Fidelity National Financial, Inc. [FNF] Filings

10-Q 1 fnf-20230930.htm 10-Q fnf-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-32630

FIDELITY NATIONAL FINANCIAL, INC.

(Exact name of registrant as specified in its charter)


Delaware						16-1725106
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

601 Riverside Avenue

Jacksonville, Florida, 32204

(Address of principal executive offices, including zip code)

(904) 854-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

FNF Common Stock, $0.0001 par value

FNF

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ or No ☐

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). Yes ☒ or No¨

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.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting Company	☐
		Emerging growth company	☐

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 ☐ or No ☒

The number of shares outstanding of the Registrant's common stock as of October 31, 2023 were:

FNF Common Stock 272,158,235

Table of Contents

FORM 10-Q

QUARTERLY REPORT

Quarter Ended September 30, 2023

TABLE OF CONTENTS


			Page

PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:			2
Condensed Consolidated Balance Sheets (unaudited)			3
Condensed Consolidated Statements of Earnings (unaudited)			4
Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)			5
Condensed Consolidated Statements of Equity (unaudited)			6
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to Unaudited Condensed Consolidated Financial Statements			10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			7 6
Item 3. Quantitative and Qualitative Disclosures about Market Risk			104
Item 4. Controls and Procedures			10 4
Item 5. Other Information			10 5

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			106
Item 1A. Risk Factors			106
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities			107


Item 6. Exhibits			108
Signatures			109

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except share data)


	September 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at September 30, 2023 and December 31, 2022, at an amortized cost of $43,903 and $37,708, respectively, net of allowance for credit losses of $44 and $39, respectively, and includes pledged fixed maturity securities of $479 and $448, respectively, related to secured trust deposits	$	38,785	$	33,095
Preferred securities, at fair value	758		903
Equity securities, at fair value	700		678
Derivative investments	420		244
Mortgage loans, net of allowance for credit losses of $64 and $42 at September 30, 2023 and December 31, 2022, respectively	5,174		4,554
Investments in unconsolidated affiliates	3,184		2,642
Other long-term investments	690		664
Short-term investments, at September 30, 2023 and December 31, 2022 includes pledged short-term investments of $0 and $6, respectively, related to secured trust deposits	719		2,590
Total investments	50,430		45,370
Cash and cash equivalents, at September 30, 2023 and December 31, 2022 includes $396 and $242, respectively, of pledged cash related to secured trust deposits	3,209		2,286
Trade and notes receivables, net of allowance for credit losses of $31 and $33 at September 30, 2023 and December 31, 2022, respectively	442		467


Reinsurance recoverable, net of allowance for credit losses of $10 and $10 at September 30, 2023 and December 31, 2022, respectively	7,463		5,418
Goodwill	4,830		4,635
Prepaid expenses and other assets	2,133		2,068
Market risk benefits asset	118		117
Lease assets	349		376
Other intangible assets, net	4,439		3,811
Title plants	417		416
Property and equipment, net	172		179


Total assets	$	74,002	$	65,143
LIABILITIES AND EQUITY
Liabilities:
Contractholder funds	$	46,011	$	40,843
Future policy benefits	5,823		5,021
Accounts payable and accrued liabilities	2,438		2,326
Market risk benefits liability	278		282
Notes payable	3,695		3,238
Reserve for title claim losses	1,768		1,810
Funds withheld for reinsurance liabilities	6,118		3,703
Secured trust deposits	853		862
Lease liabilities	396		418
Income taxes payable	23		—
Deferred tax liability	15		71

Total liabilities	67,418		58,574


Equity:

FNF common stock, $0.0001 par value; authorized 600,000,000 shares as of September 30, 2023 and December 31, 2022; outstanding of 272,158,235 and 272,309,890 as of September 30, 2023 and December 31, 2022, respectively, and issued of 327,721,410 and 327,757,349 as of September 30, 2023 and December 31, 2022, respectively	—		—

Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none	—		—
Additional paid-in capital	5,895		5,870
Retained earnings	5,444		5,225
Accumulated other comprehensive loss	(3,067)		(2,870)
Less: Treasury stock, 55,563,175 shares and 55,447,459 shares as of September 30, 2023 and December 31, 2022, respectively, at cost	(2,114)		(2,109)
Total Fidelity National Financial, Inc. shareholders’ equity	6,158		6,116
Non-controlling interests	426		453
Total equity	6,584		6,569
Total liabilities and equity	$	74,002	$	65,143

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in millions, except per share data)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	(Unaudited)				(Unaudited)
Revenues:
Direct title insurance premiums	$	524	$	688	$	1,493	$	2,314
Agency title insurance premiums	728		966		1,991		3,268
Escrow, title-related and other fees	1,196		1,371		3,288		3,449

Interest and investment income	686		411		1,915		1,352
Recognized gains and losses, net	(356)		(230)		(367)		(1,375)
Total revenues	2,778		3,206		8,320		9,008
Expenses:

Personnel costs	734		796		2,166		2,458
Agent commissions	564		747		1,534		2,521

Other operating expenses	380		430		1,134		1,329
Benefits and other changes in policy reserves	292		570		1,921		396
Market risk benefit (gains) losses	(49)		(68)		(20)		(187)
Depreciation and amortization	153		126		438		361
Provision for title claim losses	57		74		157		251
Interest expense	44		28		129		89
Total expenses	2,175		2,703		7,459		7,218
Earnings from continuing operations before income taxes and equity in earnings of unconsolidated affiliates	603		503		861		1,790
Income tax expense	141		136		245		494
Earnings before equity in earnings of unconsolidated affiliates	462		367		616		1,296
Equity in earnings of unconsolidated affiliates	15		—		16		16


Net earnings	477		367		632		1,312
Less: Net earnings attributable to non-controlling interests	51		5		46		13
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	426	$	362	$	586	$	1,299




Earnings per share
Basic
Net earnings per share from continuing operations attributable to common shareholders	$	1.58	$	1.33	$	2.17	$	4.69

Net earnings per share attributable to common shareholders, basic	$	1.58	$	1.33	$	2.17	$	4.69
Diluted
Net earnings per share from continuing operations attributable to common shareholders	$	1.57	$	1.32	$	2.16	$	4.66

Net earnings per share attributable to common shareholders, diluted	$	1.57	$	1.32	$	2.16	$	4.66

Weighted average common shares outstanding - basic	270		273		270		277
Weighted average common shares outstanding - diluted	271		275		271		279

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(In millions)


	Three months ended September 30,				Nine months ended September 30,

	2023		2022		2023		2022
	(Unaudited)				(Unaudited)
Net earnings	$	477	$	367	$	632	$	1,312

Other comprehensive (loss) earnings:
Unrealized loss on investments and other financial instruments (excluding investments in unconsolidated affiliates) (1)	(676)		(1,235)		(505)		(5,044)
Unrealized gain on investments in unconsolidated affiliates (2)	3		2		9		9
Unrealized loss on foreign currency translation (3)	(7)		(16)		(1)		(27)
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)	12		35		90		88
Changes in current discount rate - future policy benefits (5)	229		247		186		849
Changes in instrument-specific credit risk - market risk benefits (6)	(10)		15		(7)		98

Other comprehensive earnings attributable to non-controlling interest (7)	63		—

Fidelity National Financial, Inc. [FNF] Filings
10-Q	[2023-11-08]
10-Q	[2023-08-09]
10-Q	[2023-05-09]
10-K	[2023-02-27]
10-Q	[2022-11-09]
10-Q	[2022-08-05]
10-Q	[2022-05-10]
10-K	[2022-02-25]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-01]
10-Q	[2020-11-06]
10-Q	[2020-08-10]
10-Q	[2020-04-28]
10-K	[2020-02-14]
10-Q	[2019-10-30]
10-Q	[2019-07-23]
10-Q	[2019-04-26]
10-K	[2019-02-19]
10-Q	[2018-10-26]
10-Q	[2018-08-06]
10-Q	[2018-05-03]
10-K	[2018-02-23]
10-Q	[2017-11-02]
10-Q	[2017-08-01]
10-Q	[2017-05-04]
10-K	[2017-02-27]
10-Q	[2016-11-03]
10-Q	[2016-08-09]
10-Q	[2016-05-02]
10-K	[2016-02-23]
10-Q	[2015-10-29]
10-Q	[2015-07-30]
10-Q	[2015-05-06]
10-K	[2015-03-02]
10-Q	[2014-11-10]
10-Q	[2014-08-01]
10-Q	[2014-05-08]
10-K	[2014-02-28]
10-Q	[2013-11-07]
10-Q	[2013-08-07]
10-Q	[2013-05-01]
10-K	[2013-02-27]
10-Q	[2012-11-08]
10-Q	[2012-07-27]
10-Q	[2012-04-27]
10-K	[2012-02-23]