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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended December 31, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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16-1725106
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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601 Riverside Avenue
Jacksonville, Florida 32204
(Address of principal executive offices, including zip code)
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(904) 854-8100
(Registrant’s telephone number,
including area code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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FNF Common Stock, $0.0001 par value
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Page
Number
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Item 1.
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Business
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•
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Title.
This segment consists of the operations of our title insurance underwriters and related businesses which provide title insurance and escrow and other title-related services including trust activities, trustee sales guarantees, and home warranty products. This segment also includes our transaction services business, which includes other title-related services used in the production and management of mortgage loans, including mortgage loans that experience default.
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•
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Corporate and Other.
This
segment consists of the operations of the parent holding company, our real estate technology subsidiaries, other smaller, non-title businesses and certain unallocated corporate overhead expenses and eliminations of revenues and expenses between it and our Title segment.
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•
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Autonomy and entrepreneurship;
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•
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Bias for action;
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•
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Customer-oriented and motivated;
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•
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Minimize bureaucracy;
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•
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Employee ownership; and
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•
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Highest standard of conduct.
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•
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Continue to operate multiple title brands independently
. We believe that in order to maintain and strengthen our title insurance customer base, we must operate our strongest brands in a given marketplace independently of each other. Our national and regional brands include Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Alamo Title, and National Title of New York. In our largest markets, we operate multiple brands. This approach allows us to continue to attract customers who identify with a particular brand and allows us to utilize a broader base of local agents and local operations than we would have with a single consolidated brand.
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•
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Consistently deliver superior customer service.
We believe customer service and consistent product delivery are the most important factors in attracting and retaining customers. Our ability to provide superior customer service and consistent product delivery requires continued focus on providing high quality service and products at competitive prices. Our goal is to continue to improve the experience of our customers, in all aspects of our business.
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•
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Manage our operations successfully through business cycles
. We operate in a cyclical industry and our ability to diversify our revenue base within our title insurance business and manage the duration of our investments may allow us to better operate in this cyclical business. Maintaining a broad geographic revenue base, utilizing both direct and independent agency operations and pursuing both residential and commercial title insurance business help diversify our title insurance revenues. We continue to monitor, evaluate and execute upon the consolidation of administrative functions, legal entity structure, and office consolidation, as necessary, to respond to the continually changing marketplace. We maintain shorter durations on our investment portfolio to mitigate our interest rate risk. A more detailed discussion of our investment strategies is included in “Investment Policies and Investment Portfolio.”
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•
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Continue to improve our products and technology.
As a national provider of real estate transaction products and services, we participate in an industry that is subject to significant change, frequent new product and service introductions and evolving industry standards. We believe that our future success will depend in part on our ability to anticipate industry changes and offer products and services that meet evolving industry standards. In connection with our service offerings, we are continuing to deploy new information system technologies to our direct and agency operations. We expect to improve the process of ordering title and escrow services and improve the delivery of our products to our customers.
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Maintain values supporting our strategy.
We believe that our continued focus on and support of our long-established corporate culture will reinforce and support our business strategy. Our goal is to foster and support a corporate culture where our employees and agents seek to operate independently and maintain profitability at the local level while forming close customer relationships by meeting customer needs and improving customer service. Utilizing a relatively flat managerial structure and providing our employees with a sense of individual ownership support this goal.
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•
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Effectively manage costs based on economic factors.
We believe that our focus on our operating margins is essential to our continued success in the title insurance business. Regardless of the business cycle in which we may be operating, we seek to continue to evaluate and manage our cost structure and make appropriate adjustments where economic conditions dictate. This continual focus on our cost structure helps us to better maintain our operating margins.
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The customer, typically a real estate salesperson or broker, escrow agent, attorney or lender, places an order for a title policy.
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Company personnel note the specifics of the title policy order and place a request with the title company or its agents for a preliminary report or commitment.
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After the relevant historical data on the property is compiled, the title officer prepares a preliminary report that documents the current status of title to the property, any exclusions, exceptions and/or limitations that the title company might include in the policy, and specific issues that need to be addressed and resolved by the parties to the transaction before the title policy will be issued.
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•
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The preliminary report is circulated to all the parties for satisfaction of any specific issues.
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After the specific issues identified in the preliminary report are satisfied, an escrow agent closes the transaction in accordance with the instructions of the parties and the title company’s conditions.
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Once the transaction is closed and all monies have been released, the title company issues a title insurance policy.
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higher margins because we retain the entire premium from each transaction instead of paying a commission to an independent agent;
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continuity of service levels to a broad range of customers; and
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additional sources of income through escrow and closing services.
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Year Ended December 31,
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2018
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2017
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2016
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Amount
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%
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Amount
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%
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Amount
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(Dollars in millions)
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Direct
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$
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2,221
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45.2
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%
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$
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2,170
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44.3
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%
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$
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2,097
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44.4
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%
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Agency
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2,690
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54.8
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2,723
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55.7
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2,626
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55.6
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Total title insurance premiums
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$
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4,911
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100.0
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%
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$
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4,893
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100.0
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%
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$
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4,723
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100.0
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%
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•
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10% of the insurer’s statutory surplus as of the immediately prior year end; or
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•
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the statutory net income of the insurer during the prior calendar year.
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S&P
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Moody’s
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FNF family of companies
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A
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A2
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An S&P "A" rating is the third highest rating of 12 ratings for S&P. According to S&P, an insurer rated “A” has strong capacity to meet its financial commitments, but is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than insurers with "AAA" or "AA" ratings.
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A Moody's "A2" rating is the third highest rating of 9 ratings for Moody's. Moody's states that companies rated “A2” are judged to be upper-medium grade and are subject to low credit risk.
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Alamo Title Insurance
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A'
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Chicago Title Insurance Company
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A''
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Commonwealth Land Title Insurance Company
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A'
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Fidelity National Title Insurance Company
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A'
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National Title Insurance of New York
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A'
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December 31,
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2018
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2017
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Amortized
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% of
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Fair
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% of
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Amortized
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% of
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Fair
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% of
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Rating(1)
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Cost
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Total
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Value
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Total
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Cost
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Total
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Value
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Total
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(Dollars in millions)
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Aaa/AAA
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$
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436
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18.1
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%
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$
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430
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17.9
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%
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$
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398
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18.8
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%
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$
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396
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18.5
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%
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Aa/AA
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260
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10.8
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260
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10.8
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335
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15.9
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337
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15.8
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A
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749
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31.0
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749
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31.3
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575
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27.3
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578
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27.2
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Baa/BBB
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633
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26.3
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630
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26.3
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510
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24.1
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519
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24.3
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Ba/BB/B
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109
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4.5
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109
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4.5
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155
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7.3
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159
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7.4
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Lower
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24
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1.0
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22
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0.9
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45
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2.1
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49
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2.3
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Other
(2)
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200
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8.3
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200
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8.3
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95
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4.5
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97
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4.5
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$
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2,411
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100.0
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%
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$
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2,400
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100.0
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%
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$
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2,113
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100.0
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%
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$
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2,135
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100.0
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%
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(1)
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Ratings as assigned by Moody’s Investors Service or Standard & Poor’s Ratings Group if a Moody's rating is unavailable.
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(2)
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This category is composed of unrated securities.
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December 31, 2018
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||||||||||||
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Amortized
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% of
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Fair
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% of
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||||||
Maturity
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Cost
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Total
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Value
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Total
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||||||
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(Dollars in millions)
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One year or less
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$
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347
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17.3
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%
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$
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344
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17.2
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%
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After one year through five years
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1,336
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66.6
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1,326
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66.3
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After five years through ten years
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226
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11.2
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227
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11.4
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After ten years
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41
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2.0
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41
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2.1
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Mortgage-backed/asset-backed securities
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59
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2.9
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60
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3.0
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$
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2,009
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100.0
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%
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$
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1,998
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100.0
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%
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December 31,
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||||||||||
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2018
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2017
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2016
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||||||
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(Dollars in millions)
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||||||||||
Net investment income (1)
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$
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169
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$
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139
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$
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141
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Average invested assets
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$
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3,291
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$
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3,296
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$
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3,936
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Effective return on average invested assets
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5.1
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%
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4.2
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%
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3.6
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%
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(1)
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Net investment income as reported in our Consolidated Statements of Earnings has been adjusted in the presentation above to provide the tax equivalent yield on tax exempt investments and to exclude interest earned on cash and cash equivalents. Net investment income includes fees earned by holding customer funds in escrow (off-balance sheet) during facilitation of tax-deferred property exchanges. See
Note D
Investments
to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for a detail of our interest income.
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Year Ended December 31,
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2018
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2017
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2016
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|||||||||||||||
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Amount
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%
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|
Amount
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%
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Amount
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%
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|||||||||
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(Dollars in millions)
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|||||||||||||||||||
Texas
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$
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707
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14.4
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%
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$
|
693
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14.2
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%
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$
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670
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14.2
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%
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California
|
681
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13.9
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708
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14.5
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690
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14.6
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Florida
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432
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8.8
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392
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8.0
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364
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7.7
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New York
|
310
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6.3
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311
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6.3
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|
336
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7.1
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Illinois
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271
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5.5
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283
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5.8
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267
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5.7
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All others
|
2,510
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51.1
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2,506
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51.2
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2,396
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50.7
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Totals
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$
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4,911
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100.0
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%
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$
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4,893
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|
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100.0
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%
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$
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4,723
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100.0
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%
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•
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changes in general economic, business, and political conditions, including changes in the financial markets;
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•
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the severity of our title insurance claims;
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•
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downgrade of our credit rating by rating agencies;
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•
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adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding, increased mortgage defaults, or a weak U.S. economy;
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•
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compliance with extensive government regulation of our operating subsidiaries and adverse changes in applicable laws or regulations or in their application by regulators;
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•
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inability to obtain without unanticipated conditions or significant delay, if at all, the necessary regulatory approvals to consummate the Stewart Merger;
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•
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inability to timely satisfy or obtain waiver any of the closing conditions to the proposed Stewart Merger;
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•
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failure to successfully integrate Stewart’s business with that of FNF, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the Stewart Merger will not be realized;
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•
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regulatory investigations of the title insurance industry;
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•
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loss of key personnel that could negatively affect our financial results and impair our operating abilities;
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•
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our business concentration in the States of California and Texas are the source of approximately
13.9%
and
14.4%
, respectively, of our title insurance premiums;
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•
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our potential inability to find suitable acquisition candidates, as well as the risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties integrating acquisitions;
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•
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our dependence on distributions from our title insurance underwriters as our main source of cash flow;
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•
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competition from other title insurance companies; and
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•
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other risks detailed in "Risk Factors" below and elsewhere in this document and in our other filings with the SEC.
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•
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when mortgage interest rates are high or increasing;
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•
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when the mortgage funding supply is limited;
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•
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when housing inventory is limited or home prices are high or increasing; and
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•
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when the United States economy is weak, including high unemployment levels.
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•
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licensing requirements;
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•
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trade and marketing practices;
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•
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accounting and financing practices;
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•
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disclosure requirements on key terms of mortgage loans;
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•
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capital and surplus requirements;
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•
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the amount of dividends and other payments made by insurance subsidiaries;
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•
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investment practices;
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•
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rate schedules;
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•
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deposits of securities for the benefit of policyholders;
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•
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establishing reserves; and
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•
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regulation of reinsurance.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
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12/31/2013
|
12/31/2014
|
12/31/2015
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12/31/2016
|
12/31/2017
|
12/31/2018
|
||||||
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||||||
Fidelity National Financial, Inc.
|
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100.00
|
|
132.23
|
|
136.09
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|
136.78
|
|
224.38
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|
185.68
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|
S&P 500
|
|
100.00
|
|
113.69
|
|
115.26
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|
129.05
|
|
157.22
|
|
150.33
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|
Peer Group
|
|
100.00
|
|
130.88
|
|
134.70
|
|
138.24
|
|
216.74
|
|
182.69
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
Cash Dividends per Share
|
||||||
First quarter
|
$
|
0.30
|
|
|
$
|
0.25
|
|
Second quarter
|
0.30
|
|
|
0.25
|
|
||
Third quarter
|
0.30
|
|
|
0.25
|
|
||
Fourth quarter
|
0.30
|
|
|
0.27
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
|
|||||
10/1/2018 - 10/31/2018
|
|
60,000
|
|
|
32.64
|
|
|
60,000
|
|
|
24,940,000
|
|
|
11/1/2018 - 11/30/2018
|
|
315,000
|
|
|
32.97
|
|
|
315,000
|
|
|
24,625,000
|
|
|
12/1/2018 - 12/31/2018
|
|
285,000
|
|
|
31.55
|
|
|
285,000
|
|
|
24,340,000
|
|
|
Total
|
|
660,000
|
|
|
$
|
32.33
|
|
|
660,000
|
|
|
|
(1)
|
On July 17, 2018, our Board of Directors approved a three-year stock repurchase program effective August 1, 2018. Under the stock repurchase program, we may repurchase up to 25 million shares of our FNF common stock through July 31, 2021.
|
(2)
|
As of the last day of the applicable month.
|
Item 6.
|
Selected Financial Data
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(Dollars in millions, except share data)
|
||||||||||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
$
|
7,594
|
|
|
$
|
7,663
|
|
|
$
|
7,257
|
|
|
$
|
6,664
|
|
|
$
|
5,647
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Personnel costs
|
2,538
|
|
|
2,460
|
|
|
2,275
|
|
|
2,137
|
|
|
1,921
|
|
|||||
Agent commissions
|
2,059
|
|
|
2,089
|
|
|
1,998
|
|
|
1,731
|
|
|
1,471
|
|
|||||
Other operating expenses
|
1,801
|
|
|
1,781
|
|
|
1,648
|
|
|
1,557
|
|
|
1,367
|
|
|||||
Depreciation and amortization
|
182
|
|
|
183
|
|
|
160
|
|
|
150
|
|
|
148
|
|
|||||
Provision for title claim losses
|
221
|
|
|
238
|
|
|
157
|
|
|
246
|
|
|
228
|
|
|||||
Interest expense
|
43
|
|
|
48
|
|
|
64
|
|
|
73
|
|
|
91
|
|
|||||
|
6,844
|
|
|
6,799
|
|
|
6,302
|
|
|
5,894
|
|
|
5,226
|
|
|||||
Earnings before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest
|
750
|
|
|
864
|
|
|
955
|
|
|
770
|
|
|
421
|
|
|||||
Income tax expense
|
120
|
|
|
235
|
|
|
347
|
|
|
274
|
|
|
175
|
|
|||||
Earnings before equity in earnings of unconsolidated affiliates
|
630
|
|
|
629
|
|
|
608
|
|
|
496
|
|
|
246
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
5
|
|
|
10
|
|
|
14
|
|
|
5
|
|
|
3
|
|
|||||
Earnings from continuing operations, net of tax
|
635
|
|
|
639
|
|
|
622
|
|
|
501
|
|
|
249
|
|
|||||
Earnings from discontinued operations, net of tax
|
—
|
|
|
155
|
|
|
70
|
|
|
60
|
|
|
270
|
|
|||||
Net earnings
|
635
|
|
|
794
|
|
|
692
|
|
|
561
|
|
|
519
|
|
|||||
Less: net earnings (loss) attributable to noncontrolling interests
|
7
|
|
|
23
|
|
|
42
|
|
|
34
|
|
|
(64
|
)
|
|||||
Net earnings attributable to FNF common shareholders
|
$
|
628
|
|
|
$
|
771
|
|
|
$
|
650
|
|
|
$
|
527
|
|
|
$
|
583
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(Dollars in millions, except share data)
|
||||||||||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic net earnings per share attributable to Old FNF common shareholders
|
|
|
|
|
|
|
|
|
$
|
0.33
|
|
||||||||
Basic net earnings per share attributable to FNF Group common shareholders
|
$
|
2.30
|
|
|
$
|
2.44
|
|
|
$
|
2.40
|
|
|
$
|
1.95
|
|
|
$
|
0.77
|
|
Basic net earnings (loss) per share attributable to FNFV Group common shareholders
|
|
|
|
$
|
1.68
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
3.04
|
|
|
Weighted average shares outstanding Old FNF, basic basis (1)
|
|
|
|
|
|
|
|
|
138
|
|
|||||||||
Weighted average shares outstanding FNF Group, basic basis (1)
|
273
|
|
|
271
|
|
|
272
|
|
|
277
|
|
|
138
|
|
|||||
Weighted average shares outstanding FNFV Group, basic basis (1)
|
|
|
65
|
|
|
67
|
|
|
79
|
|
|
46
|
|
||||||
Diluted net earnings per share attributable to Old FNF common shareholders
|
|
|
|
|
|
|
|
|
$
|
0.32
|
|
||||||||
Diluted net earnings per share attributable to FNF Group common shareholders
|
$
|
2.26
|
|
|
$
|
2.38
|
|
|
$
|
2.34
|
|
|
$
|
1.89
|
|
|
$
|
0.75
|
|
Diluted net earnings (loss) per share attributable to FNFV Group common shareholders
|
|
|
|
$
|
1.63
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
3.01
|
|
|
Weighted average shares outstanding Old FNF, diluted basis (1)
|
|
|
|
|
|
|
|
|
142
|
|
|||||||||
Weighted average shares outstanding FNF Group, diluted basis (1)
|
278
|
|
|
278
|
|
|
280
|
|
|
286
|
|
|
142
|
|
|||||
Weighted average shares outstanding FNFV Group, diluted basis (1)
|
|
|
67
|
|
|
70
|
|
|
82
|
|
|
47
|
|
||||||
Dividends declared per share of Old FNF common stock
|
|
|
|
|
|
|
|
|
|
$
|
0.36
|
|
|||||||
Dividends declared per share of FNF Group common stock
|
$
|
1.20
|
|
|
$
|
1.02
|
|
|
$
|
0.88
|
|
|
$
|
0.80
|
|
|
$
|
0.37
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments (2)
|
$
|
3,549
|
|
|
$
|
3,371
|
|
|
$
|
3,782
|
|
|
$
|
4,015
|
|
|
$
|
3,694
|
|
Cash and cash equivalents (3)
|
1,257
|
|
|
1,110
|
|
|
1,049
|
|
|
696
|
|
|
604
|
|
|||||
Total assets
|
9,301
|
|
|
9,151
|
|
|
14,521
|
|
|
14,043
|
|
|
13,868
|
|
|||||
Notes payable
|
836
|
|
|
759
|
|
|
987
|
|
|
981
|
|
|
2,086
|
|
|||||
Reserve for title claim losses
|
1,488
|
|
|
1,490
|
|
|
1,487
|
|
|
1,583
|
|
|
1,621
|
|
|||||
Redeemable NCI
|
344
|
|
|
344
|
|
|
344
|
|
|
344
|
|
|
715
|
|
|||||
Equity
|
4,628
|
|
|
4,467
|
|
|
6,898
|
|
|
6,588
|
|
|
6,073
|
|
|||||
Book value per share FNF Group (4)
|
$
|
18.05
|
|
|
$
|
17.53
|
|
|
$
|
22.81
|
|
|
$
|
21.21
|
|
|
$
|
18.87
|
|
Book value per share FNFV Group (4)
|
|
|
|
|
$
|
15.54
|
|
|
$
|
15.05
|
|
|
$
|
16.31
|
|
||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Orders opened by direct title operations (in 000's)
|
1,818
|
|
|
1,942
|
|
|
2,184
|
|
|
2,092
|
|
|
1,914
|
|
|||||
Orders closed by direct title operations (in 000's)
|
1,315
|
|
|
1,428
|
|
|
1,575
|
|
|
1,472
|
|
|
1,319
|
|
|||||
Provision for title insurance claim losses as a percent of title insurance premiums (5)
|
4.5
|
%
|
|
4.9
|
%
|
|
3.3
|
%
|
|
5.7
|
%
|
|
6.2
|
%
|
|||||
Title-related revenue (6):
|
|
|
|
|
|
|
|
|
|
||||||||||
Percentage direct operations
|
64.3
|
%
|
|
63.8
|
%
|
|
63.2
|
%
|
|
65.1
|
%
|
|
64.8
|
%
|
|||||
Percentage agency operations
|
35.7
|
%
|
|
36.2
|
%
|
|
36.8
|
%
|
|
34.9
|
%
|
|
35.2
|
%
|
(1)
|
Weighted average shares outstanding as of December 31, 2014 includes 25,920,078 FNF shares that were issued as part of the acquisition of LPS on January 2, 2014 and 91,711,237 FNFV shares that were issued as part of the recapitalization completed on June 30, 2014.
|
(2)
|
Investments as of
December 31, 2018
,
2017
,
2016
,
2015
, and
2014
, include securities pledged to secured trust deposits of
$426 million
,
$367 million
,
$544 million
,
$608 million
, and
$499 million
, respectively.
|
(3)
|
Cash and cash equivalents as of
December 31, 2018
,
2017
,
2016
,
2015
, and
2014
include cash pledged to secured trust deposits of
$412 million
,
$475 million
,
$331 million
,
$108 million
, and
$136 million
, respectively.
|
(4)
|
Book value per share is calculated as equity at December 31 of each year presented divided by actual shares outstanding at December 31 of each year presented.
|
(5)
|
Includes the effects of the release of $97 million of excess reserves in the quarter ended December 31, 2016.
|
(6)
|
Includes title insurance premiums and escrow, title-related and other fees.
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(Dollars in millions, except per share data)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$
|
1,693
|
|
|
$
|
2,123
|
|
|
$
|
2,085
|
|
|
$
|
1,693
|
|
Earnings from continuing operations before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest
|
127
|
|
|
275
|
|
|
287
|
|
|
61
|
|
||||
Net earnings attributable to FNF common shareholders
|
97
|
|
|
251
|
|
|
236
|
|
|
44
|
|
||||
Basic earnings per share attributable to FNF common shareholders
|
0.36
|
|
|
0.92
|
|
|
0.86
|
|
|
0.16
|
|
||||
Diluted earnings per share attributable to FNF common shareholders
|
0.35
|
|
|
0.90
|
|
|
0.85
|
|
|
0.16
|
|
||||
Dividends paid per share FNF common stock
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
|
0.30
|
|
||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
1,643
|
|
|
$
|
2,059
|
|
|
$
|
1,986
|
|
|
$
|
1,975
|
|
Earnings from continuing operations before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest
|
128
|
|
|
274
|
|
|
242
|
|
|
220
|
|
||||
Net earnings attributable to FNF Group common shareholders
|
71
|
|
|
175
|
|
|
170
|
|
|
246
|
|
||||
Net earnings (loss) attributable to FNFV Group common shareholders
|
1
|
|
|
121
|
|
|
(5
|
)
|
|
(8
|
)
|
||||
Basic earnings per share attributable to FNF Group common shareholders
|
0.26
|
|
|
0.65
|
|
|
0.63
|
|
|
0.90
|
|
||||
Basic earnings (loss) per share attributable to FNFV Group common shareholders
|
0.02
|
|
|
1.83
|
|
|
(0.08
|
)
|
|
(0.12
|
)
|
||||
Diluted earnings per share attributable to FNF Group common shareholders
|
0.25
|
|
|
0.63
|
|
|
0.62
|
|
|
0.88
|
|
||||
Diluted earnings (loss) per share attributable to FNFV Group common shareholders
|
0.01
|
|
|
1.81
|
|
|
(0.08
|
)
|
|
(0.12
|
)
|
||||
Dividends paid per share FNF Group common stock
|
0.25
|
|
|
0.25
|
|
|
0.25
|
|
|
0.27
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
mortgage interest rates;
|
•
|
mortgage funding supply;
|
•
|
housing inventory and home prices; and
|
•
|
strength of the United States economy, including employment levels.
|
|
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
||||||||||
Purchase transactions
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Refinance transactions
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
0.6
|
|
|||||
Total U.S. mortgage originations
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
|
December 31, 2018
|
|
|
%
|
|
December 31, 2017
|
|
%
|
|||||
|
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||
Known claims
|
|
$
|
173
|
|
|
11.6
|
%
|
|
$
|
159
|
|
|
10.7
|
%
|
IBNR
|
|
1,315
|
|
|
88.4
|
|
|
1,331
|
|
|
89.3
|
|
||
Total Reserve for Title Claim Losses
|
|
$
|
1,488
|
|
|
100.0
|
%
|
|
$
|
1,490
|
|
|
100.0
|
%
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Beginning balance
|
$
|
1,490
|
|
|
$
|
1,487
|
|
|
$
|
1,583
|
|
Change in reinsurance recoverable
|
—
|
|
|
(4
|
)
|
|
(8
|
)
|
|||
Claims loss provision related to:
|
|
|
|
|
|
|
|
|
|||
Current year
|
221
|
|
|
219
|
|
|
236
|
|
|||
Prior years (1)
|
—
|
|
|
19
|
|
|
(79
|
)
|
|||
Total title claims loss provision
|
221
|
|
|
238
|
|
|
157
|
|
|||
Claims paid, net of recoupments related to:
|
|
|
|
|
|
|
|
|
|||
Current year
|
(10
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|||
Prior years
|
(213
|
)
|
|
(223
|
)
|
|
(235
|
)
|
|||
Total title claims paid, net of recoupments
|
(223
|
)
|
|
(231
|
)
|
|
(245
|
)
|
|||
Ending balance
|
$
|
1,488
|
|
|
$
|
1,490
|
|
|
$
|
1,487
|
|
Title premiums
|
$
|
4,911
|
|
|
$
|
4,893
|
|
|
$
|
4,723
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Provision for claim losses as a percentage of title insurance premiums:
|
|
|
|
|
|
|
|
|
Current year
|
4.5
|
%
|
|
4.5
|
%
|
|
5.0
|
%
|
Prior years
|
—
|
|
|
0.4
|
|
|
(1.7
|
)
|
Total provision
|
4.5
|
%
|
|
4.9
|
%
|
|
3.3
|
%
|
|
|
Loss Payments
|
|
Claims Management Expenses
|
|
Recoupments
|
|
Net Loss Payments
|
||||||||
Year ended December 31, 2018
|
|
$
|
140
|
|
|
$
|
118
|
|
|
$
|
(35
|
)
|
|
$
|
223
|
|
Year ended December 31, 2017
|
|
145
|
|
|
121
|
|
|
(35
|
)
|
|
231
|
|
||||
Year ended December 31, 2016
|
|
179
|
|
|
121
|
|
|
(55
|
)
|
|
245
|
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
$
|
—
|
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
225
|
|
State and political subdivisions
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||
Corporate debt securities
|
—
|
|
|
1,486
|
|
|
17
|
|
|
1,503
|
|
||||
Foreign government bonds
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||
Mortgage-backed/asset-backed securities
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
Preferred securities
|
16
|
|
|
285
|
|
|
—
|
|
|
301
|
|
||||
Equity securities
|
498
|
|
|
—
|
|
|
—
|
|
|
498
|
|
||||
Other long-term investments
|
—
|
|
|
—
|
|
|
101
|
|
|
101
|
|
||||
Total assets
|
$
|
514
|
|
|
$
|
2,266
|
|
|
$
|
118
|
|
|
$
|
2,898
|
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
State and political subdivisions
|
—
|
|
|
391
|
|
|
—
|
|
|
391
|
|
||||
Corporate debt securities
|
—
|
|
|
1,117
|
|
|
—
|
|
|
1,117
|
|
||||
Foreign government bonds
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Mortgage-backed/asset-backed securities
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
||||
Preferred securities
|
23
|
|
|
296
|
|
|
—
|
|
|
319
|
|
||||
Equity securities
|
681
|
|
|
—
|
|
|
—
|
|
|
681
|
|
||||
Total assets
|
$
|
704
|
|
|
$
|
2,112
|
|
|
$
|
—
|
|
|
$
|
2,816
|
|
•
|
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, collateralized 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 securities: Preferred securities are valued by calculating the appropriate spread over a comparable US Treasury security. Inputs include benchmark quotes and other relevant market data.
|
|
December 31, 2018
|
||||||||||
|
Other long-term
|
|
Corporate debt
|
|
|
||||||
|
investments
|
|
securities
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Fair value, December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of assets associated with the adoption of ASU 2016-01 (1)
|
100
|
|
|
—
|
|
|
100
|
|
|||
Transfers from Level 2
|
—
|
|
|
17
|
|
|
17
|
|
|||
Paid-in-kind dividends
|
7
|
|
|
—
|
|
|
7
|
|
|||
Purchases
|
—
|
|
|
1
|
|
|
1
|
|
|||
Net valuation loss included in earnings
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Net unrealized loss included in other comprehensive (loss) earnings
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Fair value, December 31, 2018
|
$
|
101
|
|
|
$
|
17
|
|
|
$
|
118
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in millions)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Direct title insurance premiums
|
$
|
2,221
|
|
|
$
|
2,170
|
|
|
$
|
2,097
|
|
Agency title insurance premiums
|
2,690
|
|
|
2,723
|
|
|
2,626
|
|
|||
Escrow, title-related and other fees
|
2,615
|
|
|
2,637
|
|
|
2,416
|
|
|||
Interest and investment income
|
177
|
|
|
131
|
|
|
126
|
|
|||
Realized gains and losses, net
|
(109
|
)
|
|
2
|
|
|
(8
|
)
|
|||
Total revenue
|
7,594
|
|
|
7,663
|
|
|
7,257
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Personnel costs
|
2,538
|
|
|
2,460
|
|
|
2,275
|
|
|||
Agent commissions
|
2,059
|
|
|
2,089
|
|
|
1,998
|
|
|||
Other operating expenses
|
1,801
|
|
|
1,781
|
|
|
1,648
|
|
|||
Depreciation and amortization
|
182
|
|
|
183
|
|
|
160
|
|
|||
Provision for title claim losses
|
221
|
|
|
238
|
|
|
157
|
|
|||
Interest expense
|
43
|
|
|
48
|
|
|
64
|
|
|||
Total expenses
|
6,844
|
|
|
6,799
|
|
|
6,302
|
|
|||
Earnings from continuing operations before income taxes and equity in earnings of unconsolidated affiliates
|
750
|
|
|
864
|
|
|
955
|
|
|||
Income tax expense
|
120
|
|
|
235
|
|
|
347
|
|
|||
Equity in earnings of unconsolidated affiliates
|
5
|
|
|
10
|
|
|
14
|
|
|||
Net earnings from continuing operations
|
$
|
635
|
|
|
$
|
639
|
|
|
$
|
622
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Direct title insurance premiums
|
$
|
2,221
|
|
|
$
|
2,170
|
|
|
$
|
2,097
|
|
Agency title insurance premiums
|
2,690
|
|
|
2,723
|
|
|
2,626
|
|
|||
Escrow, title-related and other fees
|
2,189
|
|
|
2,181
|
|
|
2,128
|
|
|||
Interest and investment income
|
170
|
|
|
131
|
|
|
127
|
|
|||
Realized gains and losses, net
|
(110
|
)
|
|
6
|
|
|
—
|
|
|||
Total revenue
|
7,160
|
|
|
7,211
|
|
|
6,978
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Personnel costs
|
2,430
|
|
|
2,366
|
|
|
2,214
|
|
|||
Other operating expenses
|
1,421
|
|
|
1,404
|
|
|
1,436
|
|
|||
Agent commissions
|
2,059
|
|
|
2,089
|
|
|
1,998
|
|
|||
Depreciation and amortization
|
154
|
|
|
159
|
|
|
148
|
|
|||
Provision for title claim losses
|
221
|
|
|
238
|
|
|
157
|
|
|||
Total expenses
|
6,285
|
|
|
6,256
|
|
|
5,953
|
|
|||
Earnings before income taxes
|
$
|
875
|
|
|
$
|
955
|
|
|
$
|
1,025
|
|
Orders opened by direct title operations (in 000's)
|
1,818
|
|
|
1,942
|
|
|
2,184
|
|
|||
Orders closed by direct title operations (in 000's)
|
1,315
|
|
|
1,428
|
|
|
1,575
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
Title premiums from direct operations
|
$
|
2,221
|
|
|
45.2
|
%
|
|
$
|
2,170
|
|
|
44.3
|
%
|
|
$
|
2,097
|
|
|
44.4
|
%
|
Title premiums from agency operations
|
2,690
|
|
|
54.8
|
|
|
2,723
|
|
|
55.7
|
|
|
2,626
|
|
|
55.6
|
|
|||
Total title premiums
|
$
|
4,911
|
|
|
100.0
|
%
|
|
$
|
4,893
|
|
|
100.0
|
%
|
|
$
|
4,723
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
Agent title premiums
|
$
|
2,690
|
|
|
100.0
|
%
|
|
$
|
2,723
|
|
|
100.0
|
%
|
|
$
|
2,626
|
|
|
100.0
|
%
|
Agent commissions
|
2,059
|
|
|
76.5
|
|
|
2,089
|
|
|
76.7
|
|
|
1,998
|
|
|
76.1
|
|
|||
Net retained agent premiums
|
$
|
631
|
|
|
23.5
|
%
|
|
$
|
634
|
|
|
23.3
|
%
|
|
$
|
628
|
|
|
23.9
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Escrow, title-related and other fees
|
$
|
426
|
|
|
$
|
456
|
|
|
$
|
288
|
|
Interest and investment income
|
7
|
|
|
—
|
|
|
(1
|
)
|
|||
Realized gains and losses, net
|
1
|
|
|
(4
|
)
|
|
(8
|
)
|
|||
Total revenue
|
434
|
|
|
452
|
|
|
279
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Personnel costs
|
108
|
|
|
94
|
|
|
61
|
|
|||
Other operating expenses
|
380
|
|
|
377
|
|
|
212
|
|
|||
Depreciation and amortization
|
28
|
|
|
24
|
|
|
12
|
|
|||
Interest expense
|
43
|
|
|
48
|
|
|
64
|
|
|||
Total expenses
|
559
|
|
|
543
|
|
|
349
|
|
|||
Earnings before income taxes
|
$
|
(125
|
)
|
|
$
|
(91
|
)
|
|
$
|
(70
|
)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Notes payable principal repayment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
450
|
|
|
$
|
850
|
|
Operating lease payments
|
145
|
|
|
121
|
|
|
93
|
|
|
68
|
|
|
41
|
|
|
28
|
|
|
496
|
|
|||||||
Pension and other benefit payments
|
15
|
|
|
15
|
|
|
14
|
|
|
13
|
|
|
12
|
|
|
84
|
|
|
153
|
|
|||||||
Title claim loss estimated payments
|
220
|
|
|
216
|
|
|
172
|
|
|
139
|
|
|
148
|
|
|
593
|
|
|
1,488
|
|
|||||||
Interest on fixed rate notes payable
|
42
|
|
|
42
|
|
|
42
|
|
|
35
|
|
|
20
|
|
|
102
|
|
|
283
|
|
|||||||
Total
|
$
|
422
|
|
|
$
|
394
|
|
|
$
|
321
|
|
|
$
|
655
|
|
|
$
|
221
|
|
|
$
|
1,257
|
|
|
$
|
3,270
|
|
•
|
future mortgage interest rates, which will affect the number of real estate and refinancing transactions and, therefore, the rate at which title insurance claims will emerge;
|
•
|
the legal environment whereby court decisions and reinterpretations of title insurance policy language to broaden coverage could increase total obligations and influence claim payout patterns;
|
•
|
events such as fraud, escrow theft, multiple property title defects, foreclosure rates and individual large loss events that can substantially and unexpectedly cause increases in both the amount and timing of estimated title insurance loss payments; and
|
•
|
loss cost trends whereby increases or decreases in inflationary factors (including the value of real estate) will influence the ultimate amount of title insurance loss payments.
|
Item 7A.
|
Quantitative and Qualitative Disclosure about Market Risk
|
|
Page
Number
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions, except share data)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Direct title insurance premiums
|
$
|
2,221
|
|
|
$
|
2,170
|
|
|
$
|
2,097
|
|
Agency title insurance premiums
|
2,690
|
|
|
2,723
|
|
|
2,626
|
|
|||
Escrow, title-related and other fees
|
2,615
|
|
|
2,637
|
|
|
2,416
|
|
|||
Interest and investment income
|
177
|
|
|
131
|
|
|
126
|
|
|||
Realized gains and losses, net
|
(109
|
)
|
|
2
|
|
|
(8
|
)
|
|||
Total revenues
|
7,594
|
|
|
7,663
|
|
|
7,257
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Personnel costs
|
2,538
|
|
|
2,460
|
|
|
2,275
|
|
|||
Agent commissions
|
2,059
|
|
|
2,089
|
|
|
1,998
|
|
|||
Other operating expenses
|
1,801
|
|
|
1,781
|
|
|
1,648
|
|
|||
Depreciation and amortization
|
182
|
|
|
183
|
|
|
160
|
|
|||
Provision for title claim losses
|
221
|
|
|
238
|
|
|
157
|
|
|||
Interest expense
|
43
|
|
|
48
|
|
|
64
|
|
|||
Total expenses
|
6,844
|
|
|
6,799
|
|
|
6,302
|
|
|||
Earnings from continuing operations before income taxes and equity in earnings of unconsolidated affiliates
|
750
|
|
|
864
|
|
|
955
|
|
|||
Income tax expense on continuing operations
|
120
|
|
|
235
|
|
|
347
|
|
|||
Earnings from continuing operations before equity in earnings of unconsolidated affiliates
|
630
|
|
|
629
|
|
|
608
|
|
|||
Equity in earnings of unconsolidated affiliates
|
5
|
|
|
10
|
|
|
14
|
|
|||
Net earnings from continuing operations
|
635
|
|
|
639
|
|
|
622
|
|
|||
Earnings from discontinued operations, net of tax
|
—
|
|
|
155
|
|
|
70
|
|
|||
Net earnings
|
635
|
|
|
794
|
|
|
692
|
|
|||
Less: Net earnings attributable to non-controlling interests
|
7
|
|
|
23
|
|
|
42
|
|
|||
Net earnings attributable to Fidelity National Financial, Inc. common shareholders
|
$
|
628
|
|
|
$
|
771
|
|
|
$
|
650
|
|
|
|
|
|
|
|
||||||
Amounts attributable to Fidelity National Financial, Inc., common shareholders:
|
|
|
|
|
|
|
|
|
|||
Net earnings from continuing operations attributable to FNF Group common shareholders
|
$
|
628
|
|
|
$
|
639
|
|
|
$
|
627
|
|
Net earnings from discontinued operations attributable to FNF Group common shareholders
|
—
|
|
|
23
|
|
|
27
|
|
|||
Net earnings attributable to FNF Group common shareholders
|
$
|
628
|
|
|
$
|
662
|
|
|
$
|
654
|
|
|
|
|
|
|
|
||||||
Net earnings (loss) from discontinued operations attributable to FNFV Group common shareholders
|
|
|
|
$
|
109
|
|
|
$
|
(4
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
||||||
Net earnings from continuing operations attributable to FNF Group common shareholders
|
$
|
2.30
|
|
|
$
|
2.36
|
|
|
$
|
2.31
|
|
Net earnings from discontinued operations attributable to FNF Group common shareholders
|
—
|
|
|
0.08
|
|
|
0.09
|
|
|||
Net earnings per share attributable to FNF Group common shareholders
|
$
|
2.30
|
|
|
$
|
2.44
|
|
|
$
|
2.40
|
|
Net earnings (loss) per share from discontinued operations attributable to FNFV Group common shareholders
|
|
|
$
|
1.68
|
|
|
$
|
(0.06
|
)
|
||
Diluted
|
|
|
|
|
|
||||||
Net earnings from continuing operations attributable to FNF Group common shareholders
|
$
|
2.26
|
|
|
$
|
2.30
|
|
|
$
|
2.24
|
|
Net earnings from discontinued operations attributable to FNF Group common shareholders
|
—
|
|
|
0.08
|
|
|
0.10
|
|
|||
Net earnings per share attributable to FNF Group common shareholders
|
$
|
2.26
|
|
|
$
|
2.38
|
|
|
$
|
2.34
|
|
Net earnings (loss) per share from discontinued operations attributable to FNFV Group common shareholders
|
|
|
$
|
1.63
|
|
|
$
|
(0.06
|
)
|
||
|
|
|
|
|
|
||||||
Weighted average shares outstanding FNF Group common stock, basic basis
|
273
|
|
|
271
|
|
|
272
|
|
|||
Weighted average shares outstanding FNF Group common stock, diluted basis
|
278
|
|
|
278
|
|
|
280
|
|
|||
Weighted average shares outstanding FNFV Group common stock, basic basis
|
|
|
65
|
|
|
67
|
|
||||
Weighted average shares outstanding FNFV Group common stock, diluted basis
|
|
|
67
|
|
|
70
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Net earnings
|
$
|
635
|
|
|
$
|
794
|
|
|
$
|
692
|
|
Other comprehensive (loss) earnings, net of tax:
|
|
|
|
|
|
|
|
||||
Unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
|
(11
|
)
|
|
25
|
|
|
38
|
|
|||
Unrealized gain relating to investments in unconsolidated affiliates (2)
|
3
|
|
|
12
|
|
|
10
|
|
|||
Unrealized (loss) gain on foreign currency translation and cash flow hedging (3)
|
(8
|
)
|
|
6
|
|
|
2
|
|
|||
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)
|
—
|
|
|
3
|
|
|
—
|
|
|||
Minimum pension liability adjustment (5)
|
1
|
|
|
9
|
|
|
6
|
|
|||
Other comprehensive (loss) earnings
|
(15
|
)
|
|
55
|
|
|
56
|
|
|||
Comprehensive earnings
|
620
|
|
|
849
|
|
|
748
|
|
|||
Less: Comprehensive earnings attributable to noncontrolling interests
|
7
|
|
|
25
|
|
|
41
|
|
|||
Comprehensive earnings attributable to Fidelity National Financial Inc. common shareholders
|
$
|
613
|
|
|
$
|
824
|
|
|
$
|
707
|
|
Comprehensive earnings attributable to FNF Group common shareholders
|
$
|
613
|
|
|
$
|
709
|
|
|
$
|
703
|
|
Comprehensive earnings attributable to FNFV Group common shareholders
|
|
|
|
$
|
115
|
|
|
$
|
4
|
|
(1)
|
Net of income tax (benefit) expense of
$(4) million
,
$16 million
, and
$23 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(2)
|
Net of income tax expense of
$1 million
,
$7 million
, and
$6 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(3)
|
Net of income tax (benefit) expense of
$(2) million
,
$4 million
, and
$1 million
for the years ended
December 31, 2018
,
2017
, and
2016
, respectively.
|
(4)
|
Net of income tax expense of
$2 million
for the year ended
December 31, 2017
.
|
(5)
|
Net of income tax expense of less than
$1 million
,
$3 million
and
$3 million
for the years ended
December 31, 2018
,
2017
, and
2016
, respectively.
|
|
Fidelity National Financial, Inc. Common Shareholders
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
|
FNF Common Stock
|
|
FNFV Group Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated
Other Comprehensive Earnings (Loss)
|
|
Treasury Stock
|
|
Non-controlling
Interests
|
|
Total
Equity
|
|
Redeemable Non-controlling Interests
|
|||||||||||||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
|
|
|
Shares
|
|
$
|
|
|
|
|||||||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2015
|
282
|
|
|
$
|
—
|
|
|
81
|
|
|
$
|
—
|
|
|
$
|
4,795
|
|
|
$
|
1,374
|
|
|
$
|
(69
|
)
|
|
15
|
|
|
$
|
(346
|
)
|
|
$
|
834
|
|
|
$
|
6,588
|
|
|
$
|
344
|
|
Exercise of stock options
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||||||
Issuance of restricted stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain (loss) on investments and other financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
37
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain on foreign currency and cash flow hedging
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — minimum pension liability adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
58
|
|
|
—
|
|
|||||||||
Shares withheld for taxes and in treasury
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
|
||||||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
(268
|
)
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|||||||||
Debt conversion settled in cash
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|||||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
650
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
692
|
|
|
—
|
|
|||||||||
Balance, December 31, 2016
|
285
|
|
|
$
|
—
|
|
|
81
|
|
|
$
|
—
|
|
|
$
|
4,848
|
|
|
$
|
1,784
|
|
|
$
|
(13
|
)
|
|
27
|
|
|
$
|
(623
|
)
|
|
$
|
902
|
|
|
$
|
6,898
|
|
|
$
|
344
|
|
Exercise of stock options
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|||||||||
Issuance of restricted stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain on investments and other financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
27
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — unrealized gain on foreign currency and cash flow hedging
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||||||
Other comprehensive earnings — minimum pension liability adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|||||||||
Reclassification adjustments for change in unrealized gains and losses included in net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
44
|
|
|
—
|
|
|||||||||
Purchase of additional interest in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|||||||||
Shares withheld for taxes and in treasury
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|
|
||||||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|||||||||
Sale of consolidated subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|||||||||
Debt conversions settled in cash
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
—
|
|
|||||||||
Acquisitions of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
—
|
|
|||||||||
Black Knight repurchases of BKFS stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(47
|
)
|
|
—
|
|
|||||||||
Spin-off of Black Knight
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(823
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(801
|
)
|
|
(1,624
|
)
|
|
—
|
|
|||||||||
Distribution of FNFV to Cannae Holdings
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
(1,236
|
)
|
|
69
|
|
|
(16
|
)
|
|
196
|
|
|
(98
|
)
|
|
(1,069
|
)
|
|
—
|
|
|||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
—
|
|
|||||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
794
|
|
|
—
|
|
|||||||||
Balance, December 31, 2017
|
288
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
4,587
|
|
|
$
|
217
|
|
|
$
|
111
|
|
|
13
|
|
|
$
|
(468
|
)
|
|
$
|
20
|
|
|
$
|
4,467
|
|
|
$
|
344
|
|
See Notes to Consolidated Financial Statements.
|
|
Fidelity National Financial, Inc. Common Shareholders
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
FNF Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated
Other Comprehensive Earnings (Loss)
|
|
Treasury Stock
|
|
Non-controlling
Interests
|
|
Total
Equity
|
|
Redeemable Non-controlling Interests
|
||||||||||||||||||||||
|
Shares
|
|
$
|
|
|
|
|
Shares
|
|
$
|
|
|
|
||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2017
|
288
|
|
|
$
|
—
|
|
|
$
|
4,587
|
|
|
$
|
217
|
|
|
$
|
111
|
|
|
13
|
|
|
$
|
(468
|
)
|
|
$
|
20
|
|
|
$
|
4,467
|
|
|
$
|
344
|
|
Adjustment for cumulative effect for adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
(109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||||
Exercise of stock options
|
1
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||||
Issuance of restricted stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other comprehensive earnings — unrealized loss on investments and other financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
||||||||
Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||||
Other comprehensive earnings — unrealized loss on foreign currency and cash flow hedging
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||||||
Other comprehensive earnings — minimum pension liability adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||||||
Shares withheld for taxes and in treasury
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
|
|||||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
||||||||
Debt conversions settled in cash
|
—
|
|
|
—
|
|
|
(134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(134
|
)
|
|
—
|
|
||||||||
Dilution resulting from subsidiary equity issuance
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
—
|
|
||||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
—
|
|
||||||||
Pacific Union Sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
|
—
|
|
||||||||
Other equity activity
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
|
—
|
|
||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
635
|
|
|
—
|
|
||||||||
Balance, December 31, 2018
|
290
|
|
|
$
|
—
|
|
|
$
|
4,500
|
|
|
$
|
641
|
|
|
$
|
(13
|
)
|
|
14
|
|
|
$
|
(498
|
)
|
|
$
|
(2
|
)
|
|
$
|
4,628
|
|
|
$
|
344
|
|
See Notes to Consolidated Financial Statements.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
|||
Net earnings
|
$
|
635
|
|
|
$
|
794
|
|
|
$
|
692
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
182
|
|
|
389
|
|
|
431
|
|
|||
Equity in (earnings) losses of unconsolidated affiliates
|
(5
|
)
|
|
2
|
|
|
8
|
|
|||
Loss on sales of investments and other assets and asset impairments, net
|
18
|
|
|
16
|
|
|
2
|
|
|||
Gain on sale of business by FNFV Group
|
—
|
|
|
(276
|
)
|
|
—
|
|
|||
Gain on Pacific Union Sale
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on valuation of equity and preferred securities, net
|
95
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation cost
|
31
|
|
|
44
|
|
|
58
|
|
|||
Distributions from unconsolidated affiliates, return on investment
|
6
|
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
||||
Net decrease (increase) in trade receivables
|
15
|
|
|
(11
|
)
|
|
(14
|
)
|
|||
Net decrease (increase) in prepaid expenses and other assets
|
17
|
|
|
(60
|
)
|
|
(4
|
)
|
|||
Net increase (decrease) in accounts payable, accrued liabilities, deferred revenue and other liabilities
|
38
|
|
|
(31
|
)
|
|
87
|
|
|||
Net (decrease) increase in reserve for title claim losses
|
(2
|
)
|
|
3
|
|
|
(96
|
)
|
|||
Net change in income taxes
|
(83
|
)
|
|
(133
|
)
|
|
(2
|
)
|
|||
Net cash provided by operating activities
|
943
|
|
|
737
|
|
|
1,162
|
|
|||
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from sales of investment securities available for sale
|
676
|
|
|
434
|
|
|
238
|
|
|||
Proceeds from calls and maturities of investment securities available for sale
|
517
|
|
|
626
|
|
|
452
|
|
|||
Proceeds from sales of property and equipment
|
21
|
|
|
4
|
|
|
6
|
|
|||
Proceeds from the sale of cost method and other investments
|
—
|
|
|
21
|
|
|
36
|
|
|||
Additions to property and equipment and capitalized software
|
(83
|
)
|
|
(149
|
)
|
|
(290
|
)
|
|||
Purchases of investment securities available for sale
|
(1,313
|
)
|
|
(659
|
)
|
|
(589
|
)
|
|||
Purchases of other long-term investments
|
—
|
|
|
(86
|
)
|
|
—
|
|
|||
Net (purchases of) proceeds from short-term investment activities
|
(185
|
)
|
|
26
|
|
|
547
|
|
|||
Additional investments in unconsolidated affiliates
|
(62
|
)
|
|
(78
|
)
|
|
(166
|
)
|
|||
Distributions from unconsolidated affiliates, return of investment
|
73
|
|
|
104
|
|
|
139
|
|
|||
Other investing activities
|
(1
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
Cash proceeds from Pacific Union Sale, net of cash transferred
|
33
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from the sale of business by FNFV Group
|
—
|
|
|
325
|
|
|
—
|
|
|||
Acquisition of T-System Holding LLC, net of cash acquired
|
—
|
|
|
(202
|
)
|
|
—
|
|
|||
Acquisition of Title Guaranty of Hawaii, net of cash acquired
|
—
|
|
|
(93
|
)
|
|
—
|
|
|||
Acquisition of Commissions, Inc., net of cash acquired
|
—
|
|
|
—
|
|
|
(229
|
)
|
|||
Acquisition of eLynx Holdings, Inc., net of cash acquired
|
—
|
|
|
—
|
|
|
(115
|
)
|
|||
Acquisitions of Real Geeks, LLC and Sky Slope, Inc., net of cash acquired
|
—
|
|
|
(82
|
)
|
|
—
|
|
|||
Other acquisitions/disposals of businesses, net of cash acquired/disposed
|
(30
|
)
|
|
(105
|
)
|
|
(213
|
)
|
|||
Net cash (used in) provided by investing activities
|
(354
|
)
|
|
79
|
|
|
(191
|
)
|
|||
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Net change in secured trust deposits
|
(8
|
)
|
|
(30
|
)
|
|
160
|
|
|||
Borrowings
|
442
|
|
|
785
|
|
|
132
|
|
|||
Debt service payments
|
(370
|
)
|
|
(996
|
)
|
|
(200
|
)
|
|||
Equity portion of debt conversions paid in cash
|
(142
|
)
|
|
(317
|
)
|
|
(2
|
)
|
|||
Black Knight treasury stock repurchases of BKFS stock
|
—
|
|
|
(47
|
)
|
|
—
|
|
|||
Cash transferred in the Black Knight spin-off
|
—
|
|
|
(87
|
)
|
|
—
|
|
|||
Cash transferred in the FNFV split-off
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||
Dividends paid
|
(328
|
)
|
|
(278
|
)
|
|
(239
|
)
|
|||
Subsidiary dividends paid to noncontrolling interest shareholders
|
(10
|
)
|
|
(9
|
)
|
|
(9
|
)
|
|||
Exercise of stock options
|
19
|
|
|
31
|
|
|
19
|
|
|||
Payment of contingent consideration for prior period acquisitions
|
(13
|
)
|
|
(16
|
)
|
|
(4
|
)
|
|||
Payment for shares withheld for taxes and in treasury
|
(9
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|||
Purchases of treasury stock
|
(20
|
)
|
|
(23
|
)
|
|
(276
|
)
|
|||
Other financing activity
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(442
|
)
|
|
(1,029
|
)
|
|
(428
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
147
|
|
|
(213
|
)
|
|
543
|
|
|||
Cash and cash equivalents, at beginning of year
|
1,110
|
|
|
1,323
|
|
|
780
|
|
|||
Cash and cash equivalents, at end of year
|
$
|
1,257
|
|
|
$
|
1,110
|
|
|
$
|
1,323
|
|
Note A.
|
Business and Summary of Significant Accounting Policies
|
|
Unrealized gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates)
|
|
Unrealized (loss) gain relating to investments in unconsolidated affiliates
|
|
Unrealized (loss) gain on foreign currency translation and cash flow hedging
|
|
Minimum pension liability adjustment
|
|
Total Accumulated Other Comprehensive (Loss) Earnings
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Balance December 31, 2016
|
$
|
86
|
|
|
$
|
(68
|
)
|
|
$
|
(13
|
)
|
|
$
|
(18
|
)
|
|
$
|
(13
|
)
|
Other comprehensive earnings
|
25
|
|
|
12
|
|
|
6
|
|
|
9
|
|
|
52
|
|
|||||
Reclassification adjustments
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Distribution of FNFV to Cannae Holdings
|
2
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Balance December 31, 2017
|
116
|
|
|
11
|
|
|
(7
|
)
|
|
(9
|
)
|
|
111
|
|
|||||
Adjustment for cumulative effect for adoption of ASU 2016-01
|
(109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109
|
)
|
|||||
Adoption of ASU 2018-02
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||
Other comprehensive earnings
|
(11
|
)
|
|
3
|
|
|
(8
|
)
|
|
1
|
|
|
(15
|
)
|
|||||
Balance December 31, 2018
|
$
|
(5
|
)
|
|
$
|
17
|
|
|
$
|
(15
|
)
|
|
$
|
(10
|
)
|
|
$
|
(13
|
)
|
Cash paid
|
$
|
98
|
|
Less: Cash acquired
|
(5
|
)
|
|
Total net consideration paid
|
$
|
93
|
|
|
Fair Value
|
||
Accounts receivable
|
$
|
2
|
|
Property and equipment
|
4
|
|
|
Other intangible assets
|
49
|
|
|
Goodwill
|
41
|
|
|
Title plant
|
11
|
|
|
Prepaid expenses and other
|
2
|
|
|
Total assets acquired
|
109
|
|
|
Accounts payable and accrued liabilities
|
5
|
|
|
Total liabilities assumed
|
5
|
|
|
Non-controlling interests assumed
|
11
|
|
|
Total liabilities and equity assumed
|
16
|
|
|
Net assets acquired
|
$
|
93
|
|
|
Gross Carrying Value
|
|
Weighted Average
Estimated Useful Life
(in years)
|
||
Property and equipment
|
$
|
4
|
|
|
5
|
Other intangible assets:
|
|
|
|
||
Customer relationships
|
43
|
|
|
10
|
|
Trade name
|
5
|
|
|
10
|
|
Software
|
1
|
|
|
2
|
|
Total Other intangible assets
|
49
|
|
|
|
|
Total
|
$
|
53
|
|
|
|
Total purchase price
|
$
|
101
|
|
Less: cash acquired
|
(3
|
)
|
|
Total net assets acquired
|
98
|
|
|
Less: contingent consideration payable
|
(16
|
)
|
|
Total net cash paid
|
$
|
82
|
|
|
Fair Value
|
||
Other intangible assets
|
$
|
38
|
|
Goodwill
|
94
|
|
|
Property and equipment, net
|
1
|
|
|
Total assets acquired
|
133
|
|
|
Accounts payable and accrued liabilities
|
3
|
|
|
Deferred tax liability
|
9
|
|
|
Total liabilities assumed
|
12
|
|
|
Non-controlling interests
|
23
|
|
|
Total liabilities and equity assumed
|
35
|
|
|
Net assets acquired
|
$
|
98
|
|
|
Gross Carrying Value
|
|
Weighted Average
Estimated Useful Life
(in years)
|
||
Property and equipment, net
|
$
|
1
|
|
|
1 - 5
|
Other intangible assets:
|
|
|
|
||
Customer relationships
|
12
|
|
|
10
|
|
Trade name
|
7
|
|
|
10
|
|
Non-compete agreements
|
3
|
|
|
5
|
|
Computer software
|
16
|
|
|
7
|
|
Total Other intangible assets
|
$
|
38
|
|
|
|
Note C.
|
Fair Value Measurements
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
$
|
—
|
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
225
|
|
State and political subdivisions
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||
Corporate debt securities
|
—
|
|
|
1,486
|
|
|
17
|
|
|
1,503
|
|
||||
Foreign government bonds
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||
Mortgage-backed/asset-backed securities
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
Preferred securities
|
16
|
|
|
285
|
|
|
—
|
|
|
301
|
|
||||
Equity securities
|
498
|
|
|
—
|
|
|
—
|
|
|
498
|
|
||||
Other long-term investments
|
—
|
|
|
—
|
|
|
101
|
|
|
101
|
|
||||
Total
|
$
|
514
|
|
|
$
|
2,266
|
|
|
$
|
118
|
|
|
$
|
2,898
|
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
State and political subdivisions
|
—
|
|
|
391
|
|
|
—
|
|
|
391
|
|
||||
Corporate debt securities
|
—
|
|
|
1,117
|
|
|
—
|
|
|
1,117
|
|
||||
Foreign government bonds
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Mortgage-backed/asset-backed securities
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
||||
Preferred securities
|
23
|
|
|
296
|
|
|
—
|
|
|
319
|
|
||||
Equity securities
|
681
|
|
|
—
|
|
|
—
|
|
|
681
|
|
||||
Total
|
$
|
704
|
|
|
$
|
2,112
|
|
|
$
|
—
|
|
|
$
|
2,816
|
|
•
|
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, collateralized 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 securities: Preferred securities are valued by calculating the appropriate spread over a comparable US Treasury security. Inputs include benchmark quotes and other relevant market data.
|
|
December 31, 2018
|
||||||||||
|
Other long-term
|
|
Corporate debt
|
|
|
||||||
|
investments
|
|
securities
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Fair value, December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of assets associated with the adoption of ASU 2016-01 (1)
|
100
|
|
|
—
|
|
|
100
|
|
|||
Transfers from Level 2
|
—
|
|
|
17
|
|
|
17
|
|
|||
Paid-in-kind dividends (2)
|
7
|
|
|
—
|
|
|
7
|
|
|||
Purchases
|
—
|
|
|
1
|
|
|
1
|
|
|||
Net change in fair value included in earnings (3)
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Net unrealized loss included in other comprehensive (loss) earnings
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Fair value, December 31, 2018
|
$
|
101
|
|
|
$
|
17
|
|
|
$
|
118
|
|
|
December 31, 2018
|
||||||||||||||||||
|
Carrying
Value
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Fixed maturity investments available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
$
|
225
|
|
|
$
|
226
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
225
|
|
States and political subdivisions
|
148
|
|
|
147
|
|
|
1
|
|
|
—
|
|
|
148
|
|
|||||
Corporate debt securities
|
1,503
|
|
|
1,510
|
|
|
6
|
|
|
(13
|
)
|
|
1,503
|
|
|||||
Foreign government bonds
|
62
|
|
|
67
|
|
|
—
|
|
|
(5
|
)
|
|
62
|
|
|||||
Mortgage-backed/asset-backed securities
|
60
|
|
|
59
|
|
|
1
|
|
|
—
|
|
|
60
|
|
|||||
Total
|
$
|
1,998
|
|
|
$
|
2,009
|
|
|
$
|
9
|
|
|
$
|
(20
|
)
|
|
$
|
1,998
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Carrying
Value
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Fixed maturity investments available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
$
|
195
|
|
|
$
|
196
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
195
|
|
States and political subdivisions
|
391
|
|
|
387
|
|
|
4
|
|
|
—
|
|
|
391
|
|
|||||
Corporate debt securities
|
1,117
|
|
|
1,110
|
|
|
11
|
|
|
(4
|
)
|
|
1,117
|
|
|||||
Foreign government bonds
|
57
|
|
|
58
|
|
|
1
|
|
|
(2
|
)
|
|
57
|
|
|||||
Mortgage-backed/asset-backed securities
|
56
|
|
|
55
|
|
|
1
|
|
|
—
|
|
|
56
|
|
|||||
Preferred securities
|
319
|
|
|
307
|
|
|
12
|
|
|
—
|
|
|
319
|
|
|||||
Equity securities
|
681
|
|
|
517
|
|
|
172
|
|
|
(8
|
)
|
|
681
|
|
|||||
Total
|
$
|
2,816
|
|
|
$
|
2,630
|
|
|
$
|
201
|
|
|
$
|
(15
|
)
|
|
$
|
2,816
|
|
|
December 31, 2018
|
||||||||||||
Maturity
|
Amortized Cost
|
|
% of
Total
|
|
Fair
Value
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
One year or less
|
$
|
347
|
|
|
17.3
|
%
|
|
$
|
344
|
|
|
17.2
|
%
|
After one year through five years
|
1,336
|
|
|
66.6
|
|
|
1,326
|
|
|
66.3
|
|
||
After five years through ten years
|
226
|
|
|
11.2
|
|
|
227
|
|
|
11.4
|
|
||
After ten years
|
41
|
|
|
2.0
|
|
|
41
|
|
|
2.1
|
|
||
Mortgage-backed/asset-backed securities
|
59
|
|
|
2.9
|
|
|
60
|
|
|
3.0
|
|
||
|
$
|
2,009
|
|
|
100.0
|
%
|
|
$
|
1,998
|
|
|
100.0
|
%
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Corporate debt securities
|
$
|
661
|
|
|
$
|
(8
|
)
|
|
$
|
301
|
|
|
$
|
(5
|
)
|
|
962
|
|
|
$
|
(13
|
)
|
|
U.S. government and agencies
|
71
|
|
|
(1
|
)
|
|
117
|
|
|
(1
|
)
|
|
188
|
|
|
(2
|
)
|
||||||
Foreign government bonds
|
52
|
|
|
(3
|
)
|
|
10
|
|
|
(2
|
)
|
|
62
|
|
|
(5
|
)
|
||||||
Total temporarily impaired securities
|
$
|
784
|
|
|
$
|
(12
|
)
|
|
$
|
428
|
|
|
$
|
(8
|
)
|
|
$
|
1,212
|
|
|
$
|
(20
|
)
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Corporate debt securities
|
$
|
464
|
|
|
$
|
(3
|
)
|
|
$
|
51
|
|
|
$
|
(1
|
)
|
|
$
|
515
|
|
|
$
|
(4
|
)
|
U.S. government and agencies
|
149
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
149
|
|
|
(1
|
)
|
||||||
Foreign government bonds
|
—
|
|
|
—
|
|
|
10
|
|
|
(2
|
)
|
|
10
|
|
|
(2
|
)
|
||||||
Equity securities
|
121
|
|
|
(7
|
)
|
|
5
|
|
|
(1
|
)
|
|
126
|
|
|
(8
|
)
|
||||||
Total temporarily impaired securities
|
$
|
734
|
|
|
$
|
(11
|
)
|
|
$
|
66
|
|
|
$
|
(4
|
)
|
|
$
|
800
|
|
|
$
|
(15
|
)
|
|
|
Year ended December 31, 2018
|
||||||||||||||
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Net Realized Gains (Losses)
|
|
Gross Proceeds from Sale/Maturity
|
||||||||
|
|
(In millions)
|
||||||||||||||
Fixed maturity securities available for sale
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
838
|
|
Preferred stock
|
|
1
|
|
|
—
|
|
|
1
|
|
|
60
|
|
||||
Equity securities
|
|
5
|
|
|
(21
|
)
|
|
(16
|
)
|
|
298
|
|
||||
Valuation loss on equity securities (1)
|
|
|
|
|
|
(71
|
)
|
|
—
|
|
||||||
Valuation loss on preferred securities (1)
|
|
|
|
|
|
(24
|
)
|
|
—
|
|
||||||
Property and equipment
|
|
|
|
|
|
5
|
|
|
21
|
|
||||||
Asset impairments
|
|
|
|
|
|
(7
|
)
|
|
—
|
|
||||||
Pacific Union Sale
|
|
|
|
|
|
4
|
|
|
47
|
|
||||||
Other realized gains and losses, net
|
|
|
|
|
|
(3
|
)
|
|
—
|
|
||||||
Total
|
|
|
|
|
|
$
|
(109
|
)
|
|
$
|
1,264
|
|
||||
(1) See discussion of adoption of ASU 2016-01 in Note S.
Recent Accounting Pronouncements
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year ended December 31, 2017
|
||||||||||||||
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Net Realized Gains (Losses)
|
|
Gross Proceeds from Sale/Maturity
|
||||||||
|
|
(In millions)
|
||||||||||||||
Fixed maturity securities available for sale
|
|
$
|
7
|
|
|
$
|
(8
|
)
|
|
$
|
(1
|
)
|
|
$
|
968
|
|
Preferred stock available for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Other long-term investments
|
|
|
|
|
|
9
|
|
|
21
|
|
||||||
Loss on debt conversions
|
|
|
|
|
|
(6
|
)
|
|
—
|
|
||||||
Property, plant and equipment
|
|
|
|
|
|
2
|
|
|
4
|
|
||||||
Other intangible assets
|
|
|
|
|
|
(1
|
)
|
|
—
|
|
||||||
Other realized gains and losses, net
|
|
|
|
|
|
(1
|
)
|
|
—
|
|
||||||
Total
|
|
|
|
|
|
$
|
2
|
|
|
$
|
1,003
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year ended December 31, 2016
|
||||||||||||||
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Net Realized Gains (Losses)
|
|
Gross Proceeds from Sale/Maturity
|
||||||||
|
|
(In millions)
|
||||||||||||||
Fixed maturity securities available for sale
|
|
$
|
4
|
|
|
$
|
(16
|
)
|
|
$
|
(12
|
)
|
|
$
|
624
|
|
Preferred stock available for sale
|
|
1
|
|
|
—
|
|
|
1
|
|
|
9
|
|
||||
Equity securities available for sale
|
|
11
|
|
|
(1
|
)
|
|
10
|
|
|
50
|
|
||||
Investments in unconsolidated affiliates
|
|
|
|
|
|
(3
|
)
|
|
—
|
|
||||||
Other intangible assets
|
|
|
|
|
|
(1
|
)
|
|
—
|
|
||||||
Other assets
|
|
|
|
|
|
(3
|
)
|
|
6
|
|
||||||
Total
|
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
689
|
|
||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Tax-deferred property exchange income
|
$
|
65
|
|
|
$
|
31
|
|
|
$
|
16
|
|
Fixed maturity securities available for sale
|
55
|
|
|
61
|
|
|
76
|
|
|||
Equity securities and preferred stock available for sale
|
34
|
|
|
28
|
|
|
28
|
|
|||
Cash and cash equivalents
|
12
|
|
|
3
|
|
|
—
|
|
|||
Short-term investments
|
8
|
|
|
4
|
|
|
2
|
|
|||
Other
|
3
|
|
|
4
|
|
|
4
|
|
|||
Total
|
$
|
177
|
|
|
$
|
131
|
|
|
$
|
126
|
|
Note E.
|
Property and Equipment
|
Note F.
|
Goodwill
|
|
Title
|
|
Corporate and Other
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Balance, December 31, 2016
|
$
|
2,345
|
|
|
$
|
210
|
|
|
$
|
2,555
|
|
Goodwill acquired during the year (1)
|
84
|
|
|
104
|
|
|
188
|
|
|||
Adjustments to prior year acquisitions
|
3
|
|
|
—
|
|
|
3
|
|
|||
Balance, December 31, 2017
|
$
|
2,432
|
|
|
$
|
314
|
|
|
$
|
2,746
|
|
Goodwill acquired during the year
|
18
|
|
|
3
|
|
|
21
|
|
|||
Adjustments to prior year acquisitions
|
12
|
|
|
2
|
|
|
14
|
|
|||
Pacific Union Sale
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
|||
Impairment
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Balance, December 31, 2018
|
$
|
2,462
|
|
|
$
|
264
|
|
|
$
|
2,726
|
|
Note G.
|
Discontinued Operations
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
(in millions)
|
||||||
Escrow, title-related and other fees
|
$
|
745
|
|
|
$
|
963
|
|
Realized gains and losses, net
|
(13
|
)
|
|
—
|
|
||
Total revenues
|
732
|
|
|
963
|
|
||
Expenses:
|
|
|
|
||||
Personnel costs
|
292
|
|
|
393
|
|
||
Other operating expenses
|
145
|
|
|
190
|
|
||
Depreciation and amortization
|
154
|
|
|
208
|
|
||
Interest expense
|
42
|
|
|
62
|
|
||
Total expenses
|
633
|
|
|
853
|
|
||
Earnings from discontinued operations before income taxes
|
99
|
|
|
110
|
|
||
Income tax expense
|
40
|
|
|
36
|
|
||
Net earnings from discontinued operations
|
59
|
|
|
74
|
|
||
Less: Net earnings attributable to non-controlling interests
|
36
|
|
|
47
|
|
||
Net earnings attributable to Fidelity National Financial, Inc. common shareholders
|
$
|
23
|
|
|
$
|
27
|
|
|
|
|
|
||||
Cash flow from discontinued operations data:
|
|
|
|
||||
Net cash provided by operations
|
$
|
240
|
|
|
$
|
326
|
|
Net cash used in investing activities
|
(46
|
)
|
|
(230
|
)
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
(in millions)
|
||||||
Escrow, title-related and other fees
|
$
|
111
|
|
|
$
|
168
|
|
Restaurant revenue
|
981
|
|
|
1,158
|
|
||
Interest and investment income
|
5
|
|
|
3
|
|
||
Realized gains and losses, net
|
277
|
|
|
6
|
|
||
Total revenues
|
1,374
|
|
|
1,335
|
|
||
Expenses:
|
|
|
|
||||
Personnel costs
|
148
|
|
|
165
|
|
||
Other operating expenses
|
94
|
|
|
106
|
|
||
Cost of restaurant revenue
|
861
|
|
|
984
|
|
||
Depreciation and amortization
|
51
|
|
|
63
|
|
||
Interest expense
|
9
|
|
|
10
|
|
||
Total expenses
|
1,163
|
|
|
1,328
|
|
||
Earnings from discontinued operations before income taxes
|
211
|
|
|
7
|
|
||
Income tax expense (benefit)
|
103
|
|
|
(11
|
)
|
||
Earnings from continuing operations before equity in (losses) earnings of unconsolidated affiliates
|
108
|
|
|
18
|
|
||
Equity in losses of unconsolidated affiliates
|
(12
|
)
|
|
(22
|
)
|
||
Net earnings (loss) from discontinued operations
|
96
|
|
|
(4
|
)
|
||
Less: Net (losses) earnings attributable to non-controlling interests
|
(13
|
)
|
|
—
|
|
||
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders
|
$
|
109
|
|
|
$
|
(4
|
)
|
|
|
|
|
||||
Cash flow from discontinued operations data:
|
|
|
|
||||
Net cash (used in) provided by operations
|
$
|
(134
|
)
|
|
$
|
81
|
|
Net cash (used in) provided by investing activities
|
(11
|
)
|
|
67
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Earnings from discontinued operations attributable to Black Knight
|
$
|
59
|
|
|
$
|
74
|
|
Earnings (loss) from discontinued operations attributable to FNFV
|
96
|
|
|
(4
|
)
|
||
Total earnings from discontinued operations, net of tax
|
$
|
155
|
|
|
$
|
70
|
|
Note H.
|
Other Intangible Assets
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Customer relationships and contracts
|
$
|
827
|
|
|
$
|
860
|
|
Computer software
|
385
|
|
|
357
|
|
||
Trademarks and tradenames
|
64
|
|
|
81
|
|
||
Other
|
27
|
|
|
—
|
|
||
|
1,303
|
|
|
1,298
|
|
||
Accumulated amortization
|
(790
|
)
|
|
(680
|
)
|
||
|
$
|
513
|
|
|
$
|
618
|
|
Note I.
|
Accounts Payable and Other Accrued Liabilities
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Salaries and incentives
|
$
|
295
|
|
|
$
|
277
|
|
Accrued benefits
|
245
|
|
|
254
|
|
||
Deferred revenue
|
105
|
|
|
107
|
|
||
Contingent consideration - acquisitions
|
39
|
|
|
49
|
|
||
Trade accounts payable
|
35
|
|
|
39
|
|
||
Accrued rent
|
26
|
|
|
22
|
|
||
Accrued recording fees and transfer taxes
|
20
|
|
|
17
|
|
||
Accrued premium taxes
|
19
|
|
|
20
|
|
||
Other accrued liabilities
|
172
|
|
|
170
|
|
||
|
$
|
956
|
|
|
$
|
955
|
|
Note J.
|
Notes Payable
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions)
|
||||||
Unsecured notes, net of discount, interest payable semi-annually at 4.50%, due August 2028
|
|
$
|
442
|
|
|
$
|
—
|
|
Unsecured notes, net of discount, interest payable semi-annually at 5.50%, due September 2022
|
|
398
|
|
|
397
|
|
||
Unsecured convertible notes, net of discount, interest payable semi-annually at 4.25%, due August 2018
|
|
—
|
|
|
65
|
|
||
Revolving Credit Facility, unsecured, unused portion of $800 at December 31, 2018, due April 2022 with interest payable monthly at LIBOR + 1.40%
|
|
(4
|
)
|
|
295
|
|
||
Other
|
|
—
|
|
|
2
|
|
||
|
|
$
|
836
|
|
|
$
|
759
|
|
Gross principal maturities of notes payable at December 31, 2018 are as follows (in millions):
|
|
||
2019
|
$
|
—
|
|
2020
|
—
|
|
|
2021
|
—
|
|
|
2022
|
400
|
|
|
2023
|
—
|
|
|
Thereafter
|
450
|
|
|
|
$
|
850
|
|
Note K.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings from continuing operations
|
$
|
120
|
|
|
$
|
235
|
|
|
$
|
347
|
|
Tax expense attributable to net earnings from discontinued operations
|
—
|
|
|
144
|
|
|
25
|
|
|||
Other comprehensive earnings (loss):
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss) on investments and other financial instruments
|
(3
|
)
|
|
25
|
|
|
29
|
|
|||
Unrealized gain (loss) on foreign currency translation and cash flow hedging
|
(2
|
)
|
|
4
|
|
|
1
|
|
|||
Minimum pension liability adjustment
|
—
|
|
|
3
|
|
|
3
|
|
|||
Total income tax (benefit) expense allocated to other comprehensive earnings
|
(5
|
)
|
|
32
|
|
|
33
|
|
|||
Total income taxes
|
$
|
115
|
|
|
$
|
411
|
|
|
$
|
405
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
3.1
|
|
|
1.8
|
|
|
2.8
|
|
Deductible dividends paid to FNF 401(k) plan
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
Tax exempt interest income
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
Stock compensation
|
(0.5
|
)
|
|
(1.4
|
)
|
|
(1.7
|
)
|
Tax Credits
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Consolidated Partnerships
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
Tax reform
|
(7.1
|
)
|
|
(10.7
|
)
|
|
—
|
|
Non-deductible expenses and other, net
|
0.2
|
|
|
3.2
|
|
|
0.8
|
|
Effective tax rate
|
16.1
|
%
|
|
27.2
|
%
|
|
36.4
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Deferred Tax Assets:
|
|
|
|
|
|
||
Employee benefit accruals
|
$
|
64
|
|
|
$
|
68
|
|
Net operating loss carryforwards
|
7
|
|
|
9
|
|
||
Insurance reserve discounting
|
—
|
|
|
26
|
|
||
Accrued liabilities
|
7
|
|
|
10
|
|
||
Allowance for uncollectible accounts receivable
|
4
|
|
|
4
|
|
||
Pension plan
|
2
|
|
|
2
|
|
||
Tax credits
|
41
|
|
|
40
|
|
||
State income taxes
|
3
|
|
|
4
|
|
||
Investment securities
|
3
|
|
|
—
|
|
||
Other
|
1
|
|
|
1
|
|
||
Total gross deferred tax asset
|
132
|
|
|
164
|
|
||
Less: valuation allowance
|
22
|
|
|
22
|
|
||
Total deferred tax asset
|
$
|
110
|
|
|
$
|
142
|
|
Deferred Tax Liabilities:
|
|
|
|
|
|
||
Title plant
|
$
|
(55
|
)
|
|
$
|
(55
|
)
|
Amortization of goodwill and intangible assets
|
(113
|
)
|
|
(113
|
)
|
||
Other investments
|
(6
|
)
|
|
(5
|
)
|
||
Other
|
(23
|
)
|
|
(13
|
)
|
||
Investment securities
|
—
|
|
|
(41
|
)
|
||
Depreciation
|
(11
|
)
|
|
(9
|
)
|
||
Partnerships
|
(68
|
)
|
|
(75
|
)
|
||
Insurance reserve discounting
|
(61
|
)
|
|
—
|
|
||
Total deferred tax liability
|
$
|
(337
|
)
|
|
$
|
(311
|
)
|
Net deferred tax liability
|
$
|
(227
|
)
|
|
$
|
(169
|
)
|
Note L.
|
Summary of Reserve for Claim Losses
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in millions)
|
||||||||||
Beginning balance
|
$
|
1,490
|
|
|
$
|
1,487
|
|
|
$
|
1,583
|
|
Change in reinsurance recoverable
|
—
|
|
|
(4
|
)
|
|
(8
|
)
|
|||
Claim loss provision related to:
|
|
|
|
|
|
|
|
|
|||
Current year
|
221
|
|
|
219
|
|
|
236
|
|
|||
Prior years
|
—
|
|
|
19
|
|
|
(79
|
)
|
|||
Total title claim loss provision
|
221
|
|
|
238
|
|
|
157
|
|
|||
Claims paid, net of recoupments related to:
|
|
|
|
|
|
|
|
|
|||
Current year
|
(10
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|||
Prior years
|
(213
|
)
|
|
(223
|
)
|
|
(235
|
)
|
|||
Total title claims paid, net of recoupments
|
(223
|
)
|
|
(231
|
)
|
|
(245
|
)
|
|||
Ending balance of claim loss reserve for title insurance
|
$
|
1,488
|
|
|
$
|
1,490
|
|
|
$
|
1,487
|
|
Provision for title insurance claim losses as a percentage of title insurance premiums
|
4.5
|
%
|
|
4.9
|
%
|
|
3.3
|
%
|
Note M.
|
Commitments and Contingencies
|
Note O.
|
Employee Benefit Plans
|
|
Options
|
|
Weighted Average
Exercise Price
|
|
Exercisable
|
||||
Balance, December 31, 2015
|
9,300,509
|
|
|
$
|
23.92
|
|
|
5,256,426
|
|
Granted
|
35,000
|
|
|
35.63
|
|
|
|
|
|
Exercised
|
(1,846,153
|
)
|
|
10.12
|
|
|
|
|
|
Canceled
|
(7,673
|
)
|
|
26.17
|
|
|
|
|
|
Balance, December 31, 2016
|
7,481,683
|
|
|
$
|
27.38
|
|
|
5,821,592
|
|
Options issued as make-whole adjustment for BK Distribution
|
2,375,111
|
|
|
20.32
|
|
|
|
||
Exercised
|
(1,313,061
|
)
|
|
18.38
|
|
|
|
|
|
Canceled
|
(14,306
|
)
|
|
24.49
|
|
|
|
|
|
Balance, December 31, 2017
|
8,529,427
|
|
|
$
|
20.38
|
|
|
7,648,837
|
|
Exercised
|
(985,640
|
)
|
|
19.09
|
|
|
|
|
|
Balance, December 31, 2018
|
7,543,787
|
|
|
$
|
20.55
|
|
|
7,530,137
|
|
|
|
|
|
|||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Balance, December 31, 2015
|
1,391,874
|
|
|
$
|
30.85
|
|
Granted
|
803,292
|
|
|
34.54
|
|
|
Canceled
|
(3,266
|
)
|
|
28.07
|
|
|
Vested
|
(720,227
|
)
|
|
28.97
|
|
|
Balance, December 31, 2016
|
1,471,673
|
|
|
$
|
33.79
|
|
Granted
|
828,818
|
|
|
37.12
|
|
|
Restricted stock issued as make-whole adjustment for BK Distribution
|
545,676
|
|
|
24.62
|
|
|
Canceled
|
(11,233
|
)
|
|
24.52
|
|
|
Vested
|
(995,873
|
)
|
|
23.98
|
|
|
Balance, December 31, 2017
|
1,839,061
|
|
|
$
|
30.58
|
|
Granted
|
912,694
|
|
|
32.32
|
|
|
Canceled
|
(15,201
|
)
|
|
29.49
|
|
|
Vested
|
(915,316
|
)
|
|
28.80
|
|
|
Balance, December 31, 2018
|
1,821,238
|
|
|
$
|
32.35
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||||||
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
||||||||||
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
||||||||||
|
|
|
Remaining
|
|
Average
|
|
|
|
|
|
Remaining
|
|
Average
|
|
|
||||||||||
Range of
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
||||||||||
Exercise Prices
|
Options
|
|
Life
|
|
Price
|
|
Value
|
|
Options
|
|
Life
|
|
Price
|
|
Value
|
||||||||||
|
|
|
(In years)
|
|
|
|
(In millions)
|
|
|
|
(In years)
|
|
|
|
(In millions)
|
||||||||||
$0.00 - $14.38
|
551,224
|
|
|
0.85
|
|
$
|
14.38
|
|
|
$
|
9
|
|
|
551,224
|
|
|
0.85
|
|
$
|
14.38
|
|
|
$
|
9
|
|
$14.39 - $17.76
|
3,462,968
|
|
|
1.89
|
|
17.76
|
|
|
47
|
|
|
3,462,968
|
|
|
1.89
|
|
17.76
|
|
|
47
|
|
||||
$17.77 - $21.84
|
1,233,813
|
|
|
2.84
|
|
21.84
|
|
|
12
|
|
|
1,233,813
|
|
|
2.84
|
|
21.84
|
|
|
12
|
|
||||
$21.85 - $25.34
|
9,099
|
|
|
4.98
|
|
25.34
|
|
|
—
|
|
|
4,549
|
|
|
4.98
|
|
25.34
|
|
|
—
|
|
||||
$25.35 - $25.53
|
2,277,583
|
|
|
3.83
|
|
25.53
|
|
|
13
|
|
|
2,277,583
|
|
|
3.83
|
|
25.53
|
|
|
13
|
|
||||
$25.54 - $26.99
|
9,100
|
|
|
4.55
|
|
26.99
|
|
|
—
|
|
|
—
|
|
|
0
|
|
—
|
|
|
—
|
|
||||
|
7,543,787
|
|
|
|
|
|
|
$
|
81
|
|
|
7,530,137
|
|
|
|
|
|
|
$
|
81
|
|
Note P.
|
Supplementary Cash Flow Information
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(In millions)
|
||||||||||
Cash paid during the year:
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
|
$
|
34
|
|
|
$
|
102
|
|
|
$
|
125
|
|
Income taxes
|
|
204
|
|
|
528
|
|
|
367
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Investing activities:
|
|
|
|
|
|
|
||||||
Change in proceeds of sales of investments available for sale receivable in period
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
7
|
|
Change in purchases of investments available for sale payable in period
|
|
(2
|
)
|
|
(9
|
)
|
|
19
|
|
|||
Financing activities:
|
|
|
|
|
|
|
||||||
Liabilities assumed in connection with acquisitions (1):
|
|
|
|
|
|
|
|
|
|
|||
Fair value of assets acquired
|
|
$
|
50
|
|
|
$
|
595
|
|
|
$
|
625
|
|
Less: Total purchase price
|
|
33
|
|
|
481
|
|
|
557
|
|
|||
Liabilities and noncontrolling interests assumed
|
|
$
|
17
|
|
|
$
|
114
|
|
|
$
|
68
|
|
Change in treasury stock purchases payable in period
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Change in accrued dividends payable in period
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Texas
|
14.4
|
%
|
|
14.2
|
%
|
|
14.2
|
%
|
California
|
13.9
|
%
|
|
14.5
|
%
|
|
14.6
|
%
|
Florida
|
8.8
|
%
|
|
8.0
|
%
|
|
7.7
|
%
|
New York
|
6.3
|
%
|
|
6.3
|
%
|
|
7.1
|
%
|
|
Title
|
|
Corporate and Other
|
|
Total FNF
|
||||||
|
(In millions)
|
||||||||||
Title premiums
|
$
|
4,911
|
|
|
$
|
—
|
|
|
$
|
4,911
|
|
Other revenues
|
2,189
|
|
|
426
|
|
|
2,615
|
|
|||
Revenues from external customers
|
7,100
|
|
|
426
|
|
|
7,526
|
|
|||
Interest and investment income, including realized gains and losses
|
60
|
|
|
8
|
|
|
68
|
|
|||
Total revenues
|
7,160
|
|
|
434
|
|
|
7,594
|
|
|||
Depreciation and amortization
|
154
|
|
|
28
|
|
|
182
|
|
|||
Interest expense
|
—
|
|
|
43
|
|
|
43
|
|
|||
Earnings (loss) from continuing operations, before income taxes and equity in earnings of unconsolidated affiliates
|
875
|
|
|
(125
|
)
|
|
750
|
|
|||
Income tax expense (benefit)
|
163
|
|
|
(43
|
)
|
|
120
|
|
|||
Earnings (loss) from continuing operations, before equity in earnings of unconsolidated affiliates
|
712
|
|
|
(82
|
)
|
|
630
|
|
|||
Equity in earnings of unconsolidated affiliates
|
4
|
|
|
1
|
|
|
5
|
|
|||
Earnings (loss) from continuing operations
|
$
|
716
|
|
|
$
|
(81
|
)
|
|
$
|
635
|
|
Assets
|
$
|
8,391
|
|
|
$
|
910
|
|
|
$
|
9,301
|
|
Goodwill
|
2,462
|
|
|
264
|
|
|
2,726
|
|
|
Title
|
|
Corporate and Other
|
|
Total FNF
|
||||||
|
(In millions)
|
||||||||||
Title premiums
|
$
|
4,893
|
|
|
$
|
—
|
|
|
$
|
4,893
|
|
Other revenues
|
2,181
|
|
|
456
|
|
|
2,637
|
|
|||
Revenues from external customers
|
7,074
|
|
|
456
|
|
|
7,530
|
|
|||
Interest and investment income (loss), including realized gains and losses
|
137
|
|
|
(4
|
)
|
|
133
|
|
|||
Total revenues
|
7,211
|
|
|
452
|
|
|
7,663
|
|
|||
Depreciation and amortization
|
159
|
|
|
24
|
|
|
183
|
|
|||
Interest expense
|
—
|
|
|
48
|
|
|
48
|
|
|||
Earnings (loss) from continuing operations, before income taxes and equity in earnings of unconsolidated affiliates
|
955
|
|
|
(91
|
)
|
|
864
|
|
|||
Income tax expense (benefit)
|
274
|
|
|
(39
|
)
|
|
235
|
|
|||
Earnings (loss) from continuing operations, before equity in earnings of unconsolidated affiliates
|
681
|
|
|
(52
|
)
|
|
629
|
|
|||
Equity in earnings of unconsolidated affiliates
|
10
|
|
|
—
|
|
|
10
|
|
|||
Earnings (loss) from continuing operations
|
$
|
691
|
|
|
$
|
(52
|
)
|
|
$
|
639
|
|
Assets
|
$
|
8,405
|
|
|
$
|
746
|
|
|
$
|
9,151
|
|
Goodwill
|
2,432
|
|
|
314
|
|
|
2,746
|
|
|
Title
|
|
Corporate and Other
|
|
Total FNF
|
||||||
|
(In millions)
|
||||||||||
Title premiums
|
$
|
4,723
|
|
|
$
|
—
|
|
|
$
|
4,723
|
|
Other revenues
|
2,128
|
|
|
288
|
|
|
2,416
|
|
|||
Revenues from external customers
|
6,851
|
|
|
288
|
|
|
7,139
|
|
|||
Interest and investment income (loss), including realized gains and losses
|
127
|
|
|
(9
|
)
|
|
118
|
|
|||
Total revenues
|
6,978
|
|
|
279
|
|
|
7,257
|
|
|||
Depreciation and amortization
|
148
|
|
|
12
|
|
|
160
|
|
|||
Interest expense
|
—
|
|
|
64
|
|
|
64
|
|
|||
Earnings (loss) from continuing operations, before income taxes and equity in earnings of unconsolidated affiliates
|
1,025
|
|
|
(70
|
)
|
|
955
|
|
|||
Income tax expense (benefit)
|
386
|
|
|
(39
|
)
|
|
347
|
|
|||
Earnings (loss) from continuing operations, before equity in earnings of unconsolidated affiliates
|
639
|
|
|
(31
|
)
|
|
608
|
|
|||
Equity in earnings of unconsolidated affiliates
|
13
|
|
|
1
|
|
|
14
|
|
|||
Earnings (loss) from continuing operations
|
$
|
652
|
|
|
$
|
(30
|
)
|
|
$
|
622
|
|
Assets
|
$
|
8,756
|
|
|
$
|
5,765
|
|
|
$
|
14,521
|
|
Goodwill
|
2,345
|
|
|
210
|
|
|
2,555
|
|
•
|
Title.
This segment consists of the operations of our title insurance underwriters and related businesses which provide title insurance and escrow and other title-related services including trust activities, trustee sales guarantees, recordings and reconveyances, and home warranty products. This segment also includes our transaction services business, which includes other title-related services used in the production and management of mortgage loans, including mortgage loans that experience default.
|
•
|
Corporate and Other.
This
segment consists of the operations of the parent holding company, our real estate technology subsidiaries, other smaller, non-title businesses and certain unallocated corporate overhead expenses and eliminations of revenues and expenses between it and our Title segment. This segment also includes the results of operations of Pacific Union through the date of the Pacific Union Sale and the assets of discontinued operations, Black Knight and FNFV, as of December 31, 2016. Refer to Note G.
Discontinued Operations
for further information.
|
Note S.
|
Recent Accounting Pronouncements
|
|
|
|
|
|
|
Year ended December 31,
|
||
|
|
|
|
|
|
2018
|
||
Revenue Stream
|
|
Income Statement Classification
|
|
Segment
|
|
Total Revenue
|
||
Revenue from insurance contracts:
|
|
|
|
|
|
(in millions)
|
||
Direct title insurance premiums
|
|
Direct title insurance premiums
|
|
Title
|
|
$
|
2,221
|
|
Agency title insurance premiums
|
|
Agency title insurance premiums
|
|
Title
|
|
2,690
|
|
|
Home warranty
|
|
Escrow, title-related and other fees
|
|
Title
|
|
182
|
|
|
Total revenue from insurance contracts
|
|
|
|
|
|
5,093
|
|
|
Revenue from contracts with customers:
|
|
|
|
|
|
|
||
Escrow fees
|
|
Escrow, title-related and other fees
|
|
Title
|
|
826
|
|
|
Other title-related fees and income
|
|
Escrow, title-related and other fees
|
|
Title
|
|
585
|
|
|
ServiceLink, excluding title premiums, escrow fees, and subservicing fees
|
|
Escrow, title-related and other fees
|
|
Title
|
|
379
|
|
|
Real estate brokerage
|
|
Escrow, title-related and other fees
|
|
Corporate and other
|
|
316
|
|
|
Real estate technology
|
|
Escrow, title-related and other fees
|
|
Corporate and other
|
|
101
|
|
|
Other
|
|
Escrow, title-related and other fees
|
|
Corporate and other
|
|
9
|
|
|
Total revenue from contracts with customers
|
|
|
|
|
|
2,216
|
|
|
Other revenue:
|
|
|
|
|
|
|
||
Loan subservicing revenue
|
|
Escrow, title-related and other fees
|
|
Title
|
|
217
|
|
|
Interest and investment income
|
|
Interest and investment income
|
|
Various
|
|
177
|
|
|
Realized gains and losses, net
|
|
Realized gains and losses, net
|
|
Various
|
|
(109
|
)
|
|
Total revenues
|
|
Total revenues
|
|
|
|
7,594
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Trade receivables
|
$
|
284
|
|
|
$
|
292
|
|
Deferred revenue (contract liabilities)
|
105
|
|
|
107
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 15.
|
Exhibits, Financial Statement Schedules and Reports on Form 8-K
|
Schedule II:
Fidelity National Financial, Inc. (Parent Company Financial Statements)
|
Exhibit
Number
|
Description
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
|
4.9
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
Exhibit
Number
|
Description
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21
|
|
10.22
|
Exhibit
Number
|
Description
|
10.23
|
|
10.24
|
|
10.25
|
|
10.26
|
|
10.27
|
|
10.28
|
|
10.29
|
|
10.30
|
|
10.31
|
|
10.32
|
|
10.33
|
|
10.34
|
|
10.35
|
|
10.36
|
|
10.37
|
|
10.38
|
|
Exhibit
Number
|
Description
|
21.1
|
|
23.1
|
|
23.2
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101
|
The following materials from Fidelity National Financial, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Comprehensive Earnings, (iv) the Consolidated Statements of Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
|
|
Fidelity National Financial, Inc.
|
|
|
|
By:
|
/s/ Raymond R. Quirk
|
|
|
|
Raymond R. Quirk
|
|
|
|
Chief Executive Officer and Director
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
||||
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Raymond R. Quirk
|
|
Chief Executive Officer and Director
|
|
February 19, 2019
|
Raymond R. Quirk
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Anthony J. Park
|
|
Chief Financial Officer
|
|
February 19, 2019
|
Anthony J. Park
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ William P. Foley, II
|
|
Director and Chairman of the Board
|
|
February 19, 2019
|
William P. Foley, II
|
|
|
|
|
|
|
|
|
|
/s/ Douglas K. Ammerman
|
|
Director
|
|
February 19, 2019
|
Douglas K. Ammerman
|
|
|
|
|
|
|
|
|
|
/s/ Thomas M. Hagerty
|
|
Director
|
|
February 19, 2019
|
Thomas M. Hagerty
|
|
|
|
|
|
|
|
|
|
/s/ Daniel D. (Ron) Lane
|
|
Director
|
|
February 19, 2019
|
Daniel D. (Ron) Lane
|
|
|
|
|
|
|
|
|
|
/s/ Richard N. Massey
|
|
Director
|
|
February 19, 2019
|
Richard N. Massey
|
|
|
|
|
|
|
|
|
|
/s/ Heather H. Murren
|
|
Director
|
|
February 19, 2019
|
Heather H. Murren
|
|
|
|
|
|
|
|
|
|
/s/ John D. Rood
|
|
Director
|
|
February 19, 2019
|
John D. Rood
|
|
|
|
|
|
|
|
|
|
/s/ Peter O. Shea, Jr.
|
|
Director
|
|
February 19, 2019
|
Peter O. Shea, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Cary H. Thompson
|
|
Director
|
|
February 19, 2019
|
Cary H. Thompson
|
|
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions, except share data)
|
||||||
ASSETS
|
|||||||
Cash
|
$
|
349
|
|
|
$
|
230
|
|
Short term investments
|
202
|
|
|
85
|
|
||
Equity securities, at fair value
|
1
|
|
|
1
|
|
||
Investment in unconsolidated affiliates
|
12
|
|
|
13
|
|
||
Notes receivable
|
543
|
|
|
576
|
|
||
Investments in and amounts due from subsidiaries
|
4,629
|
|
|
4,672
|
|
||
Property and equipment, net
|
5
|
|
|
4
|
|
||
Prepaid expenses and other assets
|
11
|
|
|
1
|
|
||
Income taxes receivable
|
4
|
|
|
—
|
|
||
Total assets
|
$
|
5,756
|
|
|
$
|
5,582
|
|
LIABILITIES AND EQUITY
|
|||||||
Liabilities:
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities
|
$
|
63
|
|
|
$
|
72
|
|
Income taxes payable
|
—
|
|
|
137
|
|
||
Deferred tax liability
|
227
|
|
|
169
|
|
||
Notes payable
|
836
|
|
|
757
|
|
||
Total liabilities
|
1,126
|
|
|
1,135
|
|
||
Equity:
|
|
|
|
|
|
||
FNF common stock, $0.0001 par value; authorized 487,000,000 shares as of December 31, 2018 and 2017; outstanding of 275,373,834 and 274,431,737 as of December 31, 2018 and 2017, respectively; and issued of 289,601,523 and 287,718,304 as of December 31, 2018 and 2017, respectively
|
—
|
|
|
—
|
|
||
Preferred stock, $0.0001 par value; authorized 50,000,000 shares, issued and outstanding, none
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
4,500
|
|
|
4,587
|
|
||
Retained earnings
|
641
|
|
|
217
|
|
||
Accumulated other comprehensive loss
|
(13
|
)
|
|
111
|
|
||
Less: Treasury stock, 14,227,689 shares and 13,286,567 shares as of December 31, 2018 and 2017, respectively, at cost
|
(498
|
)
|
|
(468
|
)
|
||
Total equity of Fidelity National Financial, Inc. common shareholders
|
4,630
|
|
|
4,447
|
|
||
Total liabilities and equity
|
$
|
5,756
|
|
|
$
|
5,582
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions, except per share data)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Other fees and revenue
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
Interest and investment income and realized gains
|
40
|
|
|
24
|
|
|
24
|
|
|||
Realized gains and losses, net
|
4
|
|
|
—
|
|
|
—
|
|
|||
Total revenues
|
44
|
|
|
25
|
|
|
28
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Personnel expenses
|
35
|
|
|
32
|
|
|
26
|
|
|||
Other operating expenses
|
20
|
|
|
8
|
|
|
6
|
|
|||
Interest expense
|
43
|
|
|
48
|
|
|
64
|
|
|||
Total expenses
|
98
|
|
|
88
|
|
|
96
|
|
|||
Losses before income tax benefit and equity in earnings of subsidiaries
|
(54
|
)
|
|
(63
|
)
|
|
(68
|
)
|
|||
Income tax benefit
|
(9
|
)
|
|
(17
|
)
|
|
(24
|
)
|
|||
Losses before equity in earnings of subsidiaries
|
(45
|
)
|
|
(46
|
)
|
|
(44
|
)
|
|||
Equity in earnings of subsidiaries
|
673
|
|
|
685
|
|
|
671
|
|
|||
Earnings from continuing operations
|
628
|
|
|
639
|
|
|
627
|
|
|||
Equity in earnings of discontinued operations
|
—
|
|
|
132
|
|
|
23
|
|
|||
Net earnings attributable to Fidelity National Financial, Inc. common shareholders
|
$
|
628
|
|
|
$
|
771
|
|
|
$
|
650
|
|
|
|
|
|
|
|
||||||
Retained earnings, beginning of year
|
$
|
217
|
|
|
$
|
1,784
|
|
|
$
|
1,374
|
|
Dividends declared
|
(330
|
)
|
|
(279
|
)
|
|
(240
|
)
|
|||
Distribution of Black Knight to FNF common shareholders
|
—
|
|
|
(823
|
)
|
|
—
|
|
|||
Redemption of FNFV tracking stock and distribution of Cannae Holdings, Inc. common stock to holders of FNFV tracking stock
|
—
|
|
|
(1,236
|
)
|
|
—
|
|
|||
Cumulative effect of adoption of accounting standards
|
128
|
|
|
—
|
|
|
—
|
|
|||
Other equity activity
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Net earnings attributable to Fidelity National Financial, Inc. common shareholders
|
628
|
|
|
771
|
|
|
650
|
|
|||
Retained earnings, end of year
|
$
|
641
|
|
|
$
|
217
|
|
|
$
|
1,784
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
|||
Net earnings
|
$
|
628
|
|
|
$
|
771
|
|
|
$
|
650
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in earnings of unconsolidated affiliates
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Gain on Pacific Union Sale
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of assets
|
—
|
|
|
—
|
|
|
3
|
|
|||
Equity in earnings of subsidiaries
|
(673
|
)
|
|
(817
|
)
|
|
(694
|
)
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1
|
|
|||
Stock-based compensation
|
31
|
|
|
34
|
|
|
36
|
|
|||
Net change in income taxes
|
(81
|
)
|
|
(130
|
)
|
|
29
|
|
|||
Net decrease (increase) in prepaid expenses and other assets
|
(10
|
)
|
|
18
|
|
|
26
|
|
|||
Net increase (decrease) in accounts payable and other accrued liabilities
|
2
|
|
|
17
|
|
|
(13
|
)
|
|||
Net cash (used in) provided by operating activities
|
(109
|
)
|
|
(107
|
)
|
|
36
|
|
|||
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Purchases of investments available for sale
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Net (purchases of) proceeds from short-term investment activities
|
(117
|
)
|
|
(84
|
)
|
|
162
|
|
|||
Cash proceeds from the Pacific Union Sale
|
33
|
|
|
—
|
|
|
—
|
|
|||
Additions to notes receivable
|
—
|
|
|
(13
|
)
|
|
(24
|
)
|
|||
Collection of notes receivable
|
33
|
|
|
49
|
|
|
22
|
|
|||
Distributions from unconsolidated affiliates
|
2
|
|
|
1
|
|
|
2
|
|
|||
Additional investments in unconsolidated affiliates
|
—
|
|
|
(2
|
)
|
|
(8
|
)
|
|||
Net cash (used in) provided by investing activities
|
(49
|
)
|
|
(50
|
)
|
|
154
|
|
|||
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Borrowings
|
442
|
|
|
296
|
|
|
—
|
|
|||
Debt service payments
|
(368
|
)
|
|
(530
|
)
|
|
(2
|
)
|
|||
Equity portion of debt conversions paid in cash
|
(142
|
)
|
|
(317
|
)
|
|
(2
|
)
|
|||
Dividends paid
|
(328
|
)
|
|
(278
|
)
|
|
(240
|
)
|
|||
Purchases of treasury stock
|
(20
|
)
|
|
(23
|
)
|
|
(268
|
)
|
|||
Exercise of stock options
|
19
|
|
|
31
|
|
|
19
|
|
|||
Payment for shares withheld for taxes and in treasury
|
(9
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|||
Cash transferred in the Black Knight spin-off
|
—
|
|
|
(87
|
)
|
|
—
|
|
|||
Cash transferred in the FNFV split-off
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||
Other financing activity
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net dividends from subsidiaries
|
685
|
|
|
1,090
|
|
|
265
|
|
|||
Net cash provided by (used in) financing activities
|
277
|
|
|
141
|
|
|
(237
|
)
|
|||
Net change in cash and cash equivalents
|
119
|
|
|
(16
|
)
|
|
(47
|
)
|
|||
Cash at beginning of year
|
230
|
|
|
246
|
|
|
293
|
|
|||
Cash at end of year
|
$
|
349
|
|
|
$
|
230
|
|
|
$
|
246
|
|
B.
|
Notes Payable
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions)
|
||||||
Unsecured notes, net of discount, interest payable semi-annually at 4.50%, due August 2028
|
|
$
|
442
|
|
|
$
|
—
|
|
Unsecured notes, net of discount, interest payable semi-annually at 5.50%, due September 2022
|
|
398
|
|
|
397
|
|
||
Unsecured convertible notes, net of discount, interest payable semi-annually at 4.25%, due August 2018
|
|
—
|
|
|
65
|
|
||
Revolving Credit Facility, unsecured, unused portion of $800 at December 31, 2018, due April 2022 with interest payable monthly at LIBOR + 1.40%
|
|
(4
|
)
|
|
295
|
|
||
|
|
$
|
836
|
|
|
$
|
757
|
|
C.
|
Supplemental Cash Flow Information
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Cash paid during the year:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
34
|
|
|
$
|
54
|
|
|
$
|
63
|
|
Income tax payments
|
204
|
|
|
528
|
|
|
367
|
|
D.
|
Cash Dividends Received
|
Name of Grantee:
|
|
Number of Shares of Restricted Stock Granted:
|
|
Effective Date of Grant:
|
October 26, 2018
|
Vesting and Period of Restriction:
|
Subject to the terms of the Plan and the Restricted Stock Award Agreement attached hereto, the Period of Restriction shall lapse, and the Shares shall vest and become free of the forfeiture provisions contained in the Restricted Stock Award Agreement, with respect to one third of the shares on each anniversary of the Effective Date of Grant and satisfaction of the Performance Restriction as set forth on Exhibit A of the Restricted Stock Award Agreement, attached hereto.
|
Section 1.
|
GRANT OF RESTRICTED STOCK
|
Section 2.
|
FORFEITURE AND TRANSFER RESTRICTIONS
|
Section 3.
|
STOCK CERTIFICATES
|
Section 4.
|
SHAREHOLDER RIGHTS
|
Section 5.
|
DIVIDENDS
|
Section 6.
|
MISCELLANEOUS PROVISIONS
|
Anniversary Date
|
% of Restricted Stock
|
First (1
st
) anniversary of the Effective Date of Grant
|
33.33%
|
Second (2
nd
) anniversary of the Effective Date of Grant
|
33.33%
|
Third (3
rd
) anniversary of the Effective Date of Grant
|
33.34%
|
|
|
|
COMPANY
|
|
INCORPORATION
|
FNTG Holdings, LLC
|
|
Delaware
|
Chicago Title Insurance Company
|
|
Florida
|
Fidelity National Title Group, Inc.
|
|
Delaware
|
ServiceLink Holdings, Inc.
|
|
Delaware
|
Fidelity National Title Insurance Company
|
|
Florida
|
Commonwealth Land Title Insurance Company
|
|
Florida
|
1.
|
Registration Statements (Form S-3 Nos. 333-157123, 333-147391, 333-174650) of Fidelity National Financial, Inc.
|
2.
|
Registration Statements (Form S-4 Nos. 333-225287, 333-194938 and 333-190902) of Fidelity National Financial, Inc.
|
3.
|
Registration Statements (Form S-8 Nos. 333-197249, 333-190527, 333-157643, 333-132843, 333-138254, 333-129886, 333-129016, 333-176395, 333-213427) of Fidelity National Financial, Inc.
|
|
a)
|
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
|
b)
|
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
c)
|
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
|
d)
|
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a)
|
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
|
b)
|
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
By:
|
/s/ Raymond R. Quirk
|
|
|
|
|
Raymond R. Quirk
|
|
|
|
|
Chief Executive Officer
|
|
|
|
a)
|
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
|
b)
|
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
c)
|
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
|
d)
|
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a)
|
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
|
b)
|
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
By:
|
/s/Anthony J. Park
|
|
|
|
|
Anthony J. Park
|
|
|
|
|
Chief Financial Officer
|
|
|
1.
|
|
The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
|
|
|
|
2.
|
|
The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.
|
|
|
|
|
|
By:
|
/s/ Raymond R. Quirk
|
|
||
|
Raymond R. Quirk
|
|
||
|
Chief Executive Officer
|
|
1.
|
|
The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
|
|
|
|
2.
|
|
The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
By:
|
/s/ Anthony J. Park
|
|
||
|
Anthony J. Park
|
|
||
|
Chief Financial Officer
|
|