Condensed Financial Statements (Parent Company)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure

SCHEDULE II

1 OF 5

FIRST AMERICAN FINANCIAL CORPORATION

(Parent Company)

CONDENSED BALANCE SHEETS

(in thousands, except par values)

	December 31,
	2019			2018
Assets
Cash and cash equivalents	$	341,691		$	327,306
Due from subsidiaries, net		47,798			10,029
Income taxes receivable		10,967			11,007
Investment in subsidiaries		5,215,056			4,592,281
Other investments		77,000			—
Deferred income taxes		18,283			16,636
Other assets		109,228			90,164
	$	5,820,023		$	5,047,423
Liabilities and Equity
Accounts payable and other accrued liabilities	$	19,455		$	34,578
Pension costs and other retirement plans		376,393			334,390
Income taxes payable		25,475			8,988
Deferred income taxes		266,108			217,097
Notes and contracts payable		707,590			706,982
		1,395,021			1,302,035
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.00001 par value; Authorized—500 shares; Outstanding—none		—			—
Common stock, $0.00001 par value; Authorized—300,000 shares;
Outstanding—112,476 shares and 111,496 shares		1			1
Additional paid-in capital		2,300,926			2,258,290
Retained earnings		2,161,049			1,644,165
Accumulated other comprehensive loss		(41,492	)		(160,575	)
Total stockholders’ equity		4,420,484			3,741,881
Noncontrolling interests		4,518			3,507
Total equity		4,425,002			3,745,388
	$	5,820,023		$	5,047,423

See Notes to Condensed Financial Statements

SCHEDULE II

2 OF 5

FIRST AMERICAN FINANCIAL CORPORATION

(Parent Company)

CONDENSED STATEMENTS OF INCOME

(in thousands)

	Year Ended December 31,
	2019		2018			2017
Revenues:
Dividends from subsidiaries	$	384,799	$	394,742		$	354,350
Other income (losses)		21,660		(2,986	)		15,011
		406,459		391,756			369,361
Expenses:
Other expenses		66,984		40,415			54,245
Income before income taxes and equity in undistributed earnings of subsidiaries		339,475		351,341			315,116
Income taxes		73,209		77,031			16,606
Equity in undistributed earnings of subsidiaries		443,582		201,588			123,353
Net income		709,848		475,898			421,863
Less: Net income (loss) attributable to noncontrolling interests		2,438		1,402			(1,186	)
Net income attributable to the Company	$	707,410	$	474,496		$	423,049

See Notes to Condensed Financial Statements

SCHEDULE II

3 OF 5

FIRST AMERICAN FINANCIAL CORPORATION

(Parent Company)

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2019			2018			2017
Net income	$	709,848		$	475,898		$	421,863
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities		125,283			(38,418	)		63,563
Foreign currency translation adjustment		13,960			(26,796	)		24,744
Pension benefit adjustment		(20,161	)		12,680			74,597
Total other comprehensive income (loss), net of tax		119,082			(52,534	)		162,904
Comprehensive income		828,930			423,364			584,767
Less: Comprehensive income (loss) attributable to noncontrolling interests		2,437			1,384			(1,173	)
Comprehensive income attributable to the Company	$	826,493		$	421,980		$	585,940

See Notes to Condensed Financial Statements

SCHEDULE II

4 OF 5

FIRST AMERICAN FINANCIAL CORPORATION

(Parent Company)

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2019			2018			2017
Cash flows from operating activities:
Cash provided by operating activities	$	356,116		$	381,516		$	232,347
Cash flows from investing activities:
Net cash effect of acquisitions		(14,845	)		(67,061	)		(21,750	)
Net payments to subsidiaries		(58,193	)		(19,676	)		(41,726	)
Investments in unconsolidated entities		(77,000	)		—			—
Net change in other investments		—			—			82
Cash used for investing activities		(150,038	)		(86,737	)		(63,394	)
Cash flows from financing activities:
Borrowings under unsecured credit agreement		160,000			—			—
Repayments of notes and contracts payable		(160,000	)		—			—
Net (payments) proceeds in connection with share-based compensation plans		(1,187	)		(4,105	)		2,732
Purchase of Company shares		(2,066	)		(18,801	)		—
Payments of cash dividends		(188,440	)		(178,487	)		(159,284	)
Cash used for financing activities		(191,693	)		(201,393	)		(156,552	)
Net increase in cash and cash equivalents		14,385			93,386			12,401
Cash and cash equivalents—Beginning of period		327,306			233,920			221,519
Cash and cash equivalents—End of period	$	341,691		$	327,306		$	233,920

See Notes to Condensed Financial Statements

SCHEDULE II

5 OF 5

FIRST AMERICAN FINANCIAL CORPORATION

(Parent Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1.    Description of the Company:

First American Financial Corporation is a holding company that conducts all of its operations through its subsidiaries. The Parent Company financial statements should be read in connection with the consolidated financial statements and notes thereto included elsewhere in this Form 10-K.

NOTE 2.    Dividends Received:

The holding company received cash dividends from subsidiaries of $384.8 million, $394.4 million and $87.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.