Fidelity National Financial, Inc. [FNF] Filings

10-Q 1 fnf-20220630.htm 10-Q fnf-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


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

For the quarterly period ended June 30, 2022


☐			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 July 31, 2022 were:

FNF Common Stock 276,317,189

Table of Contents

FORM 10-Q

QUARTERLY REPORT

Quarter Ended June 30, 2022

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 (unaudited)			5
Condensed Consolidated Statements of Equity (unaudited)			6
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to Unaudited Condensed Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			51
Item 3. Quantitative and Qualitative Disclosures about Market Risk			82
Item 4. Controls and Procedures			82

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			84

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			84


Item 6. Exhibits			85
Signatures			85

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)


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at June 30, 2022 and December 31, 2021, at an amortized cost of $33,836 and $30,705, respectively, net of allowance for credit losses of $11 and $8, respectively, and includes pledged fixed maturity securities of $448 and $460, respectively, related to secured trust deposits	$	30,432	$	31,990
Preferred securities, at fair value	1,154		1,401
Equity securities, at fair value	755		1,263
Derivative investments	145		816
Mortgage loans, net of allowance for credit losses of $35 and $31 at June 30, 2022 and December 31, 2021, respectively	4,437		3,749
Investments in unconsolidated affiliates	2,835		2,486
Other long-term investments	627		579
Short-term investments, at June 30, 2022 and December 31, 2021 includes pledged short-term investments of $0 and $1, respectively, related to secured trust deposits	2,588		491
Total investments	42,973		42,775
Cash and cash equivalents, at June 30, 2022 and December 31, 2021 includes $586 and $480, respectively, of pledged cash related to secured trust deposits	2,426		4,360
Trade and notes receivables, net of allowance for credit losses of $34 and $32 at June 30, 2022 and December 31, 2021, respectively	616		557


Reinsurance recoverable, net of allowance for credit losses of $19 and $20 at June 30, 2022 and December 31, 2021, respectively	4,237		3,738
Goodwill	4,538		4,539
Prepaid expenses and other assets	2,004		1,203
Lease assets	390		376
Other intangible assets, net	3,461		2,557
Title plants	400		400
Property and equipment, net	185		185


Total assets	$	61,230	$	60,690
LIABILITIES AND EQUITY
Liabilities:
Contractholder funds	$	37,707	$	35,525
Future policy benefits	5,177		4,732
Accounts payable and accrued liabilities	2,605		2,696
Notes payable	3,094		3,096
Reserve for title claim losses	1,843		1,883
Funds withheld for reinsurance liabilities	2,277		1,676
Secured trust deposits	1,173		934
Lease liabilities	429		414
Income taxes payable	113		72
Deferred tax liability	66		205

Total liabilities	54,484		51,233


Equity:

FNF common stock, $0.0001 par value; authorized 600,000,000 shares as of June 30, 2022 and December 31, 2021; outstanding of 276,949,217 and 283,778,574 as of June 30, 2022 and December 31, 2021, respectively, and issued of 325,730,482 and 325,486,429 as of June 30, 2022 and December 31, 2021, respectively	—		—

Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none	—		—
Additional paid-in capital	5,843		5,811
Retained earnings	4,901		4,369
Accumulated other comprehensive (loss) earnings	(2,190)		779
Less: Treasury stock, 48,781,265 shares and 41,707,855 shares as of June 30, 2022 and December 31, 2021, respectively, at cost	(1,851)		(1,545)
Total Fidelity National Financial, Inc. shareholders’ equity	6,703		9,414
Non-controlling interests	43		43
Total equity	6,746		9,457
Total liabilities and equity	$	61,230	$	60,690

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 June 30,				Six months ended June 30,
	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
Revenues:
Direct title insurance premiums	$	859	$	904	$	1,626	$	1,650
Agency title insurance premiums	1,203		1,256		2,302		2,314
Escrow, title-related and other fees	782		948		2,072		1,799

Interest and investment income	463		514		941		916
Recognized gains and losses, net	(676)		232		(1,145)		275
Total revenues	2,631		3,854		5,796		6,954
Expenses:

Personnel costs	839		890		1,662		1,702
Agent commissions	930		970		1,774		1,777

Other operating expenses	457		476		899		934
Benefits and other changes in policy reserves	(418)		575		(210)		549
Depreciation and amortization	161		105		343		288
Provision for title claim losses	93		97		177		178
Interest expense	31		28		61		56
Total expenses	2,093		3,141		4,706		5,484
Earnings from continuing operations before income taxes and equity in earnings of unconsolidated affiliates	538		713		1,090		1,470
Income tax expense	164		176		319		342
Earnings before equity in earnings of unconsolidated affiliates	374		537		771		1,128
Equity in earnings of unconsolidated affiliates	14		14		16		27
Net earnings from continuing operations	388		551		787		1,155
Net earnings from discontinued operations, net of tax	—		6		—		11
Net earnings	388		557		787		1,166
Less: Net earnings attributable to non-controlling interests	6		5		8		9
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	382	$	552	$	779	$	1,157




Earnings per share
Basic
Net earnings per share from continuing operations attributable to common shareholders	$	1.37	$	1.91	$	2.79	$	3.99
Net earnings per share from discontinued operations attributable to common shareholders	—		0.02		—		0.04
Net earnings per share attributable to common shareholders, basic	$	1.37	$	1.93	$	2.79	$	4.03
Diluted
Net earnings per share from continuing operations attributable to common shareholders	$	1.37	$	1.90	$	2.77	$	3.96
Net earnings per share from discontinued operations attributable to common shareholders	—		0.02		—		0.04
Net earnings per share attributable to common shareholders, diluted	$	1.37	$	1.92	$	2.77	$	4.00

Weighted average common shares outstanding - basic	278		286		279		287
Weighted average common shares outstanding - diluted	279		288		281		289

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In millions)


	Three months ended June 30,				Six months ended June 30,

	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
Net earnings	$	388	$	557	$	787	$	1,166

Other comprehensive (loss) earnings:
Unrealized (loss) gain on investments and other financial instruments, net of adjustments to intangible assets and unearned revenue (excluding investments in unconsolidated affiliates) (1)	(1,509)		377		(3,038)		(168)
Unrealized gain on investments in unconsolidated affiliates (2)	—		—		7		9
Unrealized (loss) gain on foreign currency translation (3)	(10)		2		(12)		—
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)	41		(5)		74		(51)

Other comprehensive (loss) earnings	(1,478)		374		(2,969)		(210)
Comprehensive (loss) earnings	(1,090)		931		(2,182)		956
Less: Comprehensive earnings attributable to non-controlling interests	6		5		8		9
Comprehensive (loss) earnings attributable to Fidelity National Financial, Inc. common shareholders	$	(1,096)	$	926	$	(2,190)	$	947

_______________________________________

(1)Net of income tax (benefit) expense of $(398) million and $100 million for the three months ended June 30, 2022 and 2021, respectively, and $(689) million and $(46) million for the six months periods ended June 30, 2022 and 2021, respectively.

(2)Net of income tax expense of $2 million and $3 million for the six months ended June 30, 2022 and 2021, respectively.

(3)Net of income tax (benefit) expense of less than $(1) million and $1 million for the three months ended June 30, 2022 and 2021, respectively, and less than $(1) million for the six months ended June 30, 2022 and 2021.

(4)Net of income tax (benefit) expense of $(11) million and $1 million for the three-month periods June 30, 2022 and 2021, respectively, and $(19) million and $14 million for the six-month periods ended June 30, 2022 and 2021, respectively.

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In millions, except per share data)

(Unaudited)


		Fidelity National Financial, Inc. Common Shareholders
							Accumulated
	FNF						Other
	Common				Additional		Comprehensive		Treasury				Non-
	Stock				Paid-in	Retained	Earnings		Stock				controlling	Total
		Shares	$				Capital		Earnings		(Loss)		Shares	$		Interests		Equity
Balance, March 31, 2021		324	$	—			$	5,752	$	2,893	$	720	34	$	(1,179)	$	40	$	8,226


Exercise of stock options		—	—				9		—		—		—	—		—		9
Purchase of incremental share in consolidated subsidiaries		—	—				—		—		—		—	—		1		1

Treasury stock repurchased		—	—				—		—		—		4	(183)		—		(183)

Other comprehensive earnings - unrealized gain on investments and other financial instruments		—	—				—		—		377		—	—		—		377

Other comprehensive earnings - unrealized gain on foreign currency translation		—	—				—		—		2		—	—		—		2
Reclassification adjustments for change in unrealized gains and losses included in net earnings		—	—				—		—		(5)		—	—		—		(5)

Stock-based compensation		—	—				10		—		—		—	—		—		10

Dividends declared, $0.36 per common share		—	—				—		(102)		—		—	—		—		(102)



Subsidiary dividends declared to non-controlling interests		—	—				—		—		—		—	—		(4)

Fidelity National Financial, Inc. [FNF] Filings
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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]