-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AHIVkVxMEKBpFpwx8T1WefoTMGwipt0dxZStLZb3fzsdQmHhu2DP2IazsXqgXZeQ PCMX+ap5a7bD25ywq2Fgnw== 0000950127-04-000970.txt : 20041027 0000950127-04-000970.hdr.sgml : 20041027 20041027084532 ACCESSION NUMBER: 0000950127-04-000970 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST AMERICAN CORP CENTRAL INDEX KEY: 0000036047 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 951068610 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13585 FILM NUMBER: 041098082 BUSINESS ADDRESS: STREET 1: 1 FIRST AMERICAN WAY CITY: SANTA ANA STATE: CA ZIP: 92707 BUSINESS PHONE: 714-800-3000 MAIL ADDRESS: STREET 1: 1 FIRST AMERICAN WAY CITY: SANTA ANA STATE: CA ZIP: 92707 FORMER COMPANY: FORMER CONFORMED NAME: FIRST AMERICAN FINANCIAL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIRST AMERICAN TITLE INSURANCE & TRUST C DATE OF NAME CHANGE: 19690515 8-K 1 form8k.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 -------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(D) of the Securities Exchange Act Of 1934 ------------------- Date of report (Date of earliest event reported) October 27, 2004 ------------------------------ THE FIRST AMERICAN CORPORATION - -------------------------------------------------------------------------------- (Exact Name of the Registrant as Specified in Charter) California 0-3658 95-1068610 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1 First American Way, Santa Ana, California 92707-5913 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (714) 800-3000 ---------------------------- Not Applicable. - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On October 27, 2004, The First American Corporation issued a press release announcing its financial results for the quarter ended September 30, 2004. The full text of the press release is attached hereto as Exhibit 99.1. The information in this current report, including the exhibit hereto, is being "furnished" in accordance with General Instruction B.2 of Form 8-K. As such, this information is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act and is not incorporated by reference into any filings with the SEC unless it shall be explicitly so incorporated in such filings. Item 9.01. Financial Statements and Exhibits. Exhibit No. Description - ----------- ----------- 99.1 Press Release. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. THE FIRST AMERICAN CORPORATION Date: October 27, 2004 By: /s/ Thomas A. Klemens -------------------------------------- Name: Thomas A. Klemens Title: Senior Executive Vice President and Chief Financial Officer EX-99.1 2 exh99_1.txt PRESS RELEASE EXHIBIT 99.1 Contact: Thomas A. Klemens NEWS FOR Sr. Executive Vice President & IMMEDIATE Chief Financial Officer RELEASE (714) 800-4401 THE FIRST AMERICAN CORPORATION REPORTS RESULTS FOR THE THIRD QUARTER 2004 SANTA ANA, Calif., Oct. 27, 2004 - The First American Corporation (NYSE: FAF), the nation's largest data provider, today announced results for the third quarter ended Sept. 30, 2004:
Three Months Ended Nine Months Ended September 30 September 30 ----------------------------------- ----------------------------------- 2004 2003 2004 2003 ----------------------------------- ----------------------------------- Total revenues $ 1.72 billion $ 1.72 billion $ 4.92 billion $ 4.60 billion Income before income taxes and minority interests $202.0 million $260.8 million $532.3 million $664.0 million Net income $107.2 million $141.8 million $278.7 million $356.9 million Net income per diluted share $1.17 $1.62 $3.07 $4.15
Summary of Operations "The third quarter produced strong results despite a declining volume of mortgage applications, particularly from refinance activity, when compared with the record-setting third quarter of 2003," stated Parker S. Kennedy, chairman and chief executive officer of The First American Corporation. "This decline in refinance activity was offset, in part, by continued strength in the residential resale and new home sale markets. "We experienced strong order counts in the third quarter, and with recent mortgage interest rates hitting 6-month lows, this trend should have a positive impact on First American's fourth quarter operating results. "Key acquisitions during the quarter included Basis100, which made First American Real Estate Solutions the number one supplier of automated valuation models; and Matrix Asset Management, which completes First American's full suite of default outsourcing services." - more - First American Reports Results for the Third Quarter 2004 Page 2-2-2 Quarterly Financial Highlights Financial Services Group: o Revenues for the third quarter 2004 were $1.30 billion, a decrease of 2.3 percent when compared with record-setting revenues of $1.33 billion for the third quarter of 2003. o Pretax income was $131.8 million, a decrease of 26.5 percent when compared with the record-setting $179.2 million in the prior year quarter. o Pretax margins declined to 10.1 percent compared with 13.5 percent for the third quarter 2003. Information Technology Group: o Revenues for the third quarter 2004 were $415.3 million, an increase of 8.3 percent compared with record-setting revenues of $383.6 million for the third quarter of 2003. o Pretax income was $105.3 million, a decrease of 3.6 percent when compared with the record-setting third quarter 2003 income of $109.2 million. o Pretax margins declined to 25.4 percent compared with 28.5 percent for the third quarter 2003. Strategic Focus and Outlook Kennedy added: "We will continue to pursue our key initiatives to maintain strong profits despite a weaker mortgage application market. These initiatives, which differentiate First American from the other information providers, and create opportunities for margin expansion, include First American's bundling alternatives of multiple products and services to the mortgage industry, FAST technology to enhance production efficiencies and streamline information, and strategic acquisitions to expand data capabilities and to increase market share." Teleconference/Webcast First American's third quarter results will be discussed in more detail on Wednesday, Oct. 27, 2004, at 10 a.m. EDT, via teleconference. The dial-in number is (888) 955-3516 and the pass code is FIRST AMERICAN. The live audio webcast of the call will be available on First American's Web site at www.firstam.com/investor. An audio replay of the conference call will be available through Nov. 2, 2004, by dialing (402) 220-2070. An audio archive of the call will also be available for replay on First American's Web site. - more - First American Reports Results for the Third Quarter 2004 Page 3-3-3 About First American The First American Corporation is a Fortune 500 company that traces its history to 1889. As the nation's largest data provider, the company supplies businesses and consumers with information resources in connection with 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 six primary business segments, including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $6.21 billion in 2003, First American has 29,000 employees in approximately 1,800 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com. Forward Looking Statements Certain statements made in this press release, including those related to 2004 fourth quarter operating results and key initiatives, are forward looking. Risks and uncertainties exist that 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, 2003, as 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. (Additional Financial Data Follows) - more - First American Reports Results for the Third Quarter 2004 Page 4-4-4
Summary of Earnings (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30 September 30 ------------------------------ ------------------------------- 2004 2003 2004 2003 ------------------------------ ------------------------------- Total revenues $1,721,485 $1,716,742 $4,919,309 $4,601,648 Income before income taxes and minority interests $ 202,005 $ 260,759 $ 532,326 $ 664,005 Income taxes $ 70,800 $ 92,100 $ 187,500 $ 231,200 Minority interests $ 23,990 $ 26,812 $ 66,129 $ 75,902 Net income $ 107,215 $ 141,847 $ 278,697 $ 356,903 Net income per share: Basic $1.21 $1.83 $3.27 $4.69 Diluted $1.17 $1.62 $3.07 $4.15 Weighted average shares outstanding: Basic 88,595 77,660 85,330 76,080 Diluted 91,594 88,395 91,414 87,155
Summary Balance Sheet Information (in thousands, except per share amounts) September 30 December 31 ------------------------------- 2004 2003 ------------------------------- Total stockholders' equity $2,381,308 $1,879,520 Book value per share $26.79 $23.84
Summary Title Insurance Order Counts From Direct Operations Three Months Ended September 30 ------------------------------- 2004 2003 ------------------------------- Title orders opened: July 214,500 263,800 August 219,200 188,700 September 217,800 173,600 ------------- ------------- Third quarter total 651,500 626,100 ============= ============= Title orders closed: July 164,100 217,900 August 167,700 197,900 September 162,300 173,500 ------------- ------------- Third quarter total 494,100 589,300 ============= =============
(Additional Financial Data Follows) - more - First American Reports Results for the Third Quarter 2004 Page 5-5-5
Selected Financial Data unaudited, in thousands) Three Months Ended Nine Months Ended September September ---------------------------------- ---------------------------------- 2004 2003 2004 2003 ---------------------------------- ---------------------------------- RESULTS OF OPERATIONS Revenues Operating revenues $ 1,680,887 $ 1,670,923 $ 4,811,518 $ 4,469,233 Investment and other income 35,541 40,058 98,685 112,522 Net realized investment gains 5,057 5,761 9,106 19,893 ---------------- ---------------- --------------- ---------------- 1,721,485 1,716,742 4,919,309 4,601,648 ---------------- ---------------- --------------- ---------------- Expenses Salaries and other personnel costs 545,294 490,152 1,553,691 1,337,138 Premiums retained by agents 458,750 477,504 1,341,486 1,251,997 Other operating expenses 358,694 348,528 1,071,971 969,719 Provision for title losses and other claims 97,975 89,464 255,082 236,106 Depreciation and amortization 32,981 27,134 93,677 79,704 Premium taxes 13,324 14,348 38,954 36,814 Interest 12,462 8,853 32,122 26,165 ---------------- ---------------- --------------- ---------------- 1,519,480 1,455,983 4,386,983 3,937,643 ---------------- ---------------- --------------- ---------------- Income before income taxes and minority interests $ 202,005 $ 260,759 $ 532,326 $ 664,005 ================ ================ =============== ================ OPERATING REVENUES Financial Services Title Insurance and Services: Direct operations $ 645,203 $ 654,861 $ 1,820,654 $ 1,721,134 Agency operations 569,956 589,632 1,661,104 1,547,386 ---------------- ---------------- --------------- ---------------- 1,215,159 1,244,493 3,481,758 3,268,520 Specialty Insurance 61,617 55,180 159,956 152,213 ---------------- ---------------- --------------- ---------------- 1,276,776 1,299,673 3,641,714 3,420,733 ---------------- ---------------- --------------- ---------------- Information Technology Mortgage Information 171,698 163,473 494,282 459,837 Property Information 100,181 97,952 291,683 278,254 Credit Information 60,322 62,200 185,686 193,844 Screening Information 71,910 47,625 198,153 116,565 ---------------- ---------------- --------------- ---------------- 404,111 371,250 1,169,804 1,048,500 ---------------- ---------------- --------------- ---------------- Total operating revenues $ 1,680,887 $ 1,670,923 $ 4,811,518 $ 4,469,233 ================ ================ =============== ================ INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS Financial Services Title Insurance and Services $ 123,509 $ 170,438 $ 322,583 $ 402,682 Specialty Insurance 8,334 8,741 32,431 22,821 ---------------- ---------------- --------------- ---------------- 131,843 179,179 355,014 425,503 ---------------- ---------------- --------------- ---------------- Information Technology Mortgage Information 52,690 64,733 131,029 173,183 Property Information 30,309 26,976 90,782 82,809 Credit Information 15,172 14,987 42,192 59,565 Screening Information 7,177 2,525 13,816 6,258 ---------------- ---------------- --------------- ---------------- 105,348 109,221 277,819 321,815 ---------------- ---------------- --------------- ---------------- Total before corporate expenses and minority interest 237,191 288,400 632,833 747,318 Corporate expense 35,186 27,641 100,507 83,313 ---------------- ---------------- --------------- ---------------- Income before income taxes and minority interests $ 202,005 $ 260,759 $ 532,326 $ 664,005 ================ ================ =============== ================
- more - First American Reports Results for the Third Quarter 2004 Page 6-6-6
Segment Margins (unaudited) (in thousands, except percentages) Three Months Ended September 30 -------------------------------------------------------------------------------------------------- Total revenues Pretax (A) Margins ---------------------------------- ----------------------------- ----------------------------- 2004 2003 2004 2003 2004 2003 ---------------- ---------------- ------------- ------------- ------------- -------------- Financial Services Title Insurance and Services $ 1,237,763 $ 1,273,195 $ 123,509 $ 170,438 10.0% 13.4% Specialty Insurance 64,838 58,524 8,334 8,741 12.9% 14.9% ---------------- ---------------- ------------- ------------- ------------- -------------- $ 1,302,601 $ 1,331,719 $ 131,843 $ 179,179 10.1% 13.5% ================ ================ ============= ============= ============== ============== Information Technology Mortgage Information $ 174,508 $ 166,624 $ 52,690 $ 64,733 30.2% 38.8% Property Information 106,396 105,001 30,309 26,976 28.5% 25.7% Credit Information 62,450 64,354 15,172 14,987 24.3% 23.3% Screening Information 71,936 47,644 7,177 2,525 10.0% 5.3% ---------------- ---------------- ------------- ------------- ------------- -------------- $ 415,290 $ 383,623 $ 105,348 $ 109,221 25.4% 28.5% ================ ================ ============= ============= ============== ============== Nine Months Ended September 30 -------------------------------------------------------------------------------------------------- Total revenues Pretax (A) Margins ---------------------------------- ----------------------------- ----------------------------- 2004 2003 2004 2003 2004 2003 ---------------- ---------------- ------------- ------------- ------------- -------------- Financial Services Title Insurance and Services $ 3,542,755 $ 3,338,623 $ 322,583 $ 402,682 9.1% 12.1% Specialty Insurance 170,556 161,170 32,431 22,821 19.0% 14.2% ---------------- ---------------- ------------- ------------- ------------- -------------- $ 3,713,311 $ 3,499,793 $ 355,014 $ 425,503 9.6% 12.2% ================ ================ ============= ============= ============== ============== Information Technology Mortgage Information $ 501,214 $ 469,438 $ 131,029 $ 173,183 26.1% 36.9% Property Information 310,266 297,599 90,782 82,809 29.3% 27.8% Credit Information 192,709 214,181 42,192 59,565 21.9% 27.8% Screening Information 198,295 116,636 13,816 6,258 7.0% 5.4% ---------------- ---------------- ------------- ------------- ------------- -------------- $ 1,202,484 $ 1,097,854 $ 277,819 $ 321,815 23.1% 29.3% ================ ================ ============= ============= ============== ==============
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