FNF Reports Fourth Quarter 2019 Diluted EPS of $1.22 and Adjusted Diluted EPS of $0.95, Pre-Tax Title Margin of 20.3% and Adjusted Pre-Tax Title Margin of 16.3%

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JACKSONVILLE, Fla., Feb. 13, 2020 /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 twelve-month periods ended December 31, 2019.

  • Total revenue of approximately $2.4 billion in the fourth quarter versus $1.7 billion in the fourth quarter of 2018
  • Fourth quarter net earnings of $340 million and adjusted net earnings of $263 million versus net earnings of $44 million and adjusted net earnings of $175 million for the fourth quarter of 2018
  • Fourth quarter diluted EPS of $1.22 and adjusted diluted EPS of $0.95 versus diluted EPS of $0.16 and adjusted diluted EPS of $0.63 in the fourth quarter of 2018
  • Realized gains were $131 million in the fourth quarter versus realized losses of $144 million in the fourth quarter of 2018

Title

  • Total revenue of approximately $2.3 billion versus approximately $1.7 billion in total revenue in the fourth quarter of 2018
  • Pre-tax earnings of $468 million and adjusted pre-tax earnings of $355 million versus pre-tax earnings of $102 million and adjusted pre-tax earnings of $258 million in the fourth quarter of 2018
  • Pre-tax title margin of 20.3% and adjusted pre-tax title margin of 16.3% versus pre-tax title margin of 6.1% and adjusted pre-tax title margin of 14.2% in the fourth quarter of 2018
  • Fourth quarter purchase orders opened increased 3% on a daily basis and purchase orders closed increased 5% on a daily basis versus the fourth quarter of 2018
  • Total commercial revenue of $321 million, a 2% decline over total commercial revenue in the fourth quarter of 2018, driven by a 12% decline in fee per file partially offset by a 11% increase in closed orders; fourth quarter total commercial open orders increased 20% compared to the prior year
  • Overall fourth quarter average fee per file of $2,384, a 15% decrease versus the fourth quarter of 2018

Title Orders







Direct Orders Opened *





Direct Orders Closed *

Month





 / (% Purchase)





 / (% Purchase)

October 2019





195,000

50%





153,000

48%

November 2019





157,000

49%





127,000

49%

December 2019





140,000

51%





137,000

50%















Fourth Quarter 2019





492,000

50%





417,000

49%





































Direct Orders Opened *





Direct Orders Closed *

Month





 / (% Purchase)





 / (% Purchase)

October 2018





150,000

69%





111,000

68%

November 2018





123,000

68%





95,000

70%

December 2018





106,000

65%





95,000

68%















Fourth Quarter 2018





379,000

67%





301,000

69%



* 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

Fourth Quarter 2019 - Total Commercial





55,100







39,100







$321







$8,200

Fourth Quarter 2018 - Total Commercial





46,000







35,200







$328







$9,300

"Our strong fourth quarter results rounded out a banner year for our title business. In the quarter we generated adjusted pre-tax title earnings of $355 million and an adjusted pre-tax title margin of 16.3%. Total commercial revenues were $321 million for the quarter which compares favorably to the record breaking results that we posted in the 2018 fourth quarter where total commercial revenues were $328 million," commented Chairman William P. Foley, II.  "For the full year 2019, we generated adjusted pre-tax title earnings of $1.3 billion, a record year, and an adjusted pre-tax title margin of 16.3%, our best year since 2003.  Looking ahead to 2020, we expect mortgage originations to moderate through the year from the very strong levels enjoyed in 2019 as refinance volumes naturally ease.  We will remain vigilant on expenses as we manage this expected slowdown in volumes.

Following the termination of the merger agreement with Stewart Information Services, the Board and management underwent a comprehensive review of FNF's capital allocation strategy and determined that expanding into the annuity market through the acquisition of FGL Holdings ("F&G"), announced subsequent to quarter end, would best maximize value for our shareholders.  After three years as a minority owner and with the advent of new leadership at F&G, we decided to acquire the remaining interest in F&G as a way to diversify our earnings and reduce the risk and volatility inherent in our stand-alone title operations. F&G offers an attractive return on our capital investment in an industry with strong secular growth tailwinds that will perform well in economic environments that may be more challenging for title insurance. FNF is excited to welcome F&G's employees and policy holders to the FNF family."

Mr. Foley concluded, "In 2019 the Board focused on returning capital to shareholders having increased our quarterly cash dividend 6.5% to $0.33 per share in addition to repurchasing 2,120,000 shares throughout the year.  FNF's share repurchase plan has 22.2 million shares remaining on the authorization.  The Board will continue to evaluate capital allocation including share repurchases, dividends, debt paydown and further investments in our business segments."

Conference Call

We will host a call with investors and analysts to discuss fourth quarter 2019 FNF results on Friday, February 14, 2020, 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 3:00 p.m. Eastern Time on February 14, 2020, through February 21, 2020, by dialing 1-844-512-2921 (USA) or 1-412-317-6671.  The access code will be 13697834.

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:  the ability to consummate the proposed F&G transaction; the ability to obtain requisite regulatory, shareholder and stockholder approval and the satisfaction of other conditions to the consummation of the proposed F&G transaction; the ability of FNF to successfully integrate F&G's operations and employees; the potential impact of the announcement or consummation of the proposed F&G transaction on relationships, including with employees, suppliers, customers and competitors; 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 F&G and 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.

FOURTH QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)





Three Months Ended

December 31, 2019
 



Consolidated



Title



Corporate and

Other

Direct title premiums



$

656





$

656





$



Agency title premiums



828





828







Escrow, title related and other fees



692





642





50



Total title and escrow



2,176





2,126





50

















Interest and investment income



55





49





6



Realized gains and losses, net



131





135





(4)



Total revenue



2,362





2,310





52

















Personnel costs



717





681





36



Agent commissions



628





628







Other operating expenses



455





428





27



Depreciation and amortization



46





39





7



Claim loss expense



66





66







Interest expense



11









11



Total expenses



1,923





1,842





81

















Pre-tax earnings (loss)



$

439





$

468





$

(29)

















Non-GAAP adjustments before taxes













  Realized (gains) and losses, net



(131)





(135)





4



  Purchase price amortization



27





22





5



  Severance costs



6









6



 Total non-GAAP adjustments before taxes



$

(98)





$

(113)





$

15

















Adjusted pre-tax earnings (loss)



$

341





$

355





$

(14)



Adjusted pre-tax margin



15.3

%



16.3

%



%















Pre-tax earnings (loss)



$

439





$

468





$

(29)



  Income tax expense (benefit)



98





103





(5)



  Earnings from equity investments



3





2





1



  Non-controlling interests



4





5





(1)



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



$

340





$

362





$

(22)

















EPS attributable to FNF, Inc. common shareholders - basic



$

1.24











EPS attributable to FNF, Inc. common shareholders - diluted



$

1.22

























FNF, Inc. weighted average shares - basic



274











FNF, Inc. weighted average shares - diluted



278











 

FIDELITY NATIONAL FINANCIAL, INC.

FOURTH QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)



















Three Months Ended

December 31, 2019



Consolidated



Title



Corporate and

Other

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



$

340





$

362





$

(22)

















 Total non-GAAP, pre-tax adjustments



$

(98)





$

(113)





$

15



  Income taxes on non-GAAP adjustments



24





28





(4)



  Noncontrolling interest on non-GAAP adjustments



(3)





(3)







Total non-GAAP adjustments



$

(77)





$

(88)





$

11

















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

shareholders



$

263





$

274





$

(11)

















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



$

0.95

























Direct orders opened (000's)



492





492







Direct orders closed (000's)



417





417







Fee per file



$

2,384





$

2,384







Actual title claims paid



$

53





$

53





















Cash flows provided by operations



$

428











 

FIDELITY NATIONAL FINANCIAL, INC.

FOURTH QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)



















Three Months Ended

December 31, 2018



Consolidated



Title



Corporate and

Other

Direct title premiums



$

576





$

576





$



Agency title premiums



672





672







Escrow, title related and other fees



537





521





16



Total title and escrow



1,785





1,769





16

















Interest and investment income



52





48





4



Realized gains and losses, net



(144)





(135)





(9)



Total revenue



1,693





1,682





11

















Personnel costs



613





613







Agent commissions



513





513







Other operating expenses



394





360





34



Depreciation and amortization



44





38





6



Claim loss expense



56





56







Interest expense



12









12



Total expenses



1,632





1,580





52

















Pre-tax earnings (loss)



$

61





$

102





$

(41)

















Non-GAAP adjustments before taxes













  Realized (gains) and losses, net



144





135





9



  Purchase price amortization



27





21





6



  Transaction costs



4









4



 Total non-GAAP adjustments before taxes



$

175





$

156





$

19

















Adjusted pre-tax earnings (loss)



$

236





$

258





$

(22)



Adjusted pre-tax margin



12.8

%



14.2

%



%















Pre-tax earnings (loss)



$

61





$

102





$

(41)

















  Income tax expense (benefit)



16





26





(10)



  Earnings from equity investments



1





1







  Non-controlling interests



2





1





1

















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



$

44





$

76





$

(32)

















EPS attributable to FNF, Inc. common shareholders - basic



$

0.16











EPS attributable to FNF, Inc. common shareholders - diluted



$

0.16

























FNF, Inc. weighted average shares - basic



274











FNF, Inc. weighted average shares - diluted



277











 

 



FIDELITY NATIONAL FINANCIAL, INC.

FOURTH QUARTER SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)





















Three Months Ended

December 31, 2018



Consolidated



Title



Corporate and

Other

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



$

44





$

76





$

(32)

















 Total non-GAAP, pre-tax adjustments



$

175





$

156





$

19



  Income taxes on non-GAAP adjustments



(40)





(36)





(4)



  Noncontrolling interest on non-GAAP adjustments



(4)





(3)





(1)



Total non-GAAP adjustments



$

131





$

117





$

14

















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



$

175





$

193





$

(18)

















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



$

0.63

























Direct orders opened (000's)



379





379







Direct orders closed (000's)



301





301







Fee per file



$

2,803





$

2,803







Actual title claims paid



$

58





$

58





















Cash flows provided by operations



$

273











 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)





Twelve Months Ended

December 31, 2019



Consolidated



Title



Corporate and

Other

Direct title premiums



$

2,381





$

2,381





$



Agency title premiums



2,961





2,961







Escrow, title related and other fees



2,584





2,389





195



Total title and escrow



7,926





7,731





195

















Interest and investment income



225





202





23



Realized gains and losses, net



318





326





(8)



Total revenue



8,469





8,259





210

















Personnel costs



2,696





2,562





134



Agent commissions



2,258





2,258







Other operating expenses



1,681





1,509





172



Depreciation and amortization



178





154





24



Claim loss expense



240





240







Interest expense



47









47



Total expenses



7,100





6,723





377

















Pre-tax earnings (loss)



$

1,369





$

1,536





$

(167)

















Non-GAAP adjustments before taxes













  Realized (gains) and losses, net



(318)





(326)





8



  Purchase price amortization



105





86





19



  Transaction costs



58









58



  Severance costs



6









6



  Other adjustments



1





1







 Total non-GAAP adjustments before taxes



$

(148)





$

(239)





$

91

















Adjusted pre-tax earnings (loss)



$

1,221





$

1,297





$

(76)



Adjusted pre-tax margin



15.0

%



16.3

%



%















Pre-tax earnings (loss)



$

1,369





$

1,536





$

(167)

















  Income tax expense (benefit)



308





363





(55)



  Earnings from equity investments



15





13





2



  Non-controlling interests



14





15





(1)

















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



$

1,062





$

1,171





$

(109)

















EPS attributable to FNF, Inc. common shareholders - basic



$

3.89











EPS attributable to FNF, Inc. common shareholders - diluted



$

3.83

























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)





Twelve Months Ended

December 31, 2019



Consolidated



Title



Corporate and

Other

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



$

1,062





$

1,171





$

(109)

















 Total non-GAAP, pre-tax adjustments



$

(148)





$

(239)





$

91



  Income taxes on non-GAAP adjustments



38





60





(22)



  Noncontrolling interest on non-GAAP adjustments



(12)





(11)





(1)



Total non-GAAP adjustments



$

(122)





$

(190)





$

68

















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

shareholders



$

940





$

981





$

(41)

















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



$

3.39

























Direct orders opened (000's)



2,066





2,066







Direct orders closed (000's)



1,448





1,448







Fee per file



$

2,511





$

2,511







Actual title claims paid



$

220





$

220





















Cash flows provided by operations



$

1,121











 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)





Twelve Months Ended

December 31, 2018



Consolidated



Title



Corporate and

Other

Direct title premiums



$

2,221





$

2,221





$



Agency title premiums



2,690





2,690







Escrow, title related and other fees



2,615





2,204





411



Total title and escrow



7,526





7,115





411

















Interest and investment income



177





170





7



Realized gains and losses, net



(109)





(110)





1



Total revenue



7,594





7,175





419

















Personnel costs



2,538





2,444





94



Agent commissions



2,059





2,059







Other operating expenses



1,801





1,421





380



Depreciation and amortization



182





154





28



Claim loss expense



221





221







Interest expense



43









43



Total expenses



6,844





6,299





545

















Pre-tax earnings (loss)



$

750





$

876





$

(126)

















Non-GAAP adjustments before taxes













  Realized (gains) and losses, net



109





110





(1)



  Purchase price amortization



109





87





22



  Transaction costs



17









17



  Sales tax contingency



6





6







  Other adjustments



3





1





2



 Total non-GAAP adjustments before taxes



$

244





$

204





$

40

















Adjusted pre-tax earnings (loss)



$

994





$

1,080





$

(86)



Adjusted pre-tax margin



12.9

%



14.8

%



%















Pre-tax earnings (loss)



$

750





$

876





$

(126)

















  Income tax expense (benefit)



120





163





(43)



  Earnings from equity investments



5





4





1



  Non-controlling interests



7





8





(1)

















Net earnings attributable to FNF, Inc. common shareholders



$

628





$

709





$

(81)

















EPS attributable to FNF, Inc. common shareholders - basic



$

2.30











EPS attributable to FNF, Inc. common shareholders - diluted



$

2.26

























FNF, Inc. weighted average shares - basic



273











FNF, Inc. weighted average shares - diluted



278











 

FIDELITY NATIONAL FINANCIAL, INC.

YTD SEGMENT INFORMATION

(In millions, except order information in thousands)

(Unaudited)





Twelve Months Ended

December 31, 2018



Consolidated



Title



Corporate and

Other

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



$

628





$

709





$

(81)

















 Total non-GAAP, pre-tax adjustments



$

244





$

204





$

40



  Income taxes on non-GAAP adjustments



(55)





(46)





(9)



  Noncontrolling interest on non-GAAP adjustments



(14)





(11)





(3)



  Change in tax estimate



(45)





(45)







  Black Knight tax contingency



(8)









(8)



Total non-GAAP adjustments



$

122





$

102





$

20

















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

shareholders



$

750





$

811





$

(61)

















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



$

2.70

























Direct orders opened (000's)



1,818





1,818







Direct orders closed (000's)



1,315





1,315







Fee per file



$

2,585





$

2,585







Actual title claims paid



$

223





$

223





















Cash flows provided by operations



$

943













 

FIDELITY NATIONAL FINANCIAL, INC.

QUARTERLY OPERATING STATISTICS

(Unaudited)









Q4 2019



Q3 2019



Q2 2019



Q1 2019



Q4 2018



Q3 2018



Q2 2018



Q1 2018

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

Total opened orders*



492





592





544





438





379





456





505





478



Total opened orders per day*



7.8





9.3





8.5





7.2





6.0





7.2





7.9





7.7



Purchase % of opened orders



50

%



52

%



61

%



65

%



67

%



69

%



71

%



66

%

Refinance % of opened orders



50

%



48

%



39

%



35

%



33

%



31

%



29

%



34

%

Total closed orders*



417





409





359





263





301





339





362





313



Total closed orders per day*



6.6





6.4





5.6





4.3





4.8





5.4





5.7





5.0



Purchase % of closed orders



49

%



55

%



65

%



66

%



69

%



71

%



71

%



62

%

Refinance % of closed orders



51

%



45

%



35

%



34

%



31

%



29

%



29

%



38

%



































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

Total commercial revenue



$

321





$

301





$

286





$

231





$

328





$

276





$

280





$

235



Total commercial opened orders



55.1





56.0





58.6





49.8





46.0





48.9





54.2





52.8



Total commercial closed orders



39.1





36.4





34.0





30.0





35.2





31.2





35.1





31.5





































National commercial revenue



$

188





$

173





$

165





$

123





$

197





$

157





$

155





$

128



National commercial opened orders



22.6





23.8





25.3





20.6





19.1





19.8





23.0





21.1



National commercial closed orders



16.2





14.1





12.7





10.5





13.2





12.0





12.9





11.2





































Total Fee Per File

Fee per file



$

2,384





$

2,459





$

2,677





$

2,567





$

2,803





$

2,623





$

2,579





$

2,344



Residential fee per file



$

1,792





$

1,928





$

2,075





$

1,964





$

2,003





$

2,032





$

2,051





$

1,816



Total commercial fee per file



$

8,200





$

8,300





$

8,400





$

7,700





$

9,300





$

8,800





$

8,000





$

7,500



National commercial fee per file



$

11,600





$

12,300





$

13,000





$

11,700





$

14,900





$

13,100





$

12,000





$

11,400





































Total Staffing

Total field operations employees**



12,300





12,200





12,000





11,700





11,800





12,400





12,500





12,400





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

**During Q4 2019 we established an automated payroll data feed, based on hours worked, as a new process to determine number of field operation employees. This new process

captures shared services and other operational employees that were not previously included. All previous periods have been restated using the new method.

 

FIDELITY NATIONAL FINANCIAL, INC.

SUMMARY BALANCE SHEET INFORMATION

(In millions)









FNF, Inc.

December 31,

2019



FNF, Inc.

December 31,

2018





(Unaudited)



(Unaudited)

Cash and investment portfolio





$

5,760







$

4,806



Goodwill





2,727







2,726



Title plant





404







405



Total assets





10,677







9,301



Notes payable





838







836



Reserve for title claim losses





1,509







1,488



Secured trust deposits





791







822



Redeemable non-controlling interests





344







344



Non-redeemable non-controlling interests





(17)







(2)



Total equity and non-controlling interests





5,709







4,972



Total equity attributable to common shareholders





5,382







4,630



 

 

Cision View original content:http://www.prnewswire.com/news-releases/fnf-reports-fourth-quarter-2019-diluted-eps-of-1-22-and-adjusted-diluted-eps-of-0-95--pre-tax-title-margin-of-20-3-and-adjusted-pre-tax-title-margin-of-16-3-301004782.html

SOURCE Fidelity National Financial, Inc.

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