Document and Entity Information
3MonthsEnded
Mar. 31, 2011
Apr. 30, 2011
Jun. 30, 2010
Document Information [Line Items]
Entity Registrant Name
Fidelity National Financial, Inc.
Entity Central Index Key
0001331875
Document Type
10-Q
Document Period End Date
2011-03-31
Amendment Flag
FALSE
Document Fiscal Year Focus
2011
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
2,814,002,098
Entity Common Stock, Shares Outstanding
223,266,576
Condensed Consolidated Balance Sheets (Unaudited)(USD $)
In Millions
Mar. 31, 2011
Dec. 31, 2010
Investments:
Fixed maturity securities available for sale, at fair value, at March 31, 2011 and December 31, 2010 includes $265.1 and $251.9, respectively, of pledged fixed maturity securities related to secured trust deposits
$3,482
$3,494
Preferred stock available for sale, at fair value
50
0
Equity securities available for sale, at fair value
68
75
Investments in unconsolidated affiliates
553
528
Other long-term investments
135
133
Short-term investments
57
129
Total investments
4,347
4,359
Cash and cash equivalents, at March 31, 2011 and December 31, 2010 includes $148.8 and $146.2, respectively, of pledged cash related to secured trust deposits
531
581
Trade and notes receivables, net of allowance of $27.7 and $28.8, respectively, at March 31, 2011 and December 31, 2010
248
271
Goodwill
1,471
1,471
Prepaid expenses and other assets
409
389
Capitalized software, net
43
44
Other intangible assets, net
149
155
Title plants
390
391
Property and equipment, net
179
180
Income taxes receivable
0
16
Deferred tax assets
35
32
Total assets
7,801
7,888
Liabilities:
Accounts payable and accrued liabilities
617
700
Accounts payable to related parties
7
8
Deferred revenue
121
121
Notes payable
952
952
Reserve for claim losses
2,238
2,273
Secured trust deposits
400
388
Income taxes payable
14
0
Total liabilities
4,349
4,443
Equity:
Common stock, Class A, $0.0001 par value; authorized 600,000,000 shares as of March 31, 2011 and December 31, 2010; issued 252,494,937 as of March 31, 2011 and 252,184,269 as of December 31, 2010
0
0
Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none
0
0
Additional paid-in capital
3,754
3,745
Retained earnings
126
110
Accumulated other comprehensive earnings
6
13
Less: treasury stock, 29,248,355 shares and 28,435,980 shares as of March 31, 2011 and December 31, 2010, respectively, at cost
(452)
(441)
Total Fidelity National Financial, Inc. shareholders equity
3,433
3,427
Noncontrolling interests
18
17
Total equity
3,452
3,444
Total liabilities and equity
$7,801
$7,888
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)(USD $)
In Millions, except Share data
Mar. 31, 2011
Dec. 31, 2010
Investments:
Pledged fixed maturities
$265
$252
Pledged cash, secured trust deposits
149
146
Trade and notes receivables, allowance
28
29
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
252,494,937
252,184,269
Preferred stock, par value
$0.0001
$0.0001
Preferred stock, authorized shares
50,000,000
50,000,000
Preferred stock, issued shares
0
0
Preferred stock, outstanding shares
0
0
Treasury stock, shares
29,248,355
28,435,980
Condensed Consolidated Statements of Earnings (Unaudited)(USD $)
In Millions, except Per Share data
3MonthsEnded
Mar.31,
2011
2010
Revenues:
Direct title insurance premiums
$323
$281
Agency title insurance premiums
423
484
Escrow, title related and other fees
313
295
Specialty insurance
93
86
Interest and investment income
36
39
Realized gains and losses, net
20
29
Total revenues
1,208
1,213
Expenses:
Personnel costs
391
371
Other operating expenses
285
299
Agent commissions
328
384
Depreciation and amortization
21
23
Provision for claim losses
87
86
Interest expense
14
7
Total expenses
1,126
1,171
Earnings before income taxes and equity in losses of unconsolidated affiliates
82
43
Income tax expense
30
13
Earnings before equity in losses of unconsolidated affiliates
53
30
Equity in losses of unconsolidated affiliates
(9)
(11)
Net earnings
44
19
Less: Net earnings attributable to noncontrolling interests
2
2
Net earnings attributable to Fidelity National Financial, Inc. common shareholders
43
17
Earnings per share:
Basic and diluted net earnings attributable to Fidelity National Financial, Inc. common shareholders
0.19
0.07
Weighted average shares outstanding, basic basis
221
228
Weighted average shares outstanding, diluted basis
224
230
Cash dividends per share
$0.12
$0.15
Condensed Consolidated Statements of Comprehensive Earnings (Unaudited)(USD $)
In Millions
3MonthsEnded
Mar.31,
2011
2010
Net earnings
$44
$19
Other comprehensive earnings:
Unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
(11)1
131
Unrealized gain on investments in unconsolidated affiliates (2)
62
02
Unrealized gain on foreign currency translation (3)
13
23
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)
(2)4
(20)4
Other comprehensive (loss) earnings
(7)
(5)
Comprehensive earnings
37
14
Less: Comprehensive earnings attributable to noncontrolling interests
2
2
Comprehensive earnings attributable to Fidelity National Financial, Inc. common shareholders
$36
$12
[1] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax (benefit) expense of $(6.8)&#160;million and $7.7&#160;million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
[2] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax expense of $3.7&#160;million and $0.2 million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
[3] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax expense of $0.4 million and $0.9&#160;million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
[4] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax expense of $1.4&#160;million and $11.6&#160;million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
Condensed Consolidated Statements of Comprehenstive Earnings (Unaudited) (Parenthetical)(USD $)
In Millions
3MonthsEnded
Mar.31,
2011
2010
Condensed Consolidated Statements of Comprehensive Earnings
Income tax (benefit) expense on unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates)
$(7)
$8
Income tax expense unrealized gain on investments in unconsolidated affiliates
4
0
Income tax expense on unrealized gain on foreign currency translation
0
1
Income tax expense on reclassification adjustments for change in unrealized gains and losses included in net earnings
$1
$12
Condensed Consolidated Statements of Equity (Unaudited)(USD $)
In Millions
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Noncontrolling Interest [Member]
Total
Beginning balance at Dec. 31, 2010
3,745
110
13
(441)
17
3,444
Beginning balance, shares at Dec. 31, 2010
252
29
Increase (Decrease) in Stockholders' Equity
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
0
Stock Issued During Period, Value, Stock Options Exercised
2
2
Stock Repurchased During Period, Value
(11)
(11)
Stock Repurchased During Period, Shares
1
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
(13)
(13)
Unrealized gain loss on investments in unconsolidated affiliates
6
61
Other comprehensive earnings - unrealized gain on foreign currency translation
1
12
Stock-based compensation
7
7
Dividends, Common Stock, Cash
(27)
(27)
Subsidiary dividends paid to noncontrolling interest shareholders
(1)
(1)
Net earnings
43
2
44
Ending balance at Mar. 31, 2011
$0
$3,754
$126
$6
$(452)
$18
$3,452
Ending balance, shares at Mar. 31, 2011
253
29
[1] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax expense of $3.7&#160;million and $0.2 million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
[2] <div style="font-family:Times New Roman;font-size:10pt;"><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt; width:100%;"><tr><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-align:left;">Net of income tax expense of $0.4 million and $0.9&#160;million for the three-month periods ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">March&#160;31, 2011</font><font style="font-family:inherit;font-size:10pt;text-align:left;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-align:left;text-decoration:none;">2010</font><font style="font-family:inherit;font-size:10pt;text-align:left;">, respectively.</font></div></td></tr></table></div>
Condensed Consolidated Statements of Cash Flows (Unaudited)(USD $)
In Millions
3MonthsEnded
Mar.31,
2011
2010
Cash flows from operating activities:
Net earnings
$44
$19
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization
21
23
Equity in losses of unconsolidated affiliates
9
11
Gain on sales of investments and other assets, net
(20)
(29)
Stock-based compensation
7
6
Tax benefit associated with the exercise of stock options
0
(1)
Changes in assets and liabilities, net of effects from acquisitions:
Net (increase) decrease in pledged cash, pledged investments, and secured trust deposits
(4)
7
Net decrease in trade receivables
24
7
Net increase in prepaid expenses and other assets
(13)
(13)
Net decrease in accounts payable, accrued liabilities, deferred revenue and other
(86)
(89)
Net decrease in reserve for claim losses
(35)
(42)
Net change in income taxes
32
13
Net cash used in operating activities
(21)
(88)
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale
212
224
Proceeds from calls and maturities of investment securities available for sale
200
129
Proceeds from sale of other assets
2
10
Cash received (expended) as collateral on loaned securities, net
(1)
(0)
Additions to property and equipment
(9)
(6)
Additions to capitalized software
(3)
(0)
Purchases of investment securities available for sale
(442)
(206)
Net proceeds from (purchases of) short-term investment securities
71
(6)
Contributions to investments in unconsolidated affiliates
(26)
(21)
Distributions from unconsolidated affiliates
1
6
Net other investing activities
(2)
(1)
Acquisitions/disposals of businesses, net of cash acquired
0
0
Net cash provided by investing activities
4
129
Cash flows from financing activities:
Borrowings
0
50
Debt service payments
0
(50)
Dividends paid
(27)
(34)
Subsidiary dividends paid to noncontrolling interest shareholders
(1)
(1)
Exercise of stock options
2
3
Tax benefit associated with the exercise of stock options
0
1
Purchases of treasury stock
(11)
(12)
Net cash used in financing activities
(36)
(43)
Net decrease in cash and cash equivalents, excluding pledged cash related to secured trust deposits
(53)
(3)
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at beginning of period
435
105
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at end of period
382
103
Supplemental cash flow information:
Income tax refunds
0
(2)
Interest paid
$15
$14
Basis of Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
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, 2010.
     Certain reclassifications have been made in the 2010 Condensed Consolidated Financial Statements to conform to classifications used in 2011. In addition, we have corrected a mathematical error within the Statement of Comprehensive Earnings for the period ending March 31, 2010, which resulted in a decrease to previously reported comprehensive earnings attributable to Fidelity National Financial, Inc. common shareholders of $9.4 million. The error had no impact on our other Condensed Consolidated Financial Statements presented.
Description of Business
     We are a holding company that through our subsidiaries provides title insurance, mortgage services, specialty insurance and information services. We are the nation's largest title insurance company through our title insurance underwriters — Fidelity National Title, Chicago Title, Commonwealth Land Title, and Alamo Title — which collectively issued more title insurance policies in 2010 than any other title company in the United States. We also provide flood insurance, personal lines insurance, and home warranty insurance through our specialty insurance subsidiaries. We own a minority interest in Ceridian Corporation ("Ceridian"), a leading provider of global human resources, payroll, benefits and payment solutions. We also own a minority interest in Remy International, Inc. (“Remy”), 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.
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, 2011, 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 and from FIS. We have provided certain administrative corporate support services such as corporate aviation and other administrative support services to FIS.
•
Real estate management and lease agreements. Included in our revenues are amounts received related to leases or subleases of certain office space and furnishings 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, 2011
 
Three months ended
March 31, 2010
 
(In millions)
Rental revenue
$
—
 
 
$
0.4
 
Corporate services and cost-sharing (expense) revenue
(1.1
)
 
0.7
 
Data processing expense
(9.4
)
 
(11.6
)
Net expense
$
(10.5
)
 
$
(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 $7.1 million as of March 31, 2011 and $8.3 million as of December 31, 2010.
On October 1, 2009, pursuant to an investment agreement between us and FIS dated March 31, 2009 (the “Investment Agreement”), we invested a total of $50.0 million in FIS common stock in connection with a merger between FIS and Metavante Technologies, Inc. Under the terms of the Investment Agreement, we purchased 3,215,434 shares of FIS’s common stock at a price of $15.55 per share. Additionally, we received a transaction fee of $1.5 million from FIS. During the third quarter of 2010, we sold 1,611,574 shares as part of a tender offer by FIS at $29.00 per share for a realized gain of $21.7 million. The fair value of our remaining investment was $52.4 million and $43.9 million as of March 31, 2011 and December 31, 2010, respectively, and is recorded in equity securities. Changes in fair value of the FIS stock are recorded as other comprehensive earnings.
Earnings per Share
Earnings Per Share [Text Block]
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,
 
2011
 
2010
 
(In millions, except per share amounts)
Basic and diluted net earnings attributable to FNF common shareholders
$
42.5
 
 
$
16.5
 
 
 
 
 
Weighted average shares outstanding during the period, basic basis
220.7
 
 
227.5
 
Plus: Common stock equivalent shares assumed from conversion of options
2.9
 
 
2.8
 
Weighted average shares outstanding during the period, diluted basis
223.6
 
 
230.3
 
 
 
 
 
Basic earnings per share attributable to FNF common shareholders
$
0.19
 
 
$
0.07
 
Diluted earnings per share attributable to FNF common shareholders
$
0.19
 
 
$
0.07
 
     Options to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. Antidilutive options totaled 8.7 million shares and 14.1 million shares for the three months ended March 31, 2011 and 2010.
Fair Value Measurements
Fair Value Disclosures [Text Block]
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, 2011 and December 31, 2010, respectively:
 
March 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
U.S. government and agencies
$
—
 
 
$
228.9
 
 
$
—
 
 
$
228.9
 
State and political subdivisions
—
 
 
1,394.5
 
 
—
 
 
1,394.5
 
Corporate debt securities
—
 
 
1,543.7
 
 
—
 
 
1,543.7
 
Mortgage-backed/asset-backed securities
—
 
 
233.3
 
 
—
 
 
233.3
 
Foreign government bonds
—
 
 
82.0
 
 
—
 
 
82.0
 
Preferred stock available for sale
12.8
 
 
37.4
 
 
—
 
 
50.2
 
Equity securities available for sale
68.3
 
 
—
 
 
—
 
 
68.3
 
Other long-term investments
—
 
 
—
 
 
93.2
 
 
93.2
 
Total
$
81.1
 
 
$
3,519.8
 
 
$
93.2
 
 
$
3,694.1
 
 
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
U.S. government and agencies
$
—
 
 
$
313.5
 
 
$
—
 
 
$
313.5
 
State and political subdivisions
—
 
 
1,374.0
 
 
—
 
 
1,374.0
 
Corporate debt securities
—
 
 
1,532.7
 
 
—
 
 
1,532.7
 
Mortgage-backed/asset-backed securities
—
 
 
184.0
 
 
—
 
 
184.0
 
Foreign government bonds and other fixed maturity securities
—
 
 
80.6
 
 
9.5
 
 
90.1
 
Equity securities available for sale
75.2
 
 
—
 
 
—
 
 
75.2
 
Other long-term investments
—
 
 
—
 
 
90.1
 
 
90.1
 
Total
$
75.2
 
 
$
3,484.8
 
 
$
99.6
 
 
$
3,659.6
 
     Our Level 2 fair value measures are provided by third-party pricing services. We utilize one firm for our municipal bond portfolio and another for our other Level 2 investments. These pricing services are leading global providers of financial market data, analytics and related services to financial institutions. We only 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. 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: These securities are valued based on relevant market data for similar assets in active markets adjusted by risks inherent to the security such as credit, refunding, and liquidity. Dividends accrued are also considered in the valuation of certain preferred stocks.
     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 $75.0 million and fair value of $93.2 million at March 31, 2011 and a par value of $75.0 million and fair value of $90.1 million at December 31, 2010. The structured notes are held for general investment purposes and represent approximately two 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 represents exit prices obtained from a broker-dealer. These exit prices are the product of a proprietary valuation model utilized by the trading desk of the broker-dealer and contain assumptions relating to volatility, the level of interest rates, and the value of the underlying indexes, exchange-traded funds, and foreign currencies. We reviewed 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, 2011.
     The following table presents the changes in our investments that are classified as Level 3 for the period ended March 31, 2011 (in millions):
Balance, December 31, 2010
$
99.6
 
Proceeds received upon call/sales
(8.7
)
Realized gains
6.8
 
Net change included in other comprehensive earnings
(4.5
)
Balance, March 31, 2011
$
93.2
 
     The carrying amounts of 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.
Investments
Investment [Text Block]
Investments
     The carrying amounts and fair values of our securities available for sale at March 31, 2011 and December 31, 2010 are as follows:
 
March 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
$
228.9
 
 
$
221.3
 
 
$
10.0
 
 
$
(2.4
)
 
$
228.9
 
States and political subdivisions
1,394.5
 
 
1,368.6
 
 
33.6
 
 
(7.7
)
 
1,394.5
 
Corporate debt securities
1,543.7
 
 
1,494.1
 
 
57.4
 
 
(7.8
)
 
1,543.7
 
Mortgage-backed/asset-backed securities
233.3
 
 
227.0
 
 
6.3
 
 
—
 
 
233.3
 
Other
82.0
 
 
81.0
 
 
1.7
 
 
(0.7
)
 
82.0
 
Preferred stock available for sale
50.2
 
 
50.6
 
 
0.1
 
 
(0.5
)
 
50.2
 
Equity securities available for sale
68.3
 
 
36.6
 
 
31.7
 
 
—
 
 
68.3
 
Total
$
3,600.9
 
 
$
3,479.2
 
 
$
140.8
 
 
$
(19.1
)
 
$
3,600.9
 
 
December 31, 2010
 
Carrying
 
Cost
 
Unrealized
 
Unrealized
 
Fair
 
Value
 
Basis
 
Gains
 
Losses
 
Value
 
(In millions)
Fixed maturity securities available for sale:
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
313.5
 
 
$
303.8
 
 
$
11.8
 
 
$
(2.1
)
 
$
313.5
 
States and political subdivisions
1,374.0
 
 
1,343.3
 
 
37.9
 
 
(7.2
)
 
1,374.0
 
Corporate debt securities
1,532.7
 
 
1,469.6
 
 
69.4
 
 
(6.3
)
 
1,532.7
 
Mortgage-backed/asset-backed securities
184.0
 
 
176.8
 
 
7.2
 
 
—
 
 
184.0
 
Other
90.1
 
 
83.7
 
 
6.8
 
 
(0.4
)
 
90.1
 
Equity securities available for sale
75.2
 
 
51.1
 
 
24.4
 
 
(0.3
)
 
75.2
 
Total
$
3,569.5
 
 
$
3,428.3
 
 
$
157.5
 
 
$
(16.3
)
 
$
3,569.5
 
The cost basis on 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, 2011:
 
 
March 31, 2011
 
 
Amortized
 
% of
 
Fair
 
% of
Maturity
 
Cost
 
Total
 
Value
 
Total
 
 
(Dollars in millions)
One year or less
 
$
253.1
 
 
7.5
%
 
$
256.6
 
 
7.4
%
After one year through five years
 
1,383.9
 
 
40.8
 
 
1,444.2
 
 
41.5
 
After five years through ten years
 
1,404.8
 
 
41.4
 
 
1,422.7
 
 
40.8
 
After ten years
 
123.2
 
 
3.6
 
 
125.6
 
 
3.6
 
Mortgage-backed/asset-backed securities
 
227.0
 
 
6.7
 
 
233.3
 
 
6.7
 
Total
 
$
3,392.0
 
 
100.0
%
 
$
3,482.4
 
 
100.0
%
Subject to call
 
$
629.7
 
 
18.6
%
 
$
639.8
 
 
18.4
%
     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.
     The balance of equity securities is primarily composed of an investment in FIS stock. The fair value of our investment in the FIS stock was $52.4 million and $43.9 million as of March 31, 2011 and December 31, 2010, respectively.
      Included in our other long-term investments are 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 $93.2 million and $90.1 million as of March 31, 2011 and December 31, 2010, respectively, and we recorded a net gain (loss) of $3.1 million and $(0.8) million related to the structured notes in the three-month periods ended March 31, 2011 and 2010, 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, 2011 and December 31, 2010, were as follows (in millions):
March 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
U.S. government and agencies
$
50.0
 
 
$
(2.3
)
 
$
0.4
 
 
$
(0.1
)
 
$
50.4
 
 
$
(2.4
)
States and political subdivisions
298.6
 
 
(7.7
)
 
—
 
 
—
 
 
298.6
 
 
(7.7
)
Corporate debt securities
273.4
 
 
(7.8
)
 
—
 
 
—
 
 
273.4
 
 
(7.8
)
Preferred stock
47.0
 
 
(0.5
)
 
—
 
 
—
 
 
47.0
 
 
(0.5
)
Other
30.1
 
 
(0.7
)
 
—
 
 
—
 
 
30.1
 
 
(0.7
)
Total temporarily impaired securities
$
699.1
 
 
$
(19.0
)
 
$
0.4
 
 
$
(0.1
)
 
$
699.5
 
 
$
(19.1
)
December 31, 2010
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
U.S. government and agencies
$
54.3
 
 
$
(2.0
)
 
$
0.4
 
 
$
(0.1
)
 
$
54.7
 
 
$
(2.1
)
States and political subdivisions
255.2
 
 
(7.2
)
 
—
 
 
—
 
 
255.2
 
 
(7.2
)
Corporate debt securities
251.4
 
 
(6.3
)
 
—
 
 
—
 
 
251.4
 
 
(6.3
)
Equity securities
—
 
 
—
 
 
1.8
 
 
(0.3
)
 
1.8
 
 
(0.3
)
Other
10.8
 
 
(0.4
)
 
—
 
 
—
 
 
10.8
 
 
(0.4
)
Total temporarily impaired securities
$
571.7
 
 
$
(15.9
)
 
$
2.2
 
 
$
(0.4
)
 
$
573.9
 
 
$
(16.3
)
     During the three-month periods ended March 31, 2011 and 2010 we incurred no impairment charges relating to investments that were determined to be 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, 2011 and December 31, 2010, we held no investments for which an other-than-temporary impairment had been previously recognized. It is possible that future events may lead us to recognize potential 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 for the three-month periods ending March 31, 2011 and 2010, respectively:
 
 
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
 
$
16.3
 
 
$
(0.2
)
 
$
16.1
 
 
$
390.8
 
Preferred stock available for sale
 
—
 
 
—
 
 
—
 
 
5.0
 
Equity securities available for sale
 
1.9
 
 
—
 
 
1.9
 
 
16.3
 
Other long-term investments
 
3.1
 
 
—
 
 
3.1
 
 
—
 
Other assets
 
—
 
 
(1.2
)
 
(1.2
)
 
1.7
 
Total
 
$
21.3
 
 
$
(1.4
)
 
$
19.9
 
 
$
413.8
 
 
 
Three months ended
March 31, 2010
 
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains (Losses)
 
Gross Proceeds from Sale/Maturity
 
 
(Dollars in millions)
Fixed maturity securities available for sale
 
$
34.0
 
 
$
(1.7
)
 
$
32.3
 
 
$
349.7
 
Equity securities available for sale
 
0.5
 
 
—
 
 
0.5
 
 
3.4
 
Other long-term investments
 
—
 
 
(0.8
)
 
(0.8
)
 
—
 
Other assets
 
—
 
 
(3.4
)
 
(3.4
)
 
9.9
 
Total
 
$
34.5
 
 
$
(5.9
)
 
$
28.6
 
 
$
363.0
 
Investments in unconsolidated affiliates are recorded using the equity method of accounting. As of March 31, 2011 and December 31, 2010, investments in unconsolidated affiliates consisted of (in millions):
 
Current Ownership
 
March 31, 2011
 
December 31, 2010
Ceridian
33
%
 
$
372.5
 
 
$
367.2
 
Remy
47
%
 
129.2
 
 
108.7
 
Other
Various
 
 
51.6
 
 
51.8
 
Total
 
 
$
553.3
 
 
$
527.7
 
     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 an increase of our ownership interest from 46% to 47%.
In addition to our equity method investment in Remy, we held $29.9 million in par value of a Remy term loan as of March 31, 2011 and December 31, 2010. The fair value of the term loan was $30.1 million and $29.7 million as of March 31, 2011 and December 31, 2010, respectively, and is included in our fixed maturity securities available for sale.
Also, included in our fixed maturity securities available for sale at December 31, 2010 were $54.8 million of Remy’s bonds. On December 17, 2010, as part of a credit refinancing, Remy called these bonds at 109 percent of par, payable January 14, 2011. We received the proceeds and recognized a gain of $8.5 million during the three-month period ended March 31, 2011.
      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, 2011, includes our equity in Ceridian’s earnings for the period from October 1, 2010 through December 31, 2010, and our net earnings for the three-month period ended March 31, 2010, includes our equity in Ceridian’s earnings for the period from October 1, 2009 through December 31, 2009. Our net earnings for the three-month period ended March 31, 2011, includes our equity in Remy's earnings for the period from December 1, 2010 through February 28, 2011, and our net earnings for the three-month period ended March 31, 2010, includes our equity in Remy's earnings for the period from December 1, 2009 through February 28, 2010.
    During the three-month periods ended March 31, 2011 and 2010, we recorded an aggregate of $9.9 million and $8.4 million, respectively, in equity in losses of Ceridian and Remy and Sedgwick, our former minority-owned affiliate that provides claims management services to large corporate and public sector entities which was sold in May of 2010. Equity in earnings (loss) of other unconsolidated affiliates was $1.3 million and $(2.3) million for the three-month periods ended March 31, 2011 and 2010.
 
 
 
 
 
 
Summarized financial information for Ceridian for the relevant time periods included in our condensed consolidated financial statements is presented below.
 
December 31, 2010
 
September 30, 2010
 
(In millions)
 
(In millions)
Total current assets
$
1,033.6
 
 
$
1,080.3
 
Goodwill and other intangible assets, net
4,694.1
 
 
4,700.6
 
Other assets
4,267.8
 
 
4,859.2
 
Total assets
$
9,995.5
 
 
$
10,640.1
 
Current liabilities
$
750.0
 
 
$
799.5
 
Long-term obligations, less current portion
3,482.2
 
 
3,492.5
 
Other long-term liabilities
4,622.0
 
 
5,222.2
 
Total liabilities
8,854.2
 
 
9,514.2
 
Equity
1,141.3
 
 
1,125.9
 
Total liabilities and equity
$
9,995.5
 
 
$
10,640.1
 
 
 
Three Months Ended December 31, 2010
 
Three Months Ended December 31, 2009
 
(In millions)
 
 
Total revenues
$
393.8
 
 
$
365.5
 
Loss before income taxes
(4.8
)
 
(32.2
)
Net earnings (loss)
0.1
 
 
(22.5
)
Legal Proceedings
Commitments and Contingencies Disclosure [Text Block]
Legal Proceedings
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 significant 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 the Company's financial condition, results of operations or cash flows.
 
On November 24, 2010, plaintiffs filed a 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 Company. 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. Plaintiffs have 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. We have employed counsel and intend to vigorously defend the action. The case did not include a statement as to the amount of damages demanded, but instead included a demand for damages in an amount to be proved at trial. Due to the early stage of this case, it is not possible to make meaningful estimates, if any, of the amount or range of loss that could result from this case at this time. The case was transferred on our motion to a Multi District Litigation proceeding in South Carolina and a status conference was held on April 22, 2011.  This case is currently stayed until a decision is made on motions pending in a similar class action against an unrelated party.
 
Various governmental entities are studying the title insurance product, market, pricing, business practices, and potential regulatory and legislative changes, which may materially affect our business and operations. We receive inquiries and requests for information from state insurance departments, attorneys general and other regulatory agencies from time to time about various matters relating to our business. Sometimes these take the form of civil investigative subpoenas or market conduct examinations. We attempt to cooperate with all such inquiries. From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities which require us to pay money or take other actions.
Dividends
Dividend [Text Block]
Dividends
    On April 21, 2011, our Board of Directors formally declared a $0.12 per share cash dividend that is payable on June 30, 2011 to stockholders of record as of June 16, 2011.
Segment Information
Segment Reporting Disclosure [Text Block]
Segment Information
     Summarized financial information concerning our reportable segments is shown in the following tables.
     As of and for the three months ended March 31, 2011:
 
Fidelity National
 
Specialty
 
Corporate
 
 
 
Title Group
 
Insurance
 
and Other
 
Total
 
(In millions)
Title premiums
$
746.2
 
 
$
—
 
 
$
—
 
 
$
746.2
 
Other revenues
304.7
 
 
92.8
 
 
8.5
 
 
406.0
 
Revenues from external customers
1,050.9
 
 
92.8
 
 
8.5
 
 
1,152.2
 
Interest and investment income, including realized gains and losses
51.6
 
 
3.3
 
 
1.1
 
 
56.0
 
Total revenues
1,102.5
 
 
96.1
 
 
9.6
 
 
1,208.2
 
Depreciation and amortization
18.7
 
 
1.1
 
 
0.7
 
 
20.5
 
Interest expense
0.8
 
 
—
 
 
13.5
 
 
14.3
 
Earnings (loss), before income taxes and equity in earnings (loss) of unconsolidated affiliates
102.7
 
 
8.9
 
 
(29.3
)
 
82.3
 
Income tax expense (benefit)
37.1
 
 
2.6
 
 
(10.1
)
 
29.6
 
Earnings (loss), before equity in earnings (loss) of unconsolidated affiliates
65.6
 
 
6.3
 
 
(19.2
)
 
52.7
 
Equity in earnings (loss) of unconsolidated affiliates
1.0
 
 
—
 
 
(9.6
)
 
(8.6
)
Net earnings (loss)
$
66.6
 
 
$
6.3
 
 
$
(28.8
)
 
$
44.1
 
Assets
$
6,531.8
 
 
$
456.0
 
 
$
813.0
 
 
$
7,800.8
 
Goodwill
1,422.3
 
 
28.7
 
 
20.0
 
 
1,471.0
 
     
As of and for the three months ended March 31, 2010:
 
Fidelity National
 
Specialty
 
Corporate
 
 
 
Title Group
 
Insurance
 
and Other
 
Total
 
(In millions)
Title premiums
$
765.2
 
 
$
—
 
 
$
—
 
 
$
765.2
 
Other revenues
273.4
 
 
86.3
 
 
21.1
 
 
380.8
 
Revenues from external customers
1,038.6
 
 
86.3
 
 
21.1
 
 
1,146.0
 
Interest and investment income, including realized gains and losses
37.1
 
 
3.0
 
 
27.3
 
 
67.4
 
Total revenues
1,075.7
 
 
89.3
 
 
48.4
 
 
1,213.4
 
Depreciation and amortization
21.6
 
 
1.1
 
 
0.3
 
 
23.0
 
Interest expense
0.1
 
 
—
 
 
7.0
 
 
7.1
 
Earnings before income taxes and equity in loss of unconsolidated affiliates
24.0
 
 
6.2
 
 
12.7
 
 
42.9
 
Income tax expense
7.4
 
 
2.1
 
 
3.8
 
 
13.3
 
Earnings before equity in loss of unconsolidated affiliates
16.6
 
 
4.1
 
 
8.9
 
 
29.6
 
Equity in loss of unconsolidated affiliates
(1.4
)
 
—
 
 
(9.3
)
 
(10.7
)
Net earnings (loss)
$
15.2
 
 
$
4.1
 
 
$
(0.4
)
 
$
18.9
 
Assets
$
6,245.7
 
 
$
429.2
 
 
$
1,118.5
 
 
$
7,793.4
 
Goodwill
1,393.1
 
 
28.7
 
 
20.5
 
 
1,442.3
 
     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.
     Specialty Insurance
     This segment consists of certain subsidiaries that issue flood, home warranty, homeowners’, automobile, and other personal lines insurance policies.
     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 method investments, including Ceridian and Remy and our former investment in Sedgwick in the three months ended March 31, 2010.
Regulation
Regulatoryrestrictions [Text Block]
Regulation
 
Our insurance subsidiaries are subject to regulations that restrict their ability to pay dividends or make other distributions of cash or property to their immediate parent company without prior approval from the department of insurance of their respective states of domicile. As of December 31, 2010, $2,825.9 million of our net assets are restricted from dividend payments without prior approval from the Departments of Insurance. The combined statutory capital and surplus of our title insurers was $900.7 million as of December 31, 2010. As of March 31, 2011, our title insurers can pay or make distributions to us of approximately $70.1 million, without prior approval.