Fourth Quarter Earnings of $1.32 Per Share, Up 10% vs. 1998
CHICAGO, Jan. 25 /PRNewswire/ -- Chicago Title Corporation (NYSE: CTZ), a
leading provider of title insurance and real estate-related services, today
announced record earnings for the fourth quarter and twelve months ended
December 31, 1999.
Net income was $28.9 million, or $1.32 per basic and diluted share, in the
fourth quarter of 1999 when expenses associated with Chicago Title's pending
merger with Fidelity National Financial, Inc. are excluded. This is an
increase of 10.0 percent from the $26.3 million, or $1.20 per basic and
diluted share, of net income reported during the same period in 1998. Total
revenues for the fourth quarter of 1999 were $519.3 million, a 5.7 percent
decrease from the fourth quarter of 1998, as gains in housing sales,
commercial activity and real estate-related service operations helped to
offset the expected decline in residential home refinancing activity.
For the twelve months ended December 31, 1999, net income, excluding
merger-related costs, reached $110.5 million or $5.06 per basic and diluted
share. During the same period in 1998, net income from continuing operations
was $109.7 million, or $5.01 per basic and diluted share, excluding costs
associated with the Company's spin-off in June 1998. Total revenues for the
twelve months ended December 31, 1999 were $2,059.0 million, a 6.9 percent
increase from the same period last year.
John Rau, president and chief executive officer, stated, "The superior
results we achieved during the quarter and year underscore the geographic and
business diversity of our operations, as well as our ability to effectively
manage variable costs in an increasing interest rate environment. While
higher interest rates led to a natural decline in refinancings by homeowners,
we saw solid growth from higher home sales, commercial transactions and the
performance of our real estate-related operations. Of particular note is the
all-time record we set for commercial revenues during the fourth quarter of
the year."
Net income, including merger-related costs, was $27.3 million or $1.24 per
basic and diluted share in the fourth quarter of 1999. For the twelve months
ended December 31, 1999, net income, including merger-related costs, was
$105.8 million or $4.84 per basic and diluted share.
In June 1998, Chicago Title was spun off from Alleghany Corporation and
became an independent, publicly-traded company. Prior to the spin-off,
Chicago Title performed trust and asset management services through a
subsidiary, Alleghany Asset Management, Inc. This subsidiary remained with
Alleghany after the spin-off. Accordingly, the results of operations for this
subsidiary in 1998 are reported in Chicago Title's statements of income as
discontinued operations. As a result of the spin-off, Alleghany Asset
Management made no contribution to 1999 results. For the twelve months ended
December 31, 1998, net income from discontinued operations was $9.0 million,
or $0.41 per basic and diluted share.
Rau commented further, "We are extremely proud of the record 1999 results
achieved by the collective efforts of Chicago Title's employees in the face of
market challenges. During 1999, we completed our core investment in our
Electronic Spine, which links us electronically to major networks in the
mortgage industry. In addition, we have maintained our high standard of
financial strength, marked by the highest reserve for title losses and the
largest investment security portfolio in the industry. As a result, the
Company is well-positioned to soon join Fidelity and form the largest title
insurer in the United States."
With respect to the pending merger, proxies have been distributed to both
Chicago Title and Fidelity stockholders. Fidelity stockholders are scheduled
to vote on the merger on February 9, 2000, with Chicago Title stockholders
voting two days later on February 11, 2000. Rau added, "With solid progress
being made on the regulatory front, including the issuance of a provisional
consent order by the Federal Trade Commission, we remain on track to close
this transaction during the first quarter of 2000."
At December 31, 1999, total assets were $1.9 billion and stockholders'
equity per share was $23.39.
Chicago Title Corporation is a leading national real estate services
company that provides a full range of services required to complete real
estate transactions. With over 340 full service offices, 9,000 employees and
4,400 policy-issuing agents nationwide, it provides title insurance, escrow,
closing services, property valuation, credit reporting, flood compliance, home
warranty, default management and real estate information and technology
services. Chicago Title is the parent of Chicago Title and Trust Company,
Chicago Title Insurance Company, Security Union Title Insurance Company, and
Ticor Title Insurance Company. A comprehensive package of real estate
services is available through CastleLink(SM), which delivers title products as
well as the products of Chicago Title Flood Services, Inc., Chicago Title
Credit Services Inc., Chicago Title-Market Intelligence Inc., Chicago Title
Field Services Inc. and Consolidated Reconveyance.
The statements made in this press release contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Act of 1934 that involve a number of
uncertainties and risks that could significantly affect current plans and
anticipated actions and Chicago Title's future financial condition and
results. In addition to the matters described in this press release, risk
factors listed from time to time in Chicago Title's reports and filings with
the Securities and Exchange Commission may affect the results achieved by
Chicago Title.
For more information on Chicago Title Corporation via fax, free of charge,
dial 1-800-PRO-INFO and enter the ticker "CTZ"
Chicago Title Corporation and Subsidiaries
Financial Summary
(dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
12/31/1999 12/31/1998 12/31/1999 12/31/1998
REVENUE
Title, escrow,
trust and other
revenue $499,315 $532,576 $1,988,783 $1,861,463
Investment income 19,605 17,721 68,593 63,837
Net realized
investment gains 402 672 1,663 1,409
Total revenue 519,322 550,969 2,059,039 1,926,709
EXPENSES
Salaries and
other employee
benefits (A) 150,294 167,572 625,973 619,814
Commissions paid
to agents 193,813 192,340 726,903 648,023
Provision for title
losses 27,665 35,270 117,387 123,920
Interest expense 1,209 1,155 4,356 4,707
Other operating and
administrative
expenses (B, D) 104,408 112,487 421,999 388,540
Total expenses 477,389 508,824 1,896,618 1,785,004
Operating income from
continuing operations
before income taxes 41,933 42,145 162,421 141,705
Income taxes 14,633 15,826 56,667 53,536
Net income from
continuing
operations 27,300 26,319 105,754 88,169
Net income from
discontinued
operations (C) -- -- -- 9,013
Net income $27,300 $26,319 $105,754 $97,182
Basic and diluted
earnings per share
Continuing operations $1.24 $1.20 $4.84 $4.03
Discontinued
operations (C) -- -- -- 0.41
Net income $1.24 $1.20 $4.84 $4.44
Impact of spin-off
and merger related
costs
Net income from
continuing
operations $27,300 $26,319 $105,754 $88,169
Spin-off costs,
net of tax (A,B) -- -- -- 21,563
Merger costs, net
of tax (D) 1,641 -- 4,732 --
Net income from
continuing operations,
excluding merger and
spin-off costs $28,941 $26,319 $110,486 $109,732
Basic and diluted
earnings per share
Net income from
continuing
operations $1.24 $1.20 $4.84 $4.03
Spin-off costs, net
of tax (A,B) -- -- -- 0.98
Merger costs, net
of tax (D) 0.08 -- 0.22 --
Net income from
continuing operations,
excluding merger and
spin-off costs $1.32 $1.20 $5.06 $5.01
Weighted average shares
outstanding (000's) 21,877 21,901 21,840 21,902
Chicago Title Corporation and Subsidiaries
Financial Summary (Continued)
(dollars in thousands, except for per share data)
Three Months Ended Twelve Months Ended
12/31/1999 12/31/1998 12/31/1999 12/31/1998
Other data
Depreciation and
amortization $13,434 $12,362 $54,099 $40,907
Claims paid, net
of recoveries 16,865 19,607 69,032 70,233
Selected balance sheet information 12/31/1999 12/31/1998
Total assets $1,907,317 $1,881,759
Bank and other long term debt 20,999 21,648
Reserve for title losses 667,005 618,831
Total stockholders' equity 512,262 461,592
Stockholders' equity per share 23.39 21.07
(A) For the twelve months ended December 31, 1998, salaries and other
employee benefits included $19.5 million in direct costs associated
with the spin-off for executive compensation and $3.7 million in
related managerial restructuring expenses. Both amounts are shown on
a pre-tax basis.
(B) For the twelve months ended December 31, 1998, other operating and
administrative expenses included $5.4 million on a pre-tax basis for
professional fees, printing costs, listing fees and other expenses
directly associated with the spin-off.
(C) Results of Alleghany Asset Management are shown as discontinued
operations for all periods presented.
(D) Chicago Title entered into a definitive agreement with Fidelity
National, Inc., dated as of August 1, 1999 and amended as of
October 13, 1999, providing for the merger of Chicago Title into
Fidelity for approximately $1.2 billion, or $52.00 per share of
Chicago Title common stock (subject to certain adjustments as set
forth in the definitive agreement) using approximately equal amounts
of cash and stock. The pre-tax costs associated with the merger
during the fourth quarter include $0.3 million of investment advisory
and management consulting fees, $1.0 million of legal fees and
$0.4 million of other various direct expenses, and are all included
in other operating and administrative expenses. The pre-tax costs
associated with the merger during the twelve months ended
December 31, 1999 include $2.0 million of investment advisory and
management consulting fees, $1.9 million of legal fees and
$1.0 million of other various direct expenses, and are all included
in other operating and administrative expenses.
SOURCE Chicago Title Corporation
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Related links:
http://www.ctt.com
CONTACT:
Analysts, Toshie Y. Davis, Vice President,
Investor Relations, 312-223-4788, or Media, Barbara Harms, Vice
President, Corporate Communications, 312-223-2461, both of
Chicago Title Corporation
NOTE TO EDITORS: For further information on Chicago Title's
products and services, visit our web side at http://www.ctt.com
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