SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) May 2, 2001
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THE FIRST AMERICAN CORPORATION
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(Exact Name of the Registrant as Specified in Charter)
California 0-3658 95-1068610
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1 First American Way, Santa Ana, California 92707-5913
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (714) 800-3000
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Not Applicable.
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
See the attached Exhibit.
Item 7. Exhibits.
99 Press Release
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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: May 8, 2001 By:/s/ Thomas A. Klemens
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Name: Thomas A. Klemens
Title: Executive Vice President and Chief
Financial Officer
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THE FIRST AMERICAN CORPORATION REPORTS
OPERATING RESULTS FOR THE FIRST QUARTER 2001
SANTA ANA, Calif., May 2, 2001 - The First American Corporation (NYSE: FAF), the
nation's leading, diversified provider of business information and related
products and services, announced today operating results for the first quarter
ended March 31, 2001.
Net income for the first quarter 2001 was $27.0 million, or 39 cents per
diluted share, which includes a $14.2 million pretax gain on the previously
announced sale of the company's subsidiary, Contour Software, Inc., and a $3.6
million charge to earnings relating to the company's exit of the lender-placed
homeowner's insurance business, a part of the National Information Group
acquisition completed in May 1999. These items totaled a net benefit of $6.5
million on an after-tax basis, or 9 cents per diluted share. The resulting
operational net income for the first quarter was $20.5 million, or 30 cents per
diluted share, which compares with net income of $1.0 million, or 2 cents per
diluted share, for the comparable quarter of 2000. Revenues for the first three
months of 2001 totaled $781.0 million, an increase of 21 percent when compared
with 2000 first quarter revenues of $646.2 million.
"Fueled by lower interest rates, home sales and refinancing activity were
comparable to the record levels experienced in 1998," stated Parker S. Kennedy,
president of The First American Corporation. "The company benefited from the
higher levels of lender-driven refinance activity, as evidenced by the 434,700
new title orders opened during the first quarter of 2001, the highest quarterly
number of title orders opened in the company's history. New orders escalated 9
percent from January to February and an additional 21 percent from February to
March. This record-setting volume should provide for strong second quarter
results. During this period of robust real estate activity and high title-order
counts, we were able to increase efficiencies and keep expenses stable,
underscoring our ability to leverage technology and exercise solid expense
controls."
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Kennedy continued: "During 2001, we will experience the bottom-line
benefits of our technology enhancements, market share expansion and strategic
acquisitions. The successful sale of $210 million of our senior convertible
debentures enables us to fund our growth through careful, sound acquisitions. We
will continue to expand our diverse and profitable consumer
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information and services segment, which provides a complete suite of information
products for the automotive, employment, insurance and investment industries."
The company also announced that direct operation title-order counts are now
posted on the investor relations section of the company's Web site. New postings
will be made approximately 20 working days after month-end and will include open
as well as closed title-order transactions.
The First American Corporation, based in Santa Ana, Calif., is the nation's
leading, diversified provider of business information and related products and
services. The corporation's three primary business segments include: title
information and services; real estate information and services, which includes
mortgage information services and database information and services; and
consumer information and services, which provides automotive, subprime and
direct-to-consumer credit reporting; direct-to-consumer public records
reporting; resident screening; pre-employment screening; property and automotive
insurance tracking services; property and casualty insurance; home warranties;
investment advisory; and trust and banking services. Information about the
company and an archive of its press releases can be found on the Internet at
www.firstam.com.
Certain statements made in this press release, including those relating to
benefits derived from title-order volumes, technology enhancements, market
share expansion and acquisitions; and expansion of the company's consumer
information and services segment are forward-looking. Risks and
uncertainties exist which 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; general volatility in the capital markets;
changes in applicable government regulations; consolidation among the
company's significant customers and competitors; legal proceedings
commenced by the California attorney general and related litigation; 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, 2000, 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.
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The First American Corporation
Summary of Earnings
For the Three Months Ended
March 31
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2001 2000
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Revenues $ 780,951,000 $ 646,174,000
Income before income taxes and minority interests $ 53,408,000 $ 3,885,000
Income Taxes $ 19,500,000 $ 800,000
Minority interests $ 6,922,000 $ 2,083,000
Net income $ 26,986,000 $ 1,002,000
Net income per share:
Basic $0.42 $0.02
Diluted $0.39 $0.02
Weighted average shares outstanding:
Basic 64,165,000 64,138,000
Diluted 68,797,000 65,322,000
The First American Corporation
Summary Balance Sheet Information
March 31
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2001 2000
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Total assets $2,234,619,000 $2,060,699,000
Total equity $ 910,694,000 $ 793,605,000
Book value per share $ 14.04 $ 12.53
(Additional Financial Data to Follow)
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Selected Financial Data
(Unaudited)
For the Three Months Ended
March 31
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2001 2000
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RESULTS OF OPERATIONS
Revenues
Operating revenues $ 750,184,000 $ 635,865,000
Investment and other income 30,767,000 10,309,000
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780,951,000 646,174,000
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Expenses
Salaries and other personnel costs 274,819,000 250,204,000
Premiums retained by agents 189,407,000 167,122,000
Other operating expenses 191,088,000 166,360,000
Provision for title losses and other claims 36,490,000 30,123,000
Depreciation and amortization 24,433,000 17,416,000
Premium taxes 5,008,000 5,288,000
Interest 6,298,000 5,776,000
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727,543,000 642,289,000
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Income before income taxes and minority interests $ 53,408,000 $ 3,885,000
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OPERATING REVENUES
Title Insurance:
Direct operations $ 289,271,000 $ 235,946,000
Agency operations 234,254,000 210,600,000
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523,525,000 446,546,000
Real Estate Information 162,233,000 128,757,000
Consumer Information 64,426,000 60,562,000
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Total operating revenues $ 750,184,000 $ 635,865,000
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INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Title Insurance $ 19,677,000 $ 6,252,000
Real Estate Information 41,724,000 2,864,000
Consumer Information 3,977,000 9,594,000
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Total before corporate expenses and
minority interests 65,378,000 18,710,000
Corporate expenses 11,970,000 14,825,000
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Income before income taxes and minority interests $ 53,408,000 $ 3,885,000
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TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened:
January 127,500 87,400
February 139,100 100,300
March 168,100 123,500
Title orders closed:
January 72,900 64,500
February 84,000 71,000
March 113,200 94,800
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