UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ______ to ______
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
On October 23, 2023 there were
FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
INFORMATION INCLUDED IN REPORT
PART I: FINANCIAL INFORMATION |
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Item 1. |
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A. Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
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5 |
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6 |
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11 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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29 |
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Item 3. |
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39 |
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Item 4. |
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39 |
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PART II: OTHER INFORMATION |
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Item 1. |
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40 |
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Item 1A. |
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40 |
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Item 2. |
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50 |
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Item 3. |
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50 |
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Item 4. |
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50 |
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Item 5. |
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50 |
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Item 6. |
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51 |
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2
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS AND MAY CONTAIN THE WORDS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “INTEND,” “PLAN,” “PREDICT,” “ESTIMATE,” “PROJECT,” “WILL BE,” “WILL CONTINUE,” “WILL LIKELY RESULT,” OR OTHER SIMILAR WORDS AND PHRASES OR FUTURE OR CONDITIONAL VERBS SUCH AS “WILL,” “MAY,” “MIGHT,” “SHOULD,” “WOULD,” OR “COULD.” THESE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS REGARDING FUTURE OPERATIONS, PERFORMANCE, FINANCIAL CONDITION, PROSPECTS, PLANS AND STRATEGIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS THAT MAY PROVE TO BE INCORRECT.
RISKS AND UNCERTAINTIES EXIST THAT MAY CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN THESE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE ANTICIPATED RESULTS TO DIFFER FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION:
3
THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT CIRCUMSTANCES OR EVENTS THAT OCCUR AFTER THE DATE THE FORWARD-LOOKING STATEMENTS ARE MADE.
4
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements.
FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheets
(in millions, except par values)
(unaudited)
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September 30, |
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December 31, |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts and accrued income receivable, less allowance for credit losses of |
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Income taxes receivable |
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Investments: |
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Deposits with banks |
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Debt securities (amortized cost of $ |
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Equity securities |
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$ |
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$ |
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Secured financings receivable |
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Property and equipment, net |
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Operating lease assets |
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Title plants and other indexes |
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Deferred income taxes |
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Goodwill |
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Other intangible assets, net |
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Other assets |
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$ |
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$ |
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Liabilities and Equity |
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Deposits |
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Accounts payable and accrued liabilities |
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Deferred revenue |
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Reserve for known and incurred but not reported claims |
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Income taxes payable |
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Deferred income taxes |
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Operating lease liabilities |
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Secured financings payable |
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Notes and contracts payable |
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$ |
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$ |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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$ |
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$ |
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Noncontrolling interests |
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Total equity |
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$ |
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$ |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
5
FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenues |
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Direct premiums and escrow fees |
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$ |
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$ |
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$ |
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$ |
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Agent premiums |
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Information and other |
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Net investment income |
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Net investment gains (losses) (realized of $( |
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Expenses |
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Personnel costs |
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Premiums retained by agents |
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Other operating expenses |
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Provision for policy losses and other claims |
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Depreciation and amortization |
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Premium taxes |
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Interest |
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(Loss) income before income taxes |
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Income tax (benefit) expense |
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Net (loss) income |
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Less: Net income (loss) attributable to noncontrolling |
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Net (loss) income attributable to the Company |
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$ |
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$ |
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$ |
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$ |
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Net (loss) income per share attributable to the Company's |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Cash dividends per share |
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$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding (Note 11): |
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Basic |
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Diluted |
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See notes to condensed consolidated financial statements.
6
FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Comprehensive Income
(in millions)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net (loss) income |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Unrealized losses on debt securities |
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Foreign currency translation adjustment |
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( |
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( |
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( |
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Pension benefit adjustment |
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Total other comprehensive loss, net of tax |
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( |
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Comprehensive (loss) income |
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( |
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( |
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Less: Comprehensive income (loss) attributable to |
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( |
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Comprehensive (loss) income attributable to the Company |
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$ |
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$ |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
7
FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Stockholders’ Equity
(in millions)
(unaudited)
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First American Financial Corporation Stockholders |
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Shares |
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Common |
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Additional |
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Retained |
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Accumulated |
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Total |
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Noncontrolling |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net income for three months |
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— |
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Dividends on common shares |
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— |
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( |
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Repurchases of Company shares |
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Shares issued in connection with |
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Share-based compensation |
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— |
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Net activity related to |
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— |
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Other comprehensive income |
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— |
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Balance at March 31, 2023 |
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Net income (loss) for three months |
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— |
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Dividends on common shares |
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— |
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Repurchases of Company shares |
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Shares issued in connection with |
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Share-based compensation |
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— |
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