- Net Income for the Quarter Increases 58 Percent -
SANTA ANA, Calif., Feb. 12 /PRNewswire-FirstCall/ --
The First American Corporation (NYSE: FAF), the nation's leading diversified
provider of business information and related products and services, today
announced all-time record results for the fourth quarter and year ended Dec.
31, 2002:
For the Three For the Twelve
Months Ended Months Ended
December 31 December 31
2002 2001 2002 2001
Revenues $1.37 billion $1.07 billion $4.70 billion $3.75 billion
Net income $82.8 million $52.3 million $234.4 million $167.3 million
Net income per
diluted share $1.01 $.68 $2.92 $2.27
Summary of Operations
"2002 was a banner year," stated Parker S. Kennedy, president of The First
American Corporation. "Record levels of home purchases and refinancings,
spurred by historically low interest rates, produced record-high transaction
volume in 2002 and contributed to impressive financial results in the real
estate-related segments of our Financial Services and Information Technology
groups."
Quarterly Financial Highlights
Financial Services Group:
-- Record operating revenues for the fourth quarter 2002 were $1.05
billion, an increase of 28 percent when compared with $817.3 million
for the fourth quarter of 2001.
-- Pretax income was a record $110.8 million, an increase of 83 percent
when compared with $60.4 million in the prior year quarter.
-- Pretax margins improved to 10.4 percent compared with 7.3 percent for
the fourth quarter 2001 and 9.6 percent for the third quarter 2002.
Information Technology Group:
-- Record operating revenues for the fourth quarter 2002 were $300.4
million, an increase of 28 percent compared with $234.7 million for
the prior year quarter.
-- Pretax income was a record $77.0 million, an increase of 31 percent
when compared with $58.9 million in the prior year quarter.
-- Pretax margins improved to 24.7 percent compared with 24.2 percent for
the fourth quarter 2001.
2003 Outlook
Kennedy continued: "Order counts in our real estate-related businesses
remain at elevated levels, which should bode well for the company's results
during the first half of 2003. Our focus continues to be on steady margin
improvement through technology initiatives, back-office consolidation and
solid expense controls. In addition, we are excited about our merger with US
Search, which is expected to close in the second quarter 2003. This new
public entity, which will be named First Advantage Corporation, will provide
significant growth opportunities in the rapidly expanding screening services
industry."
Teleconference/Webcast
First American's fourth-quarter and year-end results will be discussed in
more detail on Wednesday, Feb. 12, 2003, at 11:30 a.m. EST via teleconference.
The dial-in number is (888) 396-9928 and the pass code is FIRST AMERICAN. The
live audio webcast of the call will be available on First American's Web Site
at http://www.firstam.com/investor . An audio replay of the conference call will be
available through Feb. 16, 2003, by dialing (402) 998-1118. An audio archive
of the call will also be available for replay on First American's Web site.
About First American
The First American Corporation is a Fortune 500 company that traces its
history to 1889. As the nation's leading diversified provider of business
information, the company supplies businesses and consumers with the
information resources that affect the major economic events of people's lives,
such as getting a job; renting an apartment; buying a car, house, boat or
airplane; securing a mortgage; opening or buying a business; and planning for
retirement. The First American Family of Companies, many of which command
leading market share positions in their respective industries, operate within
seven primary business segments including: Title Insurance and Services,
Specialty Insurance, Trust and Other Services, Mortgage Information, Property
Information, Credit Information and Screening Information. With revenues of
$4.70 billion in 2002, First American has approximately 25,000 employees in
more than 1,300 offices throughout the United States and abroad. More
information about the company and an archive of its press releases can be
found at http://www.firstam.com .
Forward Looking Statements
Certain statements made in this press release, including those relating to
2003 first-half results, margin improvements and growth opportunities in the
screening services industry are forward-looking. Risks and uncertainties
exist which may cause results to differ materially from those set forth in
these forward-looking statements. Factors that could cause the anticipated
results to differ from those described in the forward-looking statements
include: interest rate fluctuations; changes in the performance of the real
estate markets; access to public records and other data; general volatility in
the capital markets; changes in applicable government regulations;
consolidation among the company's significant customers and competitors; the
company's continued ability to identify businesses to be acquired; changes in
the company's ability to integrate businesses which it acquires; and other
factors described in the company's Annual Report on Form 10-K for the year
ended Dec. 31, 2001, filed with the Securities and Exchange Commission. The
forward-looking statements speak only as of the date they are made. The
company does not undertake to update forward-looking statements to reflect
circumstances or events that occur after the date the forward-looking
statements are made.
For further information, please contact Thomas A. Klemens, Executive Vice
President & Chief Financial Officer of The First American Corporation,
+1-714-800-4401.
Summary of Earnings
For the Three For the Twelve
Months Ended Months Ended
December 31 December 31
2002 2001 2002 2001
Revenues $1,374,391,000 $1,072,932,000 $4,704,209,000 $3,750,723,000
Income before
income taxes
and minority
interests $152,272,000 $100,655,000 $449,907,000 $329,540,000
Income taxes $49,800,000 $34,300,000 $149,900,000 $117,500,000
Minority
interests $19,660,000 $14,075,000 $65,640,000 $44,772,000
Net income $82,812,000 $52,280,000 $234,367,000 $167,268,000
Net income
per share:
Basic $1.13 $0.76 $3.27 $2.51
Diluted $1.01 $0.68 $2.92 $2.27
Weighted average
shares
outstanding:
Basic 73,101,000 68,641,000 71,594,000 66,568,000
Diluted 83,935,000 79,667,000 82,567,000 75,834,000
Cash Provided by Operating Activities
For the Three For the Twelve
Months Ended Months Ended
December 31 December 31
2002 2001 2002 2001
Cash provided
by operating
activities $210,089,000 $106,039,000 $540,607,000 $388,247,000
Summary Balance Sheet Information
December 31 December 31
2002 2001
Total stockholders' equity $1,364,589,000 $1,104,452,000
Book value per share $18.53 $16.08
Summary Title Insurance Order Counts
From Direct Operations
For the Three Months Ended
December 31
2002 2001
Title orders opened:
October 236,400 227,500
November 195,600 204,600
December 174,700 146,900
Fourth quarter total 606,700 579,000
Title orders closed:
October 176,500 135,200
November 154,800 134,700
December 165,300 150,400
Fourth quarter total 496,600 420,300
Selected Financial Data
For the Three For the Twelve
Months Ended Months Ended
December 31 December 31
2002 2001 2002 2001
RESULTS OF
OPERATIONS
Revenues
Operating
revenues $1,346,241,000 $1,052,017,000 $4,633,278,000 $3,662,986,000
Investment
and other
income 28,586,000 22,204,000 89,823,000 81,093,000
Net realized
investment
gains (losses) (436,000) (1,289,000) (18,892,000) 6,644,000
1,374,391,000 1,072,932,000 4,704,209,000 3,750,723,000
Expenses
Salaries and
other personnel
costs 432,878,000 345,509,000 1,523,195,000 1,263,451,000
Premiums
retained
by agents 377,016,000 299,009,000 1,292,297,000 960,215,000
Other operating
expenses 303,480,000 231,231,000 1,049,125,000 853,604,000
Provision for
title losses
and other
claims 66,578,000 50,970,000 224,589,000 180,646,000
Depreciation and
amortization 23,935,000 30,423,000 96,829,000 108,348,000
Premium taxes 10,177,000 7,370,000 34,658,000 24,840,000
Interest 8,055,000 7,765,000 33,609,000 30,079,000
1,222,119,000 972,277,000 4,254,302,000 3,421,183,000
Income before
income taxes
and minority
interests $152,272,000 $100,655,000 $449,907,000 $329,540,000
OPERATING REVENUES
Financial Services
Title Insurance and Services:
Direct
operations $532,105,000 $412,588,000 $1,803,775,000 $1,463,303,000
Agency
operations 461,364,000 366,361,000 1,589,817,000 1,185,691,000
993,469,000 778,949,000 3,393,592,000 2,648,994,000
Specialty
Insurance 42,989,000 27,806,000 143,307,000 112,054,000
Trust and
Other Services 9,396,000 10,577,000 41,737,000 39,882,000
1,045,854,000 817,332,000 3,578,636,000 2,800,930,000
Information
Technology
Mortgage
Information 142,910,000 111,453,000 479,288,000 407,006,000
Property
Information 75,728,000 56,869,000 259,315,000 210,975,000
Credit
Information 55,148,000 52,856,000 215,337,000 194,981,000
Screening
Information 26,601,000 13,507,000 100,702,000 49,094,000
300,387,000 234,685,000 1,054,642,000 862,056,000
Total
operating
revenues $1,346,241,000 $1,052,017,000 $4,633,278,000 $3,662,986,000
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Financial Services
Title Insurance
and Services $101,932,000 $52,391,000 $271,720,000 $173,654,000
Specialty
Insurance 6,610,000 4,174,000 24,465,000 11,929,000
Trust and
Other
Services 2,293,000 3,846,000 13,548,000 12,269,000
110,835,000 60,411,000 309,733,000 197,852,000
Information
Technology
Mortgage
Information 46,604,000 39,608,000 146,849,000 129,751,000
Property
Information 23,389,000 11,518,000 71,459,000 35,321,000
Credit
Information 8,439,000 8,881,000 39,266,000 30,062,000
Screening
Information (1,409,000) (1,155,000) 2,459,000 (286,000)
77,023,000 58,852,000 260,033,000 194,848,000
Total before
corporate
expenses
and minority
interest 187,858,000 119,263,000 569,766,000 392,700,000
Corporate
expense 35,586,000 18,608,000 119,859,000 63,160,000
Income before
income taxes
and minority
interests $152,272,000 $100,655,000 $449,907,000 $329,540,000
(Photo: http://www.newscom.com/cgi-bin/prnh/19990929/FAFLOGO )
SOURCE The First American Corporation
back to top
