Form 8-K Fidelity National Financ For: Oct 29
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section�13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
October�31, 2014
Fidelity National Financial, Inc.
(Exact name of Registrant as Specified in its Charter)
001-32630
(Commission File Number)
Delaware (State or Other Jurisdiction of� Incorporation or Organization) | � | 16-1725106 (IRS Employer Identification Number) |
601 Riverside Avenue
Jacksonville, Florida 32204
(Addresses of Principal Executive Offices)
(904)�854-8100
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | � | Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425) |
o | � | Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | � | Pre-commencement communications pursuant to Rule�14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | � | Pre-commencement communications pursuant to Rule�13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
�
Item�2.02. | � | Results of Operations and Financial Condition |
On October�29, 2014, Fidelity National Financial, Inc. issued an earnings release announcing its financial results for the Third Quarter of 2014. The information in this Current Report is being furnished and shall not be deemed filed for the purposes of Section�18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
A copy of the FNF Core and FNFV earnings release is attached as Exhibit�99.1 and Exhibit 99.2, respectively.
Item�9.01. | � | Financial Statements and Exhibits |
(c)�Exhibits
Exhibit | � | Description | |||
99.1 | Press release announcing FNF Core Third Quarter 2014 Earnings. | ||||
99.2 | Press release announcing FNFV Third Quarter 2014 Earnings. | ||||
�
SIGNATURE
�����Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
� | � | � | � | � | |
� | Fidelity National Financial, Inc. � | � | |||
Date: | October 29, 2014 | By:�� | /s/ Anthony J. Park | � | |
� | � | Name:�� | Anthony J. Park� | � | |
� | � | Title:�� | Chief Financial Officer� | � | |
�
�
EXHIBIT INDEX
� | � | � | � | � | |
Exhibit | � | Description | |||
99.1 | Press release announcing FNF Core Third Quarter 2014 Earnings. | ||||
99.2 | Press release announcing FNFV Third Quarter 2014 Earnings. | ||||
FNF Core Reports Third Quarter 2014 Adjusted EPS of $0.51; Adjusted Pre-Tax Title Margin of 14.7%, a 50 Basis Point Sequential Improvement From the Second Quarter of 2014; Black Knight Adjusted EBITDA Margin of 42.3% �
Jacksonville, Fla. - (October�29, 2014) - Fidelity National Financial, Inc. today reported the operating results of its core segment (NYSE: FNF), a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries, for the three and nine-month periods ended September�30, 2014.
" | Total revenue of approximately $1.7 billion in the third quarter versus $1.6 billion in the third quarter of 2013 |
" | Adjusted third quarter net earnings of $145 million versus adjusted net earnings of $115 million for the third quarter of 2013 |
" | Adjusted third quarter core diluted EPS of $0.51 versus adjusted core diluted EPS of $0.50 in the third quarter of 2013 |
" | Third quarter core free cash flow provided of $292 million versus $94 million provided in the third quarter of 2013 |
Title
" | Approximately $1.5 billion in total revenue, adjusted pre-tax earnings of $223 million and adjusted pre-tax title margin of 14.7% for the third quarter versus approximately $1.5 billion in total revenue, adjusted pre-tax earnings of $220 million and an adjusted pre-tax title margin of 14.3% in the third quarter of 2013 |
" | Adjusted pre-tax title margin of 14.7%, a 50 basis point improvement over the revised second quarter adjusted pre-tax title margin of 14.2%; second quarter 2014 was revised due to an immaterial payroll accrual correction |
" | ServiceLink generated $225 million in revenue, adjusted EBITDA of $34 million, an adjusted EBITDA margin of 15%, adjusted pre-tax earnings of $29 million and an adjusted pre-tax margin of 13% |
" | Open orders per day of 7,516 for the third quarter versus 7,406 open orders per day for the third quarter of 2013 |
" | Closed orders per day of 5,438 for the third quarter versus 6,406 closed orders per day for the third quarter of 2013 |
" | Third quarter purchase orders opened and closed increased by 7% and 2%, respectively, versus the third quarter of 2013; purchase orders opened and closed declined by 1% and 5%, respectively, excluding ServiceLink default related purchase orders |
" | Third quarter national commercial title revenue of $136 million, a 13% increase from the third quarter of 2013, driven by a 12% improvement in the commercial fee per file and a 2% increase in closed orders; open commercial orders increased by 8% over the prior year |
" | Overall third quarter average fee per file of $2,066, a 14.3% increase over the third quarter of 2013 |
" | Title claims paid of $81 million, a decrease of $22 million, or 21%, from the third quarter of 2013 |
Title Orders
Direct Orders Opened * | Direct Orders Closed * | |||||||
Month | � | �/ (% Purchase) | � | �/ (% Purchase) | ||||
July 2014 | � | � | 170,000 | 60% | � | � | 120,000 | 63% |
August 2014 | � | � | 155,000 | 60% | � | � | 115,000 | 62% |
September 2014 | � | � | 156,000 | 60% | � | � | 113,000 | 60% |
� | � | � | � | � | � | |||
Third Quarter 2014 | � | � | 481,000 | 60% | � | � | 348,000 | 62% |
� | � | � | � | � | � | |||
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Direct Orders Opened * | Direct Orders Closed * | |||||||
Month | � | �/ (% Purchase) | � | �/ (% Purchase) | ||||
July 2013 | � | � | 177,000 | 54% | � | � | 158,000 | 46% |
August 2013 | � | � | 158,000 | 57% | � | � | 139,000 | 51% |
September 2013 | � | � | 139,000 | 58% | � | � | 113,000 | 54% |
� | � | � | � | � | � | |||
Third Quarter 2013 | � | � | 474,000 | 56% | � | � | 410,000 | 50% |
* Includes an immaterial number of non-purchase and non-refinance orders
� | � | Open | � | � | Closed | � | � | Commercial | � | � | � | ||||
� | � | Commercial | � | � | Commercial | � | � | Revenue | � | � | Commercial | ||||
� | � | Orders | � | � | Orders | � | � | (In millions) | � | � | Fee Per File | ||||
Third Quarter 2014 | � | � | 21,400 | � | � | � | 12,800 | � | � | $136 | � | � | $10,600 | ||
Third Quarter 2013 | � | � | 19,900 | � | � | � | 12,600 | � | � | $120 | � | � | $9,500 | ||
- The preceding table only includes commercial activity from FNFs commercial offices in the national commercial division and does not attempt to capture potential commercial activity in our local offices.
Black Knight
" | Total revenue of $214 million, led by MSP revenue of approximately $120 million |
" | Revenue growth of 11% compared to the prior year period legacy LPS results, led by RealEC and Data and Analytics, and factoring out the increase of $15 million during 2014 from the addition of Property Insight |
" | Recent significant customer contracts that include Green Tree signing a multi-year MSP contract, Stearns and Synovus signing multi-year Empower contracts and RealEC signing contracts for Closing Insight with three of the nation's top five lenders |
" | Adjusted EBITDA of $91 million and adjusted EBITDA margin of 42.3%, a 130 basis point sequential improvement from the second quarter of 2014 and an 830 basis point improvement over the prior year |
�
This was a stable quarter for our title business as our consistent focus on operational efficiency metrics allowed us to generate a 14.7% pre-tax title margin, a 50 basis point sequential improvement over the second quarter of 2014, said Chairman William P. Foley, II. We continue to believe that we can show further margin improvement in a stable order environment and even higher margins as mortgage credit becomes more readily available and the residential real estate market continues to improve.
Black Knight had another strong quarter in both revenue growth and EBITDA margin improvement. We are also generating significant momentum in the business with recent contracts signed that will further contribute to future organic revenue growth. Additionally, the sales pipeline remains strong, with numerous MSP, Empower, Closing Insight and Data and Analytics contracts expected over the next several quarters. We expect a strong fourth quarter and are very excited about our revenue growth prospects for 2015 and 2016. Finally, the integration of LPS is effectively completed, as we have now realized nearly $296 million of cost synergies on a run-rate basis as of the end of the third quarter."
Conference Call
We will host a call with investors and analysts to discuss third quarter 2014 FNF Core results on Thursday, October 30, 2014, beginning at 9:00 a.m. Eastern Time. A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at www.fnf.com. The conference call replay will be available via webcast through the FNF Investor Relations website at www.fnf.com. The telephone replay will be available from 11:00 a.m. Eastern time on October 30, 2014, through November 6, 2014, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 338005.
About FNF
Fidelity National Financial, Inc. (FNF) is organized into two groups, FNF Core (NYSE: FNF) and FNF Ventures (NYSE: FNFV). Through our Core operations, FNF is a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries. FNF is the nations largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides industry-leading mortgage technology solutions and transaction services, including MSP�, the leading residential mortgage servicing technology platform
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in the U.S., through its majority-owned subsidiaries, Black Knight Financial Services, LLC and ServiceLink Holdings, LLC. In addition, in our FNFV group, we own majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC ("ABRH"), J. Alexanders, LLC ("J. Alexander's"), Remy International, Inc. ("Remy"), Ceridian HCM, Inc. and Comdata Inc. (collectively "Ceridian") and Digital Insurance, Inc. ("Digital Insurance").
More information about FNF can be found at www.fnf.com.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and depreciation and amortization (EBITDA), adjusted earnings before interest, taxes and depreciation and amortization (Adjusted EBITDA), adjusted earnings before interest, taxes and depreciation as a percent of adjusted revenue (Adjusted EBITDA margin), adjusted net earnings, adjusted EPS and free cash flow.
Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided below.
Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U. S. economy; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries.
This press release should be read in conjunction with the press release filed for the results of FNFV on this same date as well as the risks detailed in the Statement Regarding Forward-Looking Information, Risk Factors and other sections of the Companys Form 10-Q,10-K and other filings with the Securities and Exchange Commission.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President and Treasurer, 904-854-8120, [email protected]
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�FIDELITY NATIONAL FINANCIAL CORE
THIRD QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Direct title premiums | $ | 465 | $ | 465 | $ | $ | ||||||||||
Agency title premiums | 528 | 528 | ||||||||||||||
Escrow, title related and other fees | 708 | 491 | 214 | 3 | ||||||||||||
Total title and escrow | 1,701 | 1,484 | 214 | 3 | ||||||||||||
Interest and investment income | 27 | 28 | (1 | ) | ||||||||||||
Realized gains and losses | (2 | ) | (2 | ) | ||||||||||||
Total revenue | 1,726 | 1,510 | 214 | 2 | ||||||||||||
Personnel costs | 584 | 479 | 96 | 9 | ||||||||||||
Agent commissions | 396 | 396 | ||||||||||||||
Other operating expenses | 390 | 349 | 38 | 3 | ||||||||||||
Depreciation and amortization | 84 | 35 | 48 | 1 | ||||||||||||
Claim loss expense | 59 | 59 | ||||||||||||||
Interest expense | 32 | 8 | 24 | |||||||||||||
Total expenses | 1,545 | 1,318 | 190 | 37 | ||||||||||||
Pre-tax earnings from continuing operations | $ | 181 | $ | 192 | $ | 24 | $ | (35 | ) | |||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | 2 | $ | 2 | $ | $ | ||||||||||
��Deferred revenue adjustment for BKFS | 1 | 1 | ||||||||||||||
��Transaction costs related to acquisition of LPS | 6 | 3 | 3 | |||||||||||||
��Severance costs related to acquisition of LPS | 3 | 2 | 1 | |||||||||||||
��Synergy bonus accrual | 9 | 3 | 3 | 3 | ||||||||||||
��Other legal matters | 5 | 3 | 2 | |||||||||||||
��Purchase price amortization | 46 | 21 | 25 | |||||||||||||
�Total non-GAAP adjustments before taxes | $ | 72 | $ | 31 | $ | 36 | $ | 5 | ||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 253 | $ | 223 | $ | 60 | $ | (30 | ) | |||||||
��Adjusted pre-tax margin from continuing operations | 14.6 | % | 14.7 | % | 27.9 | % | ||||||||||
Purchase price amortization | (46 | ) | (21 | ) | (25 | ) | ||||||||||
Interest expense | 32 | 8 | 24 | |||||||||||||
Depreciation and amortization | 84 | 35 | 48 | 1 | ||||||||||||
��Adjusted EBITDA | $ | 323 | $ | 237 | $ | 91 | $ | (5 | ) | |||||||
��Adjusted EBITDA margin | 18.7 | % | 15.7 | % | 42.3 | % | ||||||||||
ServiceLink non-GAAP reconciliations: | ||||||||||||||||
ServiceLink pre-tax loss | $ | (3 | ) | |||||||||||||
Depreciation & Amortization | 25 | |||||||||||||||
ServiceLink EBITDA | $ | 22 | ||||||||||||||
Severance and other LPS acquisition costs | 8 | |||||||||||||||
Software impairment | 4 | |||||||||||||||
ServiceLink Adjusted EBITDA | $ | 34 | ||||||||||||||
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ServiceLink pre-tax loss | $ | (3 | ) | |||||||||||||
Purchase price amortization | 20 | |||||||||||||||
Severance and other LPS acquisition costs | 8 | |||||||||||||||
Software impairment | 4 | |||||||||||||||
ServiceLink adjusted pre-tax earnings | $ | 29 | ||||||||||||||
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�FIDELITY NATIONAL FINANCIAL CORE
THIRD QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | 181 | $ | 192 | $ | 24 | $ | (35 | ) | |||||||
��Income tax expense | 73 | 69 | 4 | |||||||||||||
��Earnings from equity investments | 1 | 1 | ||||||||||||||
��Non-controlling interests | (5 | ) | (5 | ) | ||||||||||||
Net earnings attributable to FNF Group common shareholders | $ | 114 | $ | 129 | $ | 24 | $ | (39 | ) | |||||||
EPS attributable to FNF Group common shareholders - basic | $ | 0.41 | $ | 0.47 | $ | 0.09 | $ | (0.14 | ) | |||||||
EPS attributable to FNF Group common shareholders - diluted | $ | 0.40 | $ | 0.45 | $ | 0.08 | $ | (0.13 | ) | |||||||
FNF Group weighted average shares - basic | 275 | |||||||||||||||
FNF Group weighted average shares - diluted | 284 | |||||||||||||||
Net earnings attributable to FNF Group common shareholders | $ | 114 | $ | 129 | $ | 24 | $ | (39 | ) | |||||||
�Total non-GAAP, pre-tax adjustments | 72 | 31 | 36 | 5 | ||||||||||||
��Income taxes on non-GAAP adjustments | (19 | ) | (8 | ) | (9 | ) | (2 | ) | ||||||||
��Noncontrolling interest on non-GAAP adjustments | (22 | ) | (10 | ) | (12 | ) | ||||||||||
Total non-GAAP adjustments | 31 | 13 | 15 | 3 | ||||||||||||
Adjusted net earnings attributable to FNF Group common shareholders | $ | 145 | $ | 142 | $ | 39 | $ | (36 | ) | |||||||
Adjusted EPS attributable to FNF Group common shareholders - diluted | $ | 0.51 | $ | 0.50 | $ | 0.14 | $ | (0.13 | ) | |||||||
Direct orders opened (000's) | 481 | 481 | ||||||||||||||
Direct orders closed (000's) | 348 | 348 | ||||||||||||||
Fee per file | $ | 2,066 | $ | 2,066 | ||||||||||||
Actual title claims paid | $ | 81 | $ | 81 | ||||||||||||
Cash flows provided by operations: | $ | 292 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Transaction costs related to acquisition of LPS | 3 | |||||||||||||||
Synergy bonus payment | 24 | |||||||||||||||
��Severance costs related to acquisition of LPS | 3 | |||||||||||||||
Total non-GAAP adjustments | 30 | |||||||||||||||
Adjusted cash flows from operations | 322 | |||||||||||||||
Capital expenditures | 30 | |||||||||||||||
Free cash flow | $ | 292 | ||||||||||||||
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�FIDELITY NATIONAL FINANCIAL CORE
THIRD QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Direct title premiums | $ | 472 | $ | 472 | $ | $ | ||||||||||
Agency title premiums | 630 | 630 | ||||||||||||||
Escrow, title related and other fees | 415 | 409 | 6 | |||||||||||||
Total title and escrow | 1,517 | 1,511 | 6 | |||||||||||||
Interest and investment income | 30 | 29 | 1 | |||||||||||||
Realized gains and losses | 3 | 3 | ||||||||||||||
Total revenue | 1,550 | 1,543 | 7 | |||||||||||||
Personnel costs | 479 | 471 | 8 | |||||||||||||
Agent commissions | 482 | 482 | ||||||||||||||
Other operating expenses | 300 | 276 | 24 | |||||||||||||
Depreciation and amortization | 16 | 17 | (1 | ) | ||||||||||||
Claim loss expense | 77 | 77 | ||||||||||||||
Interest expense | 20 | 20 | ||||||||||||||
Total expenses | 1,374 | 1,323 | 51 | |||||||||||||
Pre-tax earnings from continuing operations | $ | 176 | $ | 220 | $ | $ | (44 | ) | ||||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | (3 | ) | $ | (3 | ) | $ | $ | ||||||||
��Transaction costs related to acquisition of LPS | 6 | 6 | ||||||||||||||
��Purchase price amortization | 3 | 3 | ||||||||||||||
�Total non-GAAP adjustments before taxes | $ | 6 | $ | $ | $ | 6 | ||||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 182 | $ | 220 | $ | $ | (38 | ) | ||||||||
��Adjusted pre-tax margin from continuing operations | 11.7 | % | 14.3 | % | ||||||||||||
Purchase price amortization | (3 | ) | (3 | ) | ||||||||||||
Interest expense | 20 | 20 | ||||||||||||||
Depreciation and amortization | 16 | 17 | (1 | ) | ||||||||||||
��Adjusted EBITDA | $ | 215 | $ | 234 | $ | $ | (19 | ) | ||||||||
��Adjusted EBITDA margin | 13.9 | % | 15.2 | % | ||||||||||||
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FIDELITY NATIONAL FINANCIAL CORE
THIRD QUARTER SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | 176 | $ | 220 | $ | $ | (44 | ) | ||||||||
��Income tax expense | 63 | 77 | (14 | ) | ||||||||||||
��Earnings from equity investments | 1 | 1 | ||||||||||||||
��Earnings (loss) from discontinued operations, net of tax | (1 | ) | (1 | ) | ||||||||||||
��Non-controlling interests | 2 | 2 | ||||||||||||||
Net earnings attributable to Old FNF common shareholders | $ | 111 | $ | 141 | $ | $ | (30 | ) | ||||||||
EPS attributable to Old FNF common shareholders - basic | $ | 0.49 | $ | 0.62 | $ | $ | (0.13 | ) | ||||||||
EPS attributable to Old FNF common shareholders - diluted | $ | 0.48 | $ | 0.61 | $ | $ | (0.13 | ) | ||||||||
Old FNF weighted average shares - basic | 226 | |||||||||||||||
Old FNF weighted average shares - diluted | 230 | |||||||||||||||
Net earnings attributable to Old FNF common shareholders | $ | 111 | $ | 141 | $ | $ | (30 | ) | ||||||||
�Total non-GAAP, pre-tax adjustments | 6 | 6 | ||||||||||||||
��Income taxes on non-GAAP adjustments | (2 | ) | (2 | ) | ||||||||||||
Total non-GAAP adjustments | 4 | 4 | ||||||||||||||
Adjusted net earnings attributable to Old FNF common shareholders | $ | 115 | $ | 141 | $ | $ | (26 | ) | ||||||||
Adjusted EPS attributable to Old FNF common shareholders - diluted | $ | 0.50 | $ | 0.61 | $ | $ | (0.11 | ) | ||||||||
Direct orders opened (000's) | 474 | 474 | ||||||||||||||
Direct orders closed (000's) | 410 | 410 | ||||||||||||||
Fee per file | $ | 1,807 | $ | 1,807 | ||||||||||||
Actual title claims paid | $ | 103 | $ | 103 | ||||||||||||
Cash flows provided by operations: | $ | 105 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Transaction costs related to acquisition of LPS | 8 | |||||||||||||||
Total non-GAAP adjustments | 8 | |||||||||||||||
Adjusted cash flows from operations | 113 | |||||||||||||||
Capital expenditures | 19 | |||||||||||||||
Free cash flow | $ | 94 | ||||||||||||||
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�FIDELITY NATIONAL FINANCIAL CORE
YTD SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Direct title premiums | $ | 1,249 | $ | 1,249 | $ | $ | ||||||||||
Agency title premiums | 1,450 | 1,450 | ||||||||||||||
Escrow, title related and other fees | 2,015 | 1,394 | 632 | (11 | ) | |||||||||||
Total title and escrow | 4,714 | 4,093 | 632 | (11 | ) | |||||||||||
Interest and investment income | 88 | 89 | (1 | ) | ||||||||||||
Total revenue | 4,802 | 4,182 | 632 | (12 | ) | |||||||||||
Personnel costs | 1,774 | 1,413 | 342 | 19 | ||||||||||||
Agent commissions | 1,098 | 1,098 | ||||||||||||||
Other operating expenses | 1,186 | 1,040 | 159 | (13 | ) | |||||||||||
Depreciation and amortization | 253 | 109 | 142 | 2 | ||||||||||||
Claim loss expense | 169 | 169 | ||||||||||||||
Interest expense | 93 | 23 | 70 | |||||||||||||
Total expenses | 4,573 | 3,829 | 666 | 78 | ||||||||||||
Pre-tax earnings from continuing operations | $ | 229 | $ | 353 | $ | (34 | ) | $ | (90 | ) | ||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Deferred revenue adjustment for BKFS | 10 | 10 | ||||||||||||||
��Transaction costs related to acquisition of LPS | 56 | 42 | 40 | (26 | ) | |||||||||||
��Severance costs related to acquisition of LPS | 45 | 18 | 27 | |||||||||||||
��Synergy bonus accrual | 67 | 28 | 28 | 11 | ||||||||||||
��Premium tax settlement | (8 | ) | (8 | ) | ||||||||||||
��Other legal matters | 21 | 11 | 10 | |||||||||||||
��Purchase price amortization | 137 | 64 | 73 | |||||||||||||
�Total non-GAAP adjustments before taxes | $ | 328 | $ | 144 | $ | 189 | $ | (5 | ) | |||||||
��Adjusted pre-tax earnings from continuing operations | $ | 557 | $ | 497 | $ | 155 | $ | (95 | ) | |||||||
��Adjusted pre-tax margin from continuing operations | 11.6 | % | 11.9 | % | 24.1 | % | ||||||||||
Purchase price amortization | (137 | ) | (64 | ) | (73 | ) | ||||||||||
Interest expense | 93 | 23 | 70 | |||||||||||||
Depreciation and amortization | 253 | 109 | 142 | 2 | ||||||||||||
��Adjusted EBITDA | $ | 766 | $ | 542 | $ | 247 | $ | (23 | ) | |||||||
��Adjusted EBITDA margin | 15.9 | % | 13.0 | % | 38.5 | % | ||||||||||
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FIDELITY NATIONAL FINANCIAL CORE
YTD SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | 229 | $ | 353 | $ | (34 | ) | $ | (90 | ) | ||||||
��Income tax expense | 92 | 129 | (11 | ) | (26 | ) | ||||||||||
��Earnings from equity investments | 3 | 3 | ||||||||||||||
��Earnings (loss) from discontinued operations, net of tax | (1 | ) | (1 | ) | ||||||||||||
��Non-controlling interests | (76 | ) | (40 | ) | (36 | ) | ||||||||||
Net earnings attributable to FNF common shareholders | $ | 215 | $ | 266 | $ | 13 | $ | (64 | ) | |||||||
EPS attributable to Old FNF common shareholders - basic | $ | 0.37 | $ | 0.50 | $ | (0.04 | ) | $ | (0.09 | ) | ||||||
EPS attributable to Old FNF common shareholders - diluted | $ | 0.36 | $ | 0.49 | $ | (0.03 | ) | $ | (0.10 | ) | ||||||
EPS attributable to FNF Group common shareholders - basic | $ | 0.41 | $ | 0.47 | $ | 0.09 | $ | (0.15 | ) | |||||||
EPS attributable to FNF Group common shareholders - diluted | $ | 0.40 | $ | 0.45 | $ | 0.08 | $ | (0.13 | ) | |||||||
Old FNF weighted average shares - basic | 183 | |||||||||||||||
Old FNF weighted average shares - diluted | 189 | |||||||||||||||
FNF Group weighted average shares - basic | 92 | |||||||||||||||
FNF Group weighted average shares - diluted | 94 | |||||||||||||||
Net earnings attributable to FNF common shareholders | $ | 215 | $ | 266 | $ | 13 | $ | (64 | ) | |||||||
�Total non-GAAP, pre-tax adjustments | 328 | 144 | 189 | (5 | ) | |||||||||||
��Income taxes on non-GAAP adjustments | (80 | ) | (35 | ) | (47 | ) | 2 | |||||||||
��Noncontrolling interest on non-GAAP adjustments | (118 | ) | (52 | ) | (66 | ) | ||||||||||
Total non-GAAP adjustments | 130 | 57 | 76 | (3 | ) | |||||||||||
Adjusted net earnings attributable to FNF common shareholders* | $ | 345 | $ | 323 | $ | 89 | $ | (67 | ) | |||||||
Adjusted EPS attributable to FNF common shareholders - diluted* | $ | 1.22 | $ | 1.14 | $ | 0.31 | $ | (0.23 | ) | |||||||
* Adjusted EPS is presented as if Old FNF common shareholders and FNF Group common shareholders combined. | ||||||||||||||||
Direct orders opened (000's) | 1,463 | 1,463 | ||||||||||||||
Direct orders closed (000's) | 985 | 985 | ||||||||||||||
Fee per file | $ | 1,974 | $ | 1,974 | ||||||||||||
Actual title claims paid | $ | 226 | $ | 226 | ||||||||||||
Cash flows provided by operations: | $ | 295 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Transaction costs related to acquisition of LPS | 48 | |||||||||||||||
��Severance costs related to acquisition of LPS | 45 | |||||||||||||||
��Synergy bonus payment | 31 | |||||||||||||||
��Premium tax settlement | 15 | |||||||||||||||
10
��Other legal matters | 8 | |||||||||||||||
Total non-GAAP adjustments | 147 | |||||||||||||||
Adjusted cash flows from operations | 442 | |||||||||||||||
Capital expenditures | 82 | |||||||||||||||
Free cash flow | $ | 360 | ||||||||||||||
11
�FIDELITY NATIONAL FINANCIAL CORE
YTD SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Direct title premiums | $ | 1,377 | $ | 1,377 | $ | $ | ||||||||||
Agency title premiums | 1,779 | 1,779 | ||||||||||||||
Escrow, title related and other fees | 1,299 | 1,266 | 33 | |||||||||||||
Total title and escrow | 4,455 | 4,422 | 33 | |||||||||||||
Interest and investment income | 98 | 97 | 1 | |||||||||||||
Realized gains and losses | 11 | 10 | 1 | |||||||||||||
Total revenue | 4,564 | 4,529 | 35 | |||||||||||||
Personnel costs | 1,422 | 1,400 | 22 | |||||||||||||
Agent commissions | 1,352 | 1,352 | ||||||||||||||
Other operating expenses | 922 | 845 | 77 | |||||||||||||
Depreciation and amortization | 50 | 49 | 1 | |||||||||||||
Claim loss expense | 221 | 221 | ||||||||||||||
Interest expense | 52 | 52 | ||||||||||||||
Total expenses | 4,019 | 3,867 | 152 | |||||||||||||
Pre-tax earnings from continuing operations | $ | 545 | $ | 662 | $ | $ | (117 | ) | ||||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | (11 | ) | $ | (10 | ) | $ | $ | (1 | ) | ||||||
��Transaction costs related to acquisition of LPS | 9 | 9 | ||||||||||||||
��Other legal matters | 20 | 20 | ||||||||||||||
��Purchase price amortization | 9 | 9 | ||||||||||||||
�Total non-GAAP adjustments before taxes | $ | 27 | $ | (1 | ) | $ | $ | 28 | ||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 572 | $ | 661 | $ | $ | (89 | ) | ||||||||
��Adjusted pre-tax margin from continuing operations | 12.5 | % | 14.6 | % | ||||||||||||
Purchase price amortization | (9 | ) | (9 | ) | ||||||||||||
Interest expense | 52 | 52 | ||||||||||||||
Depreciation and amortization | 50 | 49 | 1 | |||||||||||||
��Adjusted EBITDA | $ | 665 | $ | 701 | $ | $ | (36 | ) | ||||||||
��Adjusted EBITDA margin | 14.6 | % | 15.5 | % | ||||||||||||
12
FIDELITY NATIONAL FINANCIAL CORE
YTD SEGMENT INFORMATION
(In millions, except order information in thousands)
(Unaudited)
Total FNF Core | Title | BKFS | FNF Core Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | 545 | $ | 662 | $ | $ | (117 | ) | ||||||||
��Income tax expense | 197 | 236 | (39 | ) | ||||||||||||
��Earnings from equity investments | 4 | 4 | ||||||||||||||
��Earnings from discontinued operations, net of tax | 1 | 1 | ||||||||||||||
��Non-controlling interests | 4 | 4 | ||||||||||||||
Net earnings attributable to FNF common shareholders | $ | 349 | $ | 427 | $ | $ | (78 | ) | ||||||||
EPS attributable to Old FNF common shareholders - basic | $ | 1.55 | $ | 1.90 | $ | $ | (0.35 | ) | ||||||||
EPS attributable to Old FNF common shareholders - diluted | $ | 1.52 | $ | 1.86 | $ | $ | (0.34 | ) | ||||||||
Old FNF weighted average shares - basic | 225 | |||||||||||||||
Old FNF weighted average shares - diluted | 230 | |||||||||||||||
Net earnings attributable to FNF common shareholders | $ | 349 | $ | 427 | $ | $ | (78 | ) | ||||||||
�Total non-GAAP, pre-tax adjustments | 27 | (1 | ) | 28 | ||||||||||||
��Income taxes on non-GAAP adjustments | (9 | ) | (9 | ) | ||||||||||||
Total non-GAAP adjustments | 18 | (1 | ) | 19 | ||||||||||||
Adjusted net earnings attributable to Old FNF common shareholders | $ | 367 | $ | 426 | $ | $ | (59 | ) | ||||||||
Adjusted EPS attributable to Old FNF common shareholders - diluted | $ | 1.60 | $ | 1.85 | $ | $ | (0.25 | ) | ||||||||
Direct orders opened (000's) | 1,789 | 1,789 | ||||||||||||||
Direct orders closed (000's) | 1,401 | 1,401 | ||||||||||||||
Fee per file | $ | 1,568 | $ | 1,568 | ||||||||||||
Actual title claims paid | $ | 303 | $ | 303 | ||||||||||||
Cash flows provided by operations: | $ | 298 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Transaction costs related to acquisition of LPS | 11 | |||||||||||||||
��Other legal matters | 20 | |||||||||||||||
Total non-GAAP adjustments | 31 | |||||||||||||||
Adjusted cash flows from operations | 329 | |||||||||||||||
Capital expenditures | 55 | |||||||||||||||
Free cash flow | $ | 274 | ||||||||||||||
13
�FIDELITY NATIONAL FINANCIAL CORE
QUARTERLY OPERATING STATISTICS
(Unaudited)
Q3 2014 | Q2 2014 | Q1 2014 | Q4 2013 | Q3 2013 | Q2 2013 | Q1 2013 | Q4 2012 | |||||||||||||||||||||||||
Quarterly Open Orders ('000's except % data) | ||||||||||||||||||||||||||||||||
Total open orders* | 481 | 514 | 469 | 392 | 474 | 672 | 643 | 677 | ||||||||||||||||||||||||
Total open orders per day* | 7.5 | 8.0 | 7.7 | 6.2 | 7.4 | 10.5 | 10.5 | 10.7 | ||||||||||||||||||||||||
Purchase % of open orders | 60 | % | 60 | % | 55 | % | 55 | % | 56 | % | 42 | % | 38 | % | 32 | % | ||||||||||||||||
Refinance % of open orders | 40 | % | 40 | % | 45 | % | 45 | % | 44 | % | 58 | % | 62 | % | 68 | % | ||||||||||||||||
Total closed orders* | 348 | 342 | 295 | 307 | 410 | 504 | 487 | 518 | ||||||||||||||||||||||||
Total closed orders per day* | 5.4 | 5.3 | 4.8 | 4.9 | 6.4 | 7.9 | 8.0 | 8.2 | ||||||||||||||||||||||||
Purchase % of closed orders | 62 | % | 61 | % | 52 | % | 56 | % | 50 | % | 40 | % | 31 | % | 33 | % | ||||||||||||||||
Refinance % of closed orders | 38 | % | 39 | % | 48 | % | 44 | % | 50 | % | 60 | % | 69 | % | 67 | % | ||||||||||||||||
Commercial (millions, except orders in '000's) | ||||||||||||||||||||||||||||||||
Revenue | $ | 136 | $ | 115 | $ | 104 | $ | 146 | $ | 120 | $ | 112 | $ | 88 | $ | 149 | ||||||||||||||||
Open Orders | 21.4 | 22.2 | 19.6 | 19.3 | 19.9 | 20.3 | 18.7 | 18.9 | ||||||||||||||||||||||||
Closed Orders | 12.8 | 20.3 | 10.2 | 12.8 | 12.6 | 12.3 | 10.6 | 13.6 | ||||||||||||||||||||||||
Total Fee Per File | ||||||||||||||||||||||||||||||||
Fee per file | $ | 2,066 | $ | 1,982 | $ | 1,858 | $ | 2,082 | $ | 1,807 | $ | 1,562 | $ | 1,373 | $ | 1,565 | ||||||||||||||||
Residential and local commercial fee per file | $ | 1,739 | $ | 1,750 | $ | 1,559 | $ | 1,676 | $ | 1,562 | $ | 1,373 | $ | 1,219 | $ | 1,312 | ||||||||||||||||
National commercial fee per file | $ | 10,600 | $ | 9,800 | $ | 10,200 | $ | 11,400 | $ | 9,500 | $ | 9,100 | $ | 8,300 | $ | 10,900 | ||||||||||||||||
Total Staffing | ||||||||||||||||||||||||||||||||
Total field operations employees | 10,200 | 10,200 | 10,300 | 9,900 | 10,600 | 12,000 | 12,000 | 11,600 | ||||||||||||||||||||||||
FNT Only Quarterly Operating Statistics ('000's except fee per file and staffing) | ||||||||||||||||||||||||||||||||
Total open orders* | 385 | 403 | 349 | 331 | 391 | 516 | 481 | 497 | ||||||||||||||||||||||||
Total open orders per day* | 6.0 | 6.3 | 5.7 | 5.3 | 6.1 | 8.1 | 7.9 | 7.9 | ||||||||||||||||||||||||
Purchase % of open orders | 69 | % | 71 | % | 71 | % | 65 | % | 68 | % | 56 | % | 58 | % | % | |||||||||||||||||
Refinance % of open orders | 31 | % | 29 | % | 29 | % | 35 | % | 32 | % | 44 | % | 42 | % | % | |||||||||||||||||
Total closed orders* | 282 | 272 | 219 | 263 | 323 | 387 | 354 | 396 | ||||||||||||||||||||||||
Total closed orders per day* | 4.4 | 4.3 | 3.6 | 4.2 | 5.0 | 6.0 | 5.8 | 6.3 | ||||||||||||||||||||||||
Purchase % of closed orders | 70 | % | 71 | % | 67 | % | 66 | % | 64 | % | 52 | % | 44 | % | % | |||||||||||||||||
Refinance % of closed orders | 30 | % | 29 | % | 33 | % | 34 | % | 36 | % | 48 | % | 56 | % | % | |||||||||||||||||
Fee per file | 2,306 | 2,227 | 2,151 | 2,260 | 2,028 | 1,747 | 1,537 | 1,756 | ||||||||||||||||||||||||
Total tile field operations employees | 8,900 | 8,700 | 8,600 | 8,900 | 9,300 | 10,100 | 9,900 | 9,500 | ||||||||||||||||||||||||
ServiceLink Only Quarterly Operating Statistics ('000's except fee per file and staffing) | ||||||||||||||||||||||||||||||||
Total Open Orders* | 96 | 111 | 120 | 61 | 83 | 156 | 162 | 180 | ||||||||||||||||||||||||
Total open orders per day* | 1.5 | 1.7 | 2.0 | 1.0 | 1.3 | 2.4 | 2.7 | 2.9 | ||||||||||||||||||||||||
Purchase % of open orders | 23 | % | 20 | % | 7 | % | ||||||||||||||||||||||||||
Refinance % of open orders | 77 | % | 80 | % | 93 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
Total closed orders | 66 | 70 | 76 | 44 | 87 | 117 | 133 | 122 | ||||||||||||||||||||||||
Total closed orders per day* | 1.0 | 1.1 | 1.2 | 0.7 | 1.4 | 1.8 | 2.2 | 1.9 | ||||||||||||||||||||||||
Purchase % of closed orders | 24 | % | 18 | % | 6 | % | ||||||||||||||||||||||||||
Refinance % of closed orders | 76 | % | 82 | % | 94 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
Fee per file | 1,052 | 1,038 | 1,009 | 1,013 | 989 | 951 | 936 | 946 | ||||||||||||||||||||||||
Total ServiceLink operating employees | 1,300 | 1,500 | 1,700 | 970 | 1,300 | 1,900 | 2,100 | 2,100 | ||||||||||||||||||||||||
* Includes an immaterial number of non-purchase and non-refinance orders
14
FIDELITY NATIONAL FINANCIAL CORE
SUMMARY BALANCE SHEET INFORMATION
(In millions)
� | � | FNF Core September 30, 2014 | FNF Core December 31, 2013 | |||||||
� | � | (Unaudited) | � | (Unaudited) | ||||||
Cash and investment portfolio | � | $ | 4,494 | $ | 5,235 | |||||
Goodwill | � | � | 4,489 | � | 1,438 | |||||
Title plant | � | � | 395 | � | 370 | |||||
Total assets | � | � | 12,041 | � | 8,028 | |||||
Notes payable | � | � | 2,802 | � | 983 | |||||
Reserve for title claim losses | � | � | 1,640 | � | 1,636 | |||||
Secured trust deposits | � | � | 722 | � | 588 | |||||
Redeemable non-controlling interests | 687 | |||||||||
Non-redeemable non-controlling interests | (58 | ) | 10 | |||||||
Total equity and redeemable non-controlling interests | � | � | 5,197 | � | 3,896 | |||||
� | � | FNF Core September 30, 2014 | FNFV September 30, 2014 | Intercompany Eliminations | Consolidated September 30, 2014 | Consolidated December 31, 2013 | |||||||||||||||||||
� | � | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | � | � | ||||||||||||||||||
Cash and investment portfolio | � | $ | 4,494 | $ | 593 | $ | (29 | ) | $ | 5,058 | $ | 5,761 | |||||||||||||
Goodwill | � | � | 4,489 | 483 | 4,792 | � | 1,901 | ||||||||||||||||||
Title plant | � | � | 395 | 395 | � | 370 | |||||||||||||||||||
Total assets | � | � | 12,041 | 2,778 | (29 | ) | 14,790 | � | 10,529 | ||||||||||||||||
Notes payable | � | � | 2,802 | 467 | (29 | ) | 3,240 | � | 1,323 | ||||||||||||||||
Reserve for title claim losses | � | � | 1,640 | 1,640 | � | 1,636 | |||||||||||||||||||
Secured trust deposits | � | � | 722 | 722 | � | 588 | |||||||||||||||||||
Redeemable non-controlling interests | 687 | 687 | |||||||||||||||||||||||
Non-redeemable non-controlling interests | (58 | ) | 428 | 370 | 474 | ||||||||||||||||||||
Total equity and redeemable non-controlling interests | � | � | 5,197 | 1,844 | 7,041 | � | 5,535 | ||||||||||||||||||
15
FIDELITY NATIONAL FINANCIAL, INC.
CONSOLIDATED SUMMARY OF EARNINGS
(In millions)
(Unaudited)
� | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||||||||||||||
� | Consolidated | � | Core | FNFV | Consolidated | � | Core | FNFV | ||||||||||||||||
Direct title premiums | $ | 465 | � | $ | 465 | $ | $ | 1,249 | � | $ | 1,249 | $ | ||||||||||||
Agency title premiums | 528 | � | 528 | 1,450 | � | 1,450 | ||||||||||||||||||
��Total title premiums | 993 | � | 993 | � | 2,699 | � | 2,699 | � | ||||||||||||||||
Escrow, title-related and other fees | 735 | � | 708 | 27 | 2,097 | � | 2,015 | 82 | ||||||||||||||||
�����Total title and escrow and other | 1,728 | � | 1,701 | � | 27 | 4,796 | � | 4,714 | � | 82 | ||||||||||||||
Restaurant revenue | 343 | 343 | 1,055 | 1,055 | ||||||||||||||||||||
Remy revenue | 290 | 290 | 892 | 892 | ||||||||||||||||||||
Interest and investment income | 29 | 27 | 2 | 94 | 88 | 6 | ||||||||||||||||||
Realized gains and losses | (7 | ) | (2 | ) | (5 | ) | (6 | ) | (6 | ) | ||||||||||||||
�����Total revenue | 2,383 | � | 1,726 | � | 657 | 6,831 | � | 4,802 | � | 2,029 | ||||||||||||||
Personnel costs | 645 | 584 | 61 | 1,950 | 1,774 | 176 | ||||||||||||||||||
Other operating expenses | 428 | 390 | 38 | 1,289 | 1,186 | 103 | ||||||||||||||||||
Cost of Remy revenue (includes $19 and $51 of D&A, respectively) | 266 | 266 | 771 | 771 | ||||||||||||||||||||
Cost of restaurant revenue | 296 | 296 | 899 | 899 | ||||||||||||||||||||
Agent commissions | 396 | 396 | 1,098 | 1,098 | ||||||||||||||||||||
Depreciation and amortization | 102 | 84 | 18 | 305 | 253 | 52 | ||||||||||||||||||
Title claim loss expense | 59 | 59 | 169 | 169 | ||||||||||||||||||||
Interest expense | 37 | 32 | 5 | 111 | 93 | 18 | ||||||||||||||||||
�����Total expenses | 2,229 | � | 1,545 | � | 684 | 6,592 | � | 4,573 | � | 2,019 | ||||||||||||||
Earnings from continuing operations before taxes | 154 | � | 181 | � | (27 | ) | 239 | � | 229 | � | 10 | |||||||||||||
Income tax expense | 59 | 73 | (14 | ) | 79 | 92 | (13 | ) | ||||||||||||||||
Earnings from continuing operations before equity investments | 95 | � | 108 | � | (13 | ) | 160 | � | 137 | � | 23 | |||||||||||||
Loss from equity investments | (7 | ) | 1 | (8 | ) | (43 | ) | 3 | (46 | ) | ||||||||||||||
Net earnings from continuing operations | 88 | � | 109 | � | (21 | ) | 117 | � | 140 | � | (23 | ) | ||||||||||||
Loss from discontinued operations, net of tax | (1 | ) | (1 | ) | ||||||||||||||||||||
Net earnings | 88 | 109 | (21 | ) | 116 | 139 | (23 | ) | ||||||||||||||||
Non-controlling interests | (14 | ) | (5 | ) | (9 | ) | (75 | ) | (76 | ) | 1 | |||||||||||||
Net earnings attributable to common shareholders | $ | 102 | � | $ | 114 | $ | (12 | ) | $ | 191 | � | $ | 215 | $ | (24 | ) | ||||||||
Cash flows provided by (used in) operations | 295 | 292 | 3 | 284 | 295 | (11 | ) | |||||||||||||||||
16
FIDELITY NATIONAL FINANCIAL, INC.
CONSOLIDATED SUMMARY OF EARNINGS
(In millions)
(Unaudited)
� | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||||||||||||
� | Consolidated | � | Core | FNFV | Consolidated | � | Core | FNFV | ||||||||||||||||
Direct title premiums | $ | 472 | $ | 472 | $ | $ | 1,377 | $ | 1,377 | $ | ||||||||||||||
Agency title premiums | 630 | 630 | 1,779 | 1,779 | ||||||||||||||||||||
��Total title premiums | 1,102 | � | 1,102 | � | 3,156 | � | 3,156 | � | ||||||||||||||||
Escrow, title-related and other fees | 437 | 415 | 22 | 1,361 | 1,299 | 62 | ||||||||||||||||||
�����Total title and escrow and other | 1,539 | � | 1,517 | � | 22 | 4,517 | � | 4,455 | � | 62 | ||||||||||||||
Restaurant revenue | 336 | 336 | 1,037 | 1,037 | ||||||||||||||||||||
Remy revenue | 266 | 266 | 834 | 834 | ||||||||||||||||||||
Interest and investment income | 29 | 30 | (1 | ) | 99 | 98 | 1 | |||||||||||||||||
Realized gains and losses | 4 | 3 | 1 | 7 | 11 | (4 | ) | |||||||||||||||||
�����Total revenue | 2,174 | � | 1,550 | � | 624 | 6,494 | � | 4,564 | � | 1,930 | ||||||||||||||
Personnel costs | 546 | 479 | 67 | 1,611 | 1,422 | 189 | ||||||||||||||||||
Other operating expenses | 329 | 300 | 29 | 1,020 | 922 | 98 | ||||||||||||||||||
Cost of Remy revenue (includes $19 and $55 of D&A, respectively) | 223 | 223 | 704 | 704 | ||||||||||||||||||||
Cost of restaurant revenue | 292 | 292 | 889 | 889 | ||||||||||||||||||||
Agent commissions | 482 | 482 | 1,352 | 1,352 | ||||||||||||||||||||
Depreciation and amortization | 36 | 16 | 20 | 104 | 50 | 54 | ||||||||||||||||||
Title claim loss expense | 77 | 77 | 221 | 221 | ||||||||||||||||||||
Interest expense | 27 | 20 | 7 | 71 | 52 | 19 | ||||||||||||||||||
�����Total expenses | 2,012 | � | 1,374 | � | 638 | 5,972 | � | 4,019 | � | 1,953 | ||||||||||||||
Earnings from continuing operations before taxes | 162 | � | 176 | � | (14 | ) | 522 | � | 545 | � | (23 | ) | ||||||||||||
Income tax expense | 52 | 63 | (11 | ) | 170 | 197 | (27 | ) | ||||||||||||||||
Earnings from continuing operations before equity investments | 110 | � | 113 | � | (3 | ) | 352 | � | 348 | � | 4 | |||||||||||||
Loss from equity investments | (14 | ) | 1 | (15 | ) | (20 | ) | 4 | (24 | ) | ||||||||||||||
Net earnings from continuing operations | 96 | � | 114 | � | (18 | ) | 332 | � | 352 | � | (20 | ) | ||||||||||||
Loss from discontinued operations, net of tax | (1 | ) | 1 | (2 | ) | 1 | (3 | ) | ||||||||||||||||
Net earnings | 96 | 113 | (17 | ) | 330 | 353 | (23 | ) | ||||||||||||||||
Non-controlling interests | 2 | 2 | 8 | 4 | 4 | |||||||||||||||||||
Net earnings attributable to common shareholders | $ | 94 | � | $ | 111 | $ | (17 | ) | $ | 322 | � | $ | 349 | $ | (27 | ) | ||||||||
Cash flows provided by (used in) operations | 129 | 105 | 24 | 344 | 298 | 46 | ||||||||||||||||||
###
17
FNFV Reports 3rd Quarter 2014 Results With Significant Progress on Monetization Efforts and $1.4 Billion Book Value of Portfolio Company Investments, or $15.24 Per Share Jacksonville, Fla. -- (October�29, 2014) -- FNFV (NYSE:FNFV), a tracking stock established to highlight the inherent value of the portfolio companies of Fidelity National Financial, Inc. (NYSE: FNF), today reported operating results for the three-month and nine-month periods ended September�30, 2014.
" | Total revenue of approximately $657 million in the third quarter versus $624 million in the third quarter of 2013 |
" | Third quarter adjusted diluted EPS of $0.06 versus adjusted diluted EPS of $(0.05) in the third quarter of 2013 |
" | Adjusted EBITDA of $43 million for the third quarter versus adjusted EBITDA of $31 million for the third quarter of 2013 |
" | Third quarter FNFV free cash flow used of $(12) million versus $5 million provided in the third quarter of 2013 |
Restaurant Group
" | Approximately $343 million in total revenue, adjusted EBITDA of $13 million and adjusted EBITDA margin of 3.8% for the third quarter versus approximately $338 million in total revenue, adjusted EBITDA of $13 million and an adjusted EBITDA margin of 3.9% in the third quarter of 2013 |
" | American Blue Ribbon Holdings generated $296 million in total revenue and a same store sales increase of approximately 1% in the third quarter, with O'Charley's and Ninety Nine achieving approximately 2% same store sales growth, both exceeding the Knapp-Track U. S. Casual Dining Index by more than 200 basis points |
" | J. Alexander's produced $47 million in total revenue and same store sales growth of more than 4% in the third quarter |
Remy
" | Total revenue of $290 million versus total revenue of $266 million in the third quarter of 2013 |
" | Adjusted EBITDA of $30 million and adjusted EBITDA margin of 10.3%, versus adjusted EBITDA of $33 million and adjusted EBITDA margin of 12.4% in the third quarter of 2013 |
Ceridian HCM
" | Third quarter total revenue of approximately $208 million, a 6% decline from the third quarter of 2013, pre-tax loss of $31 million, EBITDA of $22 million, excluding interest and depreciation and amortization and an EBITDA margin of 11% |
Digital Insurance
" | Third quarter total revenue of $25 million, a 38% increase over the third quarter of 2013; pre-tax earnings of $0 million, EBITDA of $5 million, excluding interest and depreciation and amortization, a 35% increase over the third quarter of 2013 and a third quarter EBITDA margin of 20% |
Monetization Initiatives
" | Announced sale of Comdata to Fleetcor in August 2014; FNFV will indirectly receive approximately 2.3 million shares of Fleetcor common stock at closing, subject to a six-month lockup period; current value of approximately $320 million; closing is expected in the fourth quarter of 2014 and HSR clearance has been received |
" | Announced tax-free distribution of Remy common stock in September 2014; current value of approximately $285 million; closing expected in December 2014 or first quarter of 2015 |
" | J. Alexander's announced filing a registration statement with the SEC related to the proposed initial offering of its common stock in October 2014 |
" | American Blue Ribbon Holdings completed a leveraged recapitalization in August 2014 that facilitated a $75 million shareholder dividend, with FNFV's share of the dividend being approximately $40 million |
���
We achieved several important milestones at FNFV this quarter, said Chairman William P. Foley, II. The pending sale of Comdata for Fleetcor common shares will bring an attractive investment in an innovative, industry-leading company. The tax-free distribution of Remy common shares provides a tax efficient monetization event for our shareholders. J. Alexander's has begun the IPO process and a publicly traded common stock will provide liquidity and a market valuation for that business. We will continue to seek to maximize the value of the portfolio company investments at FNFV."
����
1
Conference Call
We will host a call with investors and analysts to discuss third quarter 2014 results of FNFV on Thursday, October 30, 2014, beginning at 10:00 a.m. Eastern Time. A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at www.fnf.com. The conference call replay will be available via webcast through the FNF Investor Relations website at www.fnf.com. The telephone replay will be available from 12:00 p.m. Eastern time on October 30, 2014, through November 6, 2014, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 338004.
About FNF
Fidelity National Financial, Inc. (FNF) is organized into two groups, FNF Core (NYSE: FNF) and FNF Ventures (NYSE: FNFV). Through our Core operations, FNF is a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries. FNF is the nations largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides industry-leading mortgage technology solutions and transaction services, including MSP�, the leading residential mortgage servicing technology platform in the U.S., through its majority-owned subsidiaries, Black Knight Financial Services, LLC and ServiceLink Holdings, LLC. In addition, in our FNFV group, we own majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC ("ABRH"), J. Alexanders, LLC ("J. Alexander's"), Remy International, Inc. ("Remy"), Ceridian HCM, Inc. and Comdata Inc. (collectively "Ceridian") and Digital Insurance, Inc. ("Digital Insurance").
More information about FNF can be found at www.fnf.com.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and depreciation and amortization (EBITDA), adjusted earnings before interest, taxes and depreciation and amortization (Adjusted EBITDA), adjusted earnings before interest, taxes and depreciation as a percent of adjusted revenue (Adjusted EBITDA margin), adjusted net earnings, adjusted EPS and free cash flow.
Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided below.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U. S. economy; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries.
This press release should be read in conjunction with the press release filed for the results of FNFV on this same date as well as the risks detailed in the Statement Regarding Forward-Looking Information, Risk Factors and other sections of the Companys Form 10-Q,10-K and other filings with the Securities and Exchange Commission.
SOURCE: Fidelity National Financial, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President and Treasurer, 904-854-8120, [email protected]
2
�FIDELITY NATIONAL FINANCIAL VENTURES
THIRD QUARTER SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Operating revenue | $ | 660 | $ | 290 | $ | 343 | $ | 27 | ||||||||
Interest and investment income | 2 | 2 | ||||||||||||||
Realized gains and losses | (5 | ) | (5 | ) | ||||||||||||
Total revenue | 657 | 290 | 343 | 24 | ||||||||||||
Personnel costs | 61 | 20 | 19 | 22 | ||||||||||||
Other operating expenses | 38 | 16 | 15 | 7 | ||||||||||||
Cost of autoparts revenue (Includes depreciation and amortization of $19 million at Remy) | 266 | 266 | ||||||||||||||
Cost of restaurant revenue | 296 | 296 | ||||||||||||||
Depreciation and amortization | 18 | 1 | 14 | 3 | ||||||||||||
Interest expense | 5 | 5 | 2 | (2 | ) | |||||||||||
Total expenses | 684 | 308 | 346 | 30 | ||||||||||||
Pre-tax earnings from continuing operations | $ | (27 | ) | $ | (18 | ) | $ | (3 | ) | $ | (6 | ) | ||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | 5 | $ | $ | $ | 5 | ||||||||||
Transaction costs | 3 | 3 | ||||||||||||||
��Other legal matters | 20 | 20 | ||||||||||||||
��Purchase price amortization | 20 | 13 | 3 | 4 | ||||||||||||
�Total non-GAAP adjustments before taxes | $ | 48 | $ | 36 | $ | 3 | $ | 9 | ||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 21 | $ | 18 | $ | $ | 3 | |||||||||
��Adjusted pre-tax margin from continuing operations | 3.2 | % | 6.2 | % | 10.3 | % | ||||||||||
Purchase price amortization | (20 | ) | (13 | ) | (3 | ) | (4 | ) | ||||||||
Interest expense | 5 | 5 | 2 | (2 | ) | |||||||||||
Depreciation and amortization | 37 | 20 | 14 | 3 | ||||||||||||
��Adjusted EBITDA | $ | 43 | $ | 30 | $ | 13 | $ | |||||||||
��Adjusted EBITDA margin | 6.5 | % | 10.3 | % | 3.8 | % | ||||||||||
3
FIDELITY NATIONAL FINANCIAL VENTURES
THIRD QUARTER SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | (27 | ) | $ | (18 | ) | $ | (3 | ) | $ | (6 | ) | ||||
��Income tax expense | (14 | ) | (6 | ) | (8 | ) | ||||||||||
��Earnings (loss) from equity investments | (8 | ) | (8 | ) | ||||||||||||
��Non-controlling interests | (9 | ) | (7 | ) | (2 | ) | ||||||||||
Net earnings attributable to FNFV common shareholders | $ | (12 | ) | $ | (5 | ) | $ | (1 | ) | $ | (6 | ) | ||||
EPS attributable to FNFV common shareholders - basic | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.07 | ) | ||||
EPS attributable to FNFV common shareholders - diluted | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.07 | ) | ||||
FNFV weighted average shares - basic | 92 | |||||||||||||||
FNFV weighted average shares - diluted | 93 | |||||||||||||||
�Total non-GAAP, pre-tax adjustments | 48 | 36 | 3 | 9 | ||||||||||||
��Income taxes on non-GAAP adjustments | (18 | ) | (14 | ) | (1 | ) | (3 | ) | ||||||||
��Noncontrolling interest on non-GAAP adjustments | (12 | ) | (11 | ) | (1 | ) | ||||||||||
Total non-GAAP adjustments | 18 | 11 | 1 | 6 | ||||||||||||
Adjusted net earnings attributable to FNFV common shareholders | $ | 6 | $ | 6 | $ | $ | ||||||||||
Adjusted EPS attributable to FNFV common shareholders - diluted | $ | 0.06 | $ | 0.06 | $ | $ | ||||||||||
Cash flows provided by operations: | $ | 3 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Other legal matters | 16 | |||||||||||||||
Total non-GAAP adjustments | 16 | |||||||||||||||
Adjusted cash flows from operations | 19 | |||||||||||||||
Capital expenditures | 31 | |||||||||||||||
Free cash flow | $ | (12 | ) | |||||||||||||
4
FIDELITY NATIONAL FINANCIAL VENTURES
THIRD QUARTER SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Operating revenue | $ | 624 | $ | 266 | $ | 336 | $ | 22 | ||||||||
Interest and investment income | (1 | ) | 1 | (2 | ) | |||||||||||
Realized gains and losses | 1 | (1 | ) | 2 | ||||||||||||
Total revenue | 624 | 266 | 338 | 20 | ||||||||||||
Personnel costs | 67 | 19 | 16 | 32 | ||||||||||||
Other operating expenses | 29 | 11 | 15 | 3 | ||||||||||||
Cost of autoparts revenue (Includes depreciation and amortization of $19 million at Remy) | 223 | 223 | ||||||||||||||
Cost of restaurant revenue | 292 | 292 | ||||||||||||||
Depreciation and amortization | 20 | 1 | 13 | 6 | ||||||||||||
Interest expense | 7 | 6 | 2 | (1 | ) | |||||||||||
Total expenses | 638 | 260 | 338 | 40 | ||||||||||||
Pre-tax earnings from continuing operations | $ | (14 | ) | $ | 6 | $ | $ | (20 | ) | |||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | (1 | ) | $ | 1 | $ | (2 | ) | $ | |||||||
��Purchase price amortization | 17 | 12 | 2 | 3 | ||||||||||||
�Total non-GAAP adjustments before taxes | $ | 16 | $ | 13 | $ | $ | 3 | |||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 2 | $ | 19 | $ | $ | (17 | ) | ||||||||
��Adjusted pre-tax margin from continuing operations | 0.3 | % | 7.1 | % | ||||||||||||
Purchase price amortization | (17 | ) | (12 | ) | (2 | ) | (3 | ) | ||||||||
Interest expense | 7 | 6 | 2 | (1 | ) | |||||||||||
Depreciation and amortization | 39 | 20 | 13 | 6 | ||||||||||||
��Adjusted EBITDA | $ | 31 | $ | 33 | $ | 13 | $ | (15 | ) | |||||||
��Adjusted EBITDA margin | 5.0 | % | 12.4 | % | 3.9 | % | ||||||||||
5
FIDELITY NATIONAL FINANCIAL VENTURES
THIRD QUARTER SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Three Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | (14 | ) | $ | 6 | $ | $ | (20 | ) | |||||||
��Income tax expense | (11 | ) | 1 | (12 | ) | |||||||||||
��Earnings (loss) from equity investments | (15 | ) | (2 | ) | (13 | ) | ||||||||||
��Earnings from discontinued operations, net of tax | 1 | 1 | ||||||||||||||
��Non-controlling interests | 1 | (1 | ) | |||||||||||||
Net earnings attributable to Old FNF common shareholders | $ | (17 | ) | $ | 2 | $ | 1 | $ | (20 | ) | ||||||
EPS attributable to Old FNF common shareholders - basic | $ | (0.08 | ) | $ | 0.01 | $ | $ | (0.09 | ) | |||||||
EPS attributable to Old FNF common shareholders - diluted | $ | (0.07 | ) | $ | 0.01 | $ | $ | (0.08 | ) | |||||||
Old FNF weighted average shares - basic | $ | 226 | ||||||||||||||
Old FNF weighted average shares - diluted | $ | 230 | ||||||||||||||
�Total non-GAAP, pre-tax adjustments | 16 | 13 | 3 | |||||||||||||
��Income taxes on non-GAAP adjustments | (5 | ) | (4 | ) | (1 | ) | ||||||||||
��Noncontrolling interest on non-GAAP adjustments | (5 | ) | (4 | ) | (1 | ) | ||||||||||
Total non-GAAP adjustments | 6 | 5 | (1 | ) | 2 | |||||||||||
Adjusted net earnings attributable to Old FNF common shareholders | $ | (11 | ) | $ | 7 | $ | $ | (18 | ) | |||||||
Adjusted EPS attributable to Old FNF common shareholders - diluted | $ | (0.05 | ) | $ | 0.03 | $ | $ | (0.08 | ) | |||||||
Cash flows provided by operations: | $ | 24 | ||||||||||||||
Capital expenditures | 19 | |||||||||||||||
Free cash flow | $ | 5 | ||||||||||||||
6
�FIDELITY NATIONAL FINANCIAL VENTURES
YTD SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Operating revenue | $ | 2,029 | $ | 892 | $ | 1,055 | $ | 82 | ||||||||
Interest and investment income | 6 | 1 | 5 | |||||||||||||
Realized gains and losses | (6 | ) | (1 | ) | (5 | ) | ||||||||||
Total revenue | 2,029 | 893 | 1,054 | 82 | ||||||||||||
Personnel costs | 176 | 63 | 52 | 61 | ||||||||||||
Other operating expenses | 103 | 40 | 46 | 17 | ||||||||||||
Cost of autoparts revenue (Includes depreciation and amortization of $51 million at Remy) | 771 | 771 | ||||||||||||||
Cost of restaurant revenue | 899 | 899 | ||||||||||||||
Depreciation and amortization | 52 | 3 | 39 | 10 | ||||||||||||
Interest expense | 18 | 16 | 5 | (3 | ) | |||||||||||
Total expenses | 2,019 | 893 | 1,041 | 85 | ||||||||||||
Pre-tax earnings from continuing operations | $ | 10 | $ | $ | 13 | $ | (3 | ) | ||||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | 6 | $ | $ | 1 | $ | 5 | |||||||||
Transaction costs | 3 | 3 | ||||||||||||||
Other legal accruals | 20 | 20 | ||||||||||||||
��Purchase price amortization | 55 | 36 | 11 | 8 | ||||||||||||
�Total non-GAAP adjustments before taxes | $ | 84 | $ | 59 | $ | 12 | $ | 13 | ||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 94 | $ | 59 | $ | 25 | $ | 10 | ||||||||
��Adjusted pre-tax margin from continuing operations | 4.6 | % | 6.6 | % | 2.4 | % | 11.5 | % | ||||||||
Purchase price amortization | (55 | ) | (36 | ) | (11 | ) | (8 | ) | ||||||||
Interest expense | 18 | 16 | 5 | (3 | ) | |||||||||||
Depreciation and amortization | 103 | 54 | 39 | 10 | ||||||||||||
��Adjusted EBITDA | $ | 160 | $ | 93 | $ | 58 | $ | 9 | ||||||||
��Adjusted EBITDA margin | 7.9 | % | 10.4 | % | 5.5 | % | 10.3 | % | ||||||||
7
FIDELITY NATIONAL FINANCIAL VENTURES
YTD SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2014 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | 10 | $ | $ | 13 | $ | (3 | ) | ||||||||
��Income tax expense | (13 | ) | (13 | ) | ||||||||||||
��Earnings (loss) from equity investments | (46 | ) | (46 | ) | ||||||||||||
��Non-controlling interests | 1 | (2 | ) | 4 | (1 | ) | ||||||||||
Net earnings attributable to FNF common shareholders | $ | (24 | ) | $ | 2 | $ | 9 | $ | (35 | ) | ||||||
EPS attributable to Old FNF common shareholders - basic | $ | (0.04 | ) | $ | 0.03 | $ | 0.04 | $ | (0.11 | ) | ||||||
EPS attributable to Old FNF common shareholders - diluted | $ | (0.04 | ) | $ | 0.02 | $ | 0.04 | $ | (0.10 | ) | ||||||
Old FNF weighted average shares - basic | 275 | |||||||||||||||
Old FNF weighted average shares - diluted | 282 | |||||||||||||||
EPS attributable to FNFV group common shareholders - basic | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.07 | ) | ||||
EPS attributable to FNFV group common shareholders - diluted | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.07 | ) | ||||
FNFV weighted average shares - basic | 31 | |||||||||||||||
FNFV weighted average shares - diluted | 31 | |||||||||||||||
FNFV actual shares outstanding as of September 30, 2014 | 93 | |||||||||||||||
�Total Non-GAAP, pre-tax adjustments | 84 | 59 | 12 | 13 | ||||||||||||
��Income taxes on non-GAAP adjustments | (30 | ) | (22 | ) | (3 | ) | (5 | ) | ||||||||
Ceridian legal settlement, net of tax | 21 | 21 | ||||||||||||||
��Noncontrolling interest on non-GAAP adjustments | (23 | ) | (18 | ) | (5 | ) | ||||||||||
Total non-GAAP adjustments | 52 | 19 | 4 | 29 | ||||||||||||
Total adjusted net earnings attributable to FNFV | $ | 28 | $ | 21 | $ | 13 | $ | (6 | ) | |||||||
Total adjusted EPS attributable to FNFV shareholders - diluted* | $ | 0.30 | $ | 0.23 | $ | 0.14 | $ | (0.06 | ) | |||||||
* Adjusted EPS is presented as if 93M shares of FNFV group common stock were outstanding for the entire nine months | ||||||||||||||||
Cash flows used in operations: | $ | (11 | ) | |||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Other legal matters | 16 | |||||||||||||||
Total non-GAAP adjustments | 16 | |||||||||||||||
Adjusted cash flows from operations | 5 | |||||||||||||||
Capital expenditures | 64 | |||||||||||||||
Free cash flow | $ | (59 | ) | |||||||||||||
8
FIDELITY NATIONAL FINANCIAL VENTURES
YTD SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Operating revenue | $ | 1,933 | $ | 834 | $ | 1,037 | $ | 62 | ||||||||
Interest and investment income | 1 | 1 | ||||||||||||||
Realized gains and losses | (4 | ) | (4 | ) | ||||||||||||
Total revenue | 1,930 | 831 | 1,037 | 62 | ||||||||||||
Personnel costs | 189 | 65 | 47 | 77 | ||||||||||||
Other operating expenses | 98 | 36 | 50 | 12 | ||||||||||||
Cost of autoparts revenue (Includes depreciation and amortization of $55 million at Remy) | 704 | 704 | ||||||||||||||
Cost of restaurant revenue | 889 | 889 | ||||||||||||||
Depreciation and amortization | 54 | 3 | 40 | 11 | ||||||||||||
Interest expense | 19 | 16 | 6 | (3 | ) | |||||||||||
Total expenses | 1,953 | 824 | 1,032 | 97 | ||||||||||||
Pre-tax earnings from continuing operations | $ | (23 | ) | $ | 7 | $ | 5 | $ | (35 | ) | ||||||
Non-GAAP adjustments before taxes | ||||||||||||||||
��Realized (gain) loss, net adjustment | $ | 4 | $ | 4 | $ | $ | ||||||||||
Executive severance | 7 | 7 | ||||||||||||||
��Purchase price amortization | 57 | 41 | 8 | 8 | ||||||||||||
�Total non-GAAP adjustments before taxes | $ | 68 | $ | 52 | $ | 8 | $ | 8 | ||||||||
��Adjusted pre-tax earnings from continuing operations | $ | 45 | $ | 59 | $ | 13 | $ | (27 | ) | |||||||
��Adjusted pre-tax margin from continuing operations | 2.3 | % | 7.1 | % | 1.3 | % | ||||||||||
Purchase price amortization | (57 | ) | (41 | ) | (8 | ) | (8 | ) | ||||||||
Interest expense | 19 | 16 | 6 | (3 | ) | |||||||||||
Depreciation and amortization | 109 | 58 | 40 | 11 | ||||||||||||
��Adjusted EBITDA | $ | 116 | $ | 92 | $ | 51 | $ | (27 | ) | |||||||
��Adjusted EBITDA margin | 6.0 | % | 11.0 | % | 4.9 | % | ||||||||||
9
FIDELITY NATIONAL FINANCIAL VENTURES
YTD SEGMENT INFORMATION
(In millions)
(Unaudited)
Total FNFV | Remy | Restaurant Group | FNFV Corporate and Other | |||||||||||||
Nine Months Ended | ||||||||||||||||
September�30, 2013 | ||||||||||||||||
Pre-tax earnings from continuing operations | $ | (23 | ) | $ | 7 | $ | 5 | $ | (35 | ) | ||||||
��Income tax expense | (27 | ) | 2 | (1 | ) | (28 | ) | |||||||||
��Earnings (loss) from equity investments | (24 | ) | (24 | ) | ||||||||||||
��Earnings (loss) from discontinued operations, net of tax | (3 | ) | (3 | ) | ||||||||||||
��Non-controlling interests | 4 | 4 | 1 | (1 | ) | |||||||||||
Net earnings attributable to Old FNF common shareholders | $ | (27 | ) | $ | 1 | $ | 2 | $ | (30 | ) | ||||||
EPS attributable to Old FNF common shareholders - basic | $ | (0.12 | ) | $ | $ | 0.01 | $ | (0.13 | ) | |||||||
EPS attributable to Old FNF common shareholders - diluted | $ | (0.12 | ) | $ | $ | 0.01 | $ | (0.13 | ) | |||||||
Weighted average shares - basic | 225 | |||||||||||||||
Weighted average shares - diluted | 230 | |||||||||||||||
�Total non-GAAP, pre-tax adjustments | 68 | 52 | 8 | 8 | ||||||||||||
��Income taxes on non-GAAP adjustments | (20 | ) | (17 | ) | (3 | ) | ||||||||||
��Noncontrolling interest on non-GAAP adjustments | (19 | ) | (15 | ) | (4 | ) | ||||||||||
Total non-GAAP adjustments | 29 | 20 | 4 | 5 | ||||||||||||
Adjusted net earnings attributable to Old FNF common shareholders | $ | 2 | $ | 21 | $ | 6 | $ | (25 | ) | |||||||
Adjusted EPS attributable to Old FNF common shareholders - diluted | $ | 0.01 | $ | 0.09 | $ | 0.03 | $ | (0.11 | ) | |||||||
Cash flows provided by operations: | $ | 46 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
��Severance costs related to acquisition of LPS | 7 | |||||||||||||||
Total non-GAAP adjustments | 7 | |||||||||||||||
Adjusted cash flows from operations | 53 | |||||||||||||||
Capital expenditures | 60 | |||||||||||||||
Free cash flow | $ | (7 | ) | |||||||||||||
10
FIDELITY NATIONAL FINANCIAL VENTURES
SUMMARY BALANCE SHEET INFORMATION
(In millions)
� | � | FNFV September 30, 2014 | FNFV December 31, 2013 | |||||||
� | � | (Unaudited) | (Unaudited) | |||||||
Cash and investment portfolio | � | $ | 593 | $ | 559 | |||||
Goodwill | � | � | 483 | � | 462 | |||||
Total assets | � | � | 2,778 | � | 2,616 | |||||
Notes payable | � | � | 467 | � | 452 | |||||
Non-controlling interest | 428 | 465 | ||||||||
Total equity | � | � | 1,844 | � | 1,639 | |||||
� | � | FNF Core | FNFV | Intercompany Eliminations | Consolidated September 30, 2014 | Consolidated December 31, 2013 | |||||||||||||||||||
� | � | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | � | � | ||||||||||||||||||
Cash and investment portfolio | � | $ | 4,494 | $ | 593 | $ | (29 | ) | $ | 5,058 | $ | 5,761 | |||||||||||||
Goodwill | � | � | 4,489 | 483 | 4,792 | � | 1,901 | ||||||||||||||||||
Title plant | � | � | 395 | 395 | � | 370 | |||||||||||||||||||
Total assets | � | � | 12,041 | 2,778 | (29 | ) | 14,790 | � | 10,529 | ||||||||||||||||
Notes payable | � | � | 2,802 | 467 | (29 | ) | 3,240 | � | 1,323 | ||||||||||||||||
Reserve for title claim losses | � | � | 1,640 | 1,640 | � | 1,636 | |||||||||||||||||||
Secured trust deposits | � | � | 722 | 722 | � | 588 | |||||||||||||||||||
Redeemable non-controlling interests | 687 | 687 | |||||||||||||||||||||||
Non-redeemable non-controlling interests | (58 | ) | 428 | 370 | 474 | ||||||||||||||||||||
Total equity | � | � | 5,197 | 1,844 | 7,041 | � | 5,535 | ||||||||||||||||||
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FIDELITY NATIONAL FINANCIAL, INC.
CONSOLIDATED SUMMARY OF EARNINGS
(In millions)
(Unaudited)
� | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||||||||||||||
� | Consolidated | � | Core | FNFV | Consolidated | � | Core | FNFV | ||||||||||||||||
Direct title premiums | $ | 465 | � | $ | 465 | $ | $ | 1,249 | � | $ | 1,249 | $ | ||||||||||||
Agency title premiums | 528 | � | 528 | 1,450 | � | 1,450 | ||||||||||||||||||
��Total title premiums | 993 | � | 993 | � | 2,699 | � | 2,699 | � | ||||||||||||||||
Escrow, title-related and other fees | 735 | � | 708 | 27 | 2,097 | � | 2,015 | 82 | ||||||||||||||||
�����Total title and escrow and other | 1,728 | � | 1,701 | � | 27 | 4,796 | � | 4,714 | � | 82 | ||||||||||||||
Restaurant revenue | 343 | 343 | 1,055 | 1,055 | ||||||||||||||||||||
Remy revenue | 290 | 290 | 892 | 892 | ||||||||||||||||||||
Interest and investment income | 29 | 27 | 2 | 94 | 88 | 6 | ||||||||||||||||||
Realized gains and losses | (7 | ) | (2 | ) | (5 | ) | (6 | ) | (6 | ) | ||||||||||||||
�����Total revenue | 2,383 | � | 1,726 | � | 657 | 6,831 | � | 4,802 | � | 2,029 | ||||||||||||||
Personnel costs | 645 | 584 | 61 | 1,950 | 1,774 | 176 | ||||||||||||||||||
Other operating expenses | 428 | 390 | 38 | 1,289 | 1,186 | 103 | ||||||||||||||||||
Cost of Remy revenue (includes $19 and $51 of D&A, respectively) | 266 | 266 | 771 | 771 | ||||||||||||||||||||
Cost of restaurant revenue | 296 | 296 | 899 | 899 | ||||||||||||||||||||
Agent commissions | 396 | 396 | 1,098 | 1,098 | ||||||||||||||||||||
Depreciation and amortization | 102 | 84 | 18 | 305 | 253 | 52 | ||||||||||||||||||
Title claim loss expense | 59 | 59 | 169 | 169 | ||||||||||||||||||||
Interest expense | 37 | 32 | 5 | 111 | 93 | 18 | ||||||||||||||||||
�����Total expenses | 2,229 | � | 1,545 | � | 684 | 6,592 | � | 4,573 | � | 2,019 | ||||||||||||||
Earnings from continuing operations before taxes | 154 | � | 181 | � | (27 | ) | 239 | � | 229 | � | 10 | |||||||||||||
Income tax expense | 59 | 73 | (14 | ) | 79 | 92 | (13 | ) | ||||||||||||||||
Earnings from continuing operations before equity investments | 95 | � | 108 | � | (13 | ) | 160 | � | 137 | � | 23 | |||||||||||||
Loss from equity investments | (7 | ) | 1 | (8 | ) | (43 | ) | 3 | (46 | ) | ||||||||||||||
Net earnings from continuing operations | 88 | � | 109 | � | (21 | ) | 117 | � | 140 | � | (23 | ) | ||||||||||||
Loss from discontinued operations, net of tax | (1 | ) | (1 | ) | ||||||||||||||||||||
Net earnings | 88 | 109 | (21 | ) | 116 | 139 | (23 | ) | ||||||||||||||||
Non-controlling interests | (14 | ) | (5 | ) | (9 | ) | (75 | ) | (76 | ) | 1 | |||||||||||||
Net earnings attributable to common shareholders | $ | 102 | � | $ | 114 | $ | (12 | ) | $ | 191 | � | $ | 215 | $ | (24 | ) | ||||||||
Cash flows provided by (used in) operations | 295 | 292 | 3 | 284 | 295 | (11 | ) | |||||||||||||||||
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FIDELITY NATIONAL FINANCIAL, INC.
CONSOLIDATED SUMMARY OF EARNINGS
(In millions)
(Unaudited)
� | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||||||||||||
� | Consolidated | � | Core | FNFV | Consolidated | � | Core | FNFV | ||||||||||||||||
Direct title premiums | $ | 472 | $ | 472 | $ | $ | 1,377 | $ | 1,377 | $ | ||||||||||||||
Agency title premiums | 630 | 630 | 1,779 | 1,779 | ||||||||||||||||||||
��Total title premiums | 1,102 | � | 1,102 | � | 3,156 | � | 3,156 | � | ||||||||||||||||
Escrow, title-related and other fees | 437 | 415 | 22 | 1,361 | 1,299 | 62 | ||||||||||||||||||
�����Total title and escrow and other | 1,539 | � | 1,517 | � | 22 | 4,517 | � | 4,455 | � | 62 | ||||||||||||||
Restaurant revenue | 336 | 336 | 1,037 | 1,037 | ||||||||||||||||||||
Remy revenue | 266 | 266 | 834 | 834 | ||||||||||||||||||||
Interest and investment income | 29 | 30 | (1 | ) | 99 | 98 | 1 | |||||||||||||||||
Realized gains and losses | 4 | 3 | 1 | 7 | 11 | (4 | ) | |||||||||||||||||
�����Total revenue | 2,174 | � | 1,550 | � | 624 | 6,494 | � | 4,564 | � | 1,930 | ||||||||||||||
Personnel costs | 546 | 479 | 67 | 1,611 | 1,422 | 189 | ||||||||||||||||||
Other operating expenses | 329 | 300 | 29 | 1,020 | 922 | 98 | ||||||||||||||||||
Cost of Remy revenue (includes $19 and $55 of D&A, respectively) | 223 | 223 | 704 | 704 | ||||||||||||||||||||
Cost of restaurant revenue | 292 | 292 | 889 | 889 | ||||||||||||||||||||
Agent commissions | 482 | 482 | 1,352 | 1,352 | ||||||||||||||||||||
Depreciation and amortization | 36 | 16 | 20 | 104 | 50 | 54 | ||||||||||||||||||
Title claim loss expense | 77 | 77 | 221 | 221 | ||||||||||||||||||||
Interest expense | 27 | 20 | 7 | 71 | 52 | 19 | ||||||||||||||||||
�����Total expenses | 2,012 | � | 1,374 | � | 638 | 5,972 | � | 4,019 | � | 1,953 | ||||||||||||||
Earnings from continuing operations before taxes | 162 | � | 176 | � | (14 | ) | 522 | � | 545 | � | (23 | ) | ||||||||||||
Income tax expense | 52 | 63 | (11 | ) | 170 | 197 | (27 | ) | ||||||||||||||||
Earnings from continuing operations before equity investments | 110 | � | 113 | � | (3 | ) | 352 | � | 348 | � | 4 | |||||||||||||
Loss from equity investments | (14 | ) | 1 | (15 | ) | (20 | ) | 4 | (24 | ) | ||||||||||||||
Net earnings from continuing operations | 96 | � | 114 | � | (18 | ) | 332 | � | 352 | � | (20 | ) | ||||||||||||
Loss from discontinued operations, net of tax | (1 | ) | 1 | (2 | ) | 1 | (3 | ) | ||||||||||||||||
Net earnings | 96 | 113 | (17 | ) | 330 | 353 | (23 | ) | ||||||||||||||||
Non-controlling interests | 2 | 2 | 8 | 4 | 4 | |||||||||||||||||||
Net earnings attributable to common shareholders | $ | 94 | � | $ | 111 | $ | (17 | ) | $ | 322 | � | $ | 349 | $ | (27 | ) | ||||||||
Cash flows provided by (used in) operations | 129 | 105 | 24 | 344 | 298 | 46 | ||||||||||||||||||
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