<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A No. 1
(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 September 30, 1999
Commission File Number 1-9396
FIDELITY NATIONAL FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 86-0498599
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
17911 Von Karman Avenue, Suite 300, Irvine, California 92614
(Address of principal executive offices) (Zip Code)
(949) 622-4333
(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 Stock 28,493,667 shares as of November 10, 1999
<PAGE> 2
INTRODUCTORY STATEMENT
We are filing this Amendment No. 1 to our Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 1999 to include segment disclosures
in response to comments received from the Securities and Exchange Commission
regarding our Registration Statement on Form S-3 (Registration No. 333-65837).
Please refer to Note G of Notes to Condensed Consolidated Financial Statements
filed herewith.
<PAGE> 3
FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 1999
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Part I: FINANCIAL INFORMATION Page Number
-----------
<S> <C>
Item 1. Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of September 30, 1999 3
and December 31, 1998
B. Condensed Consolidated Statements of Earnings for the three-
month and nine-month periods ended September 30, 1999 and 1998 4
C. Condensed Consolidated Statements of Comprehensive Earnings
for the three-month and nine-month periods ended September 30, 1999
and 1998 5
D. Condensed Consolidated Statements of Cash Flows for the nine-month 6
periods ended September 30, 1999 and 1998
E. Notes to Condensed Consolidated Financial Statements 8
</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/ Alan L. Stinson
------------------------------
Alan L. Stinson
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer) Date: December 21, 1999
2
<PAGE> 4
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
FIDELITY NATIONAL FINANCIAL, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities available for sale, at fair value ................ $ 339,730 $330,068
Equity securities, at fair value .................................. 33,259 50,191
Other long-term investments, at cost, which approximates fair value 42,353 40,278
Short-term investments, at cost, which approximates fair value .... 71,496 94,122
Investments in real estate and partnerships, net .................. 3,815 4,673
----------- --------
Total investments ............................................. 490,653 519,332
Cash and cash equivalents .............................................. 46,209 42,492
Leases and residual interests in securitizations ....................... 128,394 93,507
Trade receivables, net ................................................. 69,186 75,940
Notes receivable, net .................................................. 18,060 10,761
Prepaid expenses and other assets ...................................... 112,270 111,471
Title plants ........................................................... 59,666 58,932
Property and equipment, net ............................................ 51,685 46,070
Deferred tax asset ..................................................... 23,927 10,965
----------- --------
$ 1,000,050 $969,470
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities .......................... $ 121,942 $123,357
Notes payable ..................................................... 190,295 214,624
Reserve for claim losses .......................................... 239,254 224,534
Income taxes payable .............................................. 1,556 8,683
----------- --------
553,047 571,198
Minority interests ................................................ 803 1,532
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 1999 and 1998; issued, 39,213,197 as of September 30, 1999 and
35,540,036 as of December 31, 1998 .............................. 4 3
Additional paid-in capital ........................................ 246,945 173,888
Retained earnings ................................................. 321,759 265,567
----------- --------
568,708 439,458
Accumulated other comprehensive earnings (loss) ................... (5,860) 11,657
Less treasury stock, 10,676,602 shares as of September 30, 1999 and
6,645,487 shares as of December 31, 1998, at cost ............... 116,648 54,375
----------- --------
446,200 396,740
----------- --------
$ 1,000,050 $969,470
=========== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 5
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
1999 1998 1999 1998
-------- ---------- ---------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE:
Title insurance premiums ................... $236,895 $ 238,207 $ 726,869 $642,726
Escrow fees ................................ 29,865 33,915 96,873 92,850
Other fees and revenue ..................... 69,116 50,866 200,441 149,089
Interest and investment income, including
realized gains (losses) .................. 5,961 6,428 19,747 28,405
-------- ---------- ---------- --------
341,837 329,416 1,043,930 913,070
-------- ---------- ---------- --------
EXPENSES:
Personnel costs ............................ 96,831 102,464 311,137 284,031
Other operating expenses ................... 85,930 62,373 248,359 177,634
Agent commissions .......................... 109,638 101,003 325,235 268,148
Provision for claim losses ................. 14,864 14,626 45,194 41,383
Interest expense ........................... 4,358 2,740 10,047 9,414
-------- ---------- ---------- --------
311,621 283,206 939,972 780,610
-------- ---------- ---------- --------
Earnings before income taxes .................. 30,216 46,210 103,958 132,460
Income tax expense ............................ 11,609 19,409 41,843 55,540
-------- ---------- ---------- --------
Net earnings ........................... $ 18,607 $ 26,801 $ 62,115 $ 76,920
======== ========== ========== ========
Basic net earnings ......................... $ 18,607 $ 26,801 $ 62,115 $ 76,920
======== ========== ========== ========
Basic earnings per share ................... $ .62 $ .94 $ 2.05 $ 2.78
======== ========== ========== ========
Weighted average shares outstanding, basic
basis .................................... 29,861 28,382 30,353 27,653
======== ========== ========== ========
Diluted net earnings ....................... $ 18,607 $ 27,461 $ 62,378 $ 78,803
======== ========== ========== ========
Diluted earnings per share ................. $ .60 $ .81 $ 1.95 $ 2.36
======== ========== ========== ========
Weighted average shares outstanding, diluted
basis .................................... 31,169 33,727 32,037 33,347
======== ========== ========== ========
Cash dividends per share ................... $ .07 $ .06 $ .21 $ .19
======== ========== ========== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 6
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
1999 1998 1999 1998
-------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net earnings ............................. $ 18,607 $ 26,801 $ 62,115 $ 76,920
Other comprehensive earnings (loss):
Unrealized losses on investments,
net (1) ............................. (7,379) (11,680) (17,378) (5,391)
Reclassification adjustments for (gains)
losses included in net earnings (2) .. 692 (1,139) (139) (7,930)
-------- -------- -------- --------
Other comprehensive loss ................. (6,687) (12,819) (17,517) (13,321)
-------- -------- -------- --------
Comprehensive earnings ................... $ 11,920 $ 13,982 $ 44,598 $ 63,599
======== ======== ======== ========
</TABLE>
(1) Net of income tax expense (benefit) of ($4,600) and ($8,458), and
($11,682) and ($3,888) for the three-month and nine-month periods ended
September 30, 1999 and 1998, respectively.
(2) Net of income tax expense (benefit) of ($431) and $825, and $93 and
$5,787 for the three-month and nine-month periods ended September 30,
1999 and 1998, respectively.
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 7
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-----------------------
1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings ............................................................... $ 62,115 $ 76,920
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization .......................................... 21,425 15,268
Net increase in reserve for claim losses ............................... 19,031 13,937
Net increase in provision for possible losses other than claims ........ 89 288
Gain on sales of assets ................................................ (232) (13,717)
Equity in gains of unconsolidated partnerships ......................... (729) (86)
Amortization of LYONs original issue discount .......................... 552 3,337
Change in assets and liabilities, net of effects from acquisition of
subsidiaries:
Net increase in leases and lease securitization residual interest ...... (34,887) (27,131)
Net (increase) decrease in trade receivables ........................... 6,751 (12,812)
Net increase in prepaid expenses and other assets ...................... (9,246) (15,518)
Net increase (decrease) in accounts payable and accrued liabilities .... (1,788) 21,912
Net increase (decrease) in income taxes ................................ (9,631) 10,621
--------- ---------
Net cash provided by operating activities ....................................... 53,450 73,019
--------- ---------
Cash flows from investing activities:
Proceeds from sales of property and equipment .............................. -- 6,968
Proceeds from sale of title plant .......................................... 1,100 405
Proceeds from sale of real estate .......................................... 946 --
Proceeds from sales and maturities of investments .......................... 339,396 162,949
Collections of notes receivable ............................................ 2,116 3,598
Additions to title plants .................................................. (1,799) (678)
Additions to property and equipment ........................................ (19,233) (16,483)
Additions to investments ................................................... (345,710) (223,641)
Additions to notes receivable .............................................. (9,670) (6,899)
Additions to real estate and joint ventures ................................ (285) --
Sale of a subsidiary, net of cash .......................................... 2,468 --
Acquisitions of businesses, net of cash acquired ........................... -- (198)
--------- ---------
Net cash used in investing activities ........................................... (30,671) (73,979)
--------- ---------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE> 8
(Continued)
FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
1999 1998
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from financing activities:
Borrowings .................................... $ 66,262 $ 17,607
Debt service payments ......................... (19,284) (20,325)
Dividends paid ................................ (6,539) (4,494)
Purchase of treasury stock .................... (62,273) --
Stock options exercised ....................... 2,772 6,898
-------- --------
Net cash used in financing activities .............. (19,062) (314)
-------- --------
Net increase (decrease) in cash and cash equivalents 3,717 (1,274)
Cash and cash equivalents at beginning of period ... 42,492 54,975
-------- --------
Cash and cash equivalents at end of period ......... $ 46,209 $ 53,701
======== ========
Supplemental cash flow information:
Income taxes paid ............................. $ 48,920 $ 43,033
======== ========
Interest paid ................................. $ 14,606 $ 6,142
======== ========
Noncash investing and financing activities:
Dividends declared and unpaid ................. $ 1,858 $ 1,820
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
7
<PAGE> 9
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. The Condensed Consolidated Financial Statements for both the
1999 and 1998 periods reflect the impact of the 1998 acquisitions of Granite
Financial, Inc. and Alamo Title Holding Company, which have been accounted for
as poolings-of-interests. 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 Annual Report on Form
10-K for the year ended December 31, 1998.
Certain reclassifications have been made in the 1998 Condensed Consolidated
Financial Statements to conform to classifications used in 1999.
Note B - Redemption of Liquid Yield Option Notes Outstanding
- ------------------------------------------------------------
On January 13, 1999, the Company announced that it was going to redeem, pursuant
to the terms of the indenture, its outstanding Liquid Yield Option Notes
("LYONs") due 2009 for $581.25 per $1,000 maturity value on February 15, 1999.
Additionally, the LYONs holders had the right to convert the outstanding LYONs
to 28.077 shares of Company common stock per $1,000 maturity value of LYONS at
any time. Through February 15, 1999, $123,681,000 maturity value of LYONs had
converted to 3,473,000 shares of common stock, resulting in an addition of
approximately $70 million to stockholders' equity while reducing outstanding
notes payable by a like amount. The remaining $432,000 of maturity value was
redeemed for cash of approximately $251,000.
Note C - Dividends
- ------------------
On September 30, 1999, the Company's Board of Directors declared a cash dividend
of $.07 per share, payable on October 27, 1999, to stockholders of record on
October 13, 1999.
Note D - Stock Purchase Plan and Employee Stock Purchase Loan Plan
- ------------------------------------------------------------------
On March 17, 1999, the Company's Board of Directors approved an increase to the
number of shares of outstanding Company common stock authorized for purchase
under the Company's previously announced purchase program. The additional
authorization permitted the Company to purchase up to 4.0 million shares. On
September 13, 1999, the Company announced that its Board of Directors had
approved a second increase of 2.0 million shares, bringing the total number of
shares of outstanding Company common stock authorized for purchase to 6.0
million. Through November 10, 1999, the Company has purchased 4.1 million shares
at an average purchase price of $15.43 per share totaling $63.0 million.
Purchases may be made from time to time by the Company in the open market or in
block purchases or in privately negotiated transactions depending on market
conditions and other factors.
Also on March 17, 1999, the Company's Board of Directors approved the adoption
of the Fidelity National Financial, Inc. Employee Stock Purchase Loan Plan
("Loan Plan") and the Non-Employee Director Stock Purchase Loan Program ("Loan
Program"). The purpose of the Loan Plan and Loan Program is to provide key
employees and directors with further incentive to maximize stockholder value.
The Company offered an aggregate of $8,650,000 in loans. Loan Plan and Loan
Program funds must be used to make private or open market purchases of Company
common stock through a broker-dealer designated by the Company. All loans are
full recourse and unsecured, and will have a five-year term. Interest will
accrue on the loans at a rate of 5% per annum due at maturity. Loans may be
prepaid any time without penalty. Through November 10, 1999, loans had been made
in the amount of $7.25 million to purchase 483,825 shares of Company common
stock at an average purchase price of $15.41 per share.
Note E - Sale of National Title Insurance of New York Inc.
- ----------------------------------------------------------
On March 18, 1998, the Company announced that it had entered into an agreement
to sell National Title Insurance of New York Inc. ("National") to American Title
Company, a wholly-owned subsidiary of American National Financial, Inc.
("ANFI"), for $3.25 million, subject to regulatory approval and certain other
conditions. The purchase price was structured at a premium to book value. The
Company currently holds a 29.4% interest in ANFI. National was acquired in April
1996,
8
<PAGE> 10
as part of the Nations Title Inc. acquisition, and has not been actively
underwriting policies since that time. This transaction received regulatory
approval on May 27, 1999 and closed on June 10, 1999. The Company recognized a
gain of approximately $1.2 million prior to applicable income taxes, in
connection with the sale of National. This gain has been reflected in the
Condensed Consolidated Statements of Earnings for the nine-month period ended
September 30, 1999.
Note F - Acquisition of Chicago Title Corporation
- -------------------------------------------------
On August 1, 1999, the Company announced that it had signed an Agreement and
Plan of Merger ("Agreement") to purchase Chicago Title Corporation ("Chicago
Title", NYSE: CTZ), headquartered in Chicago, Illinois, for approximately $1.13
billion, or $52.00 per share of Chicago Title common stock, using approximately
equal amounts of cash and Company common stock, subject to certain adjustments
based on the average price of Company common stock, as defined in the Agreement.
The allocation between cash and stock will be adjusted so Chicago Title
stockholders will receive more than 50% of the outstanding stock of the new
company. The price is payable in shares of Company common stock or, upon
election by Chicago Title stockholders, in cash, subject to proration as may be
necessary to achieve the allocation between cash and stock described above. The
Agreement has been approved by the boards of both companies, and was amended on
October 13, 1999. The transaction is subject to approval by the stockholders of
Chicago Title and the Company, requisite regulatory authorities and other
customary conditions and is expected to be completed in the first quarter of
2000.
Note G - Segment Information
- ----------------------------
During the first quarter of 1999, the Company restructured its business segments
to more accurately reflect a change in the Company's current operating
structure. All previously reported segment information has been restated to be
consistent with the current presentation.
The Company's Condensed Consolidated Financial Statements as of September 30,
1999 and 1998 and for the three-month and nine-month periods ended September 30,
1999 and 1998, respectively, include five reportable segments. Reportable
segments are determined based on the organizational structure and types of
products and services from which each reportable segment derives its revenue.
As of and for the three-month period ended September 30, 1999 (dollars in
thousands):
<TABLE>
<CAPTION>
REAL ESTATE
TITLE INFORMATION MICRO
INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL
--------- ----------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total revenue $286,536 $ 17,949 $ 28,114 $ 8,321 $ 917 $ 341,837
======== ======== ======== ========= ======== ==========
Operating earnings
(loss) $ 38,404 $ (2,977) $ 1,036 $ 1,441 $ (582) $ 37,322
Interest and investment
income, including
realized gains (losses) 4,882 117 1 -- 961 5,961
Depreciation and
amortization 6,679 167 1,246 564 53 8,709
Interest expense 110 2 557 1,185 2,504 4,358
-------- -------- -------- --------- -------- ----------
Earnings (loss) before
income taxes 36,497 (3,029) (766) (308) (2,178) 30,216
Income tax expense
(benefit) 12,171 (1,164) -- (54) 656 11,609
-------- -------- -------- --------- -------- ----------
Net earnings (loss) $ 24,326 $ (1,865) $ (766) $ (254) $ (2,834) $ 18,607
======== ======== ======== ========= ======== ==========
Assets $741,490 $ 60,205 $ 35,287 $ 134,710 $ 28,358 $1,000,050
======== ======== ======== ========= ======== ==========
</TABLE>
As of and for the three-month period ended September 30, 1998 (dollars in
thousands):
<TABLE>
<CAPTION>
REAL ESTATE
TITLE INFORMATION MICRO
INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL
--------- ----------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Total revenue $294,023 $22,110 $ 6,761 $ 6,324 $ 198 $329,416
======== ======= ======== ======== ======== ========
Operating earnings
(loss) $ 50,713 $ 1,969 $ (502) $ (2,420) $ (1,546) $ 48,214
Interest and investment
income, including
realized gains (losses) 6,088 140 2 -- 198 6,428
Depreciation and
amortization 4,733 520 231 440 (232) 5,692
Interest expense 646 2 268 304 1,520 2,740
-------- ------- -------- -------- -------- --------
Earnings (loss) before
income taxes 51,422 1,587 (999) (3,164) (2,636) 46,210
Income tax expense
(benefit) 19,880 671 (82) (1,352) 292 19,409
-------- ------- -------- -------- -------- --------
Net earnings (loss) $ 31,542 $ 916 $ (917) $ (1,812) $ (2,928) $ 26,801
======== ======= ======== ======== ======== ========
Assets $645,607 $50,499 $ 18,357 $ 99,143 $ 46,411 $860,017
======== ======= ======== ======== ======== ========
</TABLE>
9
<PAGE> 11
As of and for the nine-month period ended September 30, 1999 (dollars in
thousands):
<TABLE>
<CAPTION>
REAL ESTATE
TITLE INFORMATION MICRO
INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL
--------- ----------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total revenue $884,196 $ 64,212 $ 72,333 $ 21,448 $ 1,741 $1,043,930
======== ======== ======== ========= ======== ==========
Operating earnings
(loss) $120,186 $ (462) $ 945 $ (3,422) $ (1,564) $ 115,683
Interest and investment
income, including
realized gains (losses) 17,284 284 6 5 2,168 19,747
Depreciation and
amortization 15,503 882 3,218 1,665 157 21,425
Interest expense 477 20 1,236 4,019 4,295 10,047
-------- -------- -------- --------- -------- ----------
Earnings (loss) before
income taxes 121,490 (1,080) (3,503) (9,101) (3,848) 103,958
Income tax expense
(benefit) 44,826 (310) 29 (3,110) 408 41,843
-------- -------- -------- --------- -------- ----------
Net earnings (loss) $ 76,664 $ (770) $ (3,532) $ (5,991) $ (4,256) $ 62,115
======== ======== ======== ========= ======== ==========
Assets $741,490 $ 60,205 $ 35,287 $ 134,710 $ 28,358 $1,000,050
======== ======== ======== ========= ======== ==========
</TABLE>
As of and for the nine-month period ended September 30, 1998 (dollars in
thousands):
<TABLE>
<CAPTION>
REAL ESTATE
TITLE INFORMATION MICRO
INSURANCE SERVICES GENERAL LEASING CORPORATE TOTAL
--------- ----------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Total revenue $817,473 $62,927 $ 11,013 $ 20,259 $ 1,398 $913,070
======== ======= ======== ======== ======== ========
Operating earnings
(loss) $125,171 $ 7,623 $ (281) $ 3,134 $ (6,910) $128,737
Interest and investment
income, including
realized gains (losses) 26,784 220 3 -- 1,398 28,405
Depreciation and
amortization 11,548 1,529 612 1,422 157 15,268
Interest expense 1,884 13 310 2,898 4,309 9,414
-------- ------- -------- -------- -------- --------
Earnings (loss) before
income taxes 138,523 6,301 (1,200) (1,186) (9,978) 132,460
Income tax expense
(benefit) 54,576 2,367 (59) (520) (824) 55,540
-------- ------- -------- -------- -------- --------
Net earnings (loss) $ 83,947 $ 3,934 $ (1,141) $ (666) $ (9,154) $ 76,920
======== ======= ======== ======== ======== ========
Assets $645,607 $50,499 $ 18,357 $ 99,143 $ 46,411 $860,017
======== ======= ======== ======== ======== ========
</TABLE>
The activities of the reportable segments include the following:
Title Insurance
- ---------------
This segment, consisting of title insurance underwriters and wholly owned title
insurance agencies; provides core title insurance and escrow services, including
document preparation, collection and trust activities and certain real estate
information services. This segment coordinates its activities with those of the
real estate information services segment described below in order to offer the
full range of real estate products and services required to execute and close a
real estate transaction.
Real Estate Information Services
- --------------------------------
This segment, consisting of various real estate information subsidiaries, offers
the complementary specialized products and services required to execute and
close a real estate transaction that are not offered by the title insurance
segment described above. These services include document recording services on a
nationwide basis, tax qualifying property exchange services, property appraisal
services, tax monitoring services, credit reporting, real estate referral
services, flood monitoring, and foreclosure publishing and posting. These
services require specialized expertise and have been centralized for efficiency
and management purposes.
10
<PAGE> 12
Micro General Corporation
- -------------------------
Micro General Corporation is a full service enterprise solutions provider
offering a complete range of information technology and telecommunication
services including systems integration, application development, real estate
industry applications and eCommerce. Micro General Corporation was not
consolidated in the Company's Condensed Consolidated Financial Statements until
the second quarter of 1998.
Leasing
- -------
The leasing segment originates, funds, purchases, sells, securitizes and
services equipment leases for a broad range of businesses.
Corporate
- ---------
The corporate segment includes the operations of the parent holding company.
These operations consist of certain investment activities and the issuance and
repayment of corporate debt obligations.
Expenditures for long-lived assets relate primarily to the title insurance
segment.
The accounting policies of the segments are the same as those described in Note
A, Basis of Financial Statements. Intersegment sales or transfers which occurred
in the ordinary course of consolidated operations have been eliminated from the
segment information provided.
11
