) Additions to notes receivable .............................................. (9,670) (6,899) Additions to real estate and joint ventures ................................ (285) -- Sale of a subsidiary, net of cash .......................................... 2,468 -- Acquisitions of businesses, net of cash acquired ........................... -- (198) --------- --------- Net cash used in investing activities ........................................... (30,671) (73,979) --------- ---------
See Notes to Condensed Consolidated Financial Statements. 6 8 (Continued) FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Nine months ended September 30, --------------------- 1999 1998 -------- -------- (Unaudited) Cash flows from financing activities: Borrowings .................................... $ 66,262 $ 17,607 Debt service payments ......................... (19,284) (20,325) Dividends paid ................................ (6,539) (4,494) Purchase of treasury stock .................... (62,273) -- Stock options exercised ....................... 2,772 6,898 -------- -------- Net cash used in financing activities .............. (19,062) (314) -------- -------- Net increase (decrease) in cash and cash equivalents 3,717 (1,274) Cash and cash equivalents at beginning of period ... 42,492 54,975 -------- -------- Cash and cash equivalents at end of period ......... $ 46,209 $ 53,701 ======== ======== Supplemental cash flow information: Income taxes paid ............................. $ 48,920 $ 43,033 ======== ======== Interest paid ................................. $ 14,606 $ 6,142 ======== ======== Noncash investing and financing activities: Dividends declared and unpaid ................. $ 1,858 $ 1,820 ======== ========
See Notes to Condensed Consolidated Financial Statements. 7 9 Notes to Condensed Consolidated Financial Statements Note A - Basis of Financial Statements - -------------------------------------- The financial information included in this report includes the accounts of Fidelity National Financial, Inc. and its subsidiaries (collectively, the "Company") and has been prepared in accordance with generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. The Condensed Consolidated Financial Statements for both the 1999 and 1998 periods reflect the impact of the 1998 acquisitions of Granite Financial, Inc. and Alamo Title Holding Company, which have been accounted for as poolings-of-interests. All adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. This report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1998. Certain reclassifications have been made in the 1998 Condensed Consolidated Financial Statements to conform to classifications used in 1999. Note B - Redemption of Liquid Yield Option Notes Outstanding - ------------------------------------------------------------ On January 13, 1999, the Company announced that it was going to redeem, pursuant to the terms of the indenture, its outstanding Liquid Yield Option Notes ("LYONs") due 2009 for $581.25 per $1,000 maturity value on February 15, 1999. Additionally, the LYONs holders had the right to convert the outstanding LYONs to 28.077 shares of Company common stock per $1,000 maturity value of LYONS at any time. Through February 15, 1999, $123,681,000 maturity value of LYONs had converted to 3,473,000 shares of common stock, resulting in an addition of approximately $70 million to stockholders' equity while reducing outstanding notes payable by a like amount. The remaining $432,000 of maturity value was redeemed for cash of approximately $251,000. Note C - Dividends - ------------------ On September 30, 1999, the Company's Board of Directors declared a cash dividend of $.07 per share, payable on October 27, 1999, to stockholders of record on October 13, 1999. Note D - Stock Purchase Plan and Employee Stock Purchase Loan Plan - ------------------------------------------------------------------ On March 17, 1999, the Company's Board of Directors approved an increase to the number of shares of outstanding Company common stock authorized for purchase under the Company's previously announced purchase program. The additional authorization permitted the Company to purchase up to 4.0 million shares. On September 13, 1999, the Company announced that its Board of Directors had approved a second increase of 2.0 million shares, bringing the total number of shares of outstanding Company common stock authorized for purchase to 6.0 million. Through November 10, 1999, the Company has purchased 4.1 million shares at an average purchase price of $15.43 per share totaling $63.0 million. Purchases may be made from time to time by the Company in the open market or in block purchases or in privately negotiated transactions depending on market conditions and other factors. Also on March 17, 1999, the Company's Board of Directors approved the adoption of the Fidelity National Financial, Inc. Employee Stock Purchase Loan Plan ("Loan Plan") and the Non-Employee Director Stock Purchase Loan Program ("Loan Program"). The purpose of the Loan Plan and Loan Program is to provide key employees and directors with further incentive to maximize stockholder value. The Company offered an aggregate of $8,650,000 in loans. Loan Plan and Loan Program funds must be used to make private or open market purchases of Company common stock through a broker-dealer designated by the Company. All loans are full recourse and unsecured, and will have a five-year term. Interest will accrue on the loans at a rate of 5% per annum due at maturity. Loans may be prepaid any time without penalty. Through November 10, 1999, loans had been made in the amount of $7.25 million to purchase 483,825 shares of Company common stock at an average purchase price of $15.41 per share. Note E - Sale of National Title Insurance of New York Inc. - ---------------------------------------------------------- On March 18, 1998, the Company announced that it had entered into an agreement to sell National Title Insurance of New York Inc. ("National") to American Title Company, a wholly-owned subsidiary of American National Financial, Inc. ("ANFI"), for $3.25 million, subject to regulatory approval and certain other conditions. The purchase price was structured at a premium to book value. The Company currently holds a 29.4% interest in ANFI. National was acquired in April 1996, 8 10 as part of the Nations Title Inc. acquisition, and has not been actively underwriting policies since that time. This transaction received regulatory approval on May 27, 1999 and closed on June 10, 1999. The Company recognized a gain of approximately $1.2 million prior to applicable income taxes, in connection with the sale of National. This gain has been reflected in the Condensed Consolidated Statements of Earnings for the nine-month period ended September 30, 1999. Note F - Acquisition of Chicago Title Corporation - ------------------------------------------------- On August 1, 1999, the Company announced that it had signed an Agreement and Plan of Merger ("Agreement") to purchase Chicago Title Corporation ("Chicago Title", NYSE: CTZ), headquartered in Chicago, Illinois, for approximately $1.13 billion, or $52.00 per share of Chicago Title common stock, using approximately equal amounts of cash and Company common stock, subject to certain adjustments based on the average price of Company common stock, as defined in the Agreement. The allocation between cash and stock will be adjusted so Chicago Title stockholders will receive more than 50% of the outstanding stock of the new company. The price is payable in shares of Company common stock or, upon election by Chicago Title stockholders, in cash, subject to proration as may be necessary to achieve the allocation between cash and stock described above. The Agreement has been approved by the boards of both companies, and was amended on October 13, 1999. The transaction is subject to approval by the stockholders of Chicago Title and the Company, requisite regulatory authorities and other customary conditions and is expected to be completed in the first quarter of 2000. Note G - Segment Information - ---------------------------- During the first quarter of 1999, the Company restructured its business segments to more accurately reflect a change in the Company's current operating structure. All previously reported segment information has been restated to be consistent with the current presentation. The Company's Condensed Consolidated Financial Statements as of September 30, 1999 and 1998 and for the three-month and nine-month periods ended September 30, 1999 and 1998, respectively, include five reportable segments. Reportable segments are determined based on the organizational structure and types of products and services from which each reportable segment derives its revenue. As of and for the three-month period ended September 30, 1999 (dollars in thousands):
REAL ESTATE TITLE INFORMATION MICRO INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL --------- ----------- -------- --------- --------- ---------- Total revenue $286,536 $ 17,949 $ 28,114 $ 8,321 $ 917 $ 341,837 ======== ======== ======== ========= ======== ========== Operating earnings (loss) $ 38,404 $ (2,977) $ 1,036 $ 1,441 $ (582) $ 37,322 Interest and investment income, including realized gains (losses) 4,882 117 1 -- 961 5,961 Depreciation and amortization 6,679 167 1,246 564 53 8,709 Interest expense 110 2 557 1,185 2,504 4,358 -------- -------- -------- --------- -------- ---------- Earnings (loss) before income taxes 36,497 (3,029) (766) (308) (2,178) 30,216 Income tax expense (benefit) 12,171 (1,164) -- (54) 656 11,609 -------- -------- -------- --------- -------- ---------- Net earnings (loss) $ 24,326 $ (1,865) $ (766) $ (254) $ (2,834) $ 18,607 ======== ======== ======== ========= ======== ========== Assets $741,490 $ 60,205 $ 35,287 $ 134,710 $ 28,358 $1,000,050 ======== ======== ======== ========= ======== ==========
As of and for the three-month period ended September 30, 1998 (dollars in thousands):
REAL ESTATE TITLE INFORMATION MICRO INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL --------- ----------- -------- -------- --------- -------- Total revenue $294,023 $22,110 $ 6,761 $ 6,324 $ 198 $329,416 ======== ======= ======== ======== ======== ======== Operating earnings (loss) $ 50,713 $ 1,969 $ (502) $ (2,420) $ (1,546) $ 48,214 Interest and investment income, including realized gains (losses) 6,088 140 2 -- 198 6,428 Depreciation and amortization 4,733 520 231 440 (232) 5,692 Interest expense 646 2 268 304 1,520 2,740 -------- ------- -------- -------- -------- -------- Earnings (loss) before income taxes 51,422 1,587 (999) (3,164) (2,636) 46,210 Income tax expense (benefit) 19,880 671 (82) (1,352) 292 19,409 -------- ------- -------- -------- -------- -------- Net earnings (loss) $ 31,542 $ 916 $ (917) $ (1,812) $ (2,928) $ 26,801 ======== ======= ======== ======== ======== ======== Assets $645,607 $50,499 $ 18,357 $ 99,143 $ 46,411 $860,017 ======== ======= ======== ======== ======== ========
9 11 As of and for the nine-month period ended September 30, 1999 (dollars in thousands):
REAL ESTATE TITLE INFORMATION MICRO INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL --------- ----------- -------- --------- --------- ---------- Total revenue $884,196 $ 64,212 $ 72,333 $ 21,448 $ 1,741 $1,043,930 ======== ======== ======== ========= ======== ========== Operating earnings (loss) $120,186 $ (462) $ 945 $ (3,422) $ (1,564) $ 115,683 Interest and investment income, including realized gains (losses) 17,284 284 6 5 2,168 19,747 Depreciation and amortization 15,503 882 3,218 1,665 157 21,425 Interest expense 477 20 1,236 4,019 4,295 10,047 -------- -------- -------- --------- -------- ---------- Earnings (loss) before income taxes 121,490 (1,080) (3,503) (9,101) (3,848) 103,958 Income tax expense (benefit) 44,826 (310) 29 (3,110) 408 41,843 -------- -------- -------- --------- -------- ---------- Net earnings (loss) $ 76,664 $ (770) $ (3,532) $ (5,991) $ (4,256) $ 62,115 ======== ======== ======== ========= ======== ========== Assets $741,490 $ 60,205 $ 35,287 $ 134,710 $ 28,358 $1,000,050 ======== ======== ======== ========= ======== ==========
As of and for the nine-month period ended September 30, 1998 (dollars in thousands):
REAL ESTATE TITLE INFORMATION MICRO INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL --------- ----------- -------- -------- --------- -------- Total revenue $817,473 $62,927 $ 11,013 $ 20,259 $ 1,398 $913,070 ======== ======= ======== ======== ======== ======== Operating earnings (loss) $125,171 $ 7,623 $ (281) $ 3,134 $ (6,910) $128,737 Interest and investment income, including realized gains (losses) 26,784 220 3 -- 1,398 28,405 Depreciation and amortization 11,548 1,529 612 1,422 157 15,268 Interest expense 1,884 13 310 2,898 4,309 9,414 -------- ------- -------- -------- -------- -------- Earnings (loss) before income taxes 138,523 6,301 (1,200) (1,186) (9,978) 132,460 Income tax expense (benefit) 54,576 2,367 (59) (520) (824) 55,540 -------- ------- -------- -------- -------- -------- Net earnings (loss) $ 83,947 $ 3,934 $ (1,141) $ (666) $ (9,154) $ 76,920 ======== ======= ======== ======== ======== ======== Assets $645,607 $50,499 $ 18,357 $ 99,143 $ 46,411 $860,017 ======== ======= ======== ======== ======== ========
The activities of the reportable segments include the following: Title Insurance - --------------- This segment, consisting of title insurance underwriters and wholly owned title insurance agencies; provides core title insurance and escrow services, including document preparation, collection and trust activities and certain real estate information services. This segment coordinates its activities with those of the real estate information services segment described below in order to offer the full range of real estate products and services required to execute and close a real estate transaction. Real Estate Information Services - -------------------------------- This segment, consisting of various real estate information subsidiaries, offers the complementary specialized products and services required to execute and close a real estate transaction that are not offered by the title insurance segment described above. These services include document recording services on a nationwide basis, tax qualifying property exchange services, property appraisal services, tax monitoring services, credit reporting, real estate referral services, flood monitoring, and foreclosure publishing and posting. These services require specialized expertise and have been centralized for efficiency and management purposes. 10 12 Micro General Corporation - ------------------------- Micro General Corporation is a full service enterprise solutions provider offering a complete range of information technology and telecommunication services including systems integration, application development, real estate industry applications and eCommerce. Micro General Corporation was not consolidated in the Company's Condensed Consolidated Financial Statements until the second quarter of 1998. Leasing - ------- The leasing segment originates, funds, purchases, sells, securitizes and services equipment leases for a broad range of businesses. Corporate - --------- The corporate segment includes the operations of the parent holding company. These operations consist of certain investment activities and the issuance and repayment of corporate debt obligations. Expenditures for long-lived assets relate primarily to the title insurance segment. The accounting policies of the segments are the same as those described in Note A, Basis of Financial Statements. Intersegment sales or transfers which occurred in the ordinary course of consolidated operations have been eliminated from the segment information provided. 11 -----END PRIVACY-ENHANCED MESSAGE-----