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EXHIBIT 99.6
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The Unaudited Condensed Consolidated Balance Sheet included in the Fidelity
National Financial, Inc. Quarterly Report on Form 10-Q as of and for the three
month period ended March 31, 2000 filed May 15, 2000, has been prepared
including the impact of the merger of Chicago Title Corporation with and into
Fidelity National, Financial, Inc. The Merger has been accounted for using the
purchase method of accounting.
The Unaudited Pro Forma Combined Statement of Operations for the three months
ended March 31, 2000 and the Unaudited Combined Pro Forma Statement of Earnings
for the year ended December 31, 1999, have been prepared including the impact of
the merger of Chicago Title Corporation with and into Fidelity National,
Financial, Inc., as if the Merger had been consummated on January 1, 2000 and
January 1, 1999, respectively. The Merger has been accounted for using the
purchase method of accounting. The Pro Forma Combined Financial Data are
provided for comparative purposes only. They do not purport to be indicative of
the results that actually would have occurred if the acquisition had been
consummated on the dates indicated or the results that may be obtained in the
future.
The following footnotes describe the Pro Forma Adjustments made.
(1) Reflects interest expense incurred of merger related debt of approximately
$590.5 million at an interest rate of 7.69% and the amortization of merger
related debt issuance costs of approximately $10.2 million using the
effective interest method over six years.
(2) Represents incremental amortization of cost in excess of net assets
acquired necessary to reflect amortization of merger related cost in excess
of net assets acquired of approximately $729.8 million on a straight line
basis over twenty years.
(3) Reflects income tax benefit of interest expense and amortization of debt
issuance costs at an expected marginal tax rate of forty percent.
(4) Basic and diluted earnings (loss) per share have been calculated assuming
the issuance of approximately 38.8 million shares in connection with the
merger and the conversion of outstanding Chicago Title Corporation dilutive
securities to a basis consistent with Fidelity National Financial, Inc.
dilutive securities.
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PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
2000 (IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL UNAUDITED PRO FORMA
----------------------------------- -------------------------
CHICAGO
FIDELITY TITLE COMBINED ADJUSTMENTS COMBINED
--------- -------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
REVENUE:
Title insurance premiums and escrow fees $ 219,653 $370,493 $590,146 $ -- $ 590,146
Other fees and revenue 62,442 34,968 97,410 -- 97,410
Interest and investment income, including
realized gains (losses) 11,885 16,923 28,808 -- 28,808
--------- -------- -------- --------- ---------
293,980 422,384 716,364 -- 716,364
--------- -------- -------- --------- ---------
EXPENSES:
Personnel costs 93,487 135,421 228,908 -- 228,908
Other operating expenses 98,395 98,339 196,734 -- 196,734
Agent commissions 90,745 146,642 237,387 -- 237,387
Provision for claim losses 10,912 21,988 32,900 -- 32,900
Interest expense 6,504 1,062 7,566 11,808(1) 19,374
--------- -------- -------- --------- ---------
300,043 403,452 703,495 11,808 715,303
--------- -------- -------- --------- ---------
Earnings (loss) before amortization of cost
in excess of net assets acquired (6,063) 18,932 12,869 (11,808) 1,061
Amortization of cost in excess of net assets
acquired 1,654 4,042 5,696 5,080(2) 10,776
--------- -------- -------- --------- ---------
Earnings (loss) before income taxes (7,717) 14,890 7,173 (16,888) (9,715)
Income tax expense (benefit) (359) 6,795 6,436 (4,723)(3) 1,713
Merger-related expenses, net of applicable
income taxes -- 8,892 8,892 8,892
--------- -------- -------- --------- ---------
Net earnings (loss) from continuing operations $ (7,358) $ 16,987 $ 9,629 $ (12,165) $ (2,536)
========= ======== ======== ========= =========
LOSS PER SHARE FROM CONTINUING OPERATIONS:
Basic N/A N/A N/A N/A $ (0.04)(4)
Diluted N/A N/A N/A N/A (0.04)(4)
</TABLE>
2
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PRO FORMA COMBINED STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL UNAUDITED PRO FORMA
-------------------------------------- ---------------------------
CHICAGO
FIDELITY TITLE COMBINED ADJUSTMENTS COMBINED
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
REVENUE:
Title insurance premiums and escrow fees $1,063,186 $1,848,944 $2,912,130 $ -- $2,912,130
Other fees and revenue 260,623 139,839 400,462 -- 400,462
Interest and investment income, including
realized gains (losses) 28,395 70,256 98,651 -- 98,651
---------- ---------- ---------- ----------- ----------
1,352,204 2,059,039 3,411,243 -- 3,411,243
---------- ---------- ---------- ----------- ----------
EXPENSES:
Personnel costs 407,078 625,973 1,033,051 -- 1,033,051
Other operating expenses 328,485 408,766 737,251 -- 737,251
Agent commissions 423,675 726,903 1,150,578 -- 1,150,578
Provision for claim losses 52,713 117,387 170,100 -- 170,100
Interest expense 15,626 4,356 19,982 47,108(1) 67,090
---------- ---------- ---------- ----------- ----------
1,227,577 1,883,385 3,110,962 47,108 3,158,070
---------- ---------- ---------- ----------- ----------
Earnings (loss) before amortization of cost
in excess of net assets acquired 124,627 175,654 300,281 (47,108) 253,173
Amortization of cost in excess of net
assets acquired 6,799 13,233 20,032 23,255(2) 43,287
---------- ---------- ---------- ----------- ----------
Earnings (loss) before income taxes 117,828 162,421 280,249 (70,363) 209,886
Income tax expense (benefit) 46,975 56,667 103,642 (18,843)(3) 84,799
Merger-related expenses, net of applicable
income taxes -- 4,732 4,732 -- 4,732
---------- ---------- ---------- ----------- ----------
Net earnings (loss) from continuing operations $ 70,853 $ 110,486 $ 181,339 $ (51,520) $ 129,819
========== ========== ========== =========== ==========
EARNINGS PER SHARE FROM CONTINUING OPERATIONS:
Basic $ 2.38 $ 5.06 N/A N/A $ 1.89(4)
Diluted 2.27 5.06 N/A N/A 1.84(4)
</TABLE>
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