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FNF Reports Second Quarter 2019 Diluted EPS of $0.96 and Adjusted Diluted EPS of $0.92, Pre-Tax Title Margin of 18.5% and Adjusted Pre-Tax Title Margin of 17.7%

JACKSONVILLE, Fla., July 16, 2019 /PRNewswire/ -- Fidelity National Financial, Inc. (FNF), a leading provider of title insurance and transaction services to the real estate and mortgage industries, today reported operating results for the three and six-month periods ended June 30, 2019.

  • Total revenue of approximately $2.1 billion in the second quarter versus $2.1 billion in the second quarter of 2018
  • Second quarter net earnings of $266 million and adjusted net earnings of $255 million versus net earnings of $251 million and adjusted net earnings of $239 million for the second quarter of 2018
  • Second quarter diluted EPS of $0.96 and adjusted diluted EPS of $0.92 versus diluted EPS of $0.90 and adjusted diluted EPS of $0.86 in the second quarter of 2018
  • Realized gains were $41 million in the second quarter versus realized losses of $16 million in the second quarter of 2018, primarily due to the adoption of a new accounting standard in 2018 that requires mark to market accounting treatment of equity and preferred stock securities and recognition of the related changes in fair value in realized gains and losses, whether the securities were disposed of in the quarter or continue to be held in our investment portfolio

Title

  • Total revenue of approximately $2.1 billion versus approximately $2.0 billion in total revenue in the second quarter of 2018
  • Pre-tax earnings of $387 million and adjusted pre-tax earnings of $363 million versus pre-tax earnings of $300 million and adjusted pre-tax earnings of $337 million in the second quarter of 2018
  • Pre-tax title margin of 18.5% and adjusted pre-tax title margin of 17.7% versus pre-tax title margin of 15.3% and adjusted pre-tax title margin of 17.1% in the second quarter of 2018
  • Second quarter purchase orders opened decreased 2% on a daily basis and purchase orders closed decreased 6% on a daily basis versus the second quarter of 2018
  • Total commercial revenue of $286 million, a 2% increase versus total commercial revenue in the second quarter of 2018, driven by a 5% increase in total commercial fee per file somewhat offset by a 3% decrease in closed orders; second quarter total commercial orders opened increased 8% compared to the prior year
  • Overall second quarter average fee per file of $2,677, a 4% increase versus the second quarter of 2018

Title Orders



Direct Orders Opened *


Direct Orders Closed *

Month


 / (% Purchase)


 / (% Purchase)

April 2019



184,000

63%



114,000

65%

May 2019



179,000

63%



127,000

64%

June 2019



181,000

57%



118,000

65%








Second Quarter 2019



544,000

61%



359,000

65%

















Direct Orders Opened *


Direct Orders Closed *

Month


 / (% Purchase)


 / (% Purchase)

April 2018



167,000

70%



114,000

69%

May 2018



175,000

72%



124,000

71%

June 2018



163,000

71%



124,000

73%








Second Quarter 2018



505,000

71%



362,000

71%



* 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

Second Quarter 2019 - Total Commercial



58,600



34,000



$286



$8,400

Second Quarter 2018 - Total Commercial



54,200



35,100



$280



$8,000

"The second quarter was a very strong performance for our title business," said Chairman William P. Foley, II.  "We generated adjusted pre-tax title earnings of $363 million and a 17.7% adjusted pre-tax title margin, both of which were our best quarterly performance since the third quarter of 2003 nearly sixteen years ago. Looking ahead, purchase orders opened declined by 2% versus the second quarter of 2018, a sequential improvement from the 6% decrease in the first quarter of 2019 versus the prior year.  Refinance orders opened increased by 51% versus the second quarter of 2018, as the decline in mortgage rates appears to be more persistent than many originally expected.  Lastly, total commercial orders opened increased by 8% over the second quarter of 2018.  With strong second quarter refinance orders opened, an improving trend in purchase orders opened and continued strength in commercial orders opened, we are well positioned to continue to produce strong financial results in our title business as we enter the second half of 2019.

"With respect to the acquisition of Stewart Information Services, we recently exercised our second option to extend the closing date of the transaction an additional three months to September 18, 2019.  We continue to work with the FTC and the New York State Department of Financial Services to seek approval of the proposed acquisition.  If the approvals are obtained, we remain confident that the Stewart acquisition can create meaningful long-term value for our shareholders."

Conference Call
We will host a call with investors and analysts to discuss second quarter 2019 FNF results on Wednesday, July 17, 2019, beginning at 11:00 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 fnf.com.  The conference call replay will be available via webcast through the FNF Investor Relations website at fnf.com.  The telephone replay will be available from 1:00 p.m. Eastern Time on July 17, 2019, through July 24, 2019, by dialing 800-475-6701 (USA) or 320-365-3844 (International).  The access code will be 469222.

About Fidelity National Financial, Inc.
Fidelity National Financial, Inc. (FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries.  FNF is the nation's 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.  More information about FNF can be found at 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, FNF 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 adjusted pre-tax earnings, adjusted pre-tax earnings as a percentage of adjusted revenue (adjusted pre-tax title margin), adjusted net earnings, and adjusted EPS.

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; 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; the risk that the necessary regulatory approvals of our acquisition of Stewart Information Services Corporation ("Stewart") may not be obtained or may be obtained subject to conditions that are not anticipated;  risks that any of the closing conditions to the proposed Stewart merger may not be satisfied in a timely manner; the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the acquisition will not be realized; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of FNF's Form 10-K and other filings with the Securities and Exchange Commission ("SEC").

FNF-E

 

FIDELITY NATIONAL FINANCIAL, INC.

SECOND QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and Other

Three Months Ended



June 30, 2019



Direct title premiums


$

625


$

625


$

Agency title premiums


754


754


Escrow, title related and other fees


665


613


52

Total title and escrow


2,044


1,992


52










Interest and investment income


59


54


5

Realized gains and losses, net


41


46


(5)

Total revenue


2,144


2,092


52









Personnel costs


685


653


32

Agent commissions


579


579


Other operating expenses


409


373


36

Depreciation and amortization


44


38


6

Claim loss expense


62


62


Interest expense


12



12

Total expenses


1,791


1,705


86








Pre-tax earnings (loss)


$

353


$

387


$

(34)








Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


(41)


(46)


5

  Purchase price amortization


25


21


4

  Transaction costs


4



4

  Other adjustments


1


1


 Total non-GAAP adjustments before taxes


$

(11)


$

(24)


$

13







Adjusted pre-tax earnings (loss)


$

342


$

363


$

(21)

Adjusted pre-tax margin


16.3%


17.7%









Pre-tax earnings (loss)


$

353


$

387


$

(34)

  Income tax expense (benefit)


86


95


(9)

  Earnings from equity investments


3


3


  Non-controlling interests


4


5


(1)








Net earnings (loss) attributable to FNF, Inc. common shareholders


$

266


$

290


$

(24)








EPS attributable to FNF, Inc. common shareholders - basic


$

0.97





EPS attributable to FNF, Inc. common shareholders - diluted


$

0.96













FNF, Inc. weighted average shares - basic


273





FNF, Inc. weighted average shares - diluted


277





 

 

FIDELITY NATIONAL FINANCIAL, INC.

SECOND QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




June 30, 2019




Net earnings (loss) attributable to FNF, Inc. common shareholders


$

266


$

290


$

(24)








 Total non-GAAP, pre-tax adjustments


$

(11)


$

(24)


$

13

  Income taxes on non-GAAP adjustments


3


6


(3)

  Noncontrolling interest on non-GAAP adjustments


(3)


(2)


(1)

Total non-GAAP adjustments


$

(11)


$

(20)


$

9










Adjusted net earnings (loss) attributable to FNF, Inc. common
shareholders


$

255


$

270


$

(15)








Adjusted EPS attributable to FNF, Inc. common shareholders - diluted


$

0.92






Direct orders opened (000's)


544


544



Direct orders closed (000's)


359


359



Fee per file


$

2,677


$

2,677



Actual title claims paid


$

66


$

66










Cash flows provided by operations


$

377





 

 

FIDELITY NATIONAL FINANCIAL, INC.

SECOND QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and Other

Three Months Ended




June 30, 2018




Direct title premiums


$

599


$

599


$

Agency title premiums


732


732


Escrow, title related and other fees


765


600


165

Total title and escrow


2,096


1,931


165











Interest and investment income


43


43


Realized gains and losses, net


(16)


(16)


Total revenue


2,123


1,958


165








Personnel costs


665


633


32

Agent commissions


561


561


Other operating expenses


506


366


140

Depreciation and amortization


45


38


7

Claim loss expense


60


60


Interest expense


11



11

Total expenses


1,848


1,658


190








Pre-tax earnings (loss)


$

275


$

300


$

(25)








Non-GAAP adjustments before taxes










  Realized (gains) and losses, net


16


16


  Purchase price amortization


26


21


5

  Transaction costs


4



4

 Total non-GAAP adjustments before taxes


$

46


$

37


$

9








Adjusted pre-tax earnings (loss)


$

321


$

337


$

(16)

Adjusted pre-tax margin


15.0%


17.1%









Pre-tax earnings (loss)


$

275


$

300


$

(25)








  Income tax expense (benefit)


22


29


(7)

  Earnings from equity investments


1


1


  Non-controlling interests


3


3









Net earnings (loss) attributable to FNF, Inc. common shareholders


$

251


$

269


$

(18)








EPS attributable to FNF, Inc. common shareholders - basic


$

0.92





EPS attributable to FNF, Inc. common shareholders - diluted


$

0.90















FNF, Inc. weighted average shares - basic


273





FNF, Inc. weighted average shares - diluted


278





 

 

FIDELITY NATIONAL FINANCIAL, INC.

SECOND QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




June 30, 2018




Net earnings (loss) attributable to FNF, Inc. common shareholders


$

251


$

269


$

(18)











 Total non-GAAP, pre-tax adjustments


$

46


$

37


$

9

  Income taxes on non-GAAP adjustments


(10)


(8)


(2)

  Noncontrolling interest on non-GAAP adjustments


(3)


(3)


  Change in tax estimate


(45)


(45)


Total non-GAAP adjustments


$

(12)


$

(19)


$

7








Adjusted net earnings (loss) attributable to FNF, Inc. common
shareholders


$

239


$

250


$

(11)











Adjusted EPS attributable to FNF, Inc. common shareholders - diluted


$

0.86












Direct orders opened (000's)


505


505



Direct orders closed (000's)


362


362



Fee per file


$

2,579


$

2,579



Actual title claims paid


$

58


$

58










Cash flows provided by operations


$

331





 

 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and Other

Six Months Ended




June 30, 2019




Direct title premiums


$

1,065


$

1,065


$

Agency title premiums


1,306


1,306


Escrow, title related and other fees


1,199


1,094


105

Total title and escrow


3,570


3,465


105











Interest and investment income


113


102


11

Realized gains and losses, net


183


188


(5)

Total revenue


3,866


3,755


111








Personnel costs


1,277


1,204


73

Agent commissions


1,000


1,000


Other operating expenses


753


688


65

Depreciation and amortization


88


77


11

Claim loss expense


107


107


Interest expense


24



24

Total expenses


3,249


3,076


173








Pre-tax earnings (loss)


$

617


$

679


$

(62)








Non-GAAP adjustments before taxes










  Realized (gains) and losses, net


(183)


(188)


5

  Purchase price amortization


52


43


9

  Transaction costs


6



6

  Other adjustments


1


1


 Total non-GAAP adjustments before taxes


$

(124)


$

(144)


$

20








Adjusted pre-tax earnings (loss)


$

493


$

535


$

(42)

Adjusted pre-tax margin


13.4%


15.0%









Pre-tax earnings (loss)


$

617


$

679


$

(62)








  Income tax expense (benefit)


151


166


(15)

  Earnings from equity investments


10


10


  Non-controlling interests


4


5


(1)











Net earnings (loss) attributable to FNF, Inc. common shareholders


$

472


$

518


$

(46)








EPS attributable to FNF, Inc. common shareholders - basic


$

1.73





EPS attributable to FNF, Inc. common shareholders - diluted


$

1.70












FNF, Inc. weighted average shares - basic


273





FNF, Inc. weighted average shares - diluted


277





 

 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Six Months Ended



June 30, 2019



Net earnings (loss) attributable to FNF, Inc. common shareholders


$

472


$

518


$

(46)











 Total non-GAAP, pre-tax adjustments


$

(124)


$

(144)


$

20

  Income taxes on non-GAAP adjustments


31


36


(5)

  Noncontrolling interest on non-GAAP adjustments


(6)


(5)


(1)

Total non-GAAP adjustments


$

(99)


$

(113)


$

14








Adjusted net earnings (loss) attributable to FNF, Inc. common
shareholders


$

373


$

405


$

(32)








Adjusted EPS attributable to FNF, Inc. common shareholders - diluted


$

1.35












Direct orders opened (000's)


982


982



Direct orders closed (000's)


622


622



Fee per file


$

2,630


$

2,630



Actual title claims paid


$

115


$

115










Cash flows provided by operations


$

372





 

 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)


Six Months Ended


Consolidated


Title


Corporate and
Other

June 30, 2018




Direct title premiums


$

1,071


$

1,071


$

Agency title premiums


1,296


1,296


Escrow, title related and other fees


1,383


1,116


267

Total title and escrow


3,750


3,483


267











Interest and investment income


81


80


1

Realized gains and losses, net


(15)


(15)


Total revenue


3,816


3,548


268








Personnel costs


1,272


1,212


60

Agent commissions


992


992


Other operating expenses


929


696


233

Depreciation and amortization


92


78


14

Claim loss expense


107


107


Interest expense


22



22

Total expenses


3,414


3,085


329








Pre-tax earnings (loss)


$

402


$

463


$

(61)








Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


15


15


  Purchase price amortization


55


44


11

  Transaction costs


4



4

  Other adjustments


3


1


2

 Total non-GAAP adjustments before taxes


$

77


$

60


$

17









Adjusted pre-tax earnings (loss)


$

479


$

523


$

(44)

Adjusted pre-tax margin


12.5%


14.7%









Pre-tax earnings (loss)


$

402


$

463


$

(61)








  Income tax expense (benefit)


53


69


(16)

  Earnings from equity investments


3


2


1

  Non-controlling interests


4


4









Net earnings (loss) attributable to FNF, Inc. common shareholders


$

348


$

392


$

(44)








EPS attributable to FNF, Inc. common shareholders - basic


$

1.27





EPS attributable to FNF, Inc. common shareholders - diluted


$

1.25












FNF, Inc. weighted average shares - basic


273





FNF, Inc. weighted average shares - diluted


279





 

 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Six Months Ended




June 30, 2018




Net earnings (loss) attributable to FNF, Inc. common shareholders


$

348


$

392


$

(44)











 Total non-GAAP, pre-tax adjustments


$

77


$

60


$

17

  Income taxes on non-GAAP adjustments


(17)


(13)


(4)

  Noncontrolling interest on non-GAAP adjustments


(6)


(6)


  Change in tax estimate


(45)


(45)


$

Total non-GAAP adjustments


$

9


$

(4)


$

13








Adjusted net earnings (loss) attributable to FNF, Inc. common
shareholders


$

357


$

388


$

(31)








Adjusted EPS attributable to FNF, Inc. common shareholders - diluted


$

1.28












Direct orders opened (000's)


983


983



Direct orders closed (000's)


675


675



Fee per file


$

2,470


$

2,470



Actual title claims paid


$

110


$

110










Cash flows provided by operations


$

350






 

 

FIDELITY NATIONAL FINANCIAL, INC.

QUARTERLY OPERATING STATISTICS

(Unaudited)




Q2 2019


Q1 2019


Q4 2018


Q3 2018


Q2 2018


Q1 2018


Q4 2017


Q3 2017

Quarterly Opened Orders ('000's except % data)

Total opened orders*


544


438


379


456


505


478


445


501

Total opened orders per day*


8.5


7.2


6.0


7.2


7.9


7.7


7.2


8.0

Purchase % of opened orders


61%


65%


67%


69%


71%


66%


60%


62%

Refinance % of opened orders


39%


35%


33%


31%


29%


34%


40%


38%

Total closed orders*


359


263


301


339


362


313


357


367

Total closed orders per day*


5.6


4.3


4.8


5.4


5.7


5.0


5.8


5.8

Purchase % of closed orders


65%


66%


69%


71%


71%


62%


61%


65%

Refinance % of closed orders


35%


34%


31%


29%


29%


38%


39%


35%


























Commercial (millions, except orders in '000's)

Total commercial revenue


$

286


$

231


$

328


$

276


$

280


$

235


$

288


$

250

Total commercial opened orders


58.6


49.8


46.0


48.9


54.2


52.8


46.3


48.3

Total commercial closed orders


34.0


30.0


35.2


31.2


35.1


31.5


33.2


33.4


















National commercial revenue


$

165


$

123


$

197


$

157


$

155


$

128


$

165


$

138

National commercial opened orders


25.3


20.6


19.1


19.8


23.0


21.1


19.0


19.9

National commercial closed orders


12.7


10.5


13.2


12.0


12.9


11.2


12.1


13.1


















Total Fee Per File

Fee per file


$

2,677


$

2,567


$

2,803


$

2,623


$

2,579


$

2,344


$

2,425


$

2,368

Residential fee per file


$

2,075


$

1,964


$

2,003


$

2,032


$

2,051


$

1,816


$

1,789


$

1,885

Total commercial fee per file


$

8,400


$

7,700


$

9,300


$

8,800


$

8,000


$

7,500


$

8,700


$

7,500

National commercial fee per file


$

13,000


$

11,700


$

14,900


$

13,100


$

12,000


$

11,400


$

13,600


$

10,500


















Total Staffing

Total field operations employees


10,300


10,000


10,200


10,800


11,000


10,900


11,200


11,700

* Includes an immaterial number of non-purchase and non-refinance orders

 

 

FIDELITY NATIONAL FINANCIAL, INC.

SUMMARY BALANCE SHEET INFORMATION

(In millions)




FNF, Inc.

June 30, 2019


FNF, Inc.

December 31, 2018



(Unaudited)


(Unaudited)

Cash and investment portfolio



$

5,234




$

4,806


Goodwill



2,725




2,726


Title plant



405




405


Total assets



10,189




9,301


Notes payable



838




836


Reserve for title claim losses



1,480




1,488


Secured trust deposits



912




822


Redeemable non-controlling interests



344




344


Non-redeemable non-controlling interests



(10)




(2)


Total equity and non-controlling interests



5,296




4,972


Total equity attributable to common shareholders



4,962




4,630


 

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