FNF Fidelity National Financial Inc

JACKSONVILLE, Fla., April 23 /PRNewswire-FirstCall/ -- Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance, specialty insurance, claims management services and information services, today reported operating results for the three-month period ended March 31, 2008. 1st Quarter 2008 1st Quarter 2007 Total revenue $1.14 billion $1.37 billion Pre-tax margin 3.3% 9.3% Net earnings $27.2 million $83.4 million Net earnings per diluted share $0.13 $0.37 Cash flow from (used in) operations ($74.9 million) $84.1 million Return on average equity 3.4% 9.6% The following are summary financial and operational results for the operating segments of FNF for the three-month periods ended March 31, 2008 and 2007: Fidelity National Title Group ("FNT") 1st Quarter 2008 1st Quarter 2007 Total revenue $1.01 billion $1.25 billion Pre-tax earnings $54.0 million $114.8 million Pre-tax margin 5.3% 9.2% Month Direct Orders Opened Direct Orders Closed Closing % January 2008 201,100 88,000 44% February 2008 188,900 108,000 57% March 2008 172,200 111,800 65% First Quarter 2008 562,200 307,800 55% Month Direct Orders Opened Direct Orders Closed Closing % January 2007 212,900 128,700 60% February 2007 202,000 120,300 60% March 2007 237,500 141,400 60% First Quarter 2007 652,400 390,400 60% Open Closed Commercial Commercial Commercial Revenue Commercial Orders Orders (In thousands) Fee Per File 1st Quarter 2008 12,300 7,400 $66,600 $9,000 1st Quarter 2007 15,100 7,300 $75,400 $10,400 - The preceding table only includes commercial activity from FNF's commercial offices in the national commercial division and does not attempt to capture potential commercial activity in our local offices. Specialty Insurance 1st Quarter 2008 1st Quarter 2007 Total revenue $88.5 million $99.0 million Pre-tax earnings $9.4 million $25.4 million* Pre-tax margin 10.6% 25.7% *The 1st quarter 2007 Specialty Insurance results include a $12.2 million benefit from an adjustment related to the deferral and amortization of certain costs over the life of a policy, consistent with the recognition of the premiums. The adjustment represents costs deferred as of March 31, 2007, on policies issued over the prior twelve months. "We continue to navigate through difficult economic conditions, particularly in the mortgage and real estate markets," said Chairman William P. Foley, II. "We did see a surge in open order volumes after the 75 basis point inter-meeting Fed rate cut, but those elevated levels did not continue through the rest of the quarter. While we peaked above 11,000 open orders per day for a few weeks in late January and early February, open orders have settled down closer to 8,000 to 8,500 per day over the last six weeks. Even that order volume is the highest level we have seen since the summer of 2007, right before the credit crisis hit the mortgage markets. We have definitely seen a better start to 2008, particularly given that the first quarter is generally the weakest quarter of the year and the fact that we now have our cost structure better aligned with that level of order volumes. On the claims front, we were encouraged by our performance in the first quarter and continue to be confident in our reserve position, as no single calendar year showed more than a 10 basis point positive or negative change in the ultimate expected loss experience. This was the best quarterly performance versus the actuarial model since the first quarter of 2007. Overall, we are prepared for the operating environment to remain challenging and we will continue to seek out ways to maximize the profitability of our title insurance operations, even if it is in the face of continued difficult mortgage and real estate markets." Fidelity National Financial, Inc. (NYSE:FNF) is a leading provider of title insurance, specialty insurance, claims management services and information services. FNF is one of the nation's largest title insurance companies through its title insurance underwriters -- Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title -- that issue approximately 28 percent of all title insurance policies in the United States. FNF also provides flood insurance, personal lines insurance and home warranty insurance through its specialty insurance business. FNF also is a leading provider of outsourced claims management services to large corporate and public sector entities through its minority-owned subsidiary, Sedgwick CMS. FNF is also a leading information services company in the human resource, retail and transportation markets through another minority-owned subsidiary, Ceridian Corporation. More information about FNF can be found at http://www.fnf.com/. This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, 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 economic performance 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; 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 operating subsidiaries as a 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 the Company's Form 10-K and other filings with the Securities and Exchange Commission. FIDELITY NATIONAL FINANCIAL, INC. SUMMARY OF EARNINGS (In thousands, except per share amounts and order information) Three months ended March 31, 2008 2007 (Unaudited) Direct title premiums $304,779 $418,597 Agency title premiums 423,436 542,146 Total title premiums 728,215 960,743 Escrow, title-related and other fees 273,621 256,980 Total title and escrow 1,001,836 1,217,723 Specialty insurance 84,827 94,998 Interest and investment income 43,701 49,959 Realized gains and losses 8,477 6,382 Total revenue 1,138,841 1,369,062 Personnel costs 361,878 435,260 Other operating expenses 267,870 234,441 Agent commissions 328,009 420,157 Depreciation and amortization 36,895 29,354 Claim loss expense 87,505 110,986 Interest expense 18,636 11,977 Total expenses 1,100,793 1,242,175 Earnings before income taxes 38,048 126,887 Income tax expense 12,175 45,045 Minority interest (1,372) (1,557) Net earnings $27,245 $83,399 Net earnings per share - basic $0.13 $0.38 Net earnings per share - diluted $0.13 $0.37 Weighted average shares - basic 211,110 219,014 Weighted average shares - diluted 213,528 222,912 Direct operations orders opened 562,200 652,400 Direct operations orders closed 307,800 390,400 Fee per file $1,447 $1,557 Actual title claims paid $75,675 $55,275 FIDELITY NATIONAL FINANCIAL, INC. SEGMENT INFORMATION (In thousands) (Unaudited) Three Months Ended Specialty Corporate March 31, 2008 Consolidated FNT Insurance and Other Gross operating revenue $1,086,663 $970,717 84,827 31,119 Interest and investment income 43,701 38,392 3,579 1,730 Realized gains and losses 8,477 2,453 93 5,931 Total revenue 1,138,841 1,011,562 88,499 38,780 Personnel costs 361,878 334,321 11,340 16,217 Other operating expenses 267,870 208,075 33,154 26,641 Agent commissions 328,009 328,009 -- -- Depreciation and amortization 36,895 30,089 1,510 5,296 Claim loss expense 87,505 54,613 32,892 -- Interest expense 18,636 2,410 184 16,042 Total expenses 1,100,793 957,517 79,080 64,196 Pretax earnings 38,048 54,045 9,419 (25,416) Pretax margin 3.3% 5.3% 10.6% -- Open orders 562,200 562,200 -- -- Closed orders 307,800 307,800 -- -- Three Months Ended Specialty Corporate March 31, 2007 Consolidated FNT Insurance and Other Gross operating revenue $1,312,721 $1,200,916 $94,998 $16,807 Interest and investment income 49,959 42,009 4,003 3,947 Realized gains and losses 6,382 3,161 (31) 3,252 Total revenue 1,369,062 1,246,086 98,970 24,006 Personnel costs 435,260 410,573 11,599 13,088 Other operating expenses 234,441 198,408 21,052 14,981 Agent commissions 420,157 420,051 -- 106 Depreciation and amortization 29,354 26,917 1,558 879 Claim loss expense 110,986 72,056 38,930 -- Interest expense 11,977 3,309 405 8,263 Total expenses 1,242,175 1,131,314 73,544 37,317 Pretax earnings 126,887 114,772 25,426 (13,311) Pretax margin 9.3% 9.2% 25.7% -- Open orders 652,400 652,400 -- -- Closed orders 390,400 390,400 -- -- FIDELITY NATIONAL FINANCIAL, INC. SUMMARY BALANCE SHEET INFORMATION (In thousands, except per share amounts) March 31, December 31, 2008 2007 (Unaudited) Cash and investment portfolio $4,532,380 $4,671,383 Goodwill 1,338,571 1,339,705 Title Plant 332,768 331,888 Total assets 7,475,348 7,587,853 Notes payable 1,182,299 1,167,739 Reserve for claim losses 1,395,858 1,419,910 Secured trust deposits 702,265 689,935 Total stockholders' equity 3,231,074 3,244,088 Book value per share 15.11 15.23 DATASOURCE: Fidelity National Financial, Inc. CONTACT: Daniel Kennedy Murphy, Senior Vice President, Finance and Investor Relations, Fidelity National Financial, Inc., +1-904-854-8120, Web site: http://www.fnf.com/

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