EX-99 3 ex99.htm Exhibit 99

Exhibit 99.1







101 Gateway Centre Parkway • Richmond, Virginia  23235 • Telephone: 804-267-8000 • Fax: 804-267-8850 • Website: www.landam.com


FOR IMMEDIATE RELEASE:
February 18, 2004

CONTACTS:
G. William Evans
Chief Financial Officer
(804) 267-8114


H. Randolph Farmer
Senior Vice President
Corporate Communications
(804) 267-8120


LANDAMERICA ANNOUNCES FOURTH QUARTER &

YEAR 2003 RESULTS


LandAmerica Financial Group, Inc. (NYSE:  LFG), a leading provider of real estate transaction services, today reported operating results for the fourth quarter and year 2003 ended December 31.  


Fourth Quarter 2003

Fourth Quarter 2002


Operating Revenue

$924.3 Million

$762.9 Million

Net income

$24.7 Million

$66.3 Million

Net income per diluted share

$1.32

$3.61


    Year 2003

     Year 2002


Operating Revenue

$3,345.4 Million

$2,533.5 Million

Net income

$192.1 Million

$149.4 Million

Net income per diluted share

$10.31

$8.04



FINANCIAL HIGHLIGHTS


•

The year 2003 was a record for the Company with operating revenue exceeding $3.3 billion and earnings per share in excess of $10.

•

Revenues for the fourth quarter of 2003 were $924.3 million with strength in agency revenues and the addition of tax, flood, and credit reporting revenues, partially offset by a decline in direct title revenues.

•

Revenues for the Lender Services segment is net of $5.8 million in revenue deferrals for the fourth quarter of 2003.

•

Earnings for the fourth quarter declined by 63% over the fourth quarter of 2002, reflecting the impact of a number of factors, including but not limited to, the effect on our direct operations of the rapid decline in mortgage activity from prior periods; the incurrence of $6.2 million in one-time charges associated with severance, lease terminations, and reductions in title plant evaluations; $4.4 million in amortization of intangibles associated with recent acquisitions; and an increase in the loss provision rate.

•

The Company has expanded its disclosures in the income statement to better reflect the expansion of the Company’s operations in the Lender Services segment with the acquisitions of LERETA and Info1 in 2003.  Title Operations consists of title, escrow, and closely related business.  Lender Services consists primarily of real estate tax monitoring and payment, flood certification, mortgage credit reporting, and default management services.  Corporate and Other represents business segments that are not significant enough in size to be reported separately and consists of residential home inspection, commercial appraisals and assessments, and the industrial bank the Company acquired in 2003, as well as the unallocated portion of corporate expenses.


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“For LandAmerica, it was a record year and a building year,” said Charles H. Foster, Jr., Chairman and Chief Executive Officer.  “We significantly expanded our offering of real estate products and services with the additions of LERETA’s tax and flood services and Info1’s mortgage credit reporting services.  We also are significantly expanding our title operations in the important California market with the addition of Gateway Title in the fourth quarter and our recent announcement of an agreement to acquire Southland Title.  

“While we pursued these market expansion opportunities and began to assimilate them into our business, we also were transitioning to a mortgage market with significantly reduced residential refinancing volumes.  The Mortgage Bankers Association expects mortgage volumes for 2004 to be slightly more than half the levels seen in 2003, as driven by the decline in refinancings.  From peak levels in August, we reduced our FTE count in title operations by approximately 1,600, or over 15%, by January.  As a result, personnel and other costs in title operations were reduced by approximately $21.2 million from the third quarter to the fourth quarter 2003, and we aren’t finished.  We are taking aggressive steps to effect further reductions designed to eliminate at least $70 million in annualized personnel and other costs.

“LandAmerica’s incoming orders in the fourth quarter of 2003 were down 30% from the same quarter a year ago.  However, we did see open order counts improve in January to over 95,000.  For the year 2004 as a whole, the Mortgage Bankers Association expects mortgage originations from resale and new home sale activity to be comparable to 2003 levels.”

The Company will sponsor a conference call for analysts and shareholders on Thursday, February 19, 2004, at 10:00 AM ET to discuss the fourth quarter and year-end results.  Those wishing to participate in the conference call should dial 1-888-577-8991 prior to the beginning of the call and provide the conference operator with the pass code “LandAmerica”.  The call will be simultaneously broadcast over the Internet via LandAmerica’s Web site (www.landam.com), in the Calendar of Events area located within Investor/Financial Information.  Additionally, an audio archive of the call can be accessed two hours after the completion of the live call via LandAmerica’s Web site.

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SEGMENTED OPERATING SUMMARY

($ in Millions)



 

Quarter Ended

December 31, 2003

 

Quarter Ended

December 31, 2002

 

Title Operations

Lender Services

Corporate
& Other


Consolidated

 

Title Operations

Lender Services

Corporate
& Other


Consolidated

Operating revenues

$876.8

$40.2

$7.4

$924.3

 

$755.1

$1.2

$6.6

$762.9

Investment income

11.9

0.1

2.5

14.5

 

13.2

-

0.8

14.0

          

Agents’ commissions

456.5

-

-

456.5

 

328.1

-

-

328.1

Personnel costs

194.2

18.4

12.5

225.1

 

188.3

0.8

6.9

196.0

Claims provision

52.6

-

-

52.6

 

33.7

-

-

33.7

Amortization

1.5

3.3

(0.2)

4.6

 

0.3

-

(0.2)

0.1

Other expenses

123.0

19.1

19.8

161.8

 

101.0

0.3

15.7

117.0

 

_____

_____

______

_____

 

_____

_____

_____

_____

Operating income before

   taxes

$60.9

(0.5)

($22.2)

$38.2

 

$116.9

$0.1

($15.0)

$102.0


 

Year Ended

December 31, 2003

 

Year Ended

December 31, 2002

 

Title Operations

Lender Services

Corporate
& Other


Consolidated

 

Title Operations

Lender Services

Corporate
& Other


Consolidated

Operating revenues

$3,259.8

$49.0

$36.6

$3,345.4

 

$2,499.5

$1.9

$32.1

$2,533.5

Investment income

53.2

0.1

7.3

60.6

 

46.7

-

6.3

53.0

          

Agents’ commissions

1,511.6

-

-

1,511.6

 

1,116.2

-

-

1,116.2

Personnel costs

786.7

22.6

49.7

859.0

 

643.9

1.5

46.0

691.4

Claims provision

188.6

-

-

188.6

 

105.8

-

-

105.8

Amortization

5.4

3.5

(2.0)

6.9

 

0.7

-

(0.3)

0.4

Other expenses

449.1

23.3

70.6

543.0

 

378.9

0.7

63.3

442.9

 

_____

_____

______

_____

 

_____

_____

_____

_____

Operating income before

   taxes

$371.6

(0.3)

($74.4)

$296.9

 

$300.7

($0.3)

($70.6)

$229.8



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LandAmerica Financial Group, Inc. and Subsidiaries - Summary of Operations

(In thousands except per share data)


 

Three months ended

December 31,

 

Twelve months ended

December 31,

 

2003

2002

 

 2003

2002

      

Operating revenues

$924,347

$762,853

 

$3,345,402

$2,533,544

Investment Income

13,051

12,664

 

52,087

51,691

Gain on sales of investments

               1,477

            1,354

 

             8,513

            1,315

      

TOTAL REVENUES

           938,875

       776,871

 

      3,406,002

     2,586,550

      

Salaries and employee benefits

$225,190

$195,907

 

$859,051

$691,345

Agents’ commissions

456,494

328,064

 

1,511,641

1,116,214

Provision for policy and contract claims

52,612

33,728

 

188,649

105,817

Interest expense

3,951

2,990

 

13,082

12,379

Amortization of intangibles

4,539

101

 

6,941

425

Severance

505

180

 

607

1,107

Lease write-offs

796

0

 

796

-

Restructuring charges

0

(3,952)

 

(534)

13,370

Write-off intangibles & capitalized software

4,932

0

 

4,932

-

General, administrative and other

          151,687

        117,841

 

         523,897

        416,121

      

TOTAL EXPENSES

          900,706

        674,859

 

      3,109,062

     2,356,778

      

Operating income before taxes

$38,169

$102,012

 

$296,940

$229,772

Income tax expense

            13,474

          35,704

 

         104,820

          80,420

Net income

          $24,695

        $66,308

 

       $192,120

      $149,352

      

Net income per common share

$1.33

$3.64

 

$10.43

$8.10

Net income per common share assuming dilution

$1.32

$3.61

 

$10.31

$8.04

Gain per diluted share on sale of investments, net of

   taxes

$0.05

$0.05

 

$0.30

$0.05

Diluted EPS before gain on sales of investments, net of  

   taxes

$1.27

$3.56

 

$10.01

$7.99

Weighted average shares outstanding

18,499

18,218

 

18,422

18,438

Weighted average shares outstanding assuming dilution

18,764

18,386

 

18,636

18,580

Cash flow from operations

68,821

131,221

 

305,099

228,295

      

Orders opened

     

October

91.5

138.7

   

November

71.8

109.8

   

December

78.1

98.4

   

Total orders opened

241.4

346.9

 

1,395.0

1,177.6

Total orders closed

206.7

300.5

 

1,110.0

873.8


     
    

December 31,

2003

December 31,

2002


Cash and investments

   


1,308,462

1,242,215

Total assets

   

2,717,460

1,910,832

Policy and contract claims

   

659,571

574,467

Deferred Service Arrangements

   

163,462

2,892

Shareholders’ equity

   

1,044,478

863,620

Book value per share attributable to common shareholders

   

$55.51

$47.07

Book value per share attributable to intangibles

   

$31.00

$10.99

Tangible book value per share attributable to common shareholders

   

$24.51

$36.08


The company cautions readers that the statements contained herein regarding the company’s future business plans, operations, opportunities or prospects, including any factors which may affect future earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results to differ materially from anticipated results.  For more details on factors that could affect expectations, see the company’s Annual Report on Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission.


LandAmerica Financial Group, Inc., headquartered in Richmond, Virginia, is a leading provider of real estate transaction services. LandAmerica, through its subsidiaries Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation, Transnation Title Insurance Company, LandAmerica OneStop, LandAmerica LERETA, LandAmerica Info1, and Inspectech, services its residential and commercial customers with more than 800 offices and a network of 10,000 active agents throughout the United States, Mexico, Canada, the Caribbean, and Latin America.  More information about the company and an archive of its press releases can be found at www.landam.com.

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