EXHIBIT 99
[The First American Corporation Logo]
THE FIRST AMERICAN CORPORATION
1 First American Way o Santa Ana, California o (714) 800-3000 o (800) 854-3643
CONTACT:
Tom Klemens NEWS FOR IMMEDIATE RELEASE
Executive Vice President
& Chief Financial Officer
(714) 800-4402
THE FIRST AMERICAN CORPORATION REPORTS
OPERATING RESULTS FOR SECOND QUARTER 2000
SANTA ANA, CALIF., JULY 27, 2000 - The First American Corporation
(NYSE: FAF), the leading provider of business information and related products
and services, announced today operating results for the second quarter and six
months ended June 30, 2000.
Net income for the second quarter of 2000 was $25.0 million, or 38
cents per diluted share. This compares with 1999 second quarter net income of
$34.8 million, or 52 cents per diluted share. Revenues for the second quarter of
2000 were $775.9 million, a 1 percent decrease when compared with revenues of
$781.9 million for the same period last year.
Net income for the first six months of 2000 was $26.0 million, or 40 cents
per diluted share. This compares with $62.9 million, or 95 cents per diluted
share, in the first six months of 1999, which excludes the cumulative effect of
a change in accounting for tax service contracts of $55.6 million charged in the
first quarter of 1999. Revenues for the first half of 2000 totaled $1.42
billion, a decrease of 6 percent when compared with revenues of $1.51 billion
for the first half of 1999.
Revenue and profit declines for the second quarter, compared with the prior
year comparable quarter, were mainly attributable to higher interest rates,
which resulted in lower refinance activity. Mortgage refinancing now represents
less than 15 percent of all residential loan applications.
"We are pleased with our second quarter results, which were achieved
despite higher mortgage interest rates that significantly reduced the number of
refinance transactions compared with the second quarter of 1999," said Parker S.
Kennedy, president of First American. "We have benefited from a seasonal rebound
in national residential resale and new home sale transactions and from our
continued focus on cost containment and labor efficiencies in the title and
information services segments. We are particularly pleased with the growth in
our consumer information and services segment, which provides us with strong,
less-cyclical, higher-margin earnings. We are continuing our focused strategy of
profitable growth through acquisitions, increased market share through our
cross-marketing efforts and technology expansion," Kennedy added.
The First American Corporation, based in Santa Ana, Calif., is the
nation's leading provider of business information and related products and
services. The corporation's three primary business segments include: title
insurance and services; real estate information and services, which includes
mortgage information services and database information and services; and
consumer information and services, which provides home warranties; automotive,
subprime and direct-to-consumer credit reporting; property and casualty
insurance; property and automotive insurance tracking services; resident
screening; pre-employment screening; investment advisory; and trust and banking
services. Information about the company and an archive of its press releases can
be found on the Internet at www.firstam.com.
Any statements in this document that look forward in time involve risks
and uncertainties, including but not limited to the following: the effect
of interest rate fluctuations; changes in the performance of the real
estate markets; the effect of changing economic conditions; general
volatility in the capital markets; the demand for and the acceptance of
the company's products; changes in applicable government regulations;
continued consolidation among the company's significant customers;
consolidation among significant competitors; the impact of the legal
proceedings commenced by the California attorney general and related
litigation; the continued ability to identify businesses to be acquired;
and changes in the company's ability to integrate businesses which it
acquires. The company's actual results, performance or achievement could
differ materially from those expressed in, or implied by, any
forward-looking statements, and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur or, if any of them do, what impact they will have on
the results of operations or financial condition of the company.
(Financial Data to Follow)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues $ 775,925,000 $ 781,855,000 $ 1,422,099,000 $ 1,512,722,000
Income before income taxes, minority
interests and cumulative effect of a change
in accounting principle $ 48,346,000 $ 63,010,000 $ 52,231,000 $ 115,696,000
Income taxes $ 19,400,000 $ 21,994,000 $ 20,200,000 $ 39,700,000
Minority interests $ 3,914,000 $ 6,205,000 $ 5,997,000 $ 13,102,000
Net income before cumulative effect of a
change in accounting principle $ 25,032,000 $ 34,811,000 $ 26,034,000 $ 62,894,000
Cumulative effect of a change in accounting
for tax service contracts, net of income
taxes and minority interests -- -- -- $ (55,640,000)
Net income $ 25,032,000 $ 34,811,000 $ 26,034,000 $ 7,254,000
Per share amounts:
Basic:
Income before cumulative effect of a
change in accounting for tax service
contracts $ 0.39 $ 0.54 $ 0.41 $ 0.98
Cumulative effect of a change in
accounting for tax service contracts -- -- -- $ (0.87)
Net income $ 0.39 $ 0.54 $ 0.41 $ 0.11
Diluted:
Income before cumulative effect of a
change in accounting for tax service
contracts $ 0.38 $ 0.52 $ 0.40 $ 0.95
Cumulative effect of a change in
accounting for tax service contracts -- -- -- $ (0.84)
Net income $ 0.38 $ 0.52 $ 0.40 $ 0.11
Average shares outstanding:
Basic 63,403,000 64,763,000 63,771,000 64,202,000
Diluted 65,682,000 66,325,000 65,508,000 66,322,000
</TABLE>
(Additional Financial Data to Follow)
SELECTED FINANCIAL DATA
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
2000 1999 2000 1999
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C>
Revenues
Operating revenues $ 760,216,000 $ 769,610,000 $ 1,396,081,000 $ 1,488,797,000
Investment and other income 15,709,000 12,245,000 26,018,000 23,925,000
------------------ ---------------- ---------------- ---------------
775,925,000 781,855,000 1,422,099,000 1,512,722,000
------------------ ---------------- ---------------- ---------------
Expenses
Salaries and other personnel costs 263,059,000 259,603,000 513,263,000 515,015,000
Premiums retained by agents 225,473,000 228,212,000 392,595,000 438,780,000
Other operating expenses 168,789,000 174,443,000 335,149,000 332,606,000
Provision for title losses and other
claims 37,440,000 28,420,000 67,563,000 55,441,000
Depreciation and amortization 20,906,000 19,148,000 38,322,000 36,067,000
Premium taxes 5,634,000 5,987,000 10,922,000 11,296,000
Interest 6,278,000 3,032,000 12,054,000 7,821,000
------------------ ---------------- ---------------- ---------------
727,579,000 718,845,000 1,369,868,000 1,397,026,000
------------------ ---------------- ---------------- ---------------
Income before income taxes, minority
interests and cumulative effect of a
change in accounting principle $ 48,346,000 $ 63,010,000 $ 52,231,000 $ 115,696,000
================== ================ ================ ===============
OPERATING REVENUES
Title Insurance:
Direct operations $ 283,487,000 $ 280,007,000 $ 519,433,000 $ 540,331,000
Agency operations 275,227,000 284,852,000 485,827,000 545,513,000
------------------ ---------------- ---------------- ---------------
558,714,000 564,859,000 1,005,260,000 1,085,844,000
Real Estate Information 137,893,000 155,539,000 266,650,000 308,008,000
Consumer Information 63,609,000 49,212,000 124,171,000 94,945,000
------------------ ---------------- ---------------- ---------------
Total Operating Revenues $ 760,216.000 $ 769,610,000 $ 1,396,081,000 $ 1,488,797,000
================== ================ ================ ===============
INCOME BEFORE INCOME TAXES, MINORITY
INTERESTS AND CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE
Title Insurance $ 36,957,000 $ 49,075,000 $ 43,209,000 $ 84,237,000
Real Estate Information 13,251,000 25,366,000 16,115,000 45,440,000
Consumer Information 8,935,000 6,973,000 18,529,000 13,223,000
------------------ ---------------- ---------------- ---------------
Total before corporate expenses and
minority interests 59,143,000 81,414,000 77,853,000 142,900,000
Corporate Expenses 10,797,000 18,404,000 25,622,000 27,204,000
------------------ ---------------- ---------------- ---------------
Income before income taxes, minority
interests and cumulative effect of a
change in accounting principle $ 48,346,000 $ 63,010,000 $ 52,231,000 $ 115,696,000
================== ================ ================ ===============
TITLE INSURANCE ORDER COUNTS FROM
DIRECT OPERATIONS
Title orders opened 328,300 379,100 693,500 746,500
Title orders closed 260,900 319,000 491,200 614,100
</TABLE>
