EX-99.1 2 a00461exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

EXHIBIT 99.1

     
(FIDELITY LOGO)
  PRESS RELEASE

Fidelity National Financial, Inc. Reports Second Quarter 2004 EPS of $1.26

Jacksonville, Fla. — (July 22, 2004) — 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 period ended June 30, 2004.

     
2nd Quarter 2004   2nd Quarter 2003
Net Earnings
   Net Earnings
$222.1 million   $248.3 million
$1.26 per diluted share   $1.62 per diluted share

  •   The segment reporting of the company has been changed to be consistent with the operating structure of the company

  •   Fidelity National Information Services (FIS), a wholly-owned subsidiary of FNF, has filed a registration statement to offer shares in an initial public offering

  •   After the completion of the initial public offering, FIS will consist of Financial Institution Software and Services (FISS), Lender Outsourcing Solutions (LOS) and Information Services (IS); it will also have a Corporate and Other segment

  •   After the completion of the FIS IPO and the spin-off of FNF’s remaining ownership in FIS, FNF will consist of the Title and Escrow and Specialty Insurance segments; it will also have a Corporate and Other segment

  •   Operating revenue for the second quarter of 2004 was $2.2 billion, compared with $2.0 billion for the second quarter of 2003

  •   Title and escrow revenue was $1.5 billion for the second quarter of 2004 versus $1.4 billion in the second quarter of 2003

 

 

  •   Revenue from FISS, which includes the financial institution and mortgage processing businesses, was $300 million for the second quarter of 2004 versus $220 million for the second quarter of 2003

  •   FISS gross organic revenue growth, including inter segment revenue, was 10.9 percent for the second quarter of 2004 over the second quarter of 2003

  •   LOS revenue, which includes the loan facilitation services of LSI, outsourced default management services and the loan fulfillment and processing services for U.S. homebuilders, was $129 million for the second quarter of 2004 versus $155 million for the second quarter of 2003; LSI contributed $59 million and Default Management $58 million in revenue for the second quarter of 2004 versus $98 million for LSI and $46 million for Default Management in the second quarter of 2003

  •   IS revenue, which includes property data such as real estate tax services, flood certifications and credit reporting and real estate-related services, such as valuation and appraisal services, 1031 exchange intermediary services and multiple listing services, was $145 million for the second quarter of 2004 compared with $147 million for the second quarter of 2003

  •   Specialty Insurance contributed $58 million for the second quarter of 2004 versus $30 million in the second quarter of 2003

     The following tables provide segment financial information for the three months ended June 30, 2004 and June 30, 2003:

Three months ended June 30, 2004

                                                         
    Title and                           Specialty   Corporate    
$ amounts in thousands
   Escrow
   FISS
   LOS
   IS
   Insurance
   and Other
   Total
Gross Operating Revenue
   $ 1,568,737     $ 319,148     $ 129,882     $ 156,859     $ 58,418     $ 13,004     $ 2,246,048  
Inter Segment Eliminations
     ($34,676 )     ($19,525 )     ($615 )     ($11,696 )   $ 0     $ 0       ($66,512 )
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Net Operating Revenue
   $ 1,534,061     $ 299,623     $ 129,267     $ 145,163     $ 58,418     $ 13,004     $ 2,179,536  
Interest /Investment Income and Realized Gains/ (Losses)
   $ 20,521       ($15 )   $ 170     $ 2,490     $ 707     $ 829     $ 24,702  
Pre-Tax Income (Loss)
   $ 259,803     $ 44,556     $ 35,095     $ 32,690     $ 7,827       ($19,933 )   $ 360,038  
Gross Pre-Tax Margin
     16.4 %     14.0 %     27.0 %     20.5 %     13.2 %     —       15.9 %
Net Pre-Tax Margin
     16.7 %     14.9 %     27.1 %     22.1 %     13.2 %     —       16.3 %

 

 

Three months ended June 30, 2003

                                                         
    Title and                           Specialty   Corporate    
$ amounts in thousands
   Escrow
   FISS
   LOS
   IS
   Insurance
   and Other
   Total
Gross Operating Revenue
   $ 1,457,066     $ 219,756     $ 154,456     $ 160,913     $ 30,456     $ 15,482     $ 2,038,129  
Inter Segment Eliminations
     ($65,652 )     ($242 )   $ 107       ($13,932 )   $ 0     $ 0       ($79,719 )
Net Operating Revenue
   $ 1,391,414     $ 219,514     $ 154,563     $ 146,981     $ 30,456     $ 15,482     $ 1,958,410  
Interest/Investment Income and Realized Gains/ (Losses)
   $ 43,994       ($113 )   $ 468     $ 122     $ 536     $ 2,884     $ 47,891  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Pre-Tax Income (Loss)
   $ 311,885     $ 32,364     $ 47,958     $ 28,259     $ 5,555       ($13,992 )   $ 412,029  
Pre-Tax Margin (Gross)
     20.8 %     14.7 %     31.0 %     17.6 %     17.9 %     —       19.8 %
Pre-Tax Margin (Net)
     21.7 %     14.8 %     30.9 %     19.2 %     17.9 %     —       20.5 %

  *   The inter segment eliminations for the FISS, LOS and IS segments represent revenue from the Title and Escrow segment

     “This was another solid quarter for FNF, with $222 million in net earnings and cash flow from operations of $402 million,” said Chairman and Chief Executive Officer William P. Foley, II. “The pre-tax margins in the title business increased, as we expected, from the first quarter of this year, our financial institution software and services business reached more than $319 million in revenue for the quarter, our default management business continued to capitalize on the revenue synergy with our mortgage servicing platform and we also continued to increase the pre-tax margins in our information businesses, despite a slowing mortgage market.”

     The following table depicts monthly direct orders opened and closed for the second quarter of both 2004 and 2003:

                         
Month
   Direct Orders Opened
   Direct Orders Closed
   Closing %
April 2004
     348,500       278,900       80 %
May 2004
     284,300       251,000       88 %
June 2004
     292,400       242,000       83 %

 

 

                         
Month
   Direct Orders Opened
   Direct Orders Closed
   Closing %
Second Quarter 2004
     925,200       771,900       83 %
 
    
 		      
 		      
 		  
April 2003
     458,000       344,700       75 %
May 2003
     561,900       331,500       59 %
June 2003
     653,700       360,400       55 %
 
    
 		      
 		      
 		  
Second Quarter 2003
     1,673,600       1,036,600       62 %
 
    
 		      
 		      
 		  

     “Order volumes remain strong by historical standards, but they have certainly slowed from their peak in the refinance driven market of 2003,” said President Randy Quirk. “In our title business, we are now focused on cutting costs and maximizing profitability in a purchase driven market.”

     Fidelity National Financial, Inc., number 262 on the Fortune 500, is a provider of products and outsourced services and solutions to financial institutions and the real estate industry. The Company had total revenue of more than $7.7 billion and earned more than $860 million in 2003, with cash flow from operations of nearly $1.3 billion for that same period. FNF is a leading provider of information-based technology solutions and processing services to financial institutions and the mortgage and financial services industries through its subsidiary Fidelity Information Services, Inc. Fidelity Information Services’ software processes nearly 50 percent of all U. S. residential mortgages, it has processing and technology relationships with 45 of the top 50 U. S. banks and has clients in more than 50 countries who rely on its processing and outsourcing products and services. Additionally, FNF is the nation’s largest title insurance company and also provides other real estate-related services such as escrow, flood and tax certifications with life of loan monitoring, merged credit reporting, property valuations and appraisals, default management, relocation services, flood, homeowners and home warranty

 

 

insurance, exchange intermediary services, mortgage loan aggregation and fulfillment, multiple listing services software, mortgage loan origination software, collateral scoring analytics and real property data. More information about the FNF family of companies can be found at www.fnf.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   Six months ended
    June 30,
   June 30,
    2004
   2003
   2004
   2003
    (Unaudited)   (Unaudited)
Operating revenue
   $ 2,179,536     $ 1,958,410     $ 3,989,354     $ 3,371,596  
Interest and investment income
     16,024       14,637       30,551       31,694  
Realized gains and losses
     8,678       33,254       21,151       39,887  
 
    
 		      
 		      
 		      
 		  
Total revenue
     2,204,238       2,006,301       4,041,056       3,443,177  
Personnel costs
     721,537       667,486       1,358,133       1,114,642  
Other operating expenses
     514,281       444,254       930,432       759,863  
Agent commissions
     529,974       406,666       1,004,338       793,879  
Claim loss expense
     66,963       64,995       125,883       113,379  
Interest expense
     11,445       10,871       19,377       18,931  
 
    
 		      
 		      
 		      
 		  
Total expenses
     1,844,200       1,594,272       3,438,163       2,800,694  
Earnings before income taxes
     360,038       412,029       602,893       642,483  
Income tax expense
     136,814       156,572       229,099       241,781  
Minority interest
     1,171       7,168       1,500       12,440  
 
    
 		      
 		      
 		      
 		  
Net earnings
   $ 222,053     $ 248,289     $ 372,294     $ 388,262  
 
    
 		      
 		      
 		      
 		  
Net earnings per share – basic
   $ 1.29     $ 1.67     $ 2.19     $ 2.76  
 
    
 		      
 		      
 		      
 		  
Net earnings per share – diluted
   $ 1.26     $ 1.62     $ 2.12     $ 2.68  
 
    
 		      
 		      
 		      
 		  
Weighted average shares – basic
     171,551       148,339       169,981       140,429  
 
    
 		      
 		      
 		      
 		  
Weighted average shares – diluted
     176,754       153,212       175,331       144,966  
 
    
 		      
 		      
 		      
 		  
Direct operations orders opened
     925,200       1,673,600       1,980,800       2,929,900  
Direct operations orders closed
     771,900       1,036,600       1,415,000       1,783,500  
Fee Per File
   $ 1,177     $ 959     $ 1,143     $ 961  

 

 

SUMMARY BALANCE SHEET INFORMATION
(In thousands, except per share amounts)

                 
    June 30,   December 31,
    2004
   2003
    (Unaudited)        
Cash and investment portfolio
   $ 3,658,374     $ 3,149,472  
Goodwill
     2,432,650       1,926,478  
Capitalized software
     345,473       290,108  
Other intangible assets
     553,884       529,716  
Total assets
     8,574,985       7,263,175  
Notes payable
     848,384       659,186  
Reserve for claim losses
     984,882       940,217  
Secured trust deposits
     1,003,964       671,882  
Total equity
     4,447,257       3,873,359  
Book value per share
     25.61       23.50  

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