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Item 5. Market for Registrant’s Common Equity

2022-02-25 compared with 2021-03-01 · 10 added, 111 removed, 29 unchanged (81% of the section changed)

3 unchanged sentences

We had approximately 6,187 shareholders of record on January 31, 2022.

Refer to Note W.

Refer to Note U.

Employee Benefit Plans to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report, which is incorporated by reference into this Item 5 of Part II, for further information on securities issued for employee stock compensation pursuant to our Omnibus Plan.

11 unchanged sentences

Peer Group 100.00 144.51 122.40 158.10 150.91 239.11

Dividends declared on our common stock for the two most recent fiscal years are as follows:

Year Ended December 31,

Cash Dividends per Share

First quarter $ 0.33 $ 0.31

Second quarter 0.33 0.31

Third quarter 0.33 0.31

Fourth quarter 0.36 0.33

On February 16, 2022, our Board of Directors formally declared a $0.44 per FNF share cash dividend that is payable on March 31, 2022 to FNF shareholders of record as of March 17, 2022.

During the years ended December 31, 2021 and 2020, we declared dividend on our common stock of $1.56 and $1.35, respectively.

Our current dividend policy anticipates the payment of quarterly dividends in the future.

The declaration and payment of dividends will be at the discretion of our Board of Directors and will be dependent upon our future earnings, financial condition and capital requirements.

There are no restrictions on our retained earnings regarding our ability to pay dividends to shareholders, although there are limits on the ability of certain subsidiaries to pay dividends to us, as described below.

Our abilit y to declare dividends is subject to restrictions under our existing credit agreement.

We do not believe the restrictions contained in our credit agreement will, in the foreseeable future, adversely affect our ability to pay cash dividends at the current dividend rate.

Since we are a holding company, our ability to pay dividends will depend largely on the ability of our subsidiaries to pay dividends to us, and the ability of our title insurance subsidiaries to do so is subject to, among other factors, their compliance with applicable insurance regulations.

As of December 31, 2020, $2,559 million of our net assets are restricted from dividend payments without prior approval from the Departments of Insurance in the states where our title insurance subsidiaries are domiciled.

During 2021, our directly owned title insurance subsidiaries can pay dividends or make distributions to us of approximately $551 million without prior approval.

The limits placed on such subsidiaries’ abilities to pay dividends affect our ab ility to pay dividends.

Purchases of Equity Securities by the Issuer

On July 17, 2018, our Board of Directors approved a new three-year stock repurchase program effective August 1, 2018 (the "2018 Repurchase Program") under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2021.

On July 17, 2018, our Board of Directors approved a three-year stock repurchase program effective August 1, 2018 (the "2018 Repurchase Program") under which we were authorized to purchase up to 25 million shares of our FNF common stock through July 31, 2021.

On August 3, 2021, our Board of Directors approved a new three-year stock repurchase program effective August 3, 2021 (the "2021 Repurchase Program") under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2024.

We may make repurchases from time to time in the open market, in block purchases or in privately negotiated transactions, depending on market conditions and other factors.

During the year ended December 31, 2020, we repurchased a total of 7,450,000 FNF common shares for an aggregate amount of $244 million or an average of $32.75 per share.

Subsequent to December 31, 2020 and through market close on February 19, 2021, we repurchased a total of 400,000 shares for $16 million, or an average of $40.00 under this program.

The 2021 Repurchase Program replaces the 2018 Repurchase Program.

During the quarter ended December 31, 2021, we repurchased a total of 2,055,000 FNF common shares for an aggregate amount of $104 million or an average of $50.70 per share.

Subsequent to December 31, 2021 and through market close on February 23, 2022, we repurchased a total of 250,000 shares for $13 million, or an average of $52.60 under the 2021 Repurchase Program.

Since the original commencement of the 2021 Repurchase Program, we repurchased a total of 3,230,000 FNF common shares for an aggregate amount of $161 million, or an average of $49.90 per share.

On October 28, 2020, we announced that we intend to purchase approximately $500 million of FNF common shares over the following 12 months, based on market conditions.

The following table summarizes repurchases of equity securities by FNF during the year ended December 31, 2020 :

The following table summarizes repurchases of equity securities by FNF during the quarter ended December 31, 2021 :

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)

2 unchanged sentences

12/1/2021 - 12/31/2021 1,100,000 50.87 1,100,000 22,020,000

4/1/2020 - 4/30/2020 400,000 24.39 400,000 18,570,000

5/1/2020 - 5/31/2020 — — — 18,570,000

6/1/2020 - 6/30/2020 — — — 18,570,000

7/1/2020 - 7/31/2020 — — — 18,570,000

8/1/2020 - 8/31/2020 — — — 18,570,000

9/1/2020 - 9/30/2020 — — — 18,570,000

10/1/2020 - 10/31/2020 — — — 18,570,000

11/1/2020 - 11/30/2020 1,600,000 35.35 1,600,000 16,970,000

12/1/2020 - 12/31/2020 2,200,000 37.85 2,200,000 14,770,000

Total 2,055,000 $ 50.70 2,055,000

(1) On July 17, 2018, our Board of Directors approved a three-year stock repurchase program effective August 1, 2018.

Under the stock repurchase program, we may repurchase up to 25 million shares of our FNF common stock through July 31, 2021.

(1) On August 3, 2021 our Board of Directors approved the 2021 Repurchase Program, effective August 3, 2021, under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2024.

The 2021 Repurchase Program replaces the 2018 Repurchase Program.

(2) As of the last day of the applicable month.

Selected Financial Data

The information set forth below should be read in conjunction with the consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report.

Certain reclassifications have been made to the prior year amounts to conform with the 2020 presentation.

On November 17, 2017 we completed the split-off (the “FNFV Split-Off”) of our former wholly-owned subsidiary Cannae Holdings, Inc.

(“Cannae”), which consisted of the businesses, assets and liabilities formerly attributed to our FNF Ventures ("FNFV") Group including Ceridian Holding, LLC, American Blue Ribbon Holdings, LLC and T-System Holding LLC.

The results of FNFV are presented as discontinued operations in the following tables.

On September 29, 2017 we completed our tax-free distribution to FNF Group shareholders, of all 83.3 million shares of New BKH Corp.

("New BKH") common stock that we previously owned (the “BK Distribution”).

The results of Black Knight are presented as discontinued operations in the following tables.

Prior to November 17, 2017, our common stock was comprised of two tracking stocks, FNF Group common stock and FNFV Group common stock.

Year Ended December 31,

2020 2019 2018 2017 2016

(Dollars in millions, except share data)

Operating Data:

Revenue $ 10,778 $ 8,469 $ 7,594 $ 7,663 $ 7,257

Personnel costs 2,951 2,696 2,538 2,460 2,275

Agent commissions 2,749 2,258 2,059 2,089 1,998

Other operating expenses 1,759 1,681 1,801 1,781 1,648

Benefits & other policy reserve changes 866 — — — —

Depreciation and amortization 296 178 182 183 160

Provision for title claim losses 283 240 221 238 157

Interest expense 90 47 43 48 64

8,994 7,100 6,844 6,799 6,302

Earnings before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest 1,784 1,369 750 864 955

Income tax expense 322 308 120 235 347

Earnings before equity in earnings of unconsolidated affiliates 1,462 1,061 630 629 608

Equity in earnings of unconsolidated affiliates 15 15 5 10 14

Earnings from continuing operations, net of tax 1,477 1,076 635 639 622

(Loss) Earnings from discontinued operations, net of tax (25) — — 155 70

Net earnings 1,452 1,076 635 794 692

net earnings attributable to noncontrolling interests 25 14 7 23 42

Net earnings attributable to FNF common shareholders $ 1,427 $ 1,062 $ 628 $ 771 $ 650

Year Ended December 31,

2020 2019 2018 2017 2016

(Dollars in millions, except share data)

Per Share Data:

Basic net earnings per share attributable to FNF Group common shareholders $ 5.02 $ 3.89 $ 2.30 $ 2.44 $ 2.40

Basic net earnings (loss) per share attributable to FNFV Group common shareholders $ 1.68 $ (0.06)

Weighted average shares outstanding FNF Group, basic basis 284 273 273 271 272

Weighted average shares outstanding FNFV Group, basic basis 65 67

Diluted net earnings per share attributable to FNF Group common shareholders $ 4.99 $ 3.83 $ 2.26 $ 2.38 $ 2.34

Diluted net earnings (loss) per share attributable to FNFV Group common shareholders $ 1.63 $ (0.06)

Weighted average shares outstanding FNF Group, diluted basis 286 277 278 278 280

Weighted average shares outstanding FNFV Group, diluted basis 67 70

Dividends declared per share of FNF Group common stock $ 1.35 $ 1.26 $ 1.20 $ 1.02 $ 0.88

Balance Sheet Data:

Investments (1) $ 35,047 $ 4,384 3,549 $ 3,371 $ 3,782

Cash and cash equivalents (2) 2,719 1,376 1,257 1,110 1,049

Total assets 50,455 10,677 9,301 9,151 14,521

Notes payable 2,662 838 836 759 987

Reserve for title claim losses 1,623 1,509 1,488 1,490 1,487

Redeemable NCI — 344 344 344 344

Equity 8,392 5,365 4,628 4,467 6,898

Book value per share FNF Group (3) $ 28.80 $ 20.71 $ 18.05 $ 17.53 $ 22.81

Book value per share FNFV Group (3) $ 15.54

Orders opened by direct title operations (in 000's) 2,950 2,066 1,818 1,942 2,184

Orders closed by direct title operations (in 000's) 2,052 1,448 1,315 1,428 1,575

Provision for title insurance claim losses as a percent of title insurance premiums (4) 4.5 % 4.5 % 4.5 % 4.9 % 3.3 %

______________________________________

(1) Investments as of December 31, 2020, 2019, 2018, 2017, and 2016, include securities pledged to secured trust deposits of $456 million, $422 million, $426 million, $367 million, and $544 million, respectively.

(2) Cash and cash equivalents as of December 31, 2020, 2019, 2018, 2017, and 2016 include cash pledged to secured trust deposits of $270 million, $384 million, $412 million, $475 million, and $331 million, respectively.

(3) Book value per share is calculated as equity at December 31 of each year presented divided by actual shares outstanding at December 31 of each year presented.

(4) Includes the effects of the release of $97 million of excess reserves in the quarter ended December 31, 2016.

Selected Quarterly Financial Data (Unaudited)

Selected quarterly financial data is as follows:

Quarter Ended

March 31, June 30, September 30, December 31,

(Dollars in millions, except per share data)

Revenue $ 1,612 $ 2,420 $ 2,976 $ 3,770

(Loss) earnings from continuing operations before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest (86) 401 539 930

Net (loss) earnings attributable to FNF common shareholders (57) 309 378 801

Basic (loss) earnings per share attributable to FNF common shareholders (0.22) 1.12 1.30 2.74

Diluted (loss) earnings per share attributable to FNF common shareholders (0.22) 1.11 1.29 2.73

Dividends paid per share FNF common stock 0.33 0.33 0.33 0.36

Revenue $ 1,722 $ 2,144 $ 2,241 $ 2,362

Earnings from continuing operations before income taxes, equity in earnings of unconsolidated affiliates, and noncontrolling interest 264 353 313 439

Net earnings attributable to FNF common shareholders 206 266 250 340

Basic earnings per share attributable to FNF common shareholders 0.75 0.97 0.92 1.24

Diluted earnings per share attributable to FNF common shareholders 0.74 0.96 0.90 1.22

Dividends paid per share FNF common stock 0.31 0.31 0.31 0.33

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity