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FNF Reports Third Quarter 2019 Diluted EPS of $0.90 and Adjusted Diluted EPS of $1.10, Pre-Tax Title Margin of 17.7% and Adjusted Pre-Tax Title Margin of 18.6%

JACKSONVILLE, Fla., Oct. 29, 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 nine-month periods ended September 30, 2019.

  • Total revenue of approximately $2.2 billion in the third quarter versus $2.1 billion in the third quarter of 2018
  • Third quarter net earnings of $250 million and adjusted net earnings of $304 million versus net earnings of $236 million and adjusted net earnings of $218 million for the third quarter of 2018
  • Third quarter diluted EPS of $0.90 and adjusted diluted EPS of $1.10 versus diluted EPS of $0.85 and adjusted diluted EPS of $0.78 in the third quarter of 2018
  • Realized gains were $4 million in the third quarter versus realized gains of $50 million in the third 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 $2.2 billion versus approximately $1.9 billion in total revenue in the third quarter of 2018
  • Pre-tax earnings of $389 million and adjusted pre-tax earnings of $407 million versus pre-tax earnings of $311 million and adjusted pre-tax earnings of $299 million in the third quarter of 2018
  • Pre-tax title margin of 17.7% and adjusted pre-tax title margin of 18.6% versus pre-tax title margin of 16.0% and adjusted pre-tax title margin of 15.7% in the third quarter of 2018
  • Third quarter purchase orders opened increased 0.7% on a daily basis and purchase orders closed decreased 1.6% on a daily basis versus the third quarter of 2018
  • Total commercial revenue of $301 million, a 9% increase versus total commercial revenue in the third quarter of 2018, driven by a 17% increase in closed orders somewhat offset by a 6% decrease in total commercial fee per file; third quarter total commercial orders opened increased 15% compared to the prior year
  • Overall third quarter average fee per file of $2,459, a 6% decrease versus the third quarter of 2018

Title Orders




Direct Orders Opened *



Direct Orders Closed *

Month


 / (% Purchase)


 / (% Purchase)

July 2019



192,000

56%



134,000

59%

August 2019



214,000

48%



137,000

56%

September 2019



186,000

51%



138,000

51%








Third Quarter 2019



592,000

52%



409,000

55%


















Direct Orders Opened *



Direct Orders Closed *

Month


 / (% Purchase)



 / (% Purchase)

July 2018



158,000

70%



116,000

71%

August 2018



165,000

69%



123,000

71%

September 2018



133,000

69%



100,000

70%








Third Quarter 2018



456,000

69%



339,000

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

Third Quarter 2019 - Total Commercial



56,000




36,400




$301




$8,300

Third Quarter 2018 - Total Commercial



48,900




31,200




$276




$8,800

"During the third quarter, we experienced continued strong performance from our title business," said Chairman William P. Foley, II.  "We generated adjusted pre-tax title earnings of $407 million and an 18.6% adjusted pre-tax title margin, both of which represent record quarterly results dating back sixteen years to the third quarter of 2003. Looking ahead, purchase orders opened increased by 0.7% on a daily basis versus the third quarter of 2018, a sequential improvement from the 2% decrease in the second quarter of 2019, compared to the prior year. Refinance orders opened increased by nearly 114% on a daily basis versus the third quarter of 2018, as the decline in mortgage rates continues to drive strong refinance volumes. Lastly, total commercial orders opened increased by 15% over the third quarter of 2018.  With another strong quarter of refinance orders opened, and the continued strength in commercial orders opened, we are well positioned to continue producing strong title business results through the end of 2019."

Mr. Foley concluded, "As announced in September, we agreed to terminate our proposed merger with Stewart Information Services given insurmountable regulatory hurdles.  Looking forward, we remain committed to creating meaningful, long-term value for our shareholders and are in the process of reviewing our capital allocation strategy.  Our priorities for capital continue to be focused on share repurchases, consistent dividend growth over time, and strategic M&A that enhances the growth profile and diversification of the Company."

Conference Call

We will host a call with investors and analysts to discuss third quarter 2019 FNF results on Wednesday, October 30, 2019, beginning at 12:00 p.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 2:00 p.m. Eastern Time on October 30, 2019, through November 6, 2019, by dialing 800-475-6701 (USA) or 320-365-3844 (International).  The access code will be 472566.

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; 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.

THIRD QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




September 30, 2019




Direct title premiums


$

660



$

660



$


Agency title premiums


827



827




Escrow, title related and other fees


693



653



40


Total title and escrow


2,180



2,140



40









Interest and investment income


57



51



6


Realized gains and losses, net


4



3



1


Total revenue


2,241



2,194



47









Personnel costs


702



677



25


Agent commissions


630



630




Other operating expenses


473



393



80


Depreciation and amortization


44



38



6


Claim loss expense


67



67




Interest expense


12





12


Total expenses


1,928



1,805



123









Pre-tax earnings (loss)


$

313



$

389



$

(76)









Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


(4)



(3)



(1)


  Purchase price amortization


26



21



5


  Transaction costs


52





52


 Total non-GAAP adjustments before taxes


$

74



$

18



$

56









Adjusted pre-tax earnings (loss)


$

387



$

407



$

(20)


Adjusted pre-tax margin


17.3

%


18.6

%










Pre-tax earnings (loss)


$

313



$

389



$

(76)


  Income tax expense (benefit)


59



94



(35)


  Earnings from equity investments


2



1



1


  Non-controlling interests


6



5



1









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


$

250



$

291



$

(41)









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


277






 

FIDELITY NATIONAL FINANCIAL, INC.

THIRD QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




September 30, 2019




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


$

250



$

291



$

(41)









 Total non-GAAP, pre-tax adjustments


$

74



$

18



$

56


  Income taxes on non-GAAP adjustments


(17)



(4)



(13)


  Noncontrolling interest on non-GAAP adjustments


(3)



(3)




Total non-GAAP adjustments


$

54



$

11



$

43









Adjusted net earnings attributable to FNF, Inc. common shareholders


$

304



$

302



$

2









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


$

1.10













Direct orders opened (000's)


592



592




Direct orders closed (000's)


409



409




Fee per file


$

2,459



$

2,459




Actual title claims paid


$

52



$

52











Cash flows provided by operations


$

328






 

FIDELITY NATIONAL FINANCIAL, INC.

THIRD QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




September 30, 2018




Direct title premiums


$

574



$

574



$


Agency title premiums


722



722




Escrow, title related and other fees


695



567



128


Total title and escrow


1,991



1,863



128









Interest and investment income


44



42



2


Realized gains and losses, net


50



40



10


Total revenue


2,085



1,945



140









Personnel costs


654



619



35


Agent commissions


554



554




Other operating expenses


477



365



112


Depreciation and amortization


46



38



8


Claim loss expense


58



58




Interest expense


9





9


Total expenses


1,798



1,634



164









Pre-tax earnings (loss)


$

287



$

311



$

(24)









Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


(50)



(40)



(10)


  Purchase price amortization


27



22



5


  Transaction costs


9





9


  Sales tax contingency


6



6




 Total non-GAAP adjustments before taxes


$

(8)



$

(12)



$

4









Adjusted pre-tax earnings (loss)


$

279



$

299



$

(20)


Adjusted pre-tax margin


13.7

%


15.7

%










Pre-tax earnings (loss)


$

287



$

311



$

(24)









  Income tax expense (benefit)


51



68



(17)


  Earnings from equity investments


1



1




  Non-controlling interests


1



3



(2)









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


$

236



$

241



$

(5)









EPS attributable to FNF, Inc. common shareholders - basic


$

0.86






EPS attributable to FNF, Inc. common shareholders - diluted


$

0.85













FNF, Inc. weighted average shares - basic


273






FNF, Inc. weighted average shares - diluted


278






 

FIDELITY NATIONAL FINANCIAL, INC.

THIRD QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Three Months Ended




September 30, 2018




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


$

236



$

241



$

(5)









 Total non-GAAP, pre-tax adjustments


$

(8)



$

(12)



$

4


  Income taxes on non-GAAP adjustments


2



3



(1)


  Noncontrolling interest on non-GAAP adjustments


(4)



(2)



(2)


  Black Knight tax contingency


(8)





(8)


Total non-GAAP adjustments


$

(18)



$

(11)



$

(7)









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


$

218



$

230



$

(12)









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


$

0.78













Direct orders opened (000's)


456



456




Direct orders closed (000's)


339



339




Fee per file


$

2,623



$

2,623




Actual title claims paid


$

55



$

55











Cash flows provided by operations


$

321






 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)




Consolidated


Title


Corporate and
Other

Nine Months Ended




September 30, 2019




Direct title premiums


$

1,725



$

1,725



$


Agency title premiums


2,133



2,133




Escrow, title related and other fees


1,892



1,747



145


Total title and escrow


5,750



5,605



145









Interest and investment income


170



153



17


Realized gains and losses, net


187



191



(4)


Total revenue


6,107



5,949



158









Personnel costs


1,979



1,881



98


Agent commissions


1,630



1,630




Other operating expenses


1,226



1,081



145


Depreciation and amortization


132



115



17


Claim loss expense


174



174




Interest expense


36





36


Total expenses


5,177



4,881



296









Pre-tax earnings (loss)


$

930



$

1,068



$

(138)









Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


(187)



(191)



4


  Purchase price amortization


78



64



14


  Transaction costs


58





58


  Other adjustments


1



1




 Total non-GAAP adjustments before taxes


$

(50)



$

(126)



$

76









Adjusted pre-tax earnings (loss)


$

880



$

942



$

(62)


Adjusted pre-tax margin


14.9

%


16.4

%










Pre-tax earnings (loss)


$

930



$

1,068



$

(138)









  Income tax expense (benefit)


210



260



(50)


  Earnings from equity investments


12



11



1


  Non-controlling interests


10



10











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


$

722



$

809



$

(87)









EPS attributable to FNF, Inc. common shareholders - basic


$

2.64






EPS attributable to FNF, Inc. common shareholders - diluted


$

2.61













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

Nine Months Ended




September 30, 2019




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


$

722



$

809



$

(87)









 Total non-GAAP, pre-tax adjustments


$

(50)



$

(126)



$

76


  Income taxes on non-GAAP adjustments


14



32



(18)


  Noncontrolling interest on non-GAAP adjustments


(9)



(8)



(1)


Total non-GAAP adjustments


$

(45)



$

(102)



$

57









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


$

677



$

707



$

(30)









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


$

2.44













Direct orders opened (000's)


1,574



1,574




Direct orders closed (000's)


1,031



1,031




Fee per file


$

2,562



$

2,562




Actual title claims paid


$

167



$

167











Cash flows provided by operations


$

700






 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)


Nine Months Ended


Consolidated


Title


Corporate and
Other

September 30, 2018




Direct title premiums


$

1,645



$

1,645



$


Agency title premiums


2,018



2,018




Escrow, title related and other fees


2,078



1,683



395


Total title and escrow


5,741



5,346



395









Interest and investment income


125



122



3


Realized gains and losses, net


35



25



10


Total revenue


5,901



5,493



408









Personnel costs


1,926



1,831



95


Agent commissions


1,546



1,546




Other operating expenses


1,406



1,061



345


Depreciation and amortization


138



116



22


Claim loss expense


165



165




Interest expense


31





31


Total expenses


5,212



4,719



493









Pre-tax earnings (loss)


$

689



$

774



$

(85)









Non-GAAP adjustments before taxes







  Realized (gains) and losses, net


(35)



(25)



(10)


  Purchase price amortization


82



66



16


  Transaction costs


13





13


  Sales tax contingency


6



6




  Other adjustments


3



1



2


 Total non-GAAP adjustments before taxes


$

69



$

48



$

21









Adjusted pre-tax earnings (loss)


$

758



$

822



$

(64)


Adjusted pre-tax margin


12.9

%


15.0

%










Pre-tax earnings (loss)


$

689



$

774



$

(85)









  Income tax expense (benefit)


104



137



(33)


  Earnings from equity investments


4



3



1


  Non-controlling interests


5



7



(2)









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


$

584



$

633



$

(49)









EPS attributable to FNF, Inc. common shareholders - basic


$

2.14






EPS attributable to FNF, Inc. common shareholders - diluted


$

2.09













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

Nine Months Ended




September 30, 2018




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


$

584



$

633



$

(49)









 Total non-GAAP, pre-tax adjustments


$

69



$

48



$

21


  Income taxes on non-GAAP adjustments


(15)



(10)



(5)


  Noncontrolling interest on non-GAAP adjustments


(10)



(8)



(2)


  Change in tax estimate


(45)



(45)





  Black Knight tax contingency


$

(8)



$



$

(8)


Total non-GAAP adjustments


$

(9)



$

(15)



$

6









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


$

575



$

618



$

(43)









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


$

2.06













Direct orders opened (000's)


1,439



1,439




Direct orders closed (000's)


1,014



1,014




Fee per file


$

2,521



$

2,521




Actual title claims paid


$

165



$

165











Cash flows provided by operations


$

671






 

FIDELITY NATIONAL FINANCIAL, INC.

QUARTERLY OPERATING STATISTICS

(Unaudited)




Q3 2019


Q2 2019


Q1 2019


Q4 2018


Q3 2018


Q2 2018


Q1 2018


Q4 2017

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

Total opened orders*


592



544



438



379



456



505



478



445


Total opened orders per day*


9.3



8.5



7.2



6.0



7.2



7.9



7.7



7.2


Purchase % of opened orders


52

%


61

%


65

%


67

%


69

%


71

%


66

%


60

%

Refinance % of opened orders


48

%


39

%


35

%


33

%


31

%


29

%


34

%


40

%

Total closed orders*


409



359



263



301



339



362



313



357


Total closed orders per day*


6.4



5.6



4.3



4.8



5.4



5.7



5.0



5.8


Purchase % of closed orders


55

%


65

%


66

%


69

%


71

%


71

%


62

%


61

%

Refinance % of closed orders


45

%


35

%


34

%


31

%


29

%


29

%


38

%


39

%


















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

Total commercial revenue


$

301



$

286



$

231



$

328



$

276



$

280



$

235



$

288


Total commercial opened orders


56.0



58.6



49.8



46.0



48.9



54.2



52.8



46.3


Total commercial closed orders


36.4



34.0



30.0



35.2



31.2



35.1



31.5



33.2



















National commercial revenue


$

173



$

165



$

123



$

197



$

157



$

155



$

128



$

165


National commercial opened orders


23.8



25.3



20.6



19.1



19.8



23.0



21.1



19.0


National commercial closed orders


14.1



12.7



10.5



13.2



12.0



12.9



11.2



12.1



















Total Fee Per File

Fee per file


$

2,459



$

2,677



$

2,567



$

2,803



$

2,623



$

2,579



$

2,344



$

2,425


Residential fee per file


$

1,928



$

2,075



$

1,964



$

2,003



$

2,032



$

2,051



$

1,816



$

1,789


Total commercial fee per file


$

8,300



$

8,400



$

7,700



$

9,300



$

8,800



$

8,000



$

7,500



$

8,700


National commercial fee per file


$

12,300



$

13,000



$

11,700



$

14,900



$

13,100



$

12,000



$

11,400



$

13,600



















Total Staffing

Total field operations employees


10,500



10,300



10,000



10,200



10,800



11,000



10,900



11,200


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

 

FIDELITY NATIONAL FINANCIAL, INC.

SUMMARY BALANCE SHEET INFORMATION

(In millions)




FNF, Inc.

September 30, 2019


FNF, Inc.

December 31, 2018



(Unaudited)


(Unaudited)

Cash and investment portfolio



$

5,432




$

4,806


Goodwill



2,726




2,726


Title plant



405




405


Total assets



10,419




9,301


Notes payable



838




836


Reserve for title claim losses



1,494




1,488


Secured trust deposits



890




822


Redeemable non-controlling interests



344




344


Non-redeemable non-controlling interests



(18)




(2)


Total equity and non-controlling interests



5,465




4,972


Total equity attributable to common shareholders



5,139




4,630


 

Cision

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