<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1995
Commission File Number 1-9396
FIDELITY NATIONAL FINANCIAL, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0498599
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
17911 Von Karman Avenue, Irvine, California 92714
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(Address of principal executive offices) (Zip Code)
(714) 622-5000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
YES ( X ) NO ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
$.0001 par value common - 11,067,118 shares as of August 10, 1995
Exhibit Index appears on page 10 of 12 sequentially numbered pages.
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FORM 10-Q
QUARTERLY REPORT
Quarter Ended June 30, 1995
TABLE OF CONTENTS
Part I: FINANCIAL INFORMATION Page Number
-----------
<TABLE>
<S> <C>
Item 1. Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of 3
June 30, 1995 and December 31, 1994
B. Condensed Consolidated Statements of Operations 4
for the three-month and six-month periods ended
June 30, 1995 and 1994
C. Condensed Consolidated Statements of Cash Flows 5
for the six-month periods ended
June 30, 1995 and 1994
D. Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II: OTHER INFORMATION
Items 1.-3. of Part II have been omitted because they are not
applicable with respect to the current reporting period.
Item 4. Submission of Matters to Vote of Security Holders 10
Item 5. Omitted because it is not applicable with respect to
the current reporting period.
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIDELITY NATIONAL FINANCIAL, INC.
---------------------------------
(Registrant)
By: /s/ Carl A. Strunk
------------------------------
Carl A. Strunk
Executive Vice President,
Chief Financial Officer and Date: August 10, 1995
Treasurer
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Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Held to maturity, at amortized cost $ 26,923 $ 26,664
Available for sale, at fair value 112,266 149,111
-------- --------
Total fixed maturities 139,189 175,775
Equity securities, at fair value 25,986 15,482
Other long-term investments, at cost,
which approximates fair value 2,150 16,000
Short-term investments, at cost,
which approximates fair value 746 800
Investments in real estate and partnerships, net 9,215 9,591
-------- --------
Total investments 177,286 217,648
Cash and cash equivalents 38,148 34,689
Trade receivables, net 33,628 28,495
Notes receivable, net 16,433 13,139
Prepaid expenses and other assets 26,459 28,096
Title plants 41,109 36,977
Property and equipment, net 44,039 39,534
Deferred income taxes 6,767 12,553
Income taxes receivable 5,631 6,988
-------- --------
$389,500 $418,119
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities $ 41,472 $ 48,114
Notes payable 131,200 142,129
Reserve for claim losses 148,575 153,306
-------- --------
321,247 343,549
Minority interest 358 616
Stockholders' equity:
Preferred stock, $.0001 par value; authorized,
3,000,000 shares; issued and outstanding, none -- --
Common stock, $.0001 par value; authorized,
50,000,000 shares in 1995 and 1994;
issued, 15,714,417 in 1995 and 15,661,365 in 1994 2 2
Additional paid-in capital 57,109 56,659
Retained earnings 62,830 66,668
-------- --------
119,941 123,329
Net unrealized gains (losses) on investments 2,155 (8,914)
Less treasury stock, 4,529,457 shares in 1995 and
3,303,100 shares in 1994, at cost 54,201 40,461
-------- --------
67,895 73,954
-------- --------
$389,500 $418,119
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------ --------------------------
1995 1994 1995 1994
------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE:
Title insurance premiums $66,414 $ 95,361 $125,915 $202,569
Escrow fees 11,757 13,541 20,667 29,948
Other fees and revenue 13,841 16,474 26,029 32,821
Interest and investment income,
including realized gains and losses 3,482 4,944 5,942 8,601
------- -------- -------- --------
95,494 130,320 178,553 273,939
------- -------- -------- --------
EXPENSES:
Personnel costs 39,639 46,531 74,324 98,463
Other operating expenses 28,573 33,259 53,945 65,667
Agent commissions 19,234 34,805 40,454 73,495
Provision for claim losses 4,540 7,642 8,628 16,436
Interest expense 2,186 2,006 4,617 3,867
------- -------- -------- --------
94,172 124,243 181,968 257,928
------- -------- -------- --------
Earnings (loss) before income taxes
and extraordinary item 1,322 6,077 (3,415) 16,011
Income tax expense (benefit) 301 1,914 (1,988) 5,043
------- -------- -------- --------
Earnings (loss) before
extraordinary item 1,021 4,163 (1,427) 10,968
Extraordinary item -- loss on
early retirement of Senior Notes,
net of applicable income tax
benefit of $437 -- -- (813) --
------- -------- -------- --------
Net earnings (loss) $ 1,021 $ 4,163 $ (2,240) $ 10,968
======= ======== ======== ========
Primary earnings (loss) per share
before extraordinary item $ .09 $ .26 $ (.12) $ .69
Extraordinary item -- loss on early
retirement of Senior Notes, net of
applicable income tax benefit $ -- $ -- $ (.07) $ --
------- -------- -------- --------
Primary earnings
(loss) per share $ .09 $ .26 $ (.19) $ .69
======= ======== ======== ========
Fully diluted earnings
(loss) per share $ .09 $ .26 $ (.19) $ .65
======= ======== ======== ========
Primary weighted average
shares outstanding 11,822 15,747 11,665 15,821
======= ======== ======== ========
Fully diluted weighted
average shares outstanding 11,822 20,142 11,665 19,155
======= ======== ======== ========
Cash dividends per share $ .07 $ .07 $ .14 $ .14
======= ======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------------
1995 1994
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (2,240) $ 10,968
Reconciliation of net earnings (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 6,603 4,619
Net increase (decrease) in reserve for claim losses (4,731) 4,598
Provision for possible losses
on real estate and notes receivable 95 99
Gain on sales of investments (109) (515)
Gain on early retirement of LYONs, net -- (891)
Amortization of LYONs original issue discount
and debt issuance costs 2,423 2,196
Other (202) 478
Change in assets and liabilities, net of effects
from acquisition of subsidiaries:
Net (increase) decrease in trade receivables (5,133) 1,396
Net (increase) decrease in
prepaid expenses and other assets 1,572 (284)
Net decrease in accounts payable
and accrued liabilities (6,801) (12,479)
Net (increase) decrease in income taxes 1,578 (5,475)
-------- --------
Net cash provided by (used in) operating activities (6,945) 4,710
-------- --------
Cash flows from investing activities:
Proceeds from sales of property and equipment 1,019 12
Proceeds from sales of title plants 1,665 24
Proceeds from sales and maturities of investments:
Held to maturity 1,506 491
Available for sale 98,523 70,515
Collections of notes receivable 1,500 1,549
Additions to title plants (5,820) (471)
Additions to property and equipment (11,635) (7,981)
Additions to investments:
Held to maturity (1,848) (2,076)
Available for sale (41,313) (113,647)
Other investments -- (16,217)
Additions to notes receivable (4,889) (5,178)
Investments in real estate and advances to partnerships (67) (121)
Acquisition of subsidiaries, net of cash acquired -- 161
Purchase of ATIC preferred stock -- (15,500)
-------- --------
Net cash provided by (used in) investing activities 38,641 (88,439)
-------- --------
</TABLE>
See notes to condensed consolidated financial statements.
(continued)
5
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
<TABLE>
<CAPTION>
Six months ended
June 30,
-------------------------
1995 1994
-------- ---------
(Unaudited)
<S> <C> <C>
Cash flows from financing activities:
Borrowings $ 21,445 $ 23,216
Issuance of LYONs -- 101,337
Repurchase of LYONs -- (7,810)
Debt service payments (34,732) (34,656)
Repurchase of treasury stock (13,740) (13,061)
Dividends paid (1,660) (2,145)
Stock options exercised 450 1,150
-------- --------
Net cash provided by (used in) financing activities (28,237) 68,031
-------- --------
Net increase (decrease) in cash and cash equivalents 3,459 (15,698)
Cash and cash equivalents at beginning of period 34,689 42,731
-------- --------
Cash and cash equivalents at end of period $ 38,148 $ 27,033
======== ========
Supplemental cash flow information:
Income taxes paid (refunded) $ (4,920) $ 9,408
======== ========
Interest paid $ 5,674 $ 1,671
======== ========
Noncash investing and financing activities:
Dividends declared and unpaid $ 784 $ 1,035
======== ========
Acquisition of ACS Systems, Inc.:
Assets acquired $ 3,694
Liabilities assumed (1,013)
--------
Value of stock issued $ 2,681
========
</TABLE>
See notes to condensed consolidated financial statements.
6
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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Financial Statements
The financial information included in this report includes the accounts of
Fidelity National Financial, Inc. and its subsidiaries (collectively, the
"Company") and has been prepared in accordance with generally accepted
accounting principles and the instructions to Form 10-Q and Article 10 of
Regulation S-X. All adjustments, consisting of normal recurring accruals
considered necessary for a fair presentation, have been included. This report
should be read in conjunction with the Company's 1994 Annual Report on Form
10-K for the year ended December 31, 1994, as amended. Certain
reclassifications have been made in the 1994 Condensed Consolidated Financial
Statements to conform to the classifications used in 1995.
Note B - Dividends
On June 20, 1995, the Company's Board of Directors declared a cash dividend of
$.07 per share, payable on July 21, 1995, to stockholders of record on July 11,
1995.
Note C - Authorization To Repurchase Common Stock and LYONs
On March 9, 1995, the Company announced that its Board of Directors authorized
the additional repurchase, in the open market or in privately negotiated
transactions, of up to 2 million shares of its common stock, or a comparable
amount of the Company's Liquid Yield Option Notes (the "LYONs"). This is in
addition to the 5 million shares or a comparable amount of LYONs previously
authorized for repurchase by the Board of Directors -- 1 million shares on
March 31, 1994, 1 million shares on June 14, 1994, and an additional 3 million
shares on August 11, 1994. Any shares repurchased will initially be held by
the Company. A limited number of shares may be used for various stock-based
employee benefit programs and the remainder may be used for other general
corporate purposes or held in treasury. As of August 10, 1995, the Company had
repurchased 4,651,957 shares of its common stock for an aggregate price of
$55.7 million, or $11.98 per share. Additionally, as of August 10, 1995, the
Company had repurchased $48 million in maturity amount of LYONs for an
aggregate price of $17.6 million, all of which were purchased in 1994.
Note D - Acquisitions
On March 8, 1995, the Company acquired the common stock of Western Title
Company of Washington, an underwritten title agency with operations in King
County (Seattle) and Snohomish County (Everett) in the state of Washington.
Western Title Company of Washington was acquired from its selling shareholder
for $3.2 million in cash. In addition, the Company also acquired an option to
purchase a title plant in Pierce County (Tacoma), Washington. The acquired
company operates as a subsidiary of the Company in King and Snohomish Counties
under the name Fidelity National Title Company of Washington. The acquisition
has been accounted for as a purchase.
On May 2, 1995, the Company acquired the common stock of Butte County Title
Company, an underwritten title agency with operations in Butte County in the
state of California. Butte County Title Company was acquired from its selling
shareholders for $400,000 in cash. The acquired company operates as a
subsidiary of the Company in Butte County. The acquisition has been accounted
for as a purchase.
On June 14, 1995 the Company acquired certain assets of World Title Company
("WTC") for a purchase price to be determined based on the collection of
certain accounts. In the case of trade accounts receivable acquired, the
Company will retain 15% of amounts collected subsequent to the acquisition date
and will remit the remaining 85% to the Department of Insurance of the State of
California ("Department"). The Company has also acquired the open title orders
of WTC as of the purchase date. The Company will retain 66.5% of amounts
collected subsequent to the acquisition date and will remit the remaining 33.5%
to the Department.
7
<PAGE> 8
On June 19, 1995 the Company announced that it had entered into a letter of
intent with Nations Holding Group to acquire one hundred percent of Nations
Title Inc., a Kansas corporation. Nations Title Inc., together with its wholly
owned subsidiaries Nations Title Insurance Company, Nations Title Insurance of
New York Inc. and National Title Insurance of New York Inc., is the eighth
largest title insurance underwriter and is in the business of underwriting and
issuing title insurance policies and performing title related services such as
escrow and trust activities in 49 states, Puerto Rico, Guam and the Virgin
Islands.
Under the terms of the letter of intent, Fidelity National Financial will
acquire one hundred percent of the outstanding stock of Nations Title Inc. from
its sole shareholder, Nations Holding Group, for a purchase price in cash and
Fidelity National Financial common stock equal to Nations Title Inc.'s adjusted
book value determined in accordance with generally accepted accounting
principles.
On June 22, 1995 the Company acquired 100% of the common stock of World Tax
Service ("World Tax") from WTC Financial, the parent company of WTC, for $1.8
million. The Company had previously executed an Asset Option Agreement
("Agreement") with WTC Financial to acquire an option to purchase a 60%
undivided interest in all of the assets of World Tax. In connection with the
Agreement, WTC Financial was granted an option to purchase 100,000 shares of
the Company's common stock at $14.50 per share. The option to purchase shares
was acquired from WTC Financial as part of the World Tax transaction. This
transaction has been accounted for as a purchase.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Total revenue for the second quarter of 1995 decreased 26.7% to $95.5 million
from $130.3 million in the second quarter of 1994 as a result of the
significant decline in refinancing activity and a stagnation in residential
resale and new home sale markets. This market downturn can be attributed to
the steady increase in mortgage interest rates which resulted from actions
taken by the Federal Reserve Board during 1994. The slowdown in real estate
activity has caused a decrease in title orders and, thus, a reduction in title
premiums, escrow fees and other title related revenue. In addition, it appears
that the real estate/title insurance markets are returning to a seasonal nature
in which the six-month period ended June 30 has historically been the slowest.
Total revenue for the six-month period ended June 30, 1995 has decreased 34.8%
to $178.6 million from $273.9 million for the six-month period ended June 30,
1994.
Interest and investment income decreased 28.6% to $3.5 million in the second
quarter of 1995 from $4.9 million in the second quarter of 1994. Interest and
investment income for the six-month period ended June 30, 1995 decreased 31.4%
to $5.9 million from $8.6 million for the comparable 1994 period. The decrease
in interest and investment income earned during the 1995 periods is primarily
due to a decrease in average invested assets compared to the same periods in
1994. Net realized gains from the sale of investments were $510,000 in the
second quarter of 1995 and $360,000 in the corresponding 1994 period. Also
included in the second quarter of 1994 interest and investment income amount is
a net gain on the early retirement of Liquid Yield Option Notes (LYONs) of
$891,000. Net realized gains for the six-month periods ended June 30, 1995 and
1994, excluding the gain related to the LYONs, were $109,000 and $500,000,
respectively.
The Company's operating expenses consist primarily of personnel costs and other
operating expenses which are incurred as title insurance orders are received
and processed. Title insurance premiums and escrow fees are recognized as
income at the time the underlying real estate transaction closes. As a result,
revenue lags approximately 60-90 days behind expenses and, therefore, gross
margins may fluctuate.
Personnel costs include both base salaries and commissions paid to employees
and are the most significant operating expense incurred by the Company. These
costs generally fluctuate with the level of direct orders opened and closed and
with the mix of revenue between direct and agency operations. Personnel costs,
as a percentage of total revenue, have increased to 41.5% for the three-month
period ended June 30, 1995 from 35.7% for the corresponding period in 1994. As
a result of the reduction in title orders and title related business, the
Company has taken significant measures to maintain appropriate personnel costs
relative to revenue, as indicated in the decrease in personnel costs of
approximately $6.9 million, or 14.8%, between the second quarters of 1995 and
1994. Personnel costs as a percentage of total revenue for the six-month
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period ended June 30, 1995 have increased to 41.6% from 35.9% for the
corresponding 1994 period. However, personnel costs have decreased $24.1
million or 24.5% in the six-month period ended June 30, 1995 compared to the
same period in 1994. The Company continues to monitor prevailing market
conditions and will adjust its personnel levels as necessary, while positioning
itself to take advantage of a real estate recovery as it occurs.
Other operating expenses consist primarily of facilities expenses, title plant
maintenance, premium taxes (which insurance underwriters are required to pay on
title premiums in lieu of franchise and other state taxes), escrow losses,
courier services, computer services, professional services, general insurance,
trade and notes receivable allowances and depreciation. Other operating
expenses increased as a percentage of total revenue to 29.9% in the second
quarter of 1995 from 25.5% in the second quarter of 1994. Other operating
expenses as a percentage of total revenue for the six-month period ended June
30, 1995 have increased to 30.2% from 24.0% in 1994. In response to the
current market environment, the Company has implemented aggressive cost control
programs which will help maintain operating expense levels consistent with the
levels of title related revenue production. However, certain fixed costs are
incurred regardless of revenue levels which resulted in the percentage
increases.
Agent commissions represent the portion of policy premiums retained by agents
pursuant to the terms of their respective agency contracts. Agent commissions
were 75.0% of agency premiums in the second quarter of 1995 compared to 77.1%
of agency premiums in the second quarter of 1994, and 76.1% and 77.0% of agency
premiums for the six-month periods ended June 30, 1995 and 1994, respectively.
The provision for claim losses includes an estimate of anticipated title claims
and major claims. The estimate of anticipated title claims is accrued as a
percentage of title premium revenue based on the Company's historical loss
experience and other relevant factors. The Company monitors its claims
experience on a continual basis and adjusts the provision for claim losses
accordingly. The Company believes, based on its loss development studies, that
it will maintain the trend of favorable claim loss experience as a result of
its underwriting and claims handling practices, as well as the refinancing
business of prior years. Based on the Company's loss experience, in 1995 the
Company has provided for claim losses at 7.0% of title insurance premiums prior
to the impact of major claim expense and recoupments. Application of these
factors resulted in a net provision for claim losses as a percentage of
premiums of 6.8% and 8.0% for the three-month periods ended June 30, 1995 and
1994, respectively, and 6.9% and 8.1% for the six-month periods ended June 30,
1995 and 1994, respectively.
Interest expense is incurred by the Company in financing its capital asset
purchases and certain acquisitions. Interest expense consists of interest
related to the Company's outstanding debt and the amortization of original
issue discount and debt issuance costs related to the LYONs issued in February
1994. Interest expense of "non-LYONs" debt totaled $965,000 and $550,000 for
the three-month periods ended June 30, 1995 and 1994, respectively, and $2.2
million and $1.7 million for the six-month periods ended June 30, 1995 and
1994, respectively. The LYONs related component of interest expense amounted
to $1.2 million for the second quarter of 1995 and $1.5 million for the second
quarter of 1994, and $2.4 million and $2.2 million for the six-month periods
ended June 30, 1995 and 1994, respectively. Interest expense and amortization
expense increased in 1995 over 1994 primarily as a result of the LYONs offering
and an increase in the average outstanding balance of a certain subsidiary's
equipment outstanding debt. Increases in the prime interest rate, to which
certain of the interest rates paid by the Company are indexed, also resulted in
increased interest expense in 1995 over 1994.
Income tax expense (benefit) for the three-month periods ended June 30, 1995
and 1994, as a percentage of earnings (loss) before income taxes, was 22.8% and
31.5%, respectively and (52.0%) and 31.5% for the six-month periods ended June
30, 1995 and 1994, respectively. The 1995 benefit for the six-month period
ended June 30, 1995 includes the impact of the extraordinary loss on
extinguishment of debt. These fluctuations are primarily the result of the
significant tax exempt component of the Company's investment portfolio and the
related tax consequences of tax exempt income when the Company is not
generating operating income.
In order to reduce interest expense incurred and interest rates paid, the
Company determined to prepay the Senior Secured Notes (the "Senior Notes")
issued in March 1993. Pursuant to the terms and conditions of the Senior Note
Agreement, the Company has provided for the Make Whole Provision, as defined,
and related expenses in the
9
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first quarter of 1995. This amount, $1.25 million, before related income
taxes, has been reflected as an extraordinary item in the Condensed
Consolidated Statement of Operations for the six-month period ended June 30,
1995.
Liquidity and Capital Resources
The Company's insurance subsidiaries collect premiums and pay claims and
operating expenses. Fluctuations in operating cash flows are primarily the
result of increases or decreases in revenue. The insurance subsidiaries also
have cash flow sources derived from investment income, repayments of principal
and proceeds from sales and maturities of investments and dividends and
distributions from subsidiaries. Positive cash flow from insurance
subsidiaries is invested primarily in short term investments and medium term
bonds. Short term investments held by the Company's insurance subsidiaries
provide liquidity for projected claims and operating expenses.
As a holding company, the Company receives cash from its subsidiaries as
reimbursement for operating and other administrative expenses it incurs. The
reimbursements are executed within the guidelines of various management
agreements between the holding company and its subsidiaries. The Company's
cash requirements include debt service, operating expenses, taxes and dividends
on its common stock. The Company believes that all anticipated cash
requirements for current operations will be met from internally generated funds
and short term bank borrowings through existing credit facilities.
One of the additional significant sources of the Company's funds is dividend
and other distributions from its insurance subsidiaries. The insurance
subsidiaries are restricted by state regulations in their ability to pay
dividends and make distributions. Each state of domicile regulates the extent
to which the Company's six title underwriters can pay dividends or make other
distributions to the Company.
The short and long term liquidity requirements of the Company and insurance
subsidiaries are monitored regularly to match cash inflows with cash
requirements. The Company and insurance subsidiaries forecast their daily cash
needs and periodically review their short and long term projected sources and
uses of funds, as well as the asset, liability, investment and cash flow
assumptions underlying these projections.
Part II: OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
On June 20, 1995, the Company held its annual meeting of
stockholders pursuant to a Notice and Proxy Statement dated
May 24, 1995. At the meeting, stockholders approved by a vote
of 6,914,226 for, 502,586 against with 71,294 abstaining, an
amendment to the Company's 1987 Employee Stock Purchase Plan
(the "Plan") increasing shares available under the Plan and
elected William A. Imparato (10,376,736 for and 30,091
withheld), Donald M. Koll (10,371,175 for and 35,652
withheld), Cary H. Thompson (10,376,723 for and 30,104
withheld), the slate of directors recommended by management.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11 Computation of Primary and Fully Diluted Earnings
Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
None
10
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EXHIBIT 11
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED
EARNINGS PER SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
1995(1) 1994 1995(2) 1994
-------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Earnings (loss) before
extraordinary item $ 1,021 $ 4,163 $(1,427) $10,968
Extraordinary item -- loss
on early retirement of Senior
Notes, net of applicable income
tax benefit of $437 -- -- (813) --
------- ------- ------- -------
Primary earnings (loss) 1,021 4,163 (2,240) 10,968
Add: Amortization of original
issue discount and debt issuance
costs, net of income tax effect,
applicable to LYONs -- 997 -- 1,504
------- ------- ------- -------
Fully diluted earnings (loss) $ 1,021 $ 5,160 $(2,240) $12,472
======= ======= ======= =======
Weighted average shares outstanding
during the period 11,405 15,324 11,665 15,323
Common stock equivalent
shares - primary 417 423 -- 498
------- ------- ------- -------
Common and common stock equivalent
shares for purpose of calculating
primary earnings (loss) per share 11,822 15,747 11,665 15,821
Incremental shares to reflect
full dilution -- 4,395 -- 3,334
------- ------- ------- -------
Total shares for purpose of
calculating fully diluted earnings
(loss) per share 11,822 20,142 11,665 19,155
======= ======= ======= =======
Primary earnings (loss) per share
before extraordinary item $ .09 $ .26 $ (.12) $ .69
Extraordinary item, loss on early
retirement of Senior Debt,
net of income tax benefit -- -- (.07) --
------- ------- ------- -------
Primary earnings (loss) per share $ .09 $ .26 $ (.19) $ .69
======= ======= ======= =======
Fully diluted earnings
(loss) per share $ .09 $ .26 $ (.19) $ .65
======= ======= ======= =======
</TABLE>
(1) The impact of the assumed conversion of fully dilutive securities is
antidilutive, and is therefore excluded from the computation.
(2) The impact of the assumed conversion of dilutive securities is
antidilutive, and is therefore excluded from the computation.
11
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 112,266
<DEBT-CARRYING-VALUE> 26,923
<DEBT-MARKET-VALUE> 26,812
<EQUITIES> 25,986
<MORTGAGE> 0
<REAL-ESTATE> 9,215
<TOTAL-INVEST> 177,286
<CASH> 38,148
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 389,500
<POLICY-LOSSES> 148,575
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 131,200
<COMMON> 2
0
0
<OTHER-SE> 67,893
<TOTAL-LIABILITY-AND-EQUITY> 389,500
125,915
<INVESTMENT-INCOME> 5,833
<INVESTMENT-GAINS> 109
<OTHER-INCOME> 46,696
<BENEFITS> 8,628
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 168,723
<INCOME-PRETAX> (3,415)
<INCOME-TAX> (1,988)
<INCOME-CONTINUING> (1,427)
<DISCONTINUED> 0
<EXTRAORDINARY> (813)
<CHANGES> 0
<NET-INCOME> (2,240)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
