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Fidelity National Financial(FNF) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements Unaudited Q1 2025 condensed consolidated financial statements show net earnings of $83 million and total assets of $98.2 billion Condensed Consolidated Balance Sheets Total assets increased to $98.2 billion as of March 31, 2025, with liabilities at $89.4 billion and equity at $8.8 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $98,209 | $95,263 | | Total investments | $64,167 | $63,615 | | Cash and cash equivalents | $4,484 | $3,479 | | Goodwill | $5,271 | $5,271 | | Total Liabilities | $89,412 | $86,731 | | Contractholder funds | $57,823 | $56,404 | | Notes payable | $4,394 | $4,321 | | Total Equity | $8,797 | $8,532 | Condensed Consolidated Statements of Earnings Net earnings attributable to shareholders decreased to $83 million in Q1 2025, with total revenues falling to $2.73 billion Statement of Earnings Summary (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $2,729 | $3,299 | | Recognized gains and losses, net | $(287) | $275 | | Total expenses | $2,618 | $2,968 | | Net earnings attributable to FNF | $83 | $248 | | Net earnings per share, diluted | $0.30 | $0.91 | Condensed Consolidated Statements of Comprehensive Earnings Comprehensive earnings attributable to FNF shareholders decreased to $269 million in Q1 2025, boosted by $186 million in other comprehensive earnings Comprehensive Earnings Summary (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net earnings | $83 | $269 | | Other comprehensive earnings | $186 | $90 | | Comprehensive earnings attributable to FNF | $269 | $338 | Condensed Consolidated Statements of Equity Total equity increased to $8.80 billion by Q1 2025, driven by earnings, offset by $137 million in dividends and $25 million in repurchases - Dividends declared for Q1 2025 were $0.50 per common share, totaling $137 million18 - The company repurchased treasury stock for $25 million during the quarter18 Condensed Consolidated Statements of Cash Flows Net cash from operating activities was $1.12 billion in Q1 2025, resulting in a $1.01 billion net increase in cash and cash equivalents Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,115 | $1,591 | | Net cash used in investing activities | $(785) | $(1,096) | | Net cash provided by financing activities | $675 | $255 | | Net increase in cash and cash equivalents | $1,005 | $750 | Notes to Unaudited Condensed Consolidated Financial Statements This section details accounting policies and financial figures, covering business description, F&G offerings, claim reserves, investments, and debt obligations - FNF is a leading provider of title insurance and related services, mortgage transaction services, and annuity and life insurance products through its majority-owned subsidiary, F&G22 - In Q1 2025, subsidiary F&G completed a public offering of 8 million shares of its common stock, redeemed $300 million of its 5.50% Senior Notes, and issued $375 million of 7.30% Junior Subordinated Notes242526 - The provision for title insurance claim losses was maintained at a rate of 4.5% of title insurance premiums for both Q1 2025 and Q1 202448 - The company has significant unfunded commitments of $3.7 billion as of March 31, 2025, primarily related to its F&G segment for investments165 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, business trends, and liquidity, noting lower Title segment earnings and an F&G segment loss, while maintaining strong liquidity Business Trends and Conditions Business trends show MBA forecasting mortgage origination growth for the Title segment, while F&G benefits from an aging U.S. population and strong annuity sales MBA U.S. Mortgage Originations Forecast (in trillions) | Year | Purchase | Refinance | Total | | :--- | :--- | :--- | :--- | | 2024 (Actual) | $1.3 | $0.5 | $1.8 | | 2025 | $1.4 | $0.7 | $2.1 | | 2026 | $1.6 | $0.8 | $2.4 | | 2027 | $1.7 | $0.8 | $2.5 | - Average interest rates for a 30-year fixed-rate mortgage were 6.8% for Q1 2025, slightly up from 6.7% in Q1 2024262 - The aging U.S. population, with over 10,000 people turning 65 daily, is expected to drive demand for F&G's retirement products273 Results of Operations Consolidated net earnings fell to $83 million in Q1 2025, with Title segment earnings decreasing and F&G segment reporting a $26 million pre-tax loss Title Segment Operating Results (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $1,774 | $1,663 | | Total expenses | $1,603 | $1,445 | | Earnings before income taxes | $171 | $218 | F&G Segment Operating Results (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $908 | $1,569 | | Recognized gains and (losses), net | $(263) | $212 | | Total benefits and expenses | $934 | $1,427 | | Earnings (loss) before income taxes | $(26) | $142 | - In the Title segment, direct closed orders increased by 8% YoY to 201,000, and the average fee per file rose to $3,761 from $3,555289291 Liquidity and Capital Resources The company maintains strong liquidity with $4.5 billion in cash, supported by $1.1 billion operating cash flow, and continued capital returns - As of March 31, 2025, the company had cash and cash equivalents of $4.5 billion and $800 million available under its Revolving Credit Facility364 - A dividend of $0.50 per share was paid in Q1 2025, and another $0.50 per share dividend was declared in May 2025363 - Under its 2024 Repurchase Program, the company repurchased 390,000 shares for approximately $25 million in Q1 2025376 Quantitative and Qualitative Disclosures about Market Risk No material changes in market risks have occurred since the disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in the market risks described in the Annual Report on Form 10-K for the year ended December 31, 2024380 Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that disclosure controls and procedures are effective381 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls382 PART II. OTHER INFORMATION Legal Proceedings This section incorporates by reference the discussion of legal proceedings detailed in Note F to the financial statements - Details on legal proceedings are provided in Note F of the Condensed Consolidated Financial Statements384 Risk Factors No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K385 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities FNF repurchased 390,000 shares for approximately $25 million in Q1 2025 under its 2024 Repurchase Program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 0 | $— | | Feb 2025 | 75,000 | $61.71 | | Mar 2025 | 315,000 | $63.83 | | Total | 390,000 | $63.42 | - The repurchases were made under a three-year stock repurchase program approved on July 31, 2024, authorizing the purchase of up to 25 million shares of FNF common stock386 Defaults Upon Senior Securities The company reported no defaults upon its senior securities during the period - None389 Mine Safety Disclosures This item is not applicable to the company - Not applicable390 Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter391 Exhibits This section lists exhibits filed with Form 10-Q, including F&G note indentures, SOX certifications, and interactive data files - Exhibits filed include indentures for F&G's 7.300% Junior Subordinated Notes, Sarbanes-Oxley Section 302 and 906 certifications, and Inline XBRL documents393