Document and Entity Information(USD $)
3 Months Ended
Mar. 31, 2012
Jun. 30, 2011
Document and Entity Information
Entity Registrant Name
Fidelity National Financial, Inc.
Entity Central Index Key
0001331875
Document Type
10-Q
Document Period End Date
Mar. 31, 2012
Amendment Flag
false
Document Fiscal Year Focus
2012
Document Fiscal Period Focus
Q1
Current Fiscal Year End Date
--12-31
Entity Well-Known Seasoned Issuer
Yes
Entity Voluntary Filers
No
Entity Current Reporting Status
Yes
Entity Filer Category
Large Accelerated Filer
Entity Public Float
$3,332,281,166
Entity Common Stock, Shares Outstanding
222,803,069
Condensed Consolidated Balance Sheets (unaudited)(USD $)
In Millions, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Investments:
Fixed maturity securities available for sale, at fair value, at March 31, 2012 and December 31, 2011 includes $276.5 and $274.2, respectively, of pledged fixed maturity securities related to secured trust deposits
$3,185.0
$3,200.2
Preferred stock available for sale, at fair value
103.6
71.4
Equity securities available for sale, at fair value
129.6
105.7
Investments in unconsolidated affiliates
552.3
546.5
Other long-term investments
77.7
77.5
Short-term investments
51.4
50.4
Total investments
4,099.6
4,051.7
Cash and cash equivalents, at March 31, 2012 and December 31, 2011 includes $168.4 and $161.3, respectively, of pledged cash related to secured trust deposits
728.2
665.7
Trade and notes receivables, net of allowance of $21.1 and $22.6, respectively, at March 31, 2012 and December 31, 2011
330.1
321.5
Goodwill
1,461.1
1,452.2
Prepaid expenses and other assets
671.3
653.6
Capitalized software, net
31.7
28.1
Other intangible assets, net
128.0
130.7
Title plants
386.6
386.7
Property and equipment, net
165.5
166.1
Income taxes receivable
0
5.8
Total assets
8,002.1
7,862.1
Liabilities:
Accounts payable and accrued liabilities
744.2
857.1
Accounts payable to related parties
6.5
5.6
Income taxes payable
20.2
0
Notes payable
1,066.5
915.8
Reserve for title claim losses
1,863.1
1,912.8
Secured trust deposits
433.0
419.9
Deferred tax liability
110.3
95.0
Total liabilities
4,243.8
4,206.2
Equity:
Common stock, Class A, $0.0001 par value; authorized 600,000,000 shares as of March 31, 2012 and December 31, 2011; issued 256,994,038 as of March 31, 2012 and 254,868,454 as of December 31, 2011
0
0
Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none
0
0
Additional paid-in capital
3,829.2
3,798.6
Retained earnings
416.7
373.4
Accumulated other comprehensive earnings (loss)
20.5
(7.1)
Less: treasury stock, 34,190,969 shares as of March 31, 2012 and December 31, 2011, at cost
(532.2)
(532.2)
Total Fidelity National Financial, Inc. shareholders' equity
3,734.2
3,632.7
Noncontrolling interests
24.1
23.2
Total equity
3,758.3
3,655.9
Total liabilities and equity
$8,002.1
$7,862.1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)(USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Pledged fixed maturities
$276.5
$274.2
Pledged cash, secured trust deposits
168.4
161.3
Trade and notes receivables, allowance
$21.2
$22.6
Equity:
Common stock, Class A, par value
$0.0001
$0.0001
Common stock, Class A, authorized shares
600,000,000
600,000,000
Common stock, Class A, issued shares
256,994,038
254,868,454
Preferred stock, par value
$0.0001
$0.0001
Preferred stock, authorized shares
50,000,000
50,000,000
Preferred stock, outstanding shares
0
0
Treasury stock, at cost, shares
34,190,969
34,190,969
Condensed Consolidated Statements of Earnings (Unaudited)(USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Revenues:
Direct title insurance premiums
$354.0
$322.9
Agency title insurance premiums
413.9
423.3
Escrow, title related and other fees
381.6
332.5
Interest and investment income
36.4
33.7
Realized gains and losses, net
4.0
19.5
Total revenues
1,189.9
1,131.9
Expenses:
Personnel costs
407.6
383.6
Other operating expenses
275.2
258.7
Agent commissions
315.6
327.7
Depreciation and amortization
17.0
19.7
Provision for title claim losses
53.8
50.8
Interest expense
15.1
14.3
Total expenses
1,084.3
1,054.8
Earnings from continuing operations before income taxes and equity in earnings (loss) of unconsolidated affiliates
105.6
77.1
Income tax expense
36.9
28.0
Earnings from continuing operations before equity in earnings (loss) of unconsolidated affiliates
68.7
49.1
Equity in earnings (loss) of unconsolidated affiliates
5.8
(8.6)
Net earnings from continuing operations
74.5
40.5
Net earnings from discontinued operations, net of tax
2.7
3.6
Net earnings
77.2
44.1
Less: Net earnings attributable to noncontrolling interests
2.8
1.6
Net earnings attributable to Fidelity National Financial, Inc. Common Shareholders
74.4
42.5
Earnings per share
Basic net earnings per share from continuing operations attributable to FNF common shareholders
$0.33
$0.17
Basic net earnings per share from discontinued operations attributable to FNF common shareholders
$0.01
$0.02
Basic earnings per share attributable to FNF common shareholders
$0.34
$0.19
Diluted net earnings per share from continuing operations attributable to FNF common shareholders
$0.32
$0.17
Diluted net earnings per share from discontinued operations attributable to FNF common shareholders
$0.01
$0.02
Diluted earnings per share attributable to FNF common shareholders
$0.33
$0.19
Weighted average number of shares outstanding, basic
218.8
220.7
Weighted average number of shares outstanding, diluted
223.3
223.6
Cash dividends paid per share
$0.14
$0.12
Income (Loss) from Continuing Operations Attributable to Parent
$71.7
$38.9
Condensed Consolidated Statements of Comprehensive Earnings (Unaudited)(USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Net earnings
$77.2
$44.1
Other comprehensive earnings:
Unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
27.41
(2.3)1
Unrealized gain (loss) on investments in unconsolidated affiliates (2)
0.42
6.12
Unrealized loss on foreign currency translation (3)
1.03
0.63
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)
(1.2)4
(11.1)4
Other comprehensive earnings
27.6
(6.7)
Comprehensive earnings
104.8
37.4
Less: Net earnings attributable to noncontrolling interests
2.8
1.6
Comprehensive earnings attributable to Fidelity National Financial Inc. Common Shareholders
$102.0
$35.8
Condensed Consolidated Statement of Comprehensive Earnings (unaudited) (Parentheticals)(USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
$16.1
$(1.4)
Unrealized Gain Loss on Investments in Unconsolidated Affiliates Tax
0.2
3.7
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax
0.7
0.4
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax
$0.8
$(6.8)
Condensed Consolidated Statement of Equity (Unaudited)(USD $)
In Millions, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Earnings [Member]
Treasury Stock [Member]
Noncontrolling Interest [Member]
Beginning Balance at Dec. 31, 2011
$3,655.9
$0
$3,798.6
$373.4
$(7.1)
$(532.2)
$23.2
Beginning Balance, Shares at Dec. 31, 2011
254.9
34.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options
20.3
20.3
Exercise of stock options, Shares
2.1
Tax benefit associated with the exercise of stock options
4.7
4.7
Other comprehensive earnings unrealized loss on investments and other financial instruments (excluding investments in unconsolidated affiliates)
26.2
26.2
Other comprehensive earnings unrealized gain on investments in unconsolidated affiliates
0.41
0.4
Other comprehensive earnings unrealized loss on foreign currency translation
1.02
1.0
Stock-based compensation
5.6
5.6
Dividends declared
(31.1)
(31.1)
Subsidiary dividends paid to noncontrolling interests
(1.9)
(1.9)
Net earnings
77.2
74.4
2.8
Ending Balance at Mar. 31, 2012
$3,758.3
$0
$3,829.2
$416.7
$20.5
$(532.2)
$24.1
Ending Balance, Shares at Mar. 31, 2012
257.0
34.2
Condensed Consolidated Statements of Cash Flows (Unaudited)(USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Cash flows from operating activities:
Net earnings
$77.2
$44.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
17.1
20.5
Equity in earnings (loss) of unconsolidated affiliates
(5.8)
8.6
Gain on sales of investments and other assets, net
(3.4)
(19.9)
Stock-based compensation cost
5.6
6.5
Tax benefit associated with the exercise of stock options
(4.7)
0
Changes in assets and liabilities, net of effects from acquisitions:
Net (increase) decrease in pledged cash, pledged investments, and secured trust deposits
9.7
(4.0)
Net decrease (increase) in trade receivables
(7.0)
24.4
Net decrease in prepaid expenses and other assets
(7.7)
(12.8)
Net decrease in accounts payable, accrued liabilities, deferred revenue and other
(101.1)
(131.1)
Net decrease in reserve for title claim losses
(54.4)
(34.9)
Net change in income taxes
29.5
32.1
Net cash provided by operating activities
(45.0)
(66.5)
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale
147.8
211.0
Proceeds from calls and maturities of investment securities available for sale
98.5
202.3
Proceeds from sale of other assets
2.3
1.7
Additions to property and equipment
(10.5)
(8.9)
Additions to capitalized software
(1.8)
(3.3)
Purchases of investment securities available for sale
(267.7)
(397.2)
Net proceeds from short-term investment securities
(1.0)
71.3
Contributions to investments in unconsolidated affiliates
0
(26.0)
Net other investing activities
1.4
(0.7)
Acquisitions/disposals of businesses, net of cash acquired
(11.1)
(0.3)
Net cash (used in) provided by investing activities
(42.1)
49.9
Cash flows from financing activities:
Borrowings
150.0
0
Dividends paid
(30.6)
(26.5)
Subsidiary dividends paid to noncontrolling interest shareholders
(1.9)
(0.5)
Exercise of stock options
20.3
2.0
Tax benefit associated with the exercise of stock options
4.7
0
Purchases of treasury stock
0
(11.2)
Net cash used in financing activities
142.5
(36.2)
Net (decrease) increase in cash and cash equivalents, excluding pledged cash related to secured trust deposits
55.4
(52.8)
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at beginning of period
504.4
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at end of period
559.8
Supplemental cash flow information:
Income taxes paid
8.9
0
Interest paid
$14.2
$14.6
Basis of Financial Statements
Basis of Financial Statements
Basis of Financial Statements
 The unaudited financial information in this report includes the accounts of Fidelity National Financial, Inc. and its subsidiaries (collectively, “we,” “us,” “our,” or “FNF”) prepared in accordance with generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011.

Certain reclassifications have been made in the 2011 Condensed Consolidated Financial Statements to conform to classifications used in 2012. In addition, we have corrected a prior period error in the Statement of Cash Flows. The correction was between cash flows from operating activities and cash flows from investing activities for the three months ended March 31, 2011 and resulted in an increase in cash used in operating activities and an increase in cash provided by investing activities of $45.5 million. There was no impact on our other Condensed Consolidated Financial Statements presented.

Description of Business
We are a leading provider of title insurance, mortgage services and diversified services. FNF is the nation's largest title insurance company. Our title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title - collectively issue more title insurance policies than any other title company in the United States. As of April 2012, FNF also owns a majority interest in O'Charley's Inc., a multi-concept restaurant company that operates or franchises restaurants under the O'Charley's, Ninety Nine Restaurant, and Stoney River Legendary Steaks brands. In addition, among other operations, FNF owns minority interests in Ceridian Corporation, a leading provider of global human capital management and payment solutions, Remy International, Inc., a leading designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles and American Blue Ribbon Holdings, LLC ("ABRH"), owner and operator of the Village Inn, Bakers Square and Max & Erma's restaurant chains.

Acquisition of O'Charley's Inc. and Reorganization of Fidelity Newport Holdings
On April 2, 2012, we successfully completed a tender offer for the outstanding common stock of O'Charley's Inc. ("O'Charley's"). Approximately 18,067,581 shares were validly tendered as of the expiration time. This represented approximately 74.9% of O'Charley's outstanding shares of common stock on a fully diluted basis and 80.2% of O'Charley's outstanding shares of common stock, giving us control of O'Charley's. On April 9, 2012 we exercised the top-up option to purchase 14,862,194 additional shares for $9.85 per share, resulting in our total ownership of approximately 95.0% of the outstanding common stock of O'Charley's Inc. Total consideration paid was $178.0 million in cash for the shares tendered on April 2, 2012 as well as a note for the top-up option exercised on April 9, 2012. Immediately following a one-month waiting period required under the Tennessee Business Corporation Act, we will complete the closing of the short-form merger with O'Charley's and subsequently own 100% of O'Charley's. The note will be canceled as a result of the short-form merger.

Upon closing of the short-form merger with O'Charley's, we plan to combine O'Charley's with our investment in ABRH. Our investment in ABRH is held by Fidelity Newport Holdings, LLC (“FNH”), which we currently own a 45.0% interest. Our investment in FNH as of March 31, 2012 was $35.9 million and is included in investments in unconsolidated affiliates on the Condensed Consolidated Balance Sheets. We have entered into a Memorandum of Understanding with our partner in FNH to effect a reorganization transaction pursuant to which we will contribute our investment in 100.0% of the common stock of O'Charley's to FNH in exchange for an increase in our ownership interest from 45.0% to 55.0%, and cash of $124.1 million, which is subject to change. Following consummation of the reorganization transaction, FNH will own 100.0% of ABRH and O'Charley's. We expect to consolidate the operations of FNH beginning in the second quarter of 2012 and begin reporting three segments for the quarter ended June 30, 2012.

As of December 25, 2011, there were 221 O’Charley’s company-owned restaurants in 17 states in the East, Southeast and Midwest, 105 Ninety Nine restaurants in seven states throughout New England and upstate New York, and 10 Stoney River restaurants in six states in the East, Southeast and Midwest. As of December 25, 2011, there were also six franchised O’Charley’s restaurants in four states in the Southeast and Midwest. As of December 25, 2011, O'Charley's reported total assets and liabilities of $313.6 million and $145.1 million, respectively, and total revenue and net loss of $827.1 million and $12.1 million, respectively, for the year then ended.
Discontinued Operations
On December 27, 2011, we entered into a definitive agreement under which we will sell an 85.0% interest in our remaining subsidiaries that write personal lines insurance to WT Holdings, Inc. for approximately $119.5 million. The sales price is subject to typical closing adjustments based on working capital and surplus. The transaction is expected to close on May 1, 2012, subject to regulatory approval and closing conditions. Accordingly, the results of this business (which we refer to as our "at-risk" insurance business) for all periods presented are reflected in the Condensed Consolidated Statements of Earnings as discontinued operations. The at-risk insurance business sale is expected to result in a pre-tax loss of approximately $15.1 million, which was recorded in the fourth quarter of 2011. Total revenues from the at-risk insurance business included in discontinued operations are $36.2 million and $42.0 million for the three months ending March 31, 2012 and 2011, respectively. Pre-tax earnings from the at-risk insurance business included in discontinued operations are $4.0 million and $0.2 million for the three months ending March 31, 2012 and 2011, respectively. Total assets of $316.7 million and total liabilities of $141.2 million related to the at-risk business are considered held for sale and are included in prepaid and other assets and accounts payable and accrued liabilities, respectively, in the Condensed Consolidated Balance Sheet as of March 31, 2012.
On October 31, 2011, we completed the sale of our flood insurance business to WRM America Holdings LLC (“WRM America”) for $135.0 million in cash and dividends, and a $75.0 million seller note included in Trade and Notes Receivable on the Condensed Consolidated Balance Sheet as of March 31, 2012. The seller note has an 8.0% annual interest coupon, with interest payable quarterly and principal payable in full eighteen months subsequent to closing on April 30, 2013. The flood insurance business sale resulted in a pre-tax gain of approximately $154.1 million ($94.9 million after tax), which was recorded in the fourth quarter of 2011. Total revenues from the flood business included in discontinued operations are $34.4 million for the three months ending March 31, 2011. Pre-tax earnings from the flood business included in discontinued operations were $5.0 million for the three months ended March 31, 2011.
Transactions with Related Parties
Agreements with Fidelity National Information Services ("FIS")
A summary of the agreements that were in effect with FIS through March 31, 2012, is as follows:
•
Technology (“IT”) and data processing services from FIS. These agreements govern IT support services provided to us by FIS, primarily consisting of infrastructure support and data center management. Subject to certain early termination provisions (including the payment of minimum monthly service and termination fees), the agreement expires on or about June 30, 2013 with an option to renew for one or two additional years.
•
Administrative corporate support and cost-sharing services to FIS. We have provided certain administrative corporate support services such as corporate aviation and other administrative support services to FIS.
A detail of net revenues and expenses between us and FIS that were included in our results of operations for the periods presented is as follows:
 
Three months ended
March 31, 2012
 
Three months ended
March 31, 2011
 
(In millions)
Corporate services and cost-sharing revenue (expense)
$
1.2

 
$
(1.1
)
Data processing expense
(9.0
)
 
(9.4
)
Net expense
$
(7.8
)
 
$
(10.5
)

We believe the amounts earned by us or charged to us under each of the foregoing arrangements are fair and reasonable. The information technology infrastructure support and data center management services provided to us are priced within the range of prices that FIS offers to its unaffiliated third party customers for the same types of services. However, the amounts we earned or were charged under these arrangements were not negotiated at arm’s-length, and may not represent the terms that we might have obtained from an unrelated third party. The amounts due to FIS as a result of these agreements were $6.5 million as of March 31, 2012 and $5.6 million as of December 31, 2011.
Included in equity securities available for sale are 1,603,860 shares of FIS stock which were purchased during the fourth quarter of 2009 in connection with a merger between FIS and Metavante Technologies, Inc. The fair value of our investment was $53.1 million and $42.6 million as of March 31, 2012 and December 31, 2011, respectively. Changes in fair value of the FIS stock are recorded as other comprehensive earnings.
Also included in fixed maturities available for sale are FIS bonds with a fair value of $43.6 million and $23.6 million as of March 31, 2012 and December 31, 2011, respectively, as well as an FIS term loan acquired in May 2011 with a fair value of $2.1 million and $13.0 million as of March 31, 2012 and December 31, 2011, respectively.
Earnings Per Share
Earnings Per Share
Earnings Per Share
Basic earnings per share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. In periods when earnings are positive, diluted earnings per share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities. For periods when we recognize a net loss, diluted earnings per share is equal to basic earnings per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. We have granted certain options and shares of restricted stock which have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported.
  
The following table presents the computation of basic and diluted earnings per share:
 
Three months ended March 31,
 
2012
 
2011
 
(In millions, except per share amounts)
Basic and diluted net earnings from continuing operations attributable to FNF common shareholders
$
71.7

 
$
38.9

Basic and diluted net earnings from discontinued operations attributable to FNF common shareholders
2.7

 
3.6

Basic and diluted net earnings attributable to FNF common shareholders
$
74.4

 
$
42.5

 
 
 
 
Weighted average shares outstanding during the period, basic basis
218.8

 
220.7

Plus: Common stock equivalent shares assumed from conversion of options
4.5

 
2.9

Weighted average shares outstanding during the period, diluted basis
223.3

 
223.6

 
 
 
 
Basic net earnings per share from continuing operations attributable to FNF common shareholders
$
0.33

 
$
0.17

Basic net earnings per share from discontinued operations attributable to FNF common shareholders
0.01

 
0.02

Basic earnings per share attributable to FNF common shareholders
$
0.34

 
$
0.19

 
 
 
 
Diluted net earnings per share from continuing operations attributable to FNF common shareholders
$
0.32

 
$
0.17

Diluted net earnings per share from discontinued operations attributable to FNF common shareholders
0.01

 
0.02

Diluted earnings per share attributable to FNF common shareholders
$
0.33

 
$
0.19


Options to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. Antidilutive options totaled 4.3 million shares and 8.7 million shares for the three months ended March 31, 2012 and 2011, respectively.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively:
 
March 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale (1):
 
 
 
 
 
 
 
U.S. government and agencies
$
—

 
$
173.3

 
$
—

 
$
173.3

State and political subdivisions
—

 
1,373.4

 
—

 
1,373.4

Corporate debt securities
—

 
1,624.5

 
—

 
1,624.5

Mortgage-backed/asset-backed securities
—

 
223.3

 
—

 
223.3

Foreign government bonds
—

 
46.8

 
—

 
46.8

Preferred stock available for sale (2)
27.7

 
91.0

 
—

 
118.7

Equity securities available for sale
129.6

 
—

 
—

 
129.6

Other long-term investments
—

 
—

 
41.4

 
41.4

Total
$
157.3

 
$
3,532.3

 
$
41.4

 
$
3,731.0


________________________
(1) Includes $256.3 million relating to the at-risk insurance business that have been reclassed into prepaid and other assets on the Condensed Consolidated Balance Sheet as they are considered held for sale as of March 31, 2012.
(2) Includes $15.1 million relating to the at-risk insurance business that have been reclassed into prepaid and other assets on the Condensed Consolidated Balance Sheet as they are considered held for sale as of March 31, 2012.

 
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale (1):
 
 
 
 
 
 
 
U.S. government and agencies
$
—

 
$
174.6

 
$
—

 
$
174.6

State and political subdivisions
—

 
1,439.5

 
—

 
1,439.5

Corporate debt securities
—

 
1,569.1

 
—

 
1,569.1

Mortgage-backed/asset-backed securities
—

 
226.7

 
—

 
226.7

Foreign government bonds and other fixed maturity securities
—

 
47.1

 
—

 
47.1

Preferred stock available for sale (2)
14.2

 
71.4

 
—

 
85.6

Equity securities available for sale
105.7

 
—

 
—

 
105.7

Other long-term investments
—

 
—

 
40.8

 
40.8

Total
$
119.9

 
$
3,528.4

 
$
40.8

 
$
3,689.1


________________________
(1) Includes $256.7 million relating to the at-risk insurance business that have been reclassed into prepaid and other assets on the Condensed Consolidated Balance Sheet as they are considered held for sale as of December 31, 2011.
(2) Includes $14.2 million relating to the at-risk insurance business that have been reclassed into prepaid and other assets on the Condensed Consolidated Balance Sheet as they are considered held for sale as of December 31, 2011.

Our Level 2 fair value measures for fixed-maturities available for sale are provided by third-party pricing services. We utilize one firm for our taxable bond and preferred stock portfolio and another for our tax-exempt bond portfolio. These pricing services are leading global providers of financial market data, analytics and related services to financial institutions. We rely on one price for each instrument to determine the carrying amount of the assets on our balance sheet. The inputs utilized in these pricing methodologies include observable measures such as benchmark yields, reported trades, broker dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications. We review the pricing methodologies for all of our Level 2 securities by obtaining an understanding of the valuation models and assumptions used by the third-party as well as independently comparing the resulting prices to other publicly available measures of fair value and internally developed models. The pricing methodologies used by the relevant third party pricing services are:

U.S. government and agencies: These securities are valued based on data obtained for similar securities in active markets and from inter-dealer brokers.

State and political subdivisions: These securities are valued based on data obtained for similar securities in active markets and from inter-dealer brokers. Factors considered include relevant trade information, dealer quotes and other relevant market data.

Corporate debt securities: These securities are valued based on dealer quotes and related market trading activity. Factors considered include the bond's yield, its terms and conditions, or any other feature which may influence its risk and thus marketability, as well as relative credit information and relevant sector news.
 
Foreign government bonds: These securities are valued based on a discounted cash flow model incorporating observable market inputs such as available broker quotes and yields of comparable securities.

Mortgage-backed/asset-backed securities: These securities are comprised of commercial mortgage-backed securities, agency mortgage-backed securities, collaterized mortgage obligations, and asset-backed securities. They are valued based on available trade information, dealer quotes, cash flows, relevant indices and market data for similar assets in active markets.

Preferred stock: Preferred stocks are valued by calculating the appropriate spread over a comparable U.S. Treasury security. Inputs include benchmark quotes and other relevant market data.
Our Level 3 investments consist of structured notes that were purchased in the third quarter of 2009. The structured notes had a par value of $37.5 million and fair value of $41.4 million at March 31, 2012 and a par value of $37.5 million and fair value of $40.8 million at December 31, 2011. The structured notes are held for general investment purposes and represent approximately one percent of our total investment portfolio. The structured notes are classified as other long-term investments and are measured in their entirety at fair value with changes in fair value recognized in earnings. The fair value of these instruments are the product of a proprietary valuation model utilized by the trading desk of the broker-dealer which contains assumptions relating to volatility, the level of interest rates, and the underlying value of the indexes, exchange-traded funds, and foreign currencies. We review the pricing methodologies for our Level 3 investments to ensure that they are reasonable and believe they represent an exit price as of March 31, 2012.
The following table presents the changes in our investments that are classified as Level 3 for the period ended March 31, 2012 (in millions):
Balance, December 31, 2011
$
40.8

Net realized gains
0.6

Balance, March 31, 2012
$
41.4

The carrying amounts of short-term investments, accounts receivable and notes receivable approximate fair value due to their short-term nature. Additional information regarding the fair value of our investment portfolio is included in note D. Additional information regarding the fair value of our notes payable is included in note E.
Investments
Investments
Investments
The carrying amounts and fair values of our available for sale securities at March 31, 2012 and December 31, 2011 are as follows:
 
March 31, 2012
 
Carrying
 
Cost
 
Unrealized
 
Unrealized
 
Fair
 
Value
 
Basis
 
Gains
 
Losses
 
Value
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
157.7

 
$
148.2

 
$
9.5

 
$
—

 
$
157.7

State and political subdivisions
1,268.3

 
1,207.6

 
60.8

 
(0.1
)
 
1,268.3

Corporate debt securities
1,514.4

 
1,474.2

 
58.4

 
(18.2
)
 
1,514.4

Foreign government bonds
45.6

 
44.1

 
1.5

 
—

 
45.6

Mortgage-backed/asset-backed securities
199.0

 
189.8

 
9.3

 
(0.1
)
 
199.0

Preferred stock available for sale
103.6

 
101.7

 
2.8

 
(0.9
)
 
103.6

Equity securities available for sale
129.6

 
86.5

 
44.0

 
(0.9
)
 
129.6

Total
$
3,418.2

 
$
3,252.1

 
$
186.3

 
$
(20.2
)
 
$
3,418.2


 
December 31, 2011
 
Carrying
 
Cost
 
Unrealized
 
Unrealized
 
Fair
 
Value
 
Basis
 
Gains
 
Losses
 
Value
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
159.1

 
$
148.2

 
$
10.9

 
$
—

 
$
159.1

State and political subdivisions
1,330.1

 
1,266.1

 
64.1

 
(0.1
)
 
1,330.1

Corporate debt securities
1,463.4

 
1,442.7

 
48.3

 
(27.6
)
 
1,463.4

     Foreign government bonds
46.0

 
44.2

 
1.8

 
—

 
46.0

Mortgage-backed/asset-backed securities
201.6

 
191.8

 
9.8

 
—

 
201.6

Preferred stock available for sale
71.4

 
74.8

 
0.4

 
(3.8
)
 
71.4

Equity securities available for sale
105.7

 
83.2

 
25.5

 
(3.0
)
 
105.7

Total
$
3,377.3

 
$
3,251.0

 
$
160.8

 
$
(34.5
)
 
$
3,377.3


The cost basis of fixed maturity securities available for sale includes an adjustment for amortized premium or discount since the date of purchase.
The following table presents certain information regarding contractual maturities of our fixed maturity securities at March 31, 2012:
 
 
March 31, 2012
 
 
Amortized
 
% of
 
Fair
 
% of
Maturity
 
Cost
 
Total
 
Value
 
Total
 
 
(Dollars in millions)
One year or less
 
$
307.2

 
10.0
%
 
$
311.9

 
9.8
%
After one year through five years
 
1,472.2

 
48.0

 
1,531.1

 
48.1

After five years through ten years
 
1,052.1

 
34.4

 
1,099.3

 
34.5

After ten years
 
42.6

 
1.4

 
43.7

 
1.4

Mortgage-backed/asset-backed securities
 
189.8

 
6.2

 
199.0

 
6.2

Total
 
$
3,063.9

 
100.0
%
 
$
3,185.0

 
100.0
%
Subject to call
 
$
1,446.2

 
47.2
%
 
$
1,492.6

 
46.9
%

Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Included above in amounts subject to call are $1,058.3 million and $1,088.9 million in amortized cost and fair value, respectively, of fixed maturity securities with make-whole call provisions as of March 31, 2012.
The balance of equity securities includes an investment in FIS stock. The fair value of our investment in the FIS stock was $53.1 million and $42.6 million at March 31, 2012 and December 31, 2011, respectively.
Included in our other long-term investments are various cost-method investments and fixed maturity structured notes purchased in the third quarter of 2009. The structured notes are carried at fair value (see note C) and changes in the fair value of these structured notes are recorded as realized gains and losses in the Condensed Consolidated Statements of Earnings. The carrying value of the structured notes was $41.4 million and $40.8 million as of March 31, 2012 and December 31, 2011, respectively, and we recorded net gains of $0.6 million and $3.1 million related to the structured notes in the three-month periods ended March 31, 2012 and 2011, respectively.
Net unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2012 and December 31, 2011, were as follows (in millions):
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
State and political subdivisions
$
7.3

 
$
(0.1
)
 
$
—

 
$
—

 
$
7.3

 
$
(0.1
)
Corporate debt securities
191.9

 
(14.9
)
 
16.5

 
(3.3
)
 
208.4

 
(18.2
)
Mortgage-backed/asset-backed securities
20.9

 
(0.1
)
 
—

 
—

 
20.9

 
(0.1
)
Preferred stock available for sale
20.7

 
(0.9
)
 
—

 
—

 
20.7

 
(0.9
)
Equity securities
4.8

 
(0.9
)
 
—

 
—

 
4.8

 
(0.9
)
Total temporarily impaired securities
$
245.6

 
$
(16.9
)
 
$
16.5

 
$
(3.3
)
 
$
262.1

 
$
(20.2
)


December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
State and political subdivisions
$
10.6

 
$
(0.1
)
 
$
—

 
$
—

 
$
10.6

 
$
(0.1
)
Corporate debt securities
339.0

 
(26.6
)
 
7.3

 
(1.0
)
 
346.3

 
(27.6
)
Preferred stock available for sale
52.9

 
(3.8
)
 
—

 
—

 
52.9

 
(3.8
)
Equity securities
16.1

 
(3.0
)
 
—

 
—

 
16.1

 
(3.0
)
Total temporarily impaired securities
$
418.6

 
$
(33.5
)
 
$
7.3

 
$
(1.0
)
 
$
425.9

 
$
(34.5
)

During the three-month period ended March 31, 2012, we determined that no investments in our portfolio were considered other-than-temporarily impaired. We expect to recover the entire amortized cost basis of our temporarily impaired fixed maturity securities as we do not intend to sell these securities and we do not believe that we will be required to sell the fixed maturity securities before recovery of the cost basis. As of March 31, 2012 we held $5.4 million of fixed maturity securities for which other-than-temporary impairment had been previously recognized. It is possible that future events may lead us to recognize future impairment losses related to our investment portfolio and that unanticipated future events may lead us to dispose of certain investment holdings and recognize the effects of any market movements in our condensed consolidated financial statements.




The following table presents realized gains and losses on investments and other assets and proceeds from the sale or maturity of investments and other assets for the three-month period ending March 31, 2012 and 2011, respectively:
 
 
Three months ended
March 31, 2012
 
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains (Losses)
 
Gross Proceeds from Sale/Maturity
 
 
(Dollars in millions)
Fixed maturity securities available for sale
 
$
2.2

 
$
—

 
$
2.2

 
$
246.3

Other long-term investments
 
 
 
 
 
0.3

 
—

Other assets
 
 
 
 
 
1.5

 
2.3

Total
 
 
 
 
 
$
4.0

 
$
248.6


 
 
Three months ended
March 31, 2011
 
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains (Losses)
 
Gross Proceeds from Sale/Maturity
 
 
(Dollars in millions)
Fixed maturity securities available for sale
 
$
15.9

 
$
(0.2
)
 
$
15.7

 
$
389.8

Preferred stock available for sale
 
—

 
—

 
—

 
5.0

Equity securities available for sale
 
1.9

 
—

 
1.9

 
16.3

Other long-term investments
 
 
 
 
 
3.1

 
—

Other assets
 
 
 
 
 
(1.2
)
 
1.7

Total
 
 
 
 
 
$
19.5

 
$
412.8


Investments in unconsolidated affiliates are recorded using the equity method of accounting. As of March 31, 2012 and December 31, 2011, investments in unconsolidated affiliates consisted of the following (in millions):
 
Current Ownership
 
March 31, 2012
 
December 31, 2011
Ceridian
33
%
 
$
348.0

 
$
352.8

Remy
47
%
 
150.0

 
141.8

Other
Various

 
54.3

 
51.9

     Total
 
 
$
552.3

 
$
546.5


On January 21, 2011, as part of a Common Stock Rights Offering ("the Offering") to all Remy common shareholders, we purchased an additional 9.9 million shares of Remy common stock in exchange for tendering our 42,359 shares of Remy preferred stock held and cash of $26.0 million. Following the Offering and preferred stock conversion, we own 14.8 million shares of Remy common stock, representing 47% of Remy's outstanding equity.
In addition to our equity method investment in Remy, we held $28.9 million and $29.7 million in par value of a Remy term loan as of March 31, 2012 and December 31, 2011, respectively. The fair value of the term loan was $28.9 million and $29.3 million as of March 31, 2012 and December 31, 2011, respectively, and is included in our fixed maturity securities available for sale.

We account for our equity in Ceridian and Remy on a three-month and one-month lag, respectively. Accordingly, our net earnings for the three-month period ended March 31, 2012, includes our equity in Ceridian’s earnings for the three-month period from October 1, 2011 through December 31, 2011, and our net earnings for the three-month period ended March 31, 2011, includes our equity in Ceridian’s earnings for the three-month period from October 1, 2010 through December 31, 2010. Our net earnings for the three-month period ended March 31, 2012, includes our equity in Remy's earnings for the three-month period ended February 29, 2012, and our net earnings for the three-month period ended March 31, 2011, include our equity in Remy's earnings for the three-month period ended February 28, 2011. During the three-month periods ended March 31, 2012 and 2011, we recorded an aggregate of $2.7 million and $(9.9) million, respectively, in equity in earnings (losses) of Ceridian and Remy. Equity in earnings of other unconsolidated affiliates was $3.1 million and $1.3 million for the three-month periods ended March 31, 2012 and 2011, respectively.

Summarized financial information for Ceridian for the relevant dates and time periods included in our condensed consolidated financial statements, is presented below.
 
December 31, 2011
 
September 30, 2011
 
(In millions)
 
(In millions)
Total current assets
$
1,083.9

 
$
1,154.0

Goodwill and other intangible assets, net
4,562.2

 
4,577.6

Other assets
4,767.7

 
4,259.6

Total assets
$
10,413.8

 
$
9,991.2

Current liabilities
$
832.4

 
$
892.0

Long-term obligations, less current portion
3,446.6

 
3,451.4

Other long-term liabilities
5,067.9

 
4,566.0

Total liabilities
9,346.9

 
8,909.4

Equity
1,066.9

 
1,081.8

Total liabilities and equity
$
10,413.8

 
$
9,991.2



 
Three Months Ended December 31, 2011
 
Three Months Ended December 31, 2010
 
(In millions)
Total revenues
$
399.1

 
$
393.8

Loss before income taxes
(23.1
)
 
(4.8
)
Net (loss) earnings
(21.9
)
 
0.1

Notes Payable
Notes Payable
Notes Payable
Notes payable consists of the following:
 
March 31, 2012
 
December 31, 2011
 
(In millions)
Unsecured convertible notes, net of discount, interest payable semi-annually at 4.25%, due August 2018
$
280.1

 
$
279.5

Unsecured notes, net of discount, interest payable semi-annually at 6.60%, due May 2017

299.8

 
299.8

Unsecured notes, net of discount, interest payable semi-annually at 5.25%, due March 2013

236.4

 
236.4

Revolving credit facility, unsecured, unused portion of $675.0 at March 31, 2012, due March 2013 with interest payable monthly at LIBOR + 2.00% (2.24% at March 31, 2012)
250.0

 
100.0

Other

0.2

 
0.1

 
$
1,066.5

 
$
915.8



At March 31, 2012, the estimated fair value of our long-term debt was $1,115.9 million and the carrying amount was $1,066.5 million. The fair value of our unsecured notes payable was $861.4 million as of March 31, 2012 and is based on established market prices for the securities on March 31, 2012 and are considered Level 2 financial liabilities. The fair value of our Revolving Credit Facility is $254.3 million and is estimated using a discounted cash flow analysis based on current market interest rates and comparison of interest rates being paid to our current incremental borrowing rates for similar types of borrowing arrangements and is considered a Level 3 financial liability.

On April 10, 2012, we entered into an agreement to amend and extend our credit agreement dated September 12, 2006, as amended and restated as of March 5, 2010 (the “ Revolving Credit Facility”) with Bank of America, N.A. as administrative agent and swing line lender (the “Administrative Agent”), and the other financial institutions party thereto, and an agreement to change the aggregate size of the credit facility under the Revolving Credit Facility. These agreements reduced the total size of the credit facility from $925.0 million to $800.0 million, with an option to increase the size of the credit facility to $900.0 million, with an extended maturity date of April 10, 2016. Pricing for the new agreement is based on an applicable margin between 132.5 basis points to 160.0 basis points over LIBOR, depending on the senior debt ratings of FNF. The Revolving Credit Facility remains subject to affirmative, negative and financial covenants customary for financings of this type, including, among other things, limits on the creation of liens, sales of assets, the incurrence of indebtedness, restricted payments, transactions with affiliates, and certain amendments. The Revolving Credit Facility prohibits us from paying dividends to our stockholders if an event of default has occurred and is continuing or would result therefrom. The Revolving Credit Facility requires us to maintain certain financial ratios and levels of capitalization. The Revolving Credit Facility includes customary events of default for facilities of this type (with customary grace periods, as applicable). These events of default include a cross-default provision that, subject to limited exceptions, permits the lenders to declare the Revolving Credit Facility in default if: (i) (A) we fail to make any payment after the applicable grace period under any indebtedness with a principal amount (including undrawn committed amounts) in excess of 3.0% of our net worth, as defined in the Revolving Credit Facility, or (B) we fail to perform any other term under any such indebtedness, or any other event occurs, as a result of which the holders thereof may cause it to become due and payable prior to its maturity; or (ii) certain termination events occur under significant interest rate, equity or other swap contracts. The Revolving Credit Facility provides that, upon the occurrence of an event of default, the interest rate on all outstanding obligations will be increased and payments of all outstanding loans may be accelerated and/or the lenders' commitments may be terminated. In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts payable under the Revolving Credit Facility shall automatically become immediately due and payable, and the lenders' commitments will automatically terminate.

Principal maturities of notes payable at March 31, 2012, are as follows (in millions):
2012
$
0.2

2013 (a)
486.4

2014
—

2015
—

2016
—

Thereafter
579.9

 
$
1,066.5

________________________
(a) In April 2012, $250.0 million of this balance was refinanced under our Revolving Credit Facility and is now due in April 2016.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Legal and Regulatory Contingencies

In the ordinary course of business, we are involved in various pending and threatened litigation matters related to our operations, some of which include claims for punitive or exemplary damages. This customary litigation includes but is not limited to a wide variety of cases arising out of or related to title and escrow claims, for which we make provisions through our loss reserves. Additionally, like other insurance companies, our ordinary course litigation includes a number of class action and purported class action lawsuits, which make allegations related to aspects of our insurance operations. We believe that no actions, other than the matter discussed below, depart from customary litigation incidental to our business.
        
We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. None of the amounts we have currently recorded is considered to be individually or in the aggregate material to our financial condition. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable. While some of these matters could be material to our operating results for any particular period if an unfavorable outcome results, at present we do not believe that the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

On November 24, 2010, plaintiffs filed a purported class action in the United States District Court, Northern District of California, Oakland Division titled Vivian Hays, et al. vs. Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation. Plaintiffs seek to represent a class of all persons who deposited their exchange funds with LandAmerica 1031 Exchange Service (“LES”) and were not able to use them in their contemplated exchanges due to the alleged illiquidity of LES caused by the collapse of the auction rate security market in early 2008. Plaintiffs allege Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation (which was merged into Fidelity National Title Insurance Company) knew of the problems at LES and had an obligation of disclosure to exchangers, but did not disclose and instead recommended exchangers use LES in order to fund prior exchangers' transactions with money from new exchangers. In the initial complaint, plaintiffs sued our subsidiaries Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation for negligence, breach of fiduciary duty, constructive fraud and aiding and abetting LES. Plaintiffs ask for compensatory and punitive damages, prejudgment interest and reasonable attorney's fees.  The case was transferred on our motion to a Multi-District Litigation ("MDL") proceeding in South Carolina and a status conference was held on April 22, 2011.  This case was stayed until a decision was made on motions pending in a similar class action against an unrelated party. The court in that case ruled on June 15, 2011 on the motion to dismiss the complaint filed by the unrelated party and dismissed the complaint. The plaintiffs in the case against Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation filed an amended complaint on August 15, 2011. The complaint added approximately twenty new plaintiffs and two new defendants; Commonwealth Land Title Company and LandAmerica Charter Title Company, both of which are affiliates of FNF. It also expanded the causes of action.  The new causes of action are aiding and abetting fraud committed by LES; conspiracy to commit fraud with LES; aiding and abetting breach of fiduciary duty by LES; aiding and abetting conversion of trust funds by LES; enterprise liability; negligence; breach of fiduciary duty; conversion of escrow funds and RICO liability.  We filed a motion to dismiss the Second Amended Complaint on September 30, 2011 as we believe we have strong legal and factual defenses to this action.  The Amended Complaint did not seek a specified amount of damages as to each of the plaintiffs but is seeking damages to plaintiffs and potential class members measured by the loss of their property, consequential damages and other elements of damages including punitive and treble damages.  A hearing on the motion to dismiss was held on January 17, 2012 but was not ruled on before the MDL Court filed a suggestion of remand to the Judicial Panel on MDL, suggesting that the Hays case be remanded to California court and that a standalone 1031 action be remanded to the New York court where the actions were transferred from. There was no opposition to the suggestion and the matters were remanded. On January 26, 2012 the LES liquidation trust filed a motion to approve a settlement agreement between the LES liquidation trust, the LFG liquidation trust and certain underwriters at Lloyd's of London with the Bankruptcy Court for the Eastern District of Virginia. The motion asks the bankruptcy court to approve the settlement, which would have the effect of exhausting all insurance coverage for the LandAmerica Financial Group, Inc. (“LFG”) entities, including the entities FNF purchased from LFG that are named as defendants in the Hays action.  The entities purchased from LFG are co-insureds under the Lloyds policies, had made claims based on the LES 1031 litigation, and other claims as a result of operations.  Despite having made these claims as co-insureds, and having requested notice and an opportunity to negotiate with Lloyds and the LES liquidation trust to find a mutually acceptable resolution to all claims, Lloyds and LES excluded our Companies from the negotiation.  On February 16, 2012 we filed an objection to approval of the settlement.  We argued that the self-insured retention amounts and potential coverage have not been sufficiently disclosed and/or are incorrectly calculated, as well as that it is inequitable to exhaust coverage under the policy by settling with the LES liquidation trust leaving our claims unsatisfied.  On March 29, 2012, the LES liquidation trust, the LFG liquidation trust, the Companies affiliated with FNF and certain underwriters at Lloyd's of London entered into a Settlement Agreement and Release (the “Settlement”). The Settlement contemplates an $11.0 million payment being made by the Companies to settle the purported class action; $3.2 million of which will be paid by the Lloyd's of London underwriters. We anticipate that this matter will be resolved by fourth quarter of 2012. If the Settlement is not approved, we intend to continue to vigorously defend the action.
From time to time we receive inquiries and requests for information from state insurance departments, attorneys general and other regulatory agencies about various matters relating to our business. Sometimes these take the form of civil investigative demands or subpoenas. We cooperate with all such inquiries and we have responded to or are currently responding to inquiries from multiple governmental agencies. Also, regulators and courts have been dealing with issues arising from foreclosures and related processes and documentation. Various governmental entities are studying the title insurance product, market, pricing, and business practices, and potential regulatory and legislative changes, which may materially affect our business and operations. From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities which may require us to pay fines, claims or take other actions.

Operating Leases
On June 29, 2004 we entered into an off-balance sheet financing arrangement (commonly referred to as a “synthetic lease”). The owner/lessor in this arrangement acquired land and various real property improvements associated with new construction of an office building in Jacksonville, Florida, that are part of FNF’s corporate campus and headquarters. The lessor financed the acquisition of the facilities through funding provided by third-party financial institutions. On June 27, 2011, we renewed and amended the synthetic lease for the facilities. The amended lease provides for a five year term ending June 27, 2016 and had an outstanding balance as of March 31, 2012 of $71.3 million. The amended lease includes guarantees by us of up to 83.0% of the outstanding lease balance, and options to purchase the facilities at the outstanding lease balance. The guarantee becomes effective if we decline to purchase the facilities at the end of the lease and also decline to renew the lease. The lessor is a third-party company and we have no affiliation or relationship with the lessor or any of its employees, directors or affiliates, and transactions with the lessor are limited to the operating lease agreements and the associated rent expense that have been included in other operating expenses in the Condensed Consolidated Statements of Earnings. We do not believe the lessor is a variable interest entity, as defined in the FASB standard on consolidation of variable interest entities.
Dividends
Dividends
Dividends
On April 24, 2012, our Board of Directors declared cash dividends of $0.14 per share, payable on June 29, 2012, to shareholders of record as of June 15, 2012.
Segment Information
Segment Information
Segment Information
Summarized financial information concerning our reportable segments is shown in the following tables. As a result of the close on the sale of the flood insurance business in October 2011 and the upcoming sale of our at-risk insurance business in May 2012, we reorganized our reporting segments to reflect the disposition of these businesses and the realignment of the remaining specialty businesses. Prior period segment information has been restated to conform to the current segment presentation.
As of and for the three months ended March 31, 2012:
 
Fidelity National
 
Corporate
 
 
 
Title Group
 
and Other
 
Total
 
(In millions)
Title premiums
$
767.9

 
$
—

 
$
767.9

Other revenues
368.4

 
13.2

 
381.6

Revenues from external customers
1,136.3

 
13.2

 
1,149.5

Interest and investment income, including net realized gains and losses
38.7

 
1.7

 
40.4

Total revenues
1,175.0

 
14.9

 
1,189.9

Depreciation and amortization
16.3

 
0.7

 
17.0

Interest expense
0.2

 
14.9

 
15.1

Earnings (loss) from continuing operations before income taxes and equity in earnings of unconsolidated affiliates
129.5

 
(23.9
)
 
105.6

Income tax expense (benefit)
45.4

 
(8.5
)
 
36.9

Earnings (loss) from continuing operations before equity in earnings of unconsolidated affiliates
84.1

 
(15.4
)
 
68.7

Equity in earnings of unconsolidated affiliates
1.6

 
4.2

 
5.8

Earnings (loss) from continuing operations
$
85.7

 
$
(11.2
)
 
$
74.5

Assets
$
6,497.5

 
$
1,504.6

 
$
8,002.1

Goodwill
1,442.3

 
18.8

 
1,461.1






As of and for the three months ended March 31, 2011:
 
Fidelity National
 
Corporate
 
 
 
Title Group
 
and Other
 
Total
 
(In millions)
Title premiums
$
746.2

 
$
—

 
$
746.2

Other revenues
324.0

 
8.5

 
332.5

Revenues from external customers
1,070.2

 
8.5

 
1,078.7

Interest and investment income, including realized gains and losses
52.0

 
1.2

 
53.2

Total revenues
1,122.2

 
9.7

 
1,131.9

Depreciation and amortization
19.0

 
0.7

 
19.7

Interest expense
0.8

 
13.5

 
14.3

Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated affiliates
106.3

 
(29.2
)
 
77.1

Income tax expense (benefit)
38.0

 
(10.0
)
 
28.0

Earnings (loss) from continuing operations before equity in earnings (loss) of unconsolidated affiliates
68.3

 
(19.2
)
 
49.1

Equity in earnings (loss) of unconsolidated affiliates
1.0

 
(9.6
)
 
(8.6
)
Earnings (loss) from continuing operations
$
69.3

 
$
(28.8
)
 
$
40.5

Assets
$
6,610.2

 
$
1,190.6

 
$
7,800.8

Goodwill
1,429.8

 
41.2

 
1,471.0


The activities of the reportable segments include the following:
Fidelity National Title Group
This segment consists of the operations of FNF’s title insurance underwriters and related businesses. This segment provides core title insurance and escrow and other title related services including collection and trust activities, trustee’s sales guarantees, recordings and reconveyances, and home warranty insurance.
Corporate and Other
The corporate and other segment consists of the operations of the parent holding company, certain other unallocated corporate overhead expenses, other smaller operations, and our share in the operations of certain equity investments, including Ceridian, Remy and ABRH.

Basis of Financial Statements (Tables)
Related Party Transactions [Text Block]
A detail of net revenues and expenses between us and FIS that were included in our results of operations for the periods presented is as follows:
 
Three months ended
March 31, 2012
 
Three months ended
March 31, 2011
 
(In millions)
Corporate services and cost-sharing revenue (expense)
$
1.2

 
$
(1.1
)
Data processing expense
(9.0
)
 
(9.4
)
Net expense
$
(7.8
)
 
$
(10.5
)
Earnings Per Share (Tables)
Earnings per Share [Table Text Block]
The following table presents the computation of basic and diluted earnings per share:
 
Three months ended March 31,
 
2012
 
2011
 
(In millions, except per share amounts)
Basic and diluted net earnings from continuing operations attributable to FNF common shareholders
$
71.7

 
$
38.9

Basic and diluted net earnings from discontinued operations attributable to FNF common shareholders
2.7

 
3.6

Basic and diluted net earnings attributable to FNF common shareholders
$
74.4

 
$
42.5

 
 
 
 
Weighted average shares outstanding during the period, basic basis
218.8

 
220.7

Plus: Common stock equivalent shares assumed from conversion of options
4.5

 
2.9

Weighted average shares outstanding during the period, diluted basis
223.3

 
223.6

 
 
 
 
Basic net earnings per share from continuing operations attributable to FNF common shareholders
$
0.33

 
$
0.17

Basic net earnings per share from discontinued operations attributable to FNF common shareholders
0.01

 
0.02

Basic earnings per share attributable to FNF common shareholders
$
0.34

 
$
0.19

 
 
 
 
Diluted net earnings per share from continuing operations attributable to FNF common shareholders
$
0.32

 
$
0.17

Diluted net earnings per share from discontinued operations attributable to FNF common shareholders
0.01

 
0.02

Diluted earnings per share attributable to FNF common shareholders
$
0.33

 
$
0.19

Fair Value Measurements (Tables)
Fair Value, Assets Measured on Recurring Basis [Table Text Block]
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively:
 
March 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale (1):
 
 
 
 
 
 
 
U.S. government and agencies
$
—

 
$
173.3

 
$
—

 
$
173.3

State and political subdivisions
—

 
1,373.4

 
—

 
1,373.4

Corporate debt securities
—

 
1,624.5

 
—

 
1,624.5

Mortgage-backed/asset-backed securities
—

 
223.3

 
—

 
223.3

Foreign government bonds
—

 
46.8

 
—

 
46.8

Preferred stock available for sale (2)
27.7

 
91.0

 
—

 
118.7

Equity securities available for sale
129.6

 
—

 
—

 
129.6

Other long-term investments
—

 
—

 
41.4

 
41.4

Total
$
157.3

 
$
3,532.3

 
$
41.4

 
$
3,731.0

 
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale (1):
 
 
 
 
 
 
 
U.S. government and agencies
$
—

 
$
174.6

 
$
—

 
$
174.6

State and political subdivisions
—

 
1,439.5

 
—

 
1,439.5

Corporate debt securities
—

 
1,569.1

 
—

 
1,569.1

Mortgage-backed/asset-backed securities
—

 
226.7

 
—

 
226.7

Foreign government bonds and other fixed maturity securities
—

 
47.1

 
—

 
47.1

Preferred stock available for sale (2)
14.2

 
71.4

 
—

 
85.6

Equity securities available for sale
105.7

 
—

 
—

 
105.7

Other long-term investments
—

 
—

 
40.8

 
40.8

Total
$
119.9

 
$
3,528.4

 
$
40.8

 
$
3,689.1

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
The following table presents the changes in our investments that are classified as Level 3 for the period ended March 31, 2012 (in millions):
Investments (Tables)
Schedule of Available-for-sale Securities [Table Text Block]
 
December 31, 2011
 
Carrying
 
Cost
 
Unrealized
 
Unrealized
 
Fair
 
Value
 
Basis
 
Gains
 
Losses
 
Value
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
159.1

 
$
148.2

 
$
10.9

 
$
—

 
$
159.1

State and political subdivisions
1,330.1

 
1,266.1

 
64.1

 
(0.1
)
 
1,330.1

Corporate debt securities
1,463.4

 
1,442.7

 
48.3

 
(27.6
)
 
1,463.4

     Foreign government bonds
46.0

 
44.2

 
1.8

 
—

 
46.0

Mortgage-backed/asset-backed securities
201.6

 
191.8

 
9.8

 
—

 
201.6

Preferred stock available for sale
71.4

 
74.8

 
0.4

 
(3.8
)
 
71.4

Equity securities available for sale
105.7

 
83.2

 
25.5

 
(3.0
)
 
105.7

Total
$
3,377.3

 
$
3,251.0

 
$
160.8

 
$
(34.5
)
 
$
3,377.3

The carrying amounts and fair values of our available for sale securities at March 31, 2012 and December 31, 2011 are as follows:
 
March 31, 2012
 
Carrying
 
Cost
 
Unrealized
 
Unrealized
 
Fair
 
Value
 
Basis
 
Gains
 
Losses
 
Value
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
157.7

 
$
148.2

 
$
9.5

 
$
—

 
$
157.7

State and political subdivisions
1,268.3

 
1,207.6

 
60.8

 
(0.1
)
 
1,268.3

Corporate debt securities
1,514.4

 
1,474.2

 
58.4

 
(18.2
)
 
1,514.4

Foreign government bonds
45.6

 
44.1

 
1.5

 
—

 
45.6

Mortgage-backed/asset-backed securities
199.0

 
189.8

 
9.3

 
(0.1
)
 
199.0

Preferred stock available for sale
103.6

 
101.7

 
2.8

 
(0.9
)
 
103.6

Equity securities available for sale
129.6

 
86.5

 
44.0

 
(0.9
)
 
129.6

Total
$
3,418.2

 
$
3,252.1

 
$
186.3

 
$
(20.2
)
 
$
3,418.2

Investments Classified by Contractual Maturity Date [Table Text Block]
The following table presents certain information regarding contractual maturities of our fixed maturity securities at March 31, 2012:
 
 
March 31, 2012
 
 
Amortized
 
% of
 
Fair
 
% of
Maturity
 
Cost
 
Total
 
Value
 
Total
 
 
(Dollars in millions)
One year or less
 
$
307.2

 
10.0
%
 
$
311.9

 
9.8
%
After one year through five years
 
1,472.2

 
48.0

 
1,531.1

 
48.1

After five years through ten years
 
1,052.1

 
34.4

 
1,099.3

 
34.5

After ten years
 
42.6

 
1.4

 
43.7

 
1.4

Mortgage-backed/asset-backed securities
 
189.8

 
6.2

 
199.0

 
6.2

Total
 
$
3,063.9

 
100.0
%
 
$
3,185.0

 
100.0
%
Subject to call
 
$
1,446.2

 
47.2
%
 
$
1,492.6

 
46.9
%
Schedule of Temporary Impairment Losses, Investments [Table Text Block]
Net unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2012 and December 31, 2011, were as follows (in millions):
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Value
 
Losses
 
Value
 
Losses
 
Value