FNF Reports Second Quarter 2024 Financial Results
JACKSONVILLE, Fla., Aug. 5, 2024 /PRNewswire/ — Fidelity National Financial, Inc. (NYSE:FNF) (“FNF” or the “Company”), a leading provider of title insurance and transaction services to the real estate and mortgage industries and a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through its majority-owned, publicly traded subsidiary F&G Annuities & Life, Inc. (NYSE:FG) (“F&G”), today reported financial results for the second quarter ended June 30, 2024.
Net earnings attributable to common shareholders for the second quarter were $306 million, or $1.12 per diluted share (per share), compared to $219 million, or $0.81 per share, for the second quarter of 2023. Net earnings attributable to common shareholders include mark-to-market effects and non-recurring items; all of which are excluded from adjusted net earnings attributable to common shareholders.
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the second quarter were $338 million, or $1.24 per share, compared to $274 million, or $1.01 per share, for the second quarter of 2023. The Title Segment contributed $241 million, compared to $226 million for the second quarter of 2023. The F&G Segment contributed $122 million, compared to $67 million for the second quarter of 2023. The Corporate Segment had adjusted net earnings of $2 million before eliminating $27 million of dividend income from F&G in the consolidated financial statements, compared to $2 million for the second quarter of 2023. The Title Segment’s increase reflects higher average fee per file, higher agency revenue and an uplift in investment income. F&G Segment adjusted net earnings include alternative investment returns below our long-term expectations of $17 million and net significant expense items of $10 million. Please see “Segment Financial Results” for F&G under “Non-GAAP Measures and Other Information” for further explanation.
Company Highlights
Title Segment revenue and margin uplift; continue to successfully navigate current market: For the Title Segment, total revenue of $1.9 billion for the quarter, in line with the second quarter of 2023. Total revenue, excluding recognized gains and losses, of $2.0 billion for the second quarter, a 5% increase over $1.9 billion in the second quarter of 2023. Adjusted pre-tax title margin was 16.2% for the quarter, compared to 15.8% in the second quarter of 2023F&G Segment sustainable sales growth across multi-channel platform and record assets under management: For the F&G Segment, record gross sales of $4.4 billion for the second quarter, a 47% increase over the second quarter of 2023. F&G achieved record assets under management (AUM) of $52.2 billion as of June 30, 2024, driven by new business flows, stable inforce retention and net debt and equity proceeds over the past twelve monthsSustainable common dividend backed by strong balance sheet: FNF paid common dividends of $0.48 per share for $131 million and ended the second quarter with $696 million in cash and short-term liquid investments at the holding company
William P. Foley, II, Chairman, commented, “Our Title business continues to perform well, delivering an industry leading adjusted pre-tax Title margin of 16.2% for the second quarter, as compared to 15.8% in the year ago quarter, and demonstrating our disciplined operating strategy as we’ve adapted to the current market. While higher mortgage rates are impacting residential purchase volumes, F&G is benefiting from strong demand for its products given demographic tailwinds, prior investments in building out its multi-channel sales platform and continued strong investment performance. As a result, F&G has achieved record gross sales of $4.4 billion for the second quarter, an increase of 47% over the second quarter of 2023, as the business is seeing strength across all of its sales channels. F&G’s earnings contribution to FNF has grown to 40% for the first half of 2024, providing an important complement to our Title business. Taken together, our business is performing at a high level which speaks to both our momentum and successful execution to deliver strong results.”
Summary Financial Results
(In millions, except per share data)
Three Months Ended
Year to Date
June 30, 2024
June 30, 2023
2024
2023
Total revenue
$ 3,158
$ 3,068
$ 6,457
$ 5,542
F&G total gross sales1
$ 4,420
$ 3,008
$ 7,915
$ 6,289
F&G assets under management1
$ 52,208
$ 46,004
$ 52,208
$ 46,004
Total assets
$ 88,824
$ 73,021
$ 88,824
$ 73,021
Adjusted pre-tax title margin
16.2 %
15.8 %
13.7 %
13.2 %
Net earnings attributable to common shareholders
$ 306
$ 219
$ 554
$ 160
Net earnings per share attributable to common shareholders
$ 1.12
$ 0.81
$ 2.04
$ 0.59
Adjusted net earnings1
$ 338
$ 274
$ 544
$ 425
Adjusted net earnings per share1
$ 1.24
$ 1.01
$ 2.00
$ 1.57
Weighted average common diluted shares
273
271
272
271
Total common shares outstanding
273
272
273
272
1
See definition of non-GAAP measures below
Segment Financial Results
Title Segment
This segment consists of the operations of the Company’s title insurance underwriters and related businesses, which provide core title insurance and escrow and other title-related services including loan sub-servicing, valuations, default services, and home warranty.
Mike Nolan, Chief Executive Officer, commented, “Through the second quarter, we have continued to effectively manage our business to the trend in opened orders and delivered another industry leading performance, while generating strong cash flows that we have used to reinvest in the business and return to our shareholders. Our results reflect a disciplined operating strategy and ongoing investments in data and innovative technologies like InHere, our industry leading digital transaction platform. We had over 1 million real estate professionals and consumers use inHere in full year 2023 and nearly 700,000 in the first half of this year. Additionally, during the quarter we named our Chief Artificial Intelligence Officer. This appointment highlights AI’s importance for the future and our commitment to responsibly harness its potential to generate efficiencies, increase productivity and enhance our customers’ experience throughout their transactions.”
Second Quarter 2024 Highlights
Total revenue of $1.9 billion, compared with $1.9 billion in the second quarter of 2023Total revenue, excluding recognized gains and losses, of $2.0 billion, a 5% increase over second quarter of 2023Direct title premiums of $564 million, a 4% increase over second quarter of 2023Agency title premiums of $784 million, a 10% increase over second quarter of 2023Commercial revenue of $273 million, a 4% increase over second quarter of 2023Purchase orders opened increased 2% on a daily basis and purchase orders closed were in line with the second quarter of 2023Refinance orders opened decreased 1% on a daily basis and refinance orders closed decreased 4% on a daily basis from second quarter of 2023Commercial orders opened increased 1% over the second quarter of 2023 and commercial orders closed decreased 7% from second quarter of 2023Total fee per file of $3,759 for the second quarter, a 4% increase over the second quarter of 2023
Second Quarter 2024 Financial Results
Pre-tax title margin of 12.2% and industry leading adjusted pre-tax title margin of 16.2% for the second quarter of 2024, compared to 12.5% and 15.8%, respectively, in the second quarter of 2023Pre-tax earnings from continuing operations in Title for the second quarter of $235 million, compared with $233 million for the second quarter of 2023Adjusted pre-tax earnings in Title for the second quarter of $324 million compared with $302 million for the second quarter of 2023. The increase reflects higher average fee per file, higher agency revenue and an uplift in investment income
F&G Segment
This segment consists of operations of FNF’s majority-owned subsidiary F&G, a leading provider of insurance solutions serving retail annuity and life customers and funding agreement and pension risk transfer institutional clients.
Chris Blunt, Chief Executive Officer, commented, “Our business continues to perform well as we experienced strength across all of our channels having delivered record retail sales of $3.2 billion, increasing 39% over the prior year quarter, while our institutional market sales were $1.2 billion, up strongly as compared to $700 million of sales in the prior year quarter. Our retail products are seeing strong demand as consumers want to secure relatively higher rates, guaranteed tax deferred growth and principal protection, which is particularly attractive to baby boomers who are approaching retirement, a significant demographic trend with a long tail. We ended the second quarter with a record $61.4 billion of assets under management before flow reinsurance. We have plenty of momentum and continue to drive asset growth, deliver margin expansion and generate accretive returns that are well on pace to achieve our Investor Day targets.”
Second Quarter 2024
Record profitable gross sales: Gross sales of $4.4 billion for the second quarter, an increase of 47% over the second quarter of 2023, driven by record retail channel sales and robust institutional market salesRecord Retail channel sales of $3.2 billion for the second quarter, an increase of 39% over the second quarter of 2023, driven by strong annuity salesRobust Institutional market sales of $1.2 billion, compared to $0.7 billion in the second quarter of 2023, driven by higher funding agreements due to more favorable market conditionsNet sales of $3.4 billion for the second quarter, an increase of 55% over the second quarter of 2023Record assets under management (AUM) of $52.2 billion as of June 30, 2024, an increase of 13% from $46.0 billion as of June 30, 2023, driven by net new business flows, stable inforce retention and net debt and equity proceeds over the past twelve months. AUM before flow reinsurance was $61.4 billion as of June 30, 2024Net earnings attributable to common shareholders for F&G Segment of $171 million for the second quarter due to favorable mark-to-market movement, compared to $110 million for the second quarter of 2023 which included favorable mark-to-market movementAdjusted net earnings attributable to common shareholders for F&G Segment of $122 million for the second quarter, compared to $67 million for the second quarter of 2023F&G’s adjusted net earnings reflect alternatives investment portfolio short-term mark-to-market movement that differs from long-term return expectation. The second quarter of 2024 includes short term investment income from alternative investments and $10 million of net significant expense items, whereas the second quarter of 2023 included short term investment income from alternative investments and $4 million of significant income itemsAs compared to the prior year quarter, adjusted net earnings reflect asset growth, margin diversification from accretive flow reinsurance fees and owned distribution margin, disciplined expense management and higher interest expense due to planned capital market activityPlease see “Segment Financial Results” for F&G under “Non-GAAP Measures and Other Information” for further explanation
Conference Call
We will host a call with investors and analysts to discuss FNF’s second quarter 2024 results on Tuesday, August 6, 2024, beginning at 11:00 a.m. Eastern Time. A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at fnf.com. The conference call replay will be available via webcast through the FNF Investor Relations website at fnf.com. The telephone replay will be available from 3:00 p.m. Eastern Time on August 6, 2024, through August 13, 2024, by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 13747344.
About Fidelity National Financial, Inc.
Fidelity National Financial, Inc. (NYSE: FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries. FNF is the nation’s largest title insurance company through its title insurance underwriters – Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York – that collectively issue more title insurance policies than any other title company in the United States. More information about FNF can be found at fnf.com.
About F&G
F&G is part of the FNF family of companies. F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa. For more information, please visit fglife.com.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, this earnings release includes non-GAAP financial measures, which the Company believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include adjusted net earnings per share, adjusted pre-tax title earnings, adjusted pre-tax title earnings as a percentage of adjusted title revenue (adjusted pre-tax title margin), adjusted net earnings attributable to common shareholders (adjusted net earnings), assets under management (AUM), average assets under management (AAUM) and sales.
Management believes these non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such non-GAAP measures in the same manner as we do.
The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. By disclosing these non-GAAP financial measures, FNF believes it offers investors a greater understanding of, and an enhanced level of transparency into, the means by which the Company’s management operates the Company.
Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings, net earnings attributable to common shareholders, net earnings per share, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Further, FNF’s non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are provided below.
Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business, political crisis, war and pandemic conditions, including ongoing geopolitical conflicts; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U.S. economy; our potential inability to find suitable acquisition candidates; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that F&G and our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries, including regulation of title insurance and services and privacy and data protection laws; systems damage, failures, interruptions, cyberattacks and intrusions, or unauthorized data disclosures; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of FNF’s Form 10-K and other filings with the Securities and Exchange Commission.
FNF-E
FIDELITY NATIONAL FINANCIAL, INC.
SECOND QUARTER SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Eliminations
Three Months Ended
June 30, 2024
Direct title premiums
$ 564
$ 564
$ —
$ —
$ —
Agency title premiums
784
784
—
—
—
Escrow, title related and other fees
1,115
571
505
39
—
Total title and escrow
2,463
1,919
505
39
—
Interest and investment income
783
87
684
39
(27)
Recognized gains and losses, net
(88)
(75)
(17)
4
—
Total revenue
3,158
1,931
1,172
82
(27)
Personnel costs
779
680
69
30
—
Agent commissions
609
609
—
—
—
Other operating expenses
387
311
46
30
—
Benefits & other policy reserve changes
608
—
608
—
—
Market risk benefit (gains) losses
20
—
20
—
—
Depreciation and amortization
189
35
147
7
—
Provision for title claim losses
61
61
—
—
—
Interest expense
47
—
28
19
—
Total expenses
2,700
1,696
918
86
—
Pre-tax earnings (loss)
$ 458
$ 235
$ 254
$ (4)
$ (27)
Income tax expense (benefit)
116
72
50
(6)
—
Earnings (loss) from equity investments
1
1
—
—
—
Non-controlling interests
37
5
33
(1)
—
Net earnings (loss) attributable to common shareholders
$ 306
$ 159
$ 171
$ 3
$ (27)
EPS attributable to common shareholders – basic
$ 1.13
EPS attributable to common shareholders – diluted
$ 1.12
Weighted average shares – basic
271
Weighted average shares – diluted
273
FIDELITY NATIONAL FINANCIAL, INC.
SECOND QUARTER SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Eliminations
Three Months Ended
June 30, 2024
Net earnings (loss) attributable to common shareholders
$ 306
$ 159
$ 171
$ 3
$ (27)
Pre-tax earnings (loss)
$ 458
$ 235
$ 254
$ (4)
$ (27)
Non-GAAP Adjustments
Recognized (gains) and losses, net
53
75
(18)
(4)
—
Market related liability adjustments
(71)
—
(71)
—
—
Purchase price amortization
35
14
19
2
—
Transaction costs
(3)
—
(3)
—
—
Adjusted pre-tax earnings (loss)
$ 472
$ 324
$ 181
$ (6)
$ (27)
Total non-GAAP, pre-tax adjustments
$ 14
$ 89
$ (73)
$ (2)
$ —
Income taxes on non-GAAP adjustments
(4)
(21)
16
1
—
Non-controlling interest on non-GAAP adjustments
8
—
8
—
—
Deferred tax asset valuation allowance
14
14
—
—
—
Total non-GAAP adjustments
$ 32
$ 82
$ (49)
$ (1)
$ —
Adjusted net earnings (loss) attributable to common shareholders
$ 338
$ 241
$ 122
$ 2
$ (27)
Adjusted EPS attributable to common shareholders – diluted
$ 1.24
FIDELITY NATIONAL FINANCIAL, INC.
SECOND QUARTER SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Elimination
Three Months Ended
June 30, 2023
Direct title premiums
$ 541
$ 541
$ —
$ —
$ —
Agency title premiums
713
713
—
—
—
Escrow, title related and other fees
1,212
581
576
55
—
Total title and escrow
2,466
1,835
576
55
—
Interest and investment income
618
79
525
35
(21)
Recognized gains and losses, net
(16)
(50)
67
(33)
—
Total revenue
3,068
1,864
1,168
57
(21)
Personnel costs
755
656
56
43
—
Agent commissions
550
550
—
—
—
Other operating expenses
394
330
33
31
—
Benefits & other policy reserve changes
817
—
817
—
—
Market risk benefit (gains) losses
(30)
—
(30)
—
—
Depreciation and amortization
151
39
104
8
—
Provision for title claim losses
56
56
—
—
—
Interest expense
43
—
25
18
—
Total expenses
2,736
1,631
1,005
100
—
Pre-tax earnings (loss)
$ 332
$ 233
$ 163
$ (43)
$ (21)
Income tax expense (benefit)
90
65
33
(8)
—
Earnings from equity investments
1
1
—
—
—
Non-controlling interests
24
4
20
—
—
Net earnings (loss) attributable to common shareholders
$ 219
$ 165
$ 110
$ (35)
$ (21)
EPS attributable to common shareholders – basic
$ 0.81
EPS attributable to common shareholders – diluted
$ 0.81
Weighted average shares – basic
270
Weighted average shares – diluted
271
FIDELITY NATIONAL FINANCIAL, INC.
SECOND QUARTER SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Elimination
Three Months Ended
June 30, 2023
Net earnings (loss) attributable to common shareholders
$ 219
$ 165
$ 110
$ (35)
$ (21)
Pre-tax earnings (loss)
$ 332
$ 233
$ 163
$ (43)
$ (21)
Non-GAAP Adjustments
Recognized (gains) and losses, net
113
50
30
33
—
Market related liability adjustments
(102)
—
(102)
—
—
Purchase price amortization
28
19
6
3
—
Transaction costs
2
—
—
2
—
Adjusted pre-tax earnings (loss)
$ 373
$ 302
$ 97
$ (5)
$ (21)
Total non-GAAP, pre-tax adjustments
$ 41
$ 69
$ (66)
$ 38
$ —
Income taxes on non-GAAP adjustments
(11)
(17)
15
(9)
—
Non-controlling interest on non-GAAP adjustments
8
—
8
—
—
Deferred tax asset valuation allowance
17
9
—
8
—
Total non-GAAP adjustments
$ 55
$ 61
$ (43)
$ 37
$ —
Adjusted net earnings (loss) attributable to common shareholders
$ 274
$ 226
$ 67
$ 2
$ (21)
Adjusted EPS attributable to common shareholders – diluted
$ 1.01
FIDELITY NATIONAL FINANCIAL, INC.
YTD SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Elimination
Six Months Ended
June 30, 2024
Direct title premiums
$ 1,004
$ 1,004
$ —
$ —
$ —
Agency title premiums
1,377
1,377
—
—
—
Escrow, title related and other fees
2,396
1,055
1,246
95
—
Total title and escrow
4,777
3,436
1,246
95
—
Interest and investment income
1,493
170
1,300
77
(54)
Recognized gains and losses, net
187
(12)
195
4
—
Total revenue
6,457
3,594
2,741
176
(54)
Personnel costs
1,506
1,298
135
73
—
Agent commissions
1,069
1,069
—
—
—
Other operating expenses
756
596
104
56
—
Benefits & other policy reserve changes
1,769
—
1,769
—
—
Market risk benefit (gains) losses
9
—
9
—
—
Depreciation and amortization
356
71
270
15
—
Provision for title claim losses
107
107
—
—
—
Interest expense
96
—
58
38
—
Total expenses
5,668
3,141
2,345
182
—
Pre-tax earnings (loss) from continuing operations
$ 789
$ 453
$ 396
$ (6)
$ (54)
Income tax expense (benefit)
179
117
76
(14)
—
Earnings (loss) from equity investments
2
2
—
—
—
Non-controlling interests
58
7
51
—
—
Net earnings (loss) attributable to common shareholders
$ 554
$ 331
$ 269
$ 8
$ (54)
EPS attributable to common shareholders – basic
$ 2.04
EPS attributable to common shareholders – diluted
$ 2.04
Weighted average shares – basic
271
Weighted average shares – diluted
272
FIDELITY NATIONAL FINANCIAL, INC.
YTD SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Elimination
Six Months Ended
June 30, 2024
Net earnings (loss) attributable to common shareholders
$ 554
$ 331
$ 269
$ 8
$ (54)
Pre-tax earnings (loss)
$ 789
$ 453
$ 396
$ (6)
$ (54)
Non-GAAP Adjustments
Recognized (gains) and losses, net
22
12
14
(4)
—
Market related liability adjustments
(126)
—
(126)
—
—
Purchase price amortization
76
30
41
5
—
Transaction costs
(2)
—
(3)
1
—
Adjusted pre-tax earnings (loss)
$ 759
$ 495
$ 322
$ (4)
$ (54)
Total non-GAAP, pre-tax adjustments
$ (30)
$ 42
$ (74)
$ 2
$ —
Income taxes on non-GAAP adjustments
7
(10)
17
—
—
Deferred tax asset valuation allowance
8
8
—
—
—
Non-controlling interest on non-GAAP adjustments
5
—
5
—
—
Total non-GAAP adjustments
$ (10)
$ 40
$ (52)
$ 2
$ —
Adjusted net earnings (loss) attributable to common shareholders
$ 544
$ 371
$ 217
$ 10
$ (54)
Adjusted EPS attributable to common shareholders – diluted
$ 2.00
FIDELITY NATIONAL FINANCIAL, INC.
YTD SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
F&G
Six Months Ended
Consolidated
Title
Corporate and
Other
Elimination
June 30, 2023
Direct title premiums
$ 969
$ 969
$ —
$ —
$ —
Agency title premiums
1,263
1,263
—
—
—
Escrow, title related and other fees
2,092
1,052
941
99
—
Total title and escrow
4,324
3,284
941
99
—
Interest and investment income
1,229
160
1,044
46
(21)
Recognized gains and losses, net
(11)
(28)
52
(35)
—
Total revenue
5,542
3,416
2,037
110
(21)
Personnel costs
1,432
1,254
109
69
—
Agent commissions
970
970
—
—
—
Other operating expenses
754
626
69
59
—
Benefits & other policy reserve changes
1,629
—
1,629
—
—
Market risk benefit (gains) losses
29
—
29
—
—
Depreciation and amortization
285
76
194
15
—
Provision for title claim losses
100
100
—
—
—
Interest expense
85
—
47
38
—
Total expenses
5,284
3,026
2,077
181
—
Pre-tax earnings (loss)
$ 258
$ 390
$ (40)
$ (71)
$ (21)
Income tax expense (benefit)
104
92
25
(13)
—
Earnings from equity investments
1
1
—
—
—
Non-controlling interests
(5)
6
(11)
—
—
Net earnings (loss) attributable to common shareholders
$ 160
$ 293
$ (54)
$ (58)
$ (21)
EPS attributable to common shareholders – basic
$ 0.59
EPS attributable to common shareholders – diluted
$ 0.59
Weighted average shares – basic
270
Weighted average shares – diluted
271
FIDELITY NATIONAL FINANCIAL, INC.
YTD SEGMENT INFORMATION
(In millions, except per share data)
(Unaudited)
Consolidated
Title
F&G
Corporate and
Other
Elimination
Six Months Ended
June 30, 2023
Net earnings (loss) attributable to common shareholders
$ 160
$ 293
$ (54)
$ (58)
$ (21)
Pre-tax earnings (loss)
$ 258
$ 390
$ (40)
$ (71)
$ (21)
Non-GAAP Adjustments
Recognized (gains) and losses, net
167
28
104
35
—
Market related liability adjustments
142
—
142
—
—
Purchase price amortization
55
37
11
7
—
Transaction costs
7
—
2
5
—
Adjusted pre-tax earnings (loss)
$ 629
$ 455
$ 219
$ (24)
$ (21)
Total non-GAAP, pre-tax adjustments
$ 371
$ 65
$ 259
$ 47
$ —
Income taxes on non-GAAP adjustments
(81)
(16)
(54)
(11)
—
Deferred tax asset valuation allowance
7
(1)
—
8
—
Non-controlling interest on non-GAAP adjustments
(32)
—
(32)
—
—
Total non-GAAP adjustments
$ 265
$ 48
$ 173
$ 44
$ —
Adjusted net earnings (loss) attributable to common shareholders
$ 425
$ 341
$ 119
$ (14)
$ (21)
Adjusted EPS attributable to common shareholders – diluted
$ 1.57
FIDELITY NATIONAL FINANCIAL, INC.
SUMMARY BALANCE SHEET INFORMATION
(In millions)
June 30,
2024
December 31,
2023
(Unaudited)
(Unaudited)
Cash and investment portfolio
$ 63,916
$ 58,816
Goodwill
5,107
4,830
Title plant
420
418
Total assets
88,824
80,614
Notes payable
4,175
3,887
Reserve for title claim losses
1,721
1,770
Secured trust deposits
800
731
Accumulated other comprehensive (loss) earnings
(2,087)
(2,119)
Non-controlling interests
721
552
Total equity and non-controlling interests
7,981
7,460
Total equity attributable to common shareholders
7,260
6,908
Non-GAAP Measures and Other Information
Title Segment
The table below reconciles pre-tax title earnings to adjusted pre-tax title earnings.
Three Months Ended
Six Months Ended
(Dollars in millions)
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Pre-tax earnings
$ 235
$ 233
$ 453
$ 390
Non-GAAP adjustments before taxes
Recognized (gains) and losses, net
75
50
12
28
Purchase price amortization
14
19
30
37
Total non-GAAP adjustments
89
69
42
65
Adjusted pre-tax earnings
$ 324
$ 302
$ 495
$ 455
Adjusted pre-tax margin
16.2 %
15.8 %
13.7 %
13.2 %
FIDELITY NATIONAL FINANCIAL, INC.
QUARTERLY OPERATING STATISTICS
(Unaudited)
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Quarterly Opened Orders (‘000’s except % data)
Total opened orders*
344
315
257
318
347
308
266
363
Total opened orders per day*
5.5
5.1
4.1
5.0
5.4
5.0
4.3
5.7
Purchase % of opened orders
80 %
79 %
78 %
80 %
79 %
78 %
76 %
76 %
Refinance % of opened orders
20 %
21 %
22 %
20 %
21 %
22 %
24 %
24 %
Total closed orders*
229
186
192
224
233
188
216
278
Total closed orders per day*
3.6
3.0
3.1
3.6
3.6
3.0
3.5
4.3
Purchase % of closed orders
81 %
79 %
80 %
80 %
81 %
78 %
76 %
76 %
Refinance % of closed orders
19 %
21 %
20 %
20 %
19 %
22 %
24 %
24 %
Commercial (millions, except orders in ‘000’s)
Total commercial revenue
$ 273
$ 238
$ 294
$ 263
$ 263
$ 241
$ 344
$ 381
Total commercial opened orders
50.7
48.7
43.7
49.1
50.2
48.5
44.9
54.8
Total commercial closed orders
25.7
24.3
26.3
25.6
27.7
24.7
30.5
35.2
National commercial revenue
$ 145
$ 123
$ 164
$ 131
$ 132
$ 123
$ 177
$ 195
National commercial opened orders
21.4
19.4
18.2
19.2
19.5
18.8
17.8
22.1
National commercial closed orders
9.8
9.2
10.1
9.4
10.1
8.7
11.9
14.0
Total Fee Per File
Fee per file
$ 3,759
$ 3,555
$ 3,806
$ 3,618
$ 3,598
$ 3,446
$ 3,649
$ 3,621
Residential fee per file
$ 2,995
$ 2,746
$ 2,889
$ 2,861
$ 2,897
$ 2,601
$ 2,542
$ 2,697
Total commercial fee per file
$ 10,600
$ 9,800
$ 11,200
$ 10,300
$ 9,500
$ 9,800
$ 11,300
$ 10,800
National commercial fee per file
$ 14,800
$ 13,400
$ 16,300
$ 14,000
$ 13,000
$ 14,100
$ 14,900
$ 13,900
Total Staffing
Total field operations employees
10,300
10,000
9,900
10,400
10,600
10,400
10,700
12,000
Actual title claims paid ($ millions)
$ 70
$ 70
$ 64
$ 69
$ 67
$ 62
$ 79
$ 65
FIDELITY NATIONAL FINANCIAL, INC.
MONTHLY TITLE ORDER STATISTICS
Direct Orders Opened *
Direct Orders Closed *
Month
/ (% Purchase)
/ (% Purchase)
April 2024
119,000
81 %
75,000
81 %
May 2024
118,000
80 %
81,000
82 %
June 2024
107,000
79 %
73,000
81 %
Second Quarter 2024
344,000
80 %
229,000
81 %
Direct Orders Opened *
Direct Orders Closed *
Month
/ (% Purchase)
/ (% Purchase)
April 2023
106,000
80 %
70,000
80 %
May 2023
125,000
79 %
81,000
81 %
June 2023
116,000
79 %
82,000
81 %
Second Quarter 2023
347,000
79 %
233,000
81 %
* Includes an immaterial number of non-purchase and non-refinance orders
F&G Segment
The table below reconciles net earnings (loss) attributable to common shareholders to adjusted net earnings attributable to common shareholders. The F&G Segment is reported net of noncontrolling minority interest.
Three Months Ended
Six Months Ended
(Dollars in millions)
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net earnings attributable to common shareholders
$ 171
$ 110
$ 269
$ (54)
Non-GAAP adjustments(1):
Recognized (gains) losses, net
(18)
30
14
104
Market related liability adjustments
(71)
(102)
(126)
142
Purchase price amortization
19
6
41
11
Transaction costs
(3)
—
(3)
2
Income taxes on non-GAAP adjustments
16
15
17
(54)
Non-controlling interest on non-GAAP adjustments
8
8
5
(32)
Adjusted net earnings (loss) attributable to common shareholders(1)
$ 122
$ 67
$ 217
$ 119
Adjusted net earnings of $122 million for the second quarter of 2024 include $122 million, or $0.45 per share, of investment income from alternative investments and $3 million, or $0.01 per share, of CLO redemption gains and bond prepay income; partially offset by $13 million, or $0.05 per share, of net expense from actuarial model updates and refinements. Alternative investments investment income based on management’s long-term expected return of approximately 10% was $139 million, or $0.51 per share.
Adjusted net earnings of $67 million for the second quarter of 2023 included $69 million, or $0.26 per share, of investment income from alternative investments and $4 million, or $0.01 per share, of bond prepay income. Alternative investments investment income based on management’s long-term expected return of approximately 10% was $116 million, or $0.43 per share.
Adjusted net earnings of $217 million for the six months ended June 30, 2024 include $206 million, or $0.76 per share, of investment income from alternative investments and $8 million or $0.03 per share of CLO redemption gains and bond prepay income; partially offset by $13 million, or $0.05 per share, of net expense from actuarial model updates and refinements. Alternative investments investment income based on management’s long-term expected return of approximately 10% was $267 million, or $0.98 per share.
Adjusted net earnings of $119 million for the six months ended June 30, 2023 included $152 million, or $0.57 per share, of investment income from alternative investments and $4 million, or $0.01 per share, of bond prepay income, partially offset by $31 million, or $0.11 per share, tax valuation allowance expense. Alternative investments investment income based on management’s long-term expected return of approximately 10% was $227 million, or $0.84 per share.
Footnotes:
1.
Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information.
The table below provides a summary of sales highlights.
Three Months Ended
Six Months Ended
(In millions)
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Total annuity sales
$ 3,123
$ 2,288
$ 5,887
$ 5,012
Indexed universal life sales
44
42
86
79
Funding agreements (FABN/FHLB)
915
200
1,020
456
Pension risk transfer
338
478
922
742
Gross sales(1)
$ 4,420
$ 3,008
$ 7,915
$ 6,289
Sales attributable to flow reinsurance to third parties
(975)
(796)
(2,168)
(1,868)
Net Sales(1)
$ 3,445
$ 2,212
$ 5,747
$ 4,421
Footnotes:
1.
Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information.
DEFINITIONS
The following represents the definitions of non-GAAP measures used by the Company.
Adjusted Net Earnings attributable to common shareholders
Adjusted net earnings attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings attributable to common shareholders is calculated by adjusting net earnings (loss) attributable to common shareholders to eliminate:
i. Recognized (gains) and losses, net: the impact of net investment gains/losses, including changes in allowance for expected credit losses and other than temporary impairment (“OTTI”) losses, recognized in operations; and the effects of changes in fair value of the reinsurance related embedded derivative and other derivatives, including interest rate swaps and forwards;
ii. Market related liability adjustments: the impacts related to changes in the fair value, including both realized and unrealized gains and losses, of index product related derivatives and embedded derivatives, net of hedging cost; the impact of initial pension risk transfer deferred profit liability losses, including amortization from previously deferred pension risk transfer deferred profit liability losses; and the changes in the fair value of market risk benefits by deferring current period changes and amortizing that amount over the life of the market risk benefit;
iii. Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset and the change in fair value of liabilities recognized as a result of acquisition activities);
iv. Transaction costs: the impacts related to acquisition, integration and merger related items;
v. Certain income tax adjustments: the impacts related to unusual tax items that do not reflect our core operating performance such as the establishment or reversal of significant deferred tax asset valuation allowances in our Title and Corporate and Other segments;
vi. Other “non-recurring,” “infrequent” or “unusual items”: Management excludes certain items determined to be “non-recurring,” “infrequent” or “unusual” from adjusted net earnings when incurred if it is determined these expenses are not a reflection of the core business and when the nature of the item is such that it is not reasonably likely to recur within two years and/or there was not a similar item in the preceding two years;
vii. Non-controlling interest on non-GAAP adjustments: the portion of the non-GAAP adjustments attributable to the equity interest of entities that FNF does not wholly own; and
viii. Income taxes: the income tax impact related to the above-mentioned adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction
While these adjustments are an integral part of the overall performance of F&G, market conditions and/or the non-operating nature of these items can overshadow the underlying performance of the core business. Accordingly, management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations. Adjusted net earnings should not be used as a substitute for net earnings (loss). However, we believe the adjustments made to net earnings (loss) in order to derive adjusted net earnings provide an understanding of our overall results of operations.
Assets Under Management (AUM)
AUM is comprised of the following components and is reported net of reinsurance assets ceded in accordance with GAAP:
i. total invested assets at amortized cost, excluding investments in unconsolidated affiliates, owned distribution and derivatives;
ii. investments in unconsolidated affiliates at carrying value;
iii. related party loans and investments;
iv. accrued investment income;
v. the net payable/receivable for the purchase/sale of investments; and
vi. cash and cash equivalents excluding derivative collateral at the end of the period.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio that is retained.
AUM before Flow Reinsurance
AUM before Flow Reinsurance is comprised of components consistent with AUM, but also includes flow reinsured assets.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio including reinsured assets.
Average Assets Under Management (AAUM)
AAUM is calculated as AUM at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the rate of return on retained assets.
Sales
Annuity, IUL, funding agreement and non-life contingent PRT sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure determined in accordance with GAAP. Sales from these products are recorded as deposit liabilities (i.e., contractholder funds) within the Company’s consolidated financial statements in accordance with GAAP. Life contingent PRT sales are recorded as premiums in revenues within the consolidated financial statements. Management believes that presentation of sales, as measured for management purposes, enhances the understanding of our business and helps depict longer term trends that may not be apparent in the results of operations due to the timing of sales and revenue recognition.
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SOURCE Fidelity National Financial, Inc.