Transactions with FAFC

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Transactions with FAFC

Transactions with FAFC

In connection with the Separation, we entered into various transition services agreements with FAFC effective June 1, 2010. The agreements include transitional services in the areas of information technology, tax, accounting and finance, employee benefits and internal audit. Except for the information technology services agreements, the transition services agreements are short-term in nature. For the years ended December 31, 2012, 2011 and 2010, the net amount of $6.5 million, $6.4 million and $5.4 million, respectively, were recognized as a reduction of other operating expenses in connection with the transition services agreements (reflecting services provided by us to FAFC and from FAFC to us).

In the Separation and Distribution Agreement, we and FAFC agreed to share equally in the cost of resolution of a small number of corporate-level lawsuits, including certain consolidated securities litigation matters from which we have since been dropped. See further discussion at Note 16 – Litigation and Regulatory Contingencies.

Additionally, as part of the Separation, we entered into a Tax Sharing Agreement whereby FAFC is contingently liable for certain tax liabilities. We recorded a receivable for these contingent tax obligations from FAFC of $52.5 million and $34.4 million as of December 31, 2012, and 2011, respectively. The liability for income taxes associated with uncertain tax positions was $44.1 million and $10.4 million as of December 31, 2012 and 2011, respectively. Further, during 2012, pursuant to our Tax Sharing Agreement, we recorded a net equity adjustment of approximately $5.3 million related to Separation activity associated with FAFC. In connection with this adjustment, we recorded a correction to additional paid-in capital of $8.9 million to properly reflect the Separation distribution activity in retained earnings. This adjustment had no impact on total equity. See further discussion at Note 10 – Income Taxes.

In connection with the Separation, we issued approximately $250.0 million in value, or 12,933,265 shares of our common stock to FAFC. Based on the closing price of our stock on June 1, 2010, the value of the equity issued to FAFC was $242.6 million. As a result, we made a cash payment to FAFC of $7.4 million to arrive at the full value of $250.0 million. FAFC has agreed to dispose of the shares within five years after the Separation or to bear any adverse tax consequences arising out of holding the shares for longer than that period. Since the Separation, we repurchased 10,433,265 shares of our common stock that was owned by FAFC or one of its subsidiaries for an aggregate purchase price of $227.7 million.

On June 1, 2010, we issued a promissory note to FAFC in the amount of $19.9 million that accrues interest at a rate of 6.52% per annum. Interest was first due on July 1, 2010 and is due quarterly thereafter. The note approximates the unfunded portion of the benefit obligation attributable to participants in the FAC defined benefit pension plan that are or were our employees. The note was paid in full as of September 2011.

FAFC owns two office buildings that were leased to us under the terms of certain lease agreements which expired in December 2012. Rental expense associated with these properties totaled $4.4 million in 2012, $4.4 million in 2011, and $4.5 million in 2010.

During the years ended December 31, 2012, 2011 and 2010 we entered into commercial transactions with affiliates of FAFC. The revenue associated with these transactions, which primarily related to sales of data and other settlement services totaled $19.1 million, $15.0 million and $21.4 million in 2012, 2011 and 2010, respectively. The expenses related to these transactions, which primarily related to purchase of sales of data and other settlement services, totaled $1.6 million, $4.2 million and $11.8 million for the years ended December 31, 2012, 2011 and 2010, respectively.