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): February 4, 2009
FIDELITY NATIONAL FINANCIAL, INC.
(Exact name of Registrant as Specified in its Charter)
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| Delaware
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001-32630
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16-1725106 |
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(State or other Jurisdiction of
Incorporation or Organization)
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(Commission File
Number)
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(IRS Employer
Identification No.) |
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| 601 Riverside Avenue |
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| Jacksonville, Florida
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32204 |
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| (Address of principal executive offices)
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(Zip code) |
Registrant’s telephone number, including area code: (904) 854-8100
(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 (see General
Instruction A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
ITEM 8.01. OTHER EVENTS
On February 4, 2009, Fidelity National Financial, Inc. (“FNF”) announced its unaudited
financial results for the three-month and twelve-month periods ended December 31, 2008. The
unaudited summary of earnings, segment information and summary balance sheet information are
attached as Exhibit 99.1.
Summary Analysis of Unaudited Fourth Quarter Results
FNF generated $1 billion in revenue for the fourth quarter of 2008, with a net loss of $1.7
million. The fourth quarter results include the impact of Commonwealth Land Title Insurance
Company, Lawyers Title Insurance Company and United Capital Title Insurance Company (the “Acquired
Underwriters”), subsidiaries purchased from LandAmerica Financial Group, Inc. (“LandAmerica”) from
their acquisition date of December 22, 2008.
The title segment generated $899 million in total revenue for the fourth quarter of 2008, a
decline of 23% from the fourth quarter of 2007. This result for the 2008 period includes the
impact of the Acquired Underwriters from their acquisition date of December 22. Direct title
premiums declined by 34% versus the fourth quarter of 2007, while agency premiums declined by 26%.
Escrow and other fees were down by only 2%, as $55 million in default revenue earned offset the
decline in escrow fees.
Personnel costs of $267 million were down $91 million, or 26%, versus the fourth quarter of
2007, and decreased by $45 million, or 14%, sequentially from the third quarter. Headcount was
reduced by approximately 500 positions during the fourth quarter, ending the year with about 8,100
field employees, before the impact of the acquisition of the Acquired Underwriters. Other
operating expenses of $238 million showed a 2% decline versus the fourth quarter of 2007 and the
third quarter of 2008. The provision for title claims was $52 million for the fourth quarter of
2008. Actual title claims paid in the quarter declined to $50 million, down sequentially from $85
million in the third quarter.
Specialty Insurance revenue was $97 million for the fourth quarter, an increase of
approximately $4.5 million from the fourth quarter of 2007. Flood insurance generated $41 million
in revenue and personal lines insurance contributed $34 million in revenue. Pre-tax earnings of
$18 million were positively impacted by increased flood claim processing revenue during the fourth
quarter, driven by late summer hurricane-related floods.
Debt on FNF’s balance sheet at December 31, 2008 primarily consisted of the $490 million in
senior notes due in 2011 and 2013, the $585 million drawn under FNF’s credit facility, the $50
million subordinated note issued to LandAmerica on December 22, 2008 as partial consideration for
the Acquired Underwriters and other non-recourse debt. The debt to total capital ratio was 32% at
December 31, 2008, and 29% without the non-recourse debt. Also, FNF repaid $50 million under its
revolving credit facility on January 22, 2009, leaving it with $535 million outstanding.
The Acquired Underwriters
On December 22, 2008, FNF purchased the Acquired Underwriters for consideration consisting of
cash of $151.7 million, a $50 million principal amount subordinated note and 3,176,620 shares of
FNF’s common stock. FNF’s December 31, 2008 balance sheet information filed herewith includes
preliminary balances for the Acquired Underwriters which may change as FNF’s purchase accounting
analysis is completed. However, based on those preliminary balances, the Acquired Underwriters had
cash and investments as of December 31, 2008 of approximately $1.1 billion and total assets that
amounted to less than 20% of FNF’s total assets as of that date. During 2008, prior to the
acquisition, the Acquired Underwriters had substantial losses from operations. The calculation of
the exact amount of these losses incurred by the Acquired Underwriters has not been completed, but
will be reported under a Form 8-K to be filed by FNF in early March, as permitted by the Securities
and Exchange Commission rules. For the nine months ended September 30, 2008, LandAmerica reported
loss before taxes from its title operations segment of $332.3 million, although the Acquired
Underwriters do not represent the entire title segment of LandAmerica. Since the acquisition, FNF
has been engaged in an effort to reduce overhead at the Acquired Underwriters and restore them to
profitability. Through the end of January, FNF had eliminated