Fidelity National Financial Inc FNF

NYS: FNF | ISIN: US31620R3030   20/12/2024
56,11 USD (+1,67%)
(+1,67%)   20/12/2024

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 2023
  • F&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 months
  • Sustainable 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 2023
  • Total revenue, excluding recognized gains and losses, of $2.0 billion, a 5% increase over second quarter of 2023
    • Direct title premiums of $564 million, a 4% increase over second quarter of 2023
    • Agency title premiums of $784 million, a 10% increase over second quarter of 2023
    • Commercial revenue of $273 million, a 4% increase over second quarter of 2023
  • Purchase orders opened increased 2% on a daily basis and purchase orders closed were in line with the second quarter of 2023
  • Refinance orders opened decreased 1% on a daily basis and refinance orders closed decreased 4% on a daily basis from second quarter of 2023
  • Commercial orders opened increased 1% over the second quarter of 2023 and commercial orders closed decreased 7% from second quarter of 2023
  • Total 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 2023
  • Pre-tax earnings from continuing operations in Title for the second quarter of $235 million, compared with $233 million for the second quarter of 2023
  • Adjusted 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 sales
  • Record 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 sales
  • Robust 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 conditions
  • Net sales of $3.4 billion for the second quarter, an increase of 55% over the second quarter of 2023
  • Record 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, 2024
  • Net 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 movement
  • Adjusted 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 2023
    • F&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 items
    • As 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 activity
    • Please 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.

 

Cision View original content:https://www.prnewswire.com/news-releases/fnf-reports-second-quarter-2024-financial-results-302214677.html

SOURCE Fidelity National Financial, Inc.

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