Filed by LandAmerica Financial Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: LandAmerica Financial Group, Inc.
Commission File No. 1-13990
On November 10, 2008, LandAmerica Financial Group, Inc. (LandAmerica) issued the following press release reporting its financial results for the third quarter ended September 30, 2008:
5600 Cox Road Glen Allen, VA 23060 Telephone: (804) 267-8000 Fax: (804) 267-8466 Website: www.landam.com
FOR IMMEDIATE RELEASE | Bill Evans | Lloyd Osgood | ||
November 10, 2008 | EVP Chief Financial Officer | SVP Brand Resources | ||
Phone: (804) 267-8114 | Phone: (804) 267-8133 | |||
bevans@landlam.com | losgood@landlam.com |
RICHMOND, VA - LandAmerica Financial Group, Inc. (NYSE: LFG) announces operating results for the third quarter and nine months ended September 30, 2008.
Third | Third | |||
Quarter 2008 | Quarter 2007 | |||
(In millions, except per share data) | ||||
Total revenue | $631.8 | $906.8 | ||
Net loss | $(599.6) | $(20.8) | ||
Net loss per diluted share | $(39.45) | $(1.28) | ||
Nine Months | Nine Months | |||
2008 | 2007 | |||
(In millions, except per share data) | ||||
Total revenue | $2,030.6 | $2,860.4 | ||
Net loss | $(673.8) | $(8.2) | ||
Net loss per diluted share | $(44.33) | $(0.49) |
Commenting on LandAmericas performance, Chairman and Chief Executive Officer Theodore L. Chandler, Jr. said, This quarter we are taking a market value-driven, non-cash write-down of goodwill, other intangible assets, certain investments and deferred tax assets of $462 million.
Chandler added, We are also further strengthening our reserves by approximately $90 million to account for adverse claims development. We continue to aggressively reduce our cost infrastructure to adjust for these exceptionally difficult real estate and credit markets and, as a result, incurred $12 million of exit and termination charges this quarter.
On November 7, 2008, we signed a definitive merger agreement with Fidelity National Financial, Inc. to join the Fidelity family of companies. We believe that this combination is in the best interests of our shareholders, customers and employees and look forward to bringing the strength of our combined capabilities to the marketplace.
Merger Agreement
Under the terms of the definitive agreement, which has been approved by the boards of directors of both companies, LandAmerica shareholders will receive 0.993 shares of Fidelity common stock for each share of LandAmerica common stock issued and outstanding at the closing of the merger. The exchange ratio will be reduced if the Companys sale of Centennial Bank, which is a condition to closing the merger, results in net proceeds to the Company of less than a threshold amount. The merger transaction will be immediately preceded by a loan from certain of Fidelitys title insurance subsidiaries to the Company and/or Fidelity, and/or a dividend to Fidelity, in an amount equal to the book value, as of September 30, 2008, of the statutory surplus of Commonwealth Land Title Insurance Company and/or Lawyers Title Insurance Corporation. The proceeds from the loans and/or dividend will be used to repay outstanding indebtedness under the Companys revolving credit facility, private placement senior notes and/or existing Fidelity debt.
- more -
Page 2 of 12 |
The transaction is subject to certain closing conditions, including the approval of LandAmerica shareholders, antitrust and state regulatory approvals, the sale of Centennial Bank, receipt of certain waivers under the Companys revolving credit facility (Credit Agreement) and Note Purchase and Master Shelf Agreement with Prudential Investment Management, Inc. (Note Purchase Agreement) and the satisfaction of other closing conditions. The merger agreement also provides that Fidelity can terminate the agreement on or before November 21, 2008 if its remaining due diligence investigation causes it to determine, in its sole discretion, that it would be inadvisable to consummate the merger.
In connection with the execution of the merger agreement, a subsidiary of Fidelity also agreed to provide the Company with a $30 million stand-by credit facility for the Companys 1031 exchange subsidiary secured by auction rate securities held by that subsidiary. The stand-by credit facility cannot be drawn upon until the expiration of Fidelitys due diligence contingency on November 21, 2008.
Third Quarter Highlights
(Unless otherwise indicated, all references to growth rate percentages below compare the results of the period to those of the prior year comparable period.)
- more -
Page 3 of 12
SEGMENT RESULTS
Title Operations
Third Quarter | Third Quarter | Percent | |||
2008 | 2007 | Change | |||
(Dollars in millions) | |||||
Total revenue | $ 534.3 | $ 791.0 | (32.5)% | ||
Pretax (losses) earnings before non-cash | |||||
charges | $ (114.4) | $ 1.2 | n/m | ||
Non-cash charges | $ (217.9) | - | - | ||
Pretax (losses) earnings after non-cash charges | $ (332.3) | $ 1.2 | n/m | ||
Average full-time equivalents | 7,000 | 10,400 | (32.7)% | ||
Claims ratio | 23.5% | 9.9% | 13.6 bps | ||
|
|||||
bps basis points | |||||
n/m not meaningful |
Nine Months | Nine Months | Percent | |||
2008 | 2007 | Change | |||
(Dollars in millions) | |||||
Total revenue | $1,711.0 | $2,487.1 | (31.2)% | ||
Pretax (losses) earnings before non-cash | |||||
charges | $ (194.9) | $ 65.7 | n/m | ||
Non-cash charges | $ (217.9) | - | - | ||
Pretax (losses) earnings after non-cash charges | $ (412.8) | $ 65.7 | n/m | ||
Average full-time equivalents | 7,600 | 11,000 | (30.9)% | ||
Claims ratio | 16.3% | 8.6% | 7.7 bps | ||
|
|||||
bps basis points | |||||
n/m not meaningful |
In the Title Operations segment, total revenue was negatively affected by the decline in residential real estate transactions, lower property values, a decrease in commercial revenue and a $19.6 million non-cash impairment of certain securities. Revenue in 2007 included several large commercial transactions in the second quarter totaling approximately $17 million.
Responding to significant reductions in mortgage origination volumes, the Company has aggressively cut operating costs in this segment. FTEs in third quarter and the first nine months of 2008 were down by roughly a third from the comparable periods in 2007. The reduction in FTEs lowered salary and employee benefit costs by $71.0 million, or 32.0%, in third quarter 2008 and by 33.7% to $490.1 million in the first nine months of 2008 from the comparable periods in 2007.
Additionally, before a $60.5 million non-cash contingent liability reserve, general, administrative and other expenses decreased by $20.7 million, or 16.7%, in third quarter 2008 from third quarter 2007 and by $75.7 million, or 19.8%, in the first nine months of 2008 from the comparable period in 2007.
The claims provision as a percentage of operating revenue for the Title Operations segment was 23.5% in third quarter 2008, up from 9.9% in third quarter 2007, reflecting $5.1 million of large claims activity incurred and an increase in the frequency of claims reported for policy years 2005 through 2007, which resulted in upward development in the estimated provision for those policy years.
In addition to the impairment of certain securities, non-cash charges include impairments of goodwill and other intangibles of $137.8 million.
- more -
Page 4 of 12
Lender Services
Third Quarter | Third Quarter | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 61.0 | $ 67.4 | (9.5)% | |||
Pretax earnings (losses) before non-cash charges | $ 3.7 | $ (2.7) | n/m | |||
Non-cash charges | $ (74.9) | - | - | |||
Pretax losses after non-cash charges | $ (71.2) | $ (2.7) | n/m | |||
Average full-time equivalents | 1,560 | 1,720 | (9.3)% | |||
|
||||||
n/m not meaningful |
Nine Months | Nine Months | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 197.3 | $220.1 | (10.4)% | |||
Pretax earnings before non-cash charges | $ 17.2 | $ 11.1 | n/m | |||
Non-cash charges | $ (74.9) | $ (20.8) | n/m | |||
Pretax losses after non-cash charges | $ (57.7) | $ (9.7) | n/m | |||
Average full-time equivalents | 1,550 | 1,780 | (12.9)% | |||
|
||||||
n/m not meaningful |
Before non-cash charges, the Lender Services segment generated pretax earnings in third quarter 2008 and the first nine months of 2008. Total revenue was negatively affected by lower volume in certain product lines of the mortgage origination businesses and the loan servicing business. The default management services business experienced higher volume due primarily to increased demand for lien monitoring, foreclosure and other related services as a result of the continuing downturn in the residential real estate market. The loan sub-servicing business experienced higher revenue primarily from new product offerings. Revenue was positively affected in 2007 by the acceleration of deferred revenue in the loan servicing business in first quarter 2007.
Responding to significant reductions in mortgage origination volumes, the Company reduced average FTEs third quarter 2008 compared to third quarter 2007 by approximately 160, resulting in salary and employee benefit cost reductions of $2.0 million, or 8.2%, in third quarter 2008 from third quarter 2007. Third quarter 2008 FTEs included an increase along with demand for new loan sub-servicing products and additional demand for default management services, appraisal and subservicing products. The Company reduced average FTEs by approximately 230 in the first nine months of 2008, which resulted in salary and employee benefit reductions of $7.8 million, or 9.9%, in the first nine months of 2008 from the comparable period in 2007. Additionally, general, administrative and other expenses decreased by $10.5 million, or 25.5%, in third quarter 2008 from third quarter 2007 and by 15.1% to $96.9 million in the first nine months of 2008 over the comparable period in 2007.
Financial Services
Third Quarter | Third Quarter | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 13.0 | $ 10.8 | 20.4% | |||
Pretax earnings before non-cash charges | $ 5.1 | $ 4.0 | 27.5% | |||
Non-cash charges | $ (0.5) | - | - | |||
Pretax earnings after non-cash charges | $ 4.6 | $ 4.0 | 15.0% | |||
Average full-time equivalents | 27 | 21 | 28.6% |
- more -
Page 5 of 12
Nine Months | Nine Months | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 37.8 | $ 32.6 | 16.0% | |||
Pretax earnings before non-cash charges | $ 15.1 | $ 14.1 | 7.1% | |||
Non-cash charges | $ (0.5) | - | - | |||
Pretax earnings after non-cash charges | $ 14.6 | $ 14.1 | 3.5% | |||
Average full-time equivalents | 27 | 21 | 28.6% |
In the Financial Services segment, revenue increased primarily due to an increase in investment income and an increase in 1031 exchange business previously serviced in the Title Operations segment, offset in part by the non-cash impairment of certain securities. Pretax earnings also included the effect of increased interest expense from deposit liabilities. Average FTEs increased primarily to support the increase in 1031 exchange business.
Corporate and Other
Third Quarter | Third Quarter | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 23.5 | $ 37.6 | (37.5)% | |||
Pretax losses before non-cash charges | $ (31.6) | $ (30.9) | (2.3)% | |||
Non-cash charges | $ (13.4) | - | - | |||
Pretax losses after non-cash charges | $ (45.0) | $ (30.9) | (45.6)% | |||
Average full-time equivalents | 1,000 | 1,170 | (14.5)% |
Nine Months | Nine Months | Percent | ||||
2008 | 2007 | Change | ||||
(Dollars in millions) | ||||||
Total revenue | $ 84.5 | $ 120.6 | (29.9)% | |||
Pretax losses before non-cash charges | $ (86.9) | $ (79.5) | (9.3)% | |||
Non-cash charges | $ (13.4) | - | - | |||
Pretax losses after non-cash charges | $ (100.3) | $ (79.5) | (26.2)% | |||
Average full-time equivalents | 1,040 | 1,080 | (3.7)% |
Corporate and Other includes unallocated corporate expenses, residential home warranty and inspection businesses and commercial property appraisal and assessment businesses. Before non-cash charges, total revenue and pretax losses were negatively affected by declines in the commercial operations and in home warranty and property inspection businesses. The home warranty and property inspection businesses are dependent on existing home sale volumes. Revenue from commercial operations within Corporate and Other was $14.4 million in third quarter 2008 compared to $23.4 million in third quarter 2007, a decrease of 38.5% . Revenue from commercial operations was $48.3 million in the first nine months of 2008 compared to $67.4 million in the first nine months of 2007, a decrease of 28.3% .
Average FTEs decreased by 14.5% in third quarter 2008 compared to third quarter 2007. The decline in FTEs was in response to lower business volume and lowered salary and employee benefit costs by $2.2 million, or 8.8%, in third quarter 2008 from third quarter 2007.
In addition to $1.2 million to impair certain securities, non-cash charges include impairments of goodwill and other intangibles of $12.2 million.
Income Taxes
The effective income tax rate was (21.1)% in the first nine months of 2008 compared to 13.2% in the first nine months of 2007. In compliance with financial accounting standards, which require companies to evaluate and value their deferred tax assets, the Company has determined that a valuation allowance should be placed against its net deferred tax asset. This resulted in a third quarter non-cash charge to income tax expense of $155.7 million.
- more -
Page 6 of 12
Liquidity
As more fully discussed in the Companys Form 10-Q for the period ended September 30, 2008 that was filed with the Securities and Exchange Commission (SEC) today, the severe downturn in the housing and mortgage markets and the general credit crisis have placed a significant strain on the Companys liquidity and capital resources to the point that it has become increasingly difficult for the Company to remain an independent public company. Operating revenues have declined substantially and demand on cash resources for operations has significantly increased due to, among other things, the illiquidity of auction rate securities held for the benefit of the Companys 1031 exchange customers. To address the decline in revenue and preserve capital, the Company continued to aggressively cut costs, suspended its quarterly dividend and paused certain capital expenditures related to its Fusion initiatives.
The effects of the severe downturn also resulted in the Companys violation at September 30, 2008 of the financial debt covenants of its Note Purchase Agreement and its Credit Agreement. The covenant violations, unless waived by the lenders, constitute an event of default under the agreements, giving the lenders the right to declare all principal and accrued interest payable immediately, and exercise other rights and remedies granted under the agreements. A declaration for immediate payment under either of these agreements also would constitute an event of default under our convertible note obligations, enabling the holders of such indebtedness to require the immediate payment of such obligations.
The Company is currently in discussions with its lenders to obtain a waiver and amendment to the Note Purchase Agreement and Credit Agreement. Any agreement reached with its lenders could result in new terms which are less favorable than current terms under the existing agreements and could involve a reduction in availability of funds, an increase in interest rates and shorter maturities, among other things. If the Company is not successful in securing waivers and amendments, it may need to seek new financing arrangements from other lenders. Such alternative financing arrangements may be unavailable to the Company or available on terms substantially less favorable than its existing credit facilities.
Although the transaction with Fidelity is structured to repay the Companys Note Purchase Agreement and its Credit Agreement and the Company has taken and continues to take actions to address its liquidity and capital resource issues, there can be no assurances that the Company can negotiate an acceptable solution with its lenders or obtain alternative financing, that the Companys liquidity and capital resources will be sufficient to meet its short-term and long-term needs or that the Company will be able to consummate the merger with Fidelity. If the Companys efforts to address the above issues or to consummate the merger with Fidelity are unsuccessful, there could be a material adverse effect on the Companys business and financial position.
About LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica serves its agent, residential, commercial and lender customers throughout the United States, Mexico, Canada, the Caribbean, Latin America, Europe and Asia. LandAmerica is recognized as number one in the mortgage services industry on Fortunes® 2007 and 2008 lists of Americas Most Admired Companies.
Additional Information About the Proposed Merger
In connection with the proposed merger, Fidelity will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of LandAmerica that also constitutes a prospectus of Fidelity. LandAmerica will mail the proxy statement/prospectus to its shareholders. Fidelity and LandAmerica urge investors and security holders to read the proxy statement/prospectus regarding the proposed merger when it becomes available because it will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SECs website at www.sec.gov. You may also obtain these documents, free of charge, from Fidelitys website at www.fnf.com under the tab Investor Relations and then under the item SEC Filings. You may also obtain these documents, free of charge, from LandAmericas website at www.landam.com under the heading Investor Information and then under the tab SEC Filings.
- more -
Page 7 of 12
Fidelity, LandAmerica and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from LandAmericas shareholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of such shareholders in connection with the proposed merger will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about Fidelitys executive officers and directors in its definitive proxy statement filed with the SEC on April 15, 2008. You can find information about LandAmericas executive officers and directors in its definitive proxy statement filed with the SEC on March 24, 2008. You can obtain free copies of these documents from Fidelity and LandAmerica using the contact information above.
- more -
Page 8 of 12
Segment Results | |||||
(In millions) | |||||
Quarter Ended September 30, 2008 | |||||
| |||||
Title | Lender | Financial | Corporate | ||
Operations | Services | Services | & Other | Consolidated | |
Revenue: | |||||
Direct operations | $ 202.8 | $ 61.0 | $ 0.8 | $ 23.5 | $ 288.1 |
Agency operations | 342.0 | - | - | - | 342.0 |
Investment income | (10.5) | _ - | 12.2 | _ - | 1.7 |
Total revenue | 534.3 | 61.0 | 13.0 | 23.5 | 631.8 |
Agents commissions | 277.3 | - | - | - | 277.3 |
Interest expense on bank deposits | |||||
and FHLB borrowings | _ - | _ - | 6.7 | - | 6.7 |
Net revenue | 257.0 | 61.0 | 6.3 | 23.5 | 347.8 |
Salaries and employee benefits | 151.1 | 22.3 | 0.9 | 22.9 | 197.2 |
General, administrative and other | 163.7 | 30.7 | 0.7 | 19.4 | 214.5 |
Claims provision | 128.3 | 1.3 | 3.3 | 132.9 | |
Depreciation and amortization | 8.0 | 3.0 | 0.1 | 4.7 | 15.8 |
Interest expense on notes payable | 0.4 | - | - | 6.0 | 6.4 |
Impairment of intangible and long- | |||||
lived assets | 137.8 | 74.9 | - | 12.2 | 224.9 |
Earnings (loss) before income taxes | $ (332.3) |
$ (71.2) |
$ 4.6 |
$ (45.0) |
$ (443.9) |
Quarter Ended September 30, 2007 | |||||
| |||||
Title | Lender | Financial | Corporate | ||
Operations | Services | Services | & Other | Consolidated | |
Revenue: | |||||
Direct operations | $ 326.9 | $ 67.3 | $ 0.2 | $ 35.6 | $ 430.0 |
Agency operations | 444.0 | - | - | - | 444.0 |
Investment income | 20.1 | 0.1 | 10.6 | 2.0 | 32.8 |
Total revenue | 791.0 | 67.4 | 10.8 | 37.6 | 906.8 |
Agents commissions | 357.4 | - | - | - | 357.4 |
Interest expense on bank deposits | |||||
and FHLB borrowings | _ - | _ - | 5.7 | _ - | 5.7 |
Net revenue | 433.6 | 67.4 | 5.1 | 37.6 | 543.7 |
Salaries and employee benefits | 222.1 | 24.3 | 0.7 | 25.1 | 272.2 |
General, administrative and other | 123.9 | 41.2 | 0.3 | 30.7 | 196.1 |
Claims provision | 76.1 | 1.1 | - | 3.2 | 80.4 |
Depreciation and amortization | 10.1 | 3.5 | 0.1 | 2.8 | 16.5 |
Interest expense on notes payable | 0.2 | _ - | _ - | 6.7 | 6.9 |
Earnings (loss) before income taxes | $ 1.2 |
$ (2.7) |
$ 4.0 |
$ (30.9) |
$ (28.4) |
- more -
Page 9 of 12
Nine Months Ended September 30, 2008 | |||||||
| |||||||
Title | Lender | Financial | Corporate | ||||
Operations | Services | Services | & Other | Consolidated | |||
Revenue: | |||||||
Direct operations | $ 678.5 | $ 196.7 | $ 2.8 | $ 78.6 | $ 956.6 | ||
Agency operations | 1,017.5 | - | - | - | 1,017.5 | ||
Investment income | 15.0 | 0.6 | 35.0 | 5.9 | 56.5 | ||
Total revenue | 1,711.0 | 197.3 | 37.8 | 84.5 | 2,030.6 | ||
Agents commissions | 825.1 | - | - | - | 825.1 | ||
Interest expense on bank deposits | |||||||
and FHLB borrowings | - | - | 18.7 | - | 18.7 | ||
Net revenue | 885.9 | 197.3 | 19.1 | 84.5 | 1,186.8 | ||
Salaries and employee benefits | 490.1 | 70.8 | 2.8 | 73.2 | 636.9 | ||
General, administrative and other | 367.2 | 96.9 | 1.4 | 60.9 | 526.4 | ||
Claims provision | 276.9 | 3.4 | - | 8.6 | 288.9 | ||
Depreciation and amortization | 25.6 | 9.0 | 0.3 | 12.3 | 47.2 | ||
Interest expense on notes payable | 1.1 | - | - | 17.6 | 18.7 | ||
Impairment of intangible and long- | |||||||
lived assets | 137.8 | 74.9 | - | 12.2 | 224.9 | ||
Earnings (loss) before income taxes | $ (412.8) |
$ (57.7) |
$ 14.6 |
$ (100.3) |
$ (556.2) |
Nine Months Ended September 30, 2007 | |||||||
| |||||||
Title | Lender | Financial | Corporate | ||||
Operations | Services | Services | & Other | Consolidated | |||
Revenue: | |||||||
Direct operations | $ 1,106.3 | $ 219.1 | $ 0.6 | $ 111.5 | $1,437.5 | ||
Agency operations | 1,319.3 | - | - | - | 1,319.3 | ||
Investment income | 61.5 | 1.0 | 32.0 | 9.1 | 103.6 | ||
Total revenue | 2,487.1 | 220.1 | 32.6 | 120.6 | 2,860.4 | ||
Agents commissions | 1,062.4 | - | - | - | 1,062.4 | ||
Interest expense on bank deposits | |||||||
and FHLB borrowings | - | - | 15.1 | - | 15.1 | ||
Net revenue | 1,424.7 | 220.1 | 17.5 | 120.6 | 1,782.9 | ||
Salaries and employee benefits | 738.9 | 78.6 | 2.4 | 76.1 | 896.0 | ||
General, administrative and other | 382.4 | 114.1 | 0.8 | 82.9 | 580.2 | ||
Claims provision | 207.4 | 5.2 | - | 9.0 | 221.6 | ||
Depreciation and amortization | 29.7 | 11.1 | 0.2 | 11.3 | 52.3 | ||
Interest expense on notes payable | 0.6 | - | - | 20.8 | 21.4 | ||
Impairment of intangible and long- | |||||||
lived assets | - | 20.8 | - | - | 20.8 | ||
Earnings (loss) before income taxes | $ 65.7 |
$ (9.7) |
$ 14.1 |
$ (79.5) |
$ (9.4) |
- more -
Page 10 of 12
Summary of Operations
(In millions, except per share data and order information)
(Unaudited)
Quarter Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2008 | 2007 | 2008 | 2007 | |||||
Operating revenue | $ 630.1 | $ 874.0 | $ 1,974.1 | $ 2,756.8 | ||||
Investment and other income | 20.9 | 26.6 | 77.9 | 89.0 | ||||
Net realized investment (losses) gains | (19.2) | 6.2 | (21.4) | 14.6 | ||||
TOTAL REVENUE | 631.8 | 906.8 | 2,030.6 | 2,860.4 | ||||
Agents commissions | 277.3 | 357.4 | 825.1 | 1,062.4 | ||||
Salaries and employee benefits | 197.2 | 272.2 | 636.9 | 896.0 | ||||
General, administrative and other | 214.5 | 196.1 | 526.4 | 580.2 | ||||
Provision for policy and contract claims | 132.9 | 80.4 | 288.9 | 221.6 | ||||
Depreciation and amortization | 15.8 | 16.5 | 47.2 | 52.3 | ||||
Interest expense | 13.1 | 12.6 | 37.4 | 36.5 | ||||
Impairment of intangible and long-lived assets | 224.9 | - | 224.9 | 20.8 | ||||
TOTAL EXPENSES | 1,075.7 | 935.2 | 2,586.8 | 2,869.8 | ||||
Loss before income taxes | (443.9) | (28.4) | (556.2) | (9.4) | ||||
Income tax expense (benefit) | 155.7 | (7.6) | 117.6 | (1.2) | ||||
Net loss | $ (599.6) |
$ (20.8) |
$ (673.8) |
$ (8.2) | ||||
Net loss per common share | $ (39.45) | $ (1.28) | $ (44.33) | $ (0.49) | ||||
Weighted average number of common shares | ||||||||
outstanding | 15.2 | 16.2 | 15.2 | 16.7 | ||||
Net loss per common share assuming dilution | $ (39.45) | $ (1.28) | $ (44.33) | $ (0.49) | ||||
Weighted average number of common shares | ||||||||
outstanding assuming dilution | 15.2 | 16.2 | 15.2 | 16.7 | ||||
Other selected information: | ||||||||
Cash flow (used in) provided by operations | $ (73.2) | $ (28.7) | $ (171.5) | $ 84.0 | ||||
Title claims paid | $ 67.5 | $ 46.7 | $ 174.5 | $ 136.8 | ||||
Direct revenue per direct order closed | $ 2,000 | $ 2,200 | $ 1,900 | $ 2,200 | ||||
Direct orders opened (in thousands): | ||||||||
July | 57.5 | 85.0 | ||||||
August | 52.7 | 82.2 | ||||||
September | 52.8 | 66.0 | ||||||
Total direct orders opened | 163.0 | 233.2 | 616.9 | 810.9 | ||||
Total direct orders closed | 112.7 | 161.3 | 398.1 | 544.7 |
- more -
Page 11 of 12
Condensed Balance Sheets
(In millions, except share amounts)
September 30, | December 31, | |||
2008 | 2007 | |||
ASSETS | (Unaudited) | |||
Investments | $ 1,256.5 | $ 1,444.6 | ||
Cash | 63.2 | 98.2 | ||
Loans receivable | 720.8 | 638.4 | ||
Accrued interest receivable | 12.4 | 16.8 | ||
Notes and accounts receivable | 123.7 | 150.6 | ||
Income taxes receivable | 33.7 | 22.7 | ||
Property and equipment, net | 108.9 | 133.4 | ||
Title plants | 101.4 | 102.4 | ||
Goodwill and intangible assets, net | 674.0 | 904.3 | ||
Deferred income taxes | - | 120.1 | ||
Other assets | 230.5 | 222.2 | ||
Total assets | $ 3,325.1 |
$ 3,853.7 | ||
LIABILITIES | ||||
Policy and contract claims | $ 982.5 | $ 876.5 | ||
Deposits | 707.9 | 564.5 | ||
Accounts payable and accrued liabilities | 309.2 | 365.3 | ||
Notes payable | 569.4 | 579.5 | ||
Deferred service arrangements | 184.4 | 199.9 | ||
Other liabilities | 86.4 | 67.3 | ||
Total liabilities | 2,839.8 | 2,653.0 | ||
SHAREHOLDERS EQUITY | ||||
Common stock, no par value, 45,000,000 shares authorized, shares | ||||
issued and outstanding: 2008 15,476,306; 2007 15,351,550 | 339.2 | 335.4 | ||
Accumulated other comprehensive loss | (61.6) | (26.2) | ||
Retained earnings | 207.7 | 891.5 | ||
Total shareholders equity | 485.3 | 1,200.7 | ||
Total liabilities and shareholders equity | $ 3,325.1 |
$ 3,853.7 |
- more -
Forward-Looking Statements
The Company cautions readers that the statements contained herein regarding the Companys future financial condition, results of operations, future business plans, operations, opportunities or prospects, including any factors which may affect future earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon managements current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance or achievements to be materially different from any anticipated results, performance or achievements, expressed or implied by such forward-looking statements. Such risks and uncertainties include:
For a description of factors that may cause actual results to differ materially from such forward-looking statements, see the Companys Annual Report on Form 10-K for the full year 2007 and other reports from time to time filed with or furnished to the Securities and Exchange Commission. The Company cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made. The Company undertakes no obligation to update any forward-looking statements made in this release.
# # #
Additional Information About this Transaction
In connection with the proposed merger, Fidelity National Financial Inc. (Fidelity) will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of LandAmerica that also constitutes a prospectus of Fidelity. LandAmerica will mail the proxy statement/prospectus to its stockholders. Fidelity and LandAmerica urge investors and security holders to read the proxy statement/prospectus regarding the proposed merger when it becomes available because it will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SECs website www.sec.gov. once such documents are filed with the SEC. You may also obtain these documents, free of charge, from Fidelitys website at www.fnf.com under the tab Investor Relations and then under the item SEC Filings. You may also obtain these documents, free of charge, from LandAmericas website at www.landam.com under the heading Investor Information and then under the tab SEC Filings.
Proxy Solicitation
Fidelity, LandAmerica and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from LandAmerica stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of such stockholders in connection with the proposed merger will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about Fidelitys executive officers and directors in its definitive proxy statement filed with the SEC on April 15, 2008. You can find information about LandAmericas executive officers and directors in its definitive proxy statement filed with the SEC on March 24, 2008. You can obtain free copies of these documents from Fidelity and LandAmerica using the contact information above.