Fidelity National Financial Inc (NYSE:FNFV) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 01:00 pm ET

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Fidelity National Financial Inc (NYSE:FNFV) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the FNF 2018 Third Quarter Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. (Operator Instructions) And as a reminder, this conference is being recorded.

I'd now like to turn the conference over to our host, Dan Murphy. Please go ahead.

Executive
Dan Murphy

Thank you. Thank you for joining us this afternoon for our third quarter 2018 earnings conference call. Joining me today are our Chairman, Bill Foley; CEO, Randy Quirk; President, Mike Nolan; CFO, Tony Park; and EVP, Brent Bickett. We'll begin with a brief strategic overview from Bill. Randy will review the title business and Tony will finish with a review of the financial highlights. We'll then open the call for your questions and finish with some concluding remarks from Bill Foley.

(Forward-Looking Cautionary Statements)

This conference call will be available for replay via webcast at our website at fnf.com and will also be available through phone replay beginning at 03:00 PM Eastern Time today through November the 1st. The replay number is 800-475-6701 and the access code is 455027.

Let me now turn the call over to our Chairman, Bill Foley.

Executive
Bill Foley

Thank you, Dan. The third quarter was another solid performance for our title business, as we generated adjusted pretax title earnings of $297 million and a 15.6% adjusted pretax title margin. I'll let Randy go into more details on the title business. On the capital allocation front, we used $82 million to pay our September common stock cash dividend of $0.30 a share. We issued $450 million of 4.5% 10-year senior notes in August and used the majority of those proceeds to repay the existing $300 million outstanding borrowing on our credit facility and a $123 million to sale of the maturity of the $40 million in face value of convertible notes.

Additionally, more than $300 million in combined underwriter and non-underwriter dividends were paid up to FNF, the holding company, in the third quarter. We also received cash proceeds of $43 million at closing from the sale of Pacific Union, with some potential for future earn-out payments in cash and stock of the acquirer. The net result was that we ended the quarter with nearly $600 million in available holding company cash. It's about the precise amount that we'll need to close the Stewart Title cash portion of the transaction when that transaction is ready to close. Additionally, with the recent weakness in the stock and our earnings blackout ending after the market closes today, we have decided to restart our stock repurchase program tomorrow at at least 15,000 shares per day.

We continue to work through the regulatory process for the Stewart Information Services acquisition that we announced on March 19th. We are currently engaged in the Second Request related to the FTC's HSR regulatory review of the transaction. Responses to nearly all the FTC's request for information