UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-32630

FIDELITY NATIONAL FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		16-1725106
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
601 Riverside Avenue, Jacksonville, Florida		32204
(Address of principal executive offices)		(Zip Code)

(904) 854-8100 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o NO o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

     As of October 31, 2009, there were 230,399,239 shares of the Registrant’s Common Stock outstanding.

 

 

FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 2009
INDEX

		Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008			3
B. Condensed Consolidated Statements of Earnings for the three-month and nine-month periods ended September 30, 2009 and 2008			4
C. Condensed Consolidated Statements of Comprehensive Earnings for the three-month and nine-month periods ended September 30, 2009 and 2008			6
D. Condensed Consolidated Statement of Equity for the nine-month period ended September 30, 2009			7
E. Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2009 and 2008			8
F. Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosure About Market Risk			37
Item 4. Controls and Procedures			37
Part II: OTHER INFORMATION
Item 1. Legal Proceedings			38
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 6. Exhibits			38
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

		September 30,				December 31,
		2009				2008
		(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at September 30, 2009 includes $248,656 and $53,937, respectively, of pledged fixed maturity securities related to secured trust deposits and the securities lending program, and at December 31, 2008 includes $267,353 and $103,586, respectively, of pledged fixed maturity securities related to secured trust deposits and the securities lending program		$	3,489,185			$	2,853,829
Equity securities available for sale, at fair value			14,181				71,516
Investments in unconsolidated affiliates			585,988				644,539
Other long-term investments			102,625				18,259
Short-term investments at September 30, 2009 and December 31, 2008, includes $44,965 and $115,184, respectively, of pledged short-term investments related to secured trust deposits			498,380				788,350
Total investments			4,690,359				4,376,493
Cash and cash equivalents, at September 30, 2009 includes $159,565 and $55,674, respectively, of pledged cash related to secured trust deposits and the securities lending program, and at December 31, 2008, includes $109,587 and $107,626, respectively, of pledged cash related to secured trust deposits and the securities lending program			298,552				315,297
Trade and notes receivables, net of allowance of $29,601 and $32,627, respectively, at September 30, 2009 and December 31, 2008			267,460				290,692
Goodwill			1,533,258				1,581,658
Prepaid expenses and other assets			333,977				632,527
Capitalized software, net			59,320				85,728
Other intangible assets, net			160,945				92,510
Title plants			427,358				431,591
Property and equipment, net			199,338				307,155
Income taxes receivable			—				115,371
Deferred tax assets			113,408				139,218
Total assets		$	8,083,975			$	8,368,240
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities, at September 30, 2009 and December 31, 2008, includes $55,674 and $107,626, respectively, of security loans related to the securities lending program		$	754,639			$	828,945
Accounts payable to related parties			8,020				9,953
Income taxes payable			30,640				—
Deferred revenue			111,890				109,023
Notes payable, at December 31, 2008, includes $6,199 in notes payable to Fidelity National Information Services, Inc.			867,971				1,350,849
Reserve for claim losses			2,623,897				2,738,625
Secured trust deposits			437,975				474,073
Total liabilities			4,835,032				5,511,468
Equity:
Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none			—				—
Common stock, Class A, $0.0001 par value; authorized 600,000,000 shares as of September 30, 2009 and December 31, 2008; issued 248,536,566 as of September 30, 2009 and 228,391,066 as of December 31, 2008			25				23
Additional paid-in capital			3,706,101				3,325,209
Accumulated deficit			(138,063	)			(188,954	)
Accumulated other comprehensive loss			(39,866	)			(91,757	)
Less treasury stock, 17,897,466 shares and 13,488,288 shares as of September 30, 2009 and December 31, 2008, respectively, at cost			(297,176	)			(238,948	)
Total Fidelity National Financial, Inc. shareholders’ equity			3,231,021				2,805,573
Noncontrolling interests			17,922				51,199
Total equity			3,248,943				2,856,772
Total liabilities and equity		$	8,083,975			$	8,368,240

See Notes to Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
REVENUE:
Direct title insurance premiums		$	379,396			$	286,551			$	1,122,053			$	912,370
Agency title insurance premiums			603,572				323,769				1,814,066				1,171,120
Escrow, title related and other fees			337,602				270,898				1,029,412				803,270
Specialty insurance			99,279				99,902				276,566				278,890
Interest and investment income			36,623				30,789				112,908				102,563
Realized gains and losses, net			10,621				(42,136	)			18,084				(15,868	)
Total revenue			1,467,093				969,773				4,373,089				3,252,345
EXPENSES:
Personnel costs			410,536				328,905				1,260,391				1,039,444
Other operating expenses			343,874				300,880				1,024,043				874,743
Agent commissions			480,787				254,883				1,446,460				911,692
Depreciation and amortization			23,119				29,237				84,651				93,693
Provision for claim losses			92,540				359,664				290,234				547,596
Interest expense			7,938				13,451				28,355				43,947
Total expenses			1,358,794				1,287,020				4,134,134				3,511,115
Earnings (loss) from continuing operations before income tax expense (benefit) and equity in earnings (loss) of unconsolidated affiliates			108,299				(317,247	)			238,955				(258,770	)
Income tax expense (benefit)			34,307				(123,440	)			68,080				(106,982	)
Earnings (loss) from continuing operations before equity in earnings (loss) of unconsolidated affiliates			73,992				(193,807	)			170,875				(151,788	)
Equity in earnings (loss) of unconsolidated affiliates			2,737				(2,717	)			(13,995	)			(7,385	)
Net earnings (loss) from continuing operations			76,729				(196,524	)			156,880				(159,173	)
Net loss from discontinued operations, net of tax			(1,848	)			(3,579	)			(1,881	)			(9,046	)
Net earnings (loss)			74,881				(200,103	)			154,999				(168,219	)
Less: Net earnings (loss) attributable to noncontrolling interests			1,437				(1,801	)			2,010				(4,087	)
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders		$	73,444			$	(198,302	)		$	152,989			$	(164,132	)
Earnings per share
Basic
Net earnings (loss) from continuing operations attributable to Fidelity National Financial, Inc. common shareholders		$	0.33			$	(0.94	)		$	0.69			$	(0.75	)
Net loss from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders			(0.01	)			(0.01	)			(0.01	)			(0.03	)
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders		$	0.32			$	(0.95	)		$	0.68			$	(0.78	)
Diluted
Net earnings (loss) from continuing operations attributable to Fidelity National Financial, Inc. common shareholders		$	0.32			$	(0.94	)		$	0.68			$	(0.75	)
Net loss from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders			—				(0.01	)			(0.01	)			(0.03	)
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders		$	0.32			$	(0.95	)		$	0.67			$	(0.78	)
Weighted average shares outstanding, basic basis			228,741				208,710				223,384				210,206
Weighted average shares outstanding, diluted basis			232,141				208,710				227,410				210,206
Cash dividends paid per share		$	0.15			$	0.30			$	0.45			$	0.90

See Notes to Condensed Consolidated Financial Statements

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Amounts attributable to Fidelity National Financial, Inc., common shareholders:
Net earnings (loss) from continuing operations, net of tax, attributable to Fidelity National Financial, Inc. common shareholders		$	75,292			$	(196,162	)		$	154,757			$	(158,675	)
Net loss from discontinued operations, net of tax, attributable to Fidelity National Financial, Inc. common shareholders			(1,848	)			(2,140	)			(1,768	)			(5,457	)
Net earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders		$	73,444			$	(198,302	)		$	152,989			$	(164,132	)

See Notes to Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Net earnings (loss)		$	74,881			$	(200,103	)		$	154,999			$	(168,219	)
Other comprehensive earnings (loss):
Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)			67,150				(44,938	)			110,105				(63,578	)
Unrealized gain (loss) on investments in unconsolidated affiliates			12,622				(3,063	)			(54,363	)			(18,357	)
Unrealized gain (loss) on foreign currency translation (2)			4,521				(1,412	)			5,747				(1,118	)
Reclassification adjustments for (gains) losses included in net earnings (3)			(4,924	)			26,156				(9,598	)			29,563
Other comprehensive earnings (loss)			79,369				(23,257	)			51,891				(53,490	)
Comprehensive earnings (loss)			154,250				(223,360	)			206,890				(221,709	)
Less: Comprehensive earnings (loss) attributable to noncontrolling interests			1,437				(1,801	)			2,010				(4,087	)
Comprehensive earnings (loss) attributable to Fidelity National Financial, Inc. common shareholders		$	152,813			$	(221,559	)		$	204,880			$	(217,622	)

See Notes to Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(In thousands)
(Unaudited)

		Fidelity National Financial, Inc. Common Shareholders
																		Accumulated
										Additional								Other
		Common Stock								Paid-in				Accumulated				Comprehensive				Treasury Stock								Noncontrolling
		Shares				Amount				Capital				Deficit				Loss				Shares				Amount				Interests				Total
Balance, December 31, 2008			228,391			$	23			$	3,325,209			$	(188,954	)		$	(91,757	)			13,488			$	(238,948	)		$	51,199			$	2,856,772
Equity offering			18,170				2				331,419				—				—				—				—				—				331,421
Exercise of stock options			1,976				—				18,982				—				—				—				—				—				18,982
Tax benefit associated with the exercise of stock options			—				—				2,841				—				—				—				—				—				2,841
Unrealized gain on investments and other financial instruments (excluding investments in unconsolidated affiliates)			—				—				—				—				100,507				—				—				—				100,507
Unrealized loss on investments in unconsolidated affiliates			—				—				—				—				(54,363	)			—				—				—				(54,363	)
Unrealized gain on foreign currency			—				—				—				—				5,747				—				—				—				5,747
Stock based compensation, including issuance of restricted stock			—				—				27,650				—				—				—				—				—				27,650
De-consolidation of previous majority-owned subsidiary			—				—				—				—				—				—				—				(32,860	)			(32,860	)
Purchases of treasury stock			—				—				—				—				—				4,320				(57,062	)			—				(57,062	)
Shares withheld for taxes			—				—				—				—				—				89				(1,166	)			—				(1,166	)
Cash dividends ($0.45 per share)			—				—				—				(102,098	)			—				—				—				—				(102,098	)
Subsidiary dividends paid to noncontrolling interests			—				—				—				—				—				—				—				(2,427	)			(2,427	)
Net earnings			—				—				—				152,989				—				—				—				2,010				154,999
Balance, September 30, 2009			248,537			$	25			$	3,706,101			$	(138,063	)		$	(39,866	)			17,897			$	(297,176	)		$	17,922			$	3,248,943

See Notes to Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

		Nine months ended
		September 30,
		2009				2008
		(Unaudited)
Cash flows from operating activities:
Net earnings (loss)		$	154,999			$	(168,219	)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			103,032				106,679
Equity in loss of unconsolidated affiliates			13,995				7,385
(Gain) loss on sales of investments and other assets, net			(15,749	)			15,762
Stock-based compensation cost			27,650				23,738
Tax benefit associated with the exercise of stock options			(2,841	)			(3,078	)
Changes in assets and liabilities, net of effects from acquisitions:
Net decrease in secured trust deposits			2,839				7,577
Net decrease in trade receivables			35,091				19,369
Net decrease (increase) in prepaid expenses and other assets			88,203				(94,988	)
Net decrease in accounts payable, accrued liabilities, deferred revenue and other			(38,418	)			(78,327	)
Net (decrease) increase in reserve for claim losses			(114,728	)			214,647
Net change in income taxes			113,588				(106,422	)
Net cash provided by (used in) operating activities			367,661				(55,877	)
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale			663,816				531,508
Proceeds from maturities of investment securities available for sale			264,006				226,772
Proceeds from sale of assets			3,140				3,330
Collections of notes receivable			574				3,851
Cash expended as collateral on loaned securities, net			(2,302	)			(322	)
Additions to title plants			(1,486	)			(4,820	)
Additions to property and equipment			(44,177	)			(58,971	)
Additions to capitalized software			(3,699	)			(15,860	)
Additions to notes receivable			(11,261	)			(1,023	)
Purchases of investment securities available for sale			(1,441,784	)			(516,922	)
Purchases of other long-term investments			(75,000	)			—
Net proceeds from (purchases of) short-term investment securities			219,428				(210,392	)
Proceeds from sale of partial interest in Sedgwick CMS			—				53,872
Distributions from unconsolidated affiliates			2,971				—
Net proceeds from the sale of FN Capital			49,193				—
Acquisitions of businesses, net of cash acquired			(4,227	)			(7,293	)
Net cash (used in) provided by investing activities			(380,808	)			3,730
Cash flows from financing activities:
Equity offering			331,421				—
Borrowings			147,048				276,520
Debt service payments			(392,281	)			(88,513	)
Dividends paid			(102,098	)			(191,274	)
Subsidiary dividends paid to minority interest shareholders			(2,427	)			(3,169	)
Exercise of stock options			18,982				4,738
Tax benefit associated with the exercise of stock options			2,841				3,078
Purchases of treasury stock			(57,062	)			(45,998	)
Net cash used in financing activities			(53,576	)			(44,618	)
Net decrease in cash and cash equivalents, excluding pledged cash related to secured trust deposits			(66,723	)			(96,765	)
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at beginning of period			205,710				376,078
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at end of period		$	138,987			$	279,313
Supplemental cash flow information:
Income taxes (refunded) paid		$	(39,811	)		$	3,880
Interest paid		$	49,851			$	58,640

See Notes to Condensed Consolidated Financial Statements

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Note A — Basis of Financial Statements

     The unaudited financial information in this report includes the accounts of Fidelity National Financial, Inc. and its subsidiaries (collectively, the “Company” or “FNF”) prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

     The preparation of these Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain reclassifications have been made in the 2008 Condensed Consolidated Financial Statements to conform to classifications used in 2009.

Description of Business

     Fidelity National Financial, Inc. is a holding company that is a provider, through its subsidiaries, of title insurance, specialty insurance, claims management services, and information services. FNF is the nation’s largest title insurance company through its title insurance underwriters — Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Security Union Title, and Alamo Title — which collectively issued more title insurance policies in 2008 than any other title company in the United States. FNF also provides flood insurance, personal lines insurance, and home warranty insurance through its specialty insurance subsidiaries. FNF is also a leading provider of outsourced claims management services to large corporate and public sector entities through its minority-owned affiliate, Sedgwick CMS (“Sedgwick”). FNF is also a provider of information services in the human resources, retail, and transportation markets through another minority-owned affiliate, Ceridian Corporation (“Ceridian”).

Sale of Fidelity National Capital, Inc.

     On September 25, 2009, the Company closed on the sale Fidelity National Capital, Inc. (“FN Capital”), a wholly-owned financing and leasing subsidiary, to Winthrop Resources Corporation. Accordingly, the sale and results of FN Capital for periods prior to the sale are reflected in the financial statements as discontinued operations for all periods presented. Net proceeds to FNF from the sale of FN Capital were $49.2 million. The Company recorded a pre-tax loss on the sale of $3.4 million ($2.2 million after tax). Total revenues from FN Capital included in discontinued operations were $8.1 million and $8.2 million for the three-month periods ended September 30, 2009 and 2008, respectively, and $29.3 million and $18.8 million for the nine-month periods ended September 30, 2009 and 2008, respectively. Pre-tax (loss) income was $(1.0) million and $0.2 million for the three-month periods ended September 30, 2009 and 2008, respectively, and $(2.1) million and $0.3 million for the nine-month periods ended September 30, 2009 and 2008, respectively.

Equity Offering

     On April 14, 2009, the Company offered 15,800,000 shares of its common stock at an offering price of $19.00 per share, pursuant to an effective registration statement previously filed with the Securities and Exchange Commission. The underwriters were granted and chose to exercise an option to purchase additional shares equal to 15% of the offering, or 2,370,000 shares, at the offering price. A total of 18,170,000 shares were issued on April 20, 2009, for net proceeds of approximately $331.4 million. The proceeds were used as follows: $135.0 million to repay borrowings under the Company’s $1.1 billion revolving credit facility, $71.5 million to repurchase the Company’s public bonds, $50.8 million to repurchase shares of the Company’s common stock, $25.0 million as part of a $57.1 million capital infusion into Lawyers Title and Commonwealth Land Title, and the remainder for general corporate purposes.

Transactions with Related Parties

     The Company has historically conducted business with Fidelity National Information Services, Inc. and its subsidiaries (collectively, “FIS”). On July 2, 2008, FIS completed the spin-off of its lender processing services segment into a separate publicly traded company known as Lender Processing Services, Inc. (“LPS”). As part of the spin-off of LPS, a number of the agreements that were previously between FNF and FIS were amended and renegotiated to reflect the revised relationships between FNF and FIS and the new relationships between FNF and LPS. Effective March 15, 2009, William P. Foley, II, retired from his position as an officer and director of LPS. Prior to March 15, 2009, Mr. Foley was the Chairman of the Board of LPS. Also at that time, Daniel D. (Ron) Lane and Cary H. Thompson, retired from the LPS Board of Directors. As a result, as of March 15, 2009, LPS is no longer a related

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

party and activity between FNF and LPS subsequent to that date is not included in the Company’s disclosures of transactions with related parties.

     A summary of the agreements that were in effect with FIS through September 30, 2009, is as follows:

•

Information Technology (“IT”), data processing services and software development services from FIS. These agreements govern IT support services and software development provided to the Company by FIS, primarily consisting of infrastructure support and data center management. Subject to certain early termination provisions (including the payment of minimum monthly service and termination fees), the agreement expires on or about June 30, 2013 with an option to renew for one or two additional years.

•

Administrative corporate support and cost-sharing services to and from FIS. The Company has provided certain administrative corporate support services such as general management, corporate aviation and other administrative support services to FIS. On a lesser scale, until recently, FIS has provided similar support services to the Company. The pricing of these administrative services is at cost. The administrative corporate services agreements expire in July 2010, subject to extension in certain circumstances or early termination if the services are no longer required by the party receiving the services or upon mutual agreement of the parties.

•

Real estate management, real estate lease and equipment lease agreements. Included in the Company’s revenues are amounts received related to leases of certain equipment to FIS and the sublease of certain office space, furniture and furnishings to FIS. A majority of the leases of equipment to FIS were between FN Capital and FIS and the related receipts are no longer revenue to the Company subsequent to the sale of FN Capital on September 25, 2009.

     A detail of related party items included in revenues and expenses is as follows:

		Three months ended				Three months ended				Nine months ended				Nine months ended
		September 30, 2009				September 30, 2008				September 30, 2009				September 30, 2008
						(In millions)
Rental revenue		$	5.0			$	5.8			$	15.4			$	18.1
Data processing costs		$	12.2			$	9.1			$	36.2			$	31.7
Corporate services and cost-sharing			(0.6	)			(0.5	)			(1.6	)			(1.6	)
Interest expense			—				0.1				0.1				0.2
Total expenses		$	11.6			$	8.7			$	34.7			$	30.3

     Management believes the amounts earned by the Company or charged to it under each of the foregoing arrangements are fair and reasonable. The information technology infrastructure support and data center management services provided to the Company are priced within the range of prices that FIS offers to its unaffiliated third party customers for the same types of services. However, the amounts FNF earned or was charged under these arrangements were not negotiated at arm’s-length, and may not represent the terms that the Company might have obtained from an unrelated third party.

     Amounts due to FIS as of the dates shown were as follows:

		September 30,				December 31,
		2009				2008
		(In millions)
Note payable to FIS		$	—			$	6.2
Other amounts due to FIS			8.0				6.9

     As a result of related party transactions, as of September 30, 2009, and December 31, 2008, the Company owed $8.0 million and $6.9 million, respectively, to FIS. Also, prior to the sale of FN Capital on September 25, 2009, the Company’s consolidated balance sheet included an unsecured note payable by FN Capital to FIS, with a balance of $6.2 million at December 31, 2008, which was repaid as part of the sale of FN Capital. The Company’s related interest expense was less than $0.1 million and $0.1 million for the three-month periods ended September 30, 2009 and 2008, respectively, and $0.1 million and $0.2 million for the nine-month periods ended September 30, 2009 and 2008, respectively.

     During the nine months ended September 30, 2008, the Company paid FIS $0.8 million for capitalized software development costs, all of which was paid in the three months ended March 31, 2008. No software development costs paid to FIS were capitalized during the nine months ended September 30, 2009.

      Investment in Fidelity National Information Services, Inc .

     Subsequent to quarter-end, on October 1, 2009, pursuant to an investment agreement between the Company and FIS dated March 31, 2009 (the “Investment Agreement”), the Company invested a total of $50.0 million in FIS common stock in connection with a merger between FIS and Metavante Technologies, Inc. Under the terms of the Investment Agreement, the Company purchased 3,215,434 shares of FIS’s common stock at a price of $15.55 per share. Additionally, the Company received a transaction fee of $1.5 million from FIS.

Agreements with LPS

     As noted above, prior to March 15, 2009, LPS was a related party of the Company. Agreements with LPS for title agency and other services were in effect at that time. For the three-month and nine-month periods ended September 30, 2008, the Company recorded agency title premiums of $64.2 million and $139.7 million, and $84.2 million for the period from January 1 through March 15, 2009. The Company recorded agency title commissions of $56.9 million and $123.7 million for the three-month and nine-month periods ended September 30, 2008, and $73.8 million for the period from January 1 through March 15, 2009. The Company recorded other revenue of $1.9 million and $6.6 million for the three-month and nine-month periods ended September 30, 2008, and $5.0 million for the period from January 1 through March 15, 2009. Other operating expenses relating to agreements with LPS were $18.2 million and $62.1 million for the three-month and nine-month periods ended September 30, 2008, and $19.2 million for the period from January 1 through March 15, 2009.

     In February 2009, the Company transferred its ownership interest in FNRES Holdings, Inc. (“FNRES”) to LPS in exchange for all of the outstanding shares of Investment Property Exchange Services, Inc. (“IPEX”), a company that facilitates real estate exchanges under Section 1031 of the Internal Revenue Code. Under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 805, “Business Combinations,” the purchase price was approximately $43 million, which was the fair value of FNF’s 61% holdings in FNRES. The results of operations of FNRES are reflected as discontinued operations in the Condensed Consolidated Statements of Earnings. Discontinued operations included revenues from FNRES operations of $11.8 million in the three months ended September 30, 2008, and $3.5 million and $35.6 million in the nine months ended September 30, 2009 and 2008. Discontinued operations included pre-tax losses related to FNRES operations of $5.8 million in the three months ended September 30, 2008, and $0.5 million and $14.5 million in the nine months ended September 30, 2009 and 2008, respectively.

Recent Accounting Pronouncements

     In August 2009, the FASB updated ASC Topic 820, clarifying the methodology used to determine the fair value of a liability. This update is effective for annual reporting periods beginning after August 2009, and for interim periods during the first annual reporting period. The Company does not expect this update to have a material impact on its financial condition or results of operations.

     In June 2009, the FASB changed the hierarchy of U.S. generally accepted accounting principles (“GAAP”) such that the newly released FASB Accounting Standards Codification (“ASC”) will replace other sources of authoritative GAAP with the exception of rules and interpretive releases of the Securities and Exchange Commission, which will continue to be authoritative. The ASC is effective for financial statements issued for interim and annual periods ending after September 15, 2009 and is not intended to significantly change GAAP.

     In June 2009, the FASB updated ASC Topic 810, changing the methodology used to determine whether or not an entity is a primary beneficiary with respect to a variable interest entity and introducing a requirement to reassess on an ongoing basis whether an entity is the primary beneficiary of a variable interest entity. This update is effective for annual reporting periods beginning after November 15, 2009, and for interim periods during the first annual reporting period. The Company does not expect this update to have a material impact on its financial condition or results of operations.

     In June 2009, the FASB issued guidance to clarify its intentions relative to accounting for transfers and servicing of financial assets and extinguishment of liabilities pursuant to ASC Topic 860. This guidance also eliminates the concept of special purpose entities. It is effective for the first annual reporting period beginning after November 15, 2009. The Company does not expect this update to have a material impact on its financial condition or results of operations.

     In May 2009, the FASB updated ASC Topic 855, setting (1) the period after the balance sheet date during which management should evaluate events or transactions for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize in its financial statements events or transactions occurring after the balance sheet date, and (3) the related disclosures that an entity should make. This update is effective for interim or annual periods ending after June 15, 2009. The

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Company has implemented this update with no impact to its financial condition or results of operations in the periods presented. The Company has concluded that there were no material subsequent events, other than those disclosed elsewhere in these footnotes, through November 6, 2009, the date that the financial statements were issued.

     In April 2009, the FASB issued an update to ASC Topic 320 regarding the recognition and presentation of other-than-temporary impairments. This update modifies the requirements for recognizing other-than-temporary impairment related to debt securities classified as available-for-sale and held-to-maturity and changes the impairment model for such securities. It also modifies the presentation of other-than-temporary impairment losses and expands and increases the frequency of related disclosures for debt and equity securities. This update is effective for interim and annual periods ending after June 15, 2009. The Company has implemented this update with no material impact on its financial position or results of operations. The additional disclosures required by this update are set forth in note E.

     In April 2009, the FASB issued an update to ASC Topic 820 addressing the determination of fair value when the volume and level of activity for an asset or liability have significantly decreased and identification of transactions that are not orderly. This update is effective for interim and annual reporting periods ending after June 15, 2009. The Company has implemented this update with no material impact on its financial position or results of operations.

     In April 2009, the FASB issued an update to ASC Topic 825 to require summarized disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies. This update is effective for interim reporting periods ending after June 15, 2009. The Company has adopted this update by including additional disclosures in note D.

     In December 2008, the FASB issued an update to ASC Topic 715, requiring additional disclosures about plan assets, including investment strategies, major categories of plan assets, concentrations of risks within plan assets, inputs and valuation techniques used to measure fair value of plan assets, and the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period. This update is effective for fiscal years ending after December 15, 2009. The Company does not expect this update to have a material impact in its statements of financial condition or results of operations.

     In November 2008, the FASB updated ASC Topic 323 to clarify the accounting for certain transactions and impairment considerations involving equity method investments. This update was effective for fiscal years beginning after December 15, 2008. The Company has adopted this update with no material effects in the Company’s statements of financial condition or results of operations.

     In June 2008, the FASB issued an update to ASC Topic 260, requiring unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents to be treated as participating securities, which means that they would be included in the earnings allocation in computing earnings per share under a two-class method described in ASC Topic 260. This update is effective for interim and annual periods beginning after December 15, 2008. The Company has adopted this update with no material effects in the Company’s statements of financial condition or results of operations.

     In April 2008, the FASB issued an update to ASC Topic 350 which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. This update applies to intangible assets that are acquired individually or with a group of other assets acquired in business combinations and asset acquisitions and requires expanded disclosure related to the determination of intangible asset useful lives. This update is effective for fiscal years beginning after December 15, 2008. The Company has adopted this update with no material effects in the Company’s statements of financial condition or results of operations.

     In December 2007, the FASB issued an update to ASC Topic 810, requiring noncontrolling interests (sometimes called minority interests) to be presented as a component of equity on the balance sheet. This update also requires that the amount of net income attributable to the parent and to the noncontrolling interests be clearly identified and presented on the face of the consolidated statement of income. This update eliminates the need to apply purchase accounting when a parent company acquires a noncontrolling ownership interest in a subsidiary and requires that, upon deconsolidation of a subsidiary, a parent company recognize a gain or loss in net income after which any retained noncontrolling interest will be reported at fair value. This update requires expanded disclosures in the consolidated financial statements that identify and distinguish between the interests of the parent’s owners and the interest of the noncontrolling owners of subsidiaries. This update is effective for periods beginning on or after December 15, 2008 and will be applied prospectively except for the presentation and disclosure requirements, which will be applied retrospectively for all periods presented. The Company has implemented this update effective January 1, 2009, with no material effect in the Company’s statements of financial position or results of operations except for the changes in presentation as noted above.

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

     In December 2007, the FASB issued an update to ASC Topic 805, requiring an acquirer in a business combination to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their fair values at the acquisition date, with limited exceptions. The costs of the acquisition and any related restructuring costs will be recognized separately. Assets and liabilities arising from contingencies in a business combination are to be recognized at their fair value at the acquisition date and adjusted prospectively as new information becomes available. When the fair value of assets acquired exceeds the fair value of consideration transferred plus any noncontrolling interest in the acquiree, the excess will be recognized as a gain. Under this guidance, all business combinations are accounted for by applying the acquisition method, including combinations among mutual entities and combinations by contract alone. This update was effective for periods beginning on or after December 15, 2008. The Company has adopted this update and is applying it to business combinations occurring subsequent to December 31, 2008.

Note B — Acquisitions

     The results of operations and financial position of the entities acquired during any year are included in the Condensed Consolidated Financial Statements from and after the date of acquisition. Based on the Company’s valuation, any differences between the fair value of the identifiable assets and liabilities and the purchase price paid are recorded as goodwill. There were no individually significant acquisitions during the nine months ended September 30, 2009.

Significant Acquisition

Acquisition of Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation, and United Capital Title Insurance Company

     On December 22, 2008, FNF completed the acquisition of LandAmerica Financial Group, Inc’s (“LFG”) two principal title insurance underwriters, Commonwealth Land Title Insurance Company (“Commonwealth”) and Lawyers Title Insurance Corporation (“Lawyers”), as well as United Capital Title Insurance Company (“United”) (collectively, the “LFG Underwriters”). The total purchase price for the LFG Underwriters was $260.3 million, net of cash acquired of $5.9 million, and was comprised of $155.3 million paid in cash by two of FNF’s title insurance underwriters, Fidelity National Title Insurance Company and Chicago Title Insurance Company, a $50.0 million subordinated note due in 2013, and $50.0 million in FNF common stock (3,176,620 shares valued at $15.74 per share at the time of closing).

     The total purchase price through September 30, 2009, as adjusted for additional consideration paid during 2009 relating to other settlement acquisition related items, was as follows (in millions):

Purchase price by FNF’s title insurance underwriters, net of cash acquired		$	155.3
Subordinated note payable to LFG (see note F)			50.0
FNF common stock (3,176,620 shares valued at $15.74 per share)			50.0
Transaction costs			5.0
		$	260.3

     The purchase price has been allocated to the LFG Underwriters’ assets acquired and liabilities assumed based on our best estimates of their fair values as of December 22, 2008. Goodwill has been recorded based on the amount that the purchase price exceeds the fair value of the net assets acquired. This estimate is preliminary and subject to adjustments as the Company completes its valuation process. The initial purchase price allocation is as follows (in millions):

Investments		$	920.9
Trade and notes receivable			73.9
Title plants			89.0
Property and equipment			17.5
Deferred tax assets			153.5
Other assets			169.2
Goodwill			188.6
Reserve for claim losses			(1,112.7	)
Other liabilities assumed			(239.6	)
Total purchase price		$	260.3

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

     The following table summarizes the other liabilities assumed in the acquisition of the LFG Underwriters (in millions):

Estimated facility closure costs		$	42.4
Estimated employee termination costs			14.7
Other merger related costs			5.0
Other operating liabilities			177.5
		$	239.6

     The Company has adjusted certain liabilities and other balances relating to the LFG Underwriters as a result of evaluations performed since the acquisition. The Company is currently evaluating deferred taxes, the related valuation allowance and certain other balances relating to the LFG Underwriters. The Company will complete this evaluation during the fourth quarter of 2009 and will adjust the amounts recorded as of December 31, 2008, to reflect the Company’s revised evaluations.

Pro Forma Results

     Selected unaudited pro forma results of operations for the three-month and nine-month periods ended September 30, 2008, are presented for comparative purposes below, assuming the acquisition of the LFG Underwriters had occurred as of January 1, 2008, and using actual general and administrative expenses prior to the acquisition.

		Three months ended				Nine months ended
		September 30, 2008				September 30, 2008
		(In millions, except per share data )
Total revenues		$	1,498.1			$	4,952.1
Net loss attributable to FNF			(371.3	)			(392.6	)
Pro forma earnings per share attributable to FNF — basic			(1.75	)			(1.84	)
Pro forma earnings per share attributable to FNF — diluted			(1.75	)			(1.84	)

     In the three-month and nine-month periods ended September 30, 2008, the operations of the LFG Underwriters resulted in total revenues of $528.3 million and $1,699.8 million and net losses of $305.0 million and $418.7 million.

Note C — Earnings Per Share

     Basic earnings per share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities. The Company has granted certain options and shares of restricted stock which have been treated as common share equivalents for purposes of calculating diluted earnings per share.

     The following table presents the computation of basic and diluted earnings per share:

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
		(In thousands, except per share amounts)
Basic and diluted net earnings from continuing operations attributable to FNF common shareholders		$	75,292			$	(196,162	)		$	154,757			$	(158,675	)
Basic and diluted net loss from discontinued operations attributable to FNF common shareholders			(1,848	)			(2,140	)			(1,768	)			(5,457	)
Basic and diluted net earnings attributable to FNF common shareholders		$	73,444			$	(198,302	)		$	152,989			$	(164,132	)
Weighted average shares outstanding during the period, basic basis			228,741				208,710				223,384				210,206
Plus: Common stock equivalent shares assumed from conversion of options			3,400				—				4,026				—
Weighted average shares outstanding during the period, diluted basis			232,141				208,710				227,410				210,206
Basic net earnings per share from continuing operations attributable to FNF common shareholders		$	0.33			$	(0.94	)		$	0.69			$	(0.75	)
Basic net loss from discontinued operations attributable to FNF common shareholders			(0.01	)			(0.01	)			(0.01	)			(0.03	)
Basic earnings per share attributable to FNF common shareholders		$	0.32			$	(0.95	)		$	0.68			$	(0.78	)
Diluted net earnings per share from continuing operations attributable to FNF common shareholders		$	0.32			$	(0.94	)		$	0.68			$	(0.75	)
Diluted net loss from discontinued operations attributable to FNF common shareholders			—				(0.01	)			(0.01	)			(0.03	)
Diluted earnings per share attributable to FNF common shareholders		$	0.32			$	(0.95	)		$	0.67			$	(0.78	)

     Options to purchase shares of the Company’s common stock that are antidilutive are excluded from the computation of diluted earnings per share. Antidilutive options totaled 13,432,001 shares and 19,809,327 shares for the three months ended September 30,

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

2009 and 2008, respectively, and 9,128,552 shares and 19,809,327 shares for the nine months ended September 30, 2009 and 2008, respectively.

Note D — Fair Value Measurements

     The following table presents the Company’s fair value hierarchy, pursuant to FASB ASC Topic 820, for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2009:

		Level 1				Level 2				Level 3				Total
		(In thousands)
Fixed-maturity securities available for sale:
U.S. government and agencies		$	—			$	363,871			$	—			$	363,871
State and political subdivisions			—				1,329,644				—				1,329,644
Corporate debt securities			—				1,360,023				—				1,360,023
Foreign government bonds			—				32,932				—				32,932
Mortgage-backed/asset- backed securities			—				354,349				—				354,349
Other fixed-maturity			—				1,627				46,739				48,366
Equity securities available for sale			14,181				—				—				14,181
Other long-term investments			—				—				75,305				75,305
Total		$	14,181			$	3,442,446			$	122,044			$	3,578,671

     The Company’s Level 2 fair value measures for fixed-maturities available for sale are provided by third-party pricing services. The Company utilizes one firm for its taxable bond portfolio and another for its municipal bond portfolio. These pricing services are leading global providers of financial market data, analytics and related services to financial institutions. The Company only relies on one price for each instrument to determine the carrying amount of the assets on our balance sheet. The inputs utilized in these pricing methodologies include observable measures such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications.

     The Company’s investments classified as Level 3 at September 30, 2009, consisted of auction rate securities which were included in the assets of the LFG Underwriters that were acquired on December 22, 2008, and structured notes that the Company purchased in the third quarter of 2009. The aggregate par value and fair value of the auction rate securities were $81.8 million and $46.7 million, respectively, at September 30, 2009. There is no active market for these auction rate securities and they are valued using models with significant non-observable inputs. These securities represent less than one percent of the Company’s total investment portfolio. Fair values for auction rate securities are provided by a third-party pricing service. The Company purchased structured notes with embedded derivatives in the third quarter of 2009. The structured notes are classified as other long-term investments and are measured in their entirety at fair value with changes in fair value recognized in earnings. The Company holds these notes for general investment purposes. They are held with high credit quality financial institutions and are redeemable at maturity for an amount that is calculated based on the performance of underlying indexes, exchange-traded funds, and foreign currencies. The amounts that the issuers of these securities will pay at redemption may be greater than, equal to, or less than the initial investment, depending on the performance of these underlying factors. In each case, the Company is guaranteed the return of a substantial portion of its initial investment. These structured notes have a total par value and cost of $75.0 million, and a total fair value at September 30, 2009, of $75.3 million, or less than two percent of the Company’s total portfolio. The fair value of these instruments recorded at September 30, 2009 represents exit prices obtained from a broker-dealer. These exit prices are the product of a proprietary valuation model utilized by the trading desk of the broker-dealer and contain assumptions relating to volatility, the level of interest rates, correlation and the underlying value of the indexes, exchange-traded funds, and foreign currencies. The Company believes these valuations to be reasonable and to represent an exit price for the securities as of September 30, 2009.

     The following table presents the changes in the Company’s investments that are classified as Level 3 for the nine months ended September 30, 2009 (in thousands).

Balance, January 1, 2009		$	32,055
Purchases			75,000
Proceeds received upon call			(7,000	)
Realized gain			5,129
Unrealized gains included in other comprehensive income			16,860
Balance, September 30, 2009		$	122,044

     At September 30, 2009, the fair value of the Company’s long-term debt was $830.4 million and the carrying amount was $868.0 million. The carrying amounts of accounts receivable and notes receivable approximate fair value.

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

     The FASB delayed the effective date for the requirement of fair value disclosures with respect to nonfinancial assets and nonfinancial liabilities that are not remeasured at fair value on a recurring basis. Such disclosures were effective for fiscal years beginning after November 15, 2008. The Company has adopted these disclosure requirements effective January 1, 2009 with no effect on the Company’s statements of financial condition or results of operations for the three-month and nine-month periods ended September 30, 2009.

Additional information regarding the fair value of the Company’s investment portfolio is included in note E.

Note E — Investments

     The carrying amounts and fair values of the Company’s available for sale securities at September 30, 2009, and December 31, 2008, are as follows:

		September 30, 2009
		Carrying				Amortized				Unrealized				Unrealized				Fair
		Value				Cost				Gains				Losses				Value
		(In thousands)
Fixed-maturity securities available for sale:
U.S. government and agencies		$	363,871			$	348,153			$	17,261			$	(1,543	)		$	363,871
States and political subdivisions			1,329,644				1,277,559				52,684				(599	)			1,329,644
Corporate debt securities			1,360,023				1,294,061				72,197				(6,235	)			1,360,023
Foreign government bonds			32,932				31,678				1,274				(20	)			32,932
Mortgage-backed/ asset-backed securities			354,349				339,351				16,001				(1,003	)			354,349
Other fixed maturity securities			48,366				30,846				17,520				—				48,366
Total fixed maturity securities available for sale			3,489,185				3,321,648				176,937				(9,400	)			3,489,185
Equity securities available for sale			14,181				12,349				2,928				(1,096	)			14,181
Total available for sale securities		$	3,503,366			$	3,333,997			$	179,865			$	(10,496	)		$	3,503,366

		December 31, 2008
		Carrying				Amortized				Unrealized				Unrealized				Fair
		Value				Cost				Gains				Losses				Value
		(In thousands)
Fixed-maturity securities available for sale:
U.S. government and agencies		$	558,651			$	526,425			$	32,469			$	(243	)		$	558,651
States and political subdivisions			1,049,125				1,029,505				24,550				(4,930	)			1,049,125
Corporate debt securities			875,005				910,533				8,413				(43,941	)			875,005
Foreign government bonds			43,510				41,582				1,943				(15	)			43,510
Mortgage-backed/ asset-backed securities			293,188				292,452				1,227				(491	)			293,188
Other fixed maturity securities			34,350				33,712				677				(39	)			34,350
Total fixed maturity securities available for sale			2,853,829				2,834,209				69,279				(49,659	)			2,853,829
Equity securities available for sale			71,516				79,795				2,204				(10,483	)			71,516
Total available for sale securities		$	2,925,345			$	2,914,004			$	71,483			$	(60,142	)		$	2,925,345

     The following table presents certain information regarding contractual maturities of the Company’s fixed maturity securities available for sale at September 30, 2009:

		September 30, 2009
		Amortized				% of								% of
Maturity		Cost				Total				Fair Value				Total
		(In thousands)
One year or less		$	223,194				6.7	%		$	226,258				6.5	%
After one year through five years			1,679,132				50.6				1,755,557				50.3
After five years through ten years			830,904				25.0				876,266				25.1
After ten years			249,067				7.5				276,755				7.9
Mortgage-backed/asset-backed securities			339,351				10.2				354,349				10.2
		$	3,321,648				100.0	%		$	3,489,185				100.0	%
Subject to call		$	422,405				12.7	%		$	442,487				12.7	%

     Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

with or without call or prepayment penalties and because of prepayments by issuers. Because of the potential for prepayment on mortgage-backed and asset-backed securities, they are not categorized by contractual maturity.

     The Company lends fixed maturity and equity securities to financial institutions in short-term security lending transactions. The Company’s security lending policy requires that the cash received as collateral be 102% or more of the fair value of the loaned securities. At September 30, 2009 and December 31, 2008, the fair values of pledged fixed-maturity securities related to securities loaned totaled $53.9 million and $103.6 million, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $55.7 million and $107.6 million at September 30, 2009 and December 31, 2008, respectively, which has been included in cash and cash equivalents and in accounts payable and accrued liabilities.

     During the three-month and nine-month periods ended September 30, 2009, gross proceeds from sales of available for sale securities were $177.4 million and $663.8 million, respectively, gross gains were $9.4 million and $34.8 million, respectively, and gross losses, including impairment charges, were $2.9 million and $20.8 million, respectively. During the three-month and nine-month periods ended September 30, 2009, net unrealized gains on available for sale securities included in other comprehensive earnings totaled $99.2 million and $167.9 million, respectively, and net realized gains reclassified out of other comprehensive earnings totaled $7.8 million and $15.3 million, respectively. Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold and are credited or charged to income on a trade date basis.

     Included in the Company’s other long-term investments are fixed-maturity structured notes carried at fair value (see note D). Changes in the fair value of these structured notes are recorded as realized gains and losses in the Company’s statements of earnings. The Company recorded a net gain of $0.3 million in the three-month and nine-month periods ended September 30, 2009, related to the structured notes still held at September 30, 2009.

     Net unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2009, and December 31, 2008, were as follows:

September 30, 2009:

		Less than 12 Months								12 Months or Longer								Total
						Unrealized								Unrealized								Unrealized
		Fair Value				Losses				Fair Value				Losses				Fair Value				Losses
		(In thousands)
Fixed-maturity securities available for sale:
U.S. government and agencies		$	44,078			$	(1,543	)		$	—			$	—			$	44,078			$	(1,543	)
States and political subdivisions			33,126				(195	)			13,248				(404	)			46,374				(599	)
Corporate securities			25,797				(2,896	)			64,306				(3,339	)			90,103				(6,235	)
Mortgage-backed/ asset-backed securities			23,051				(1,003	)			—				—				23,051				(1,003	)
Foreign securities			1,972				(20	)			—				—				1,972				(20	)
Total fixed maturity securities available for sale			128,024				(5,657	)			77,554				(3,743	)			205,578				(9,400	)
Equity securities available for sale			—				—				5,016				(1,096	)			5,016				(1,096	)
Total temporarily impaired securities		$	128,024			$	(5,657	)		$	82,570			$	(4,839	)		$	210,594			$	(10,496	)

December 31, 2008:

		Less than 12 Months								12 Months or Longer								Total
						Unrealized								Unrealized								Unrealized
		Fair Value				Losses				Fair Value				Losses				Fair Value				Losses
		(In thousands)
Fixed-maturity securities available for sale:
U.S. government and agencies		$	37,920			$	(243	)		$	—			$	—			$	37,920			$	(243	)
States and political subdivisions			116,364				(3,740	)			10,762				(1,190	)			127,126				(4,930	)
Corporate securities			451,615				(26,006	)			90,043				(17,935	)			541,658				(43,941	)
Foreign securities			2,022				(15	)			—				—				2,022				(15	)
Mortgage-backed/ asset-backed securities			42,578				(491	)			—				—				42,578				(491	)
Other fixed maturity securities			2,137				(39	)			—				—				2,137				(39	)
Total fixed maturity securities available for sale			652,636				(30,534	)			100,805				(19,125	)			753,441				(49,659	)
Equity securities available for sale			22,346				(10,483	)			—				—				22,346				(10,483	)
Total temporarily impaired securities		$	674,982			$	(41,017	)		$	100,805			$	(19,125	)		$	775,787			$	(60,142	)

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

     A substantial portion of the Company’s unrealized losses relate to debt securities. These unrealized losses were primarily caused by widening credit spreads that the Company considers to be temporary. Because the Company expects to recover the entire amortized cost basis of these securities, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the securities before recovery of the cost basis, the Company does not consider these investments to be other-than-temporarily impaired. The unrealized losses relating to equity securities were caused by market changes that the Company considers to be temporary and thus the Company does not consider these investments other-than-temporarily impaired.

     During the three months ended September 30, 2009, the Company recorded impairment charges totaling $1.2 million relating to two of its equity securities that were deemed other-than-temporarily impaired. During the three months ended September 30, 2008, the Company recorded impairment charges totaling $17.8 million related to its fixed maturity securities, $13.3 million related to its equity securities, and $3.4 million related to other investments that were deemed other-than-temporarily impaired. During the nine months ended September 30, 2009, the Company recorded impairment charges totaling $6.9 million related to equity securities that were deemed other-than-temporarily impaired. During the nine months ended September 30, 2008, the Company recorded impairment charges totaling $25.4 million related to its fixed maturity securities, $16.8 million related to equity securities, and $3.4 million related to other investments that were deemed other-than-temporarily impaired. The impairment charges relating to fixed maturity securities primarily resulted from the Company’s conclusion that the severity of the decline in value and the credit risk relating to the holdings was high. The impairment charges relating to the equity securities are based on the duration of the unrealized loss and inability to predict the time to recover if the investments continue to be held. It is possible that future events may lead the Company to recognize potential future impairment losses related to our investment portfolio and that unanticipated future events may lead the Company to dispose of certain investment holdings and recognize the effects of any market movements in our consolidated financial statements.

     In accordance with ASC Topic 320, the Company determined that a total of $1.3 million in other-than-temporary impairments on fixed maturity securities had previously been recognized in relation to investments held at April 1, 2009, all of which were related to credit losses. Therefore, no cumulative effect adjustment was necessary upon implementation of the ASC topic on recognition and presentation of other-than-temporary impairments. All of the securities for which an other-than-temporary impairment had previously been recognized were sold within three months after implementation of the ASC topic. As of September 30, 2009, there were no investments held by the Company for which an other-than-temporary impairment had been previously recognized.

     Investments in unconsolidated affiliates are recorded using the equity method of accounting and, as of September 30, 2009 and December 31, 2008, consist of (in thousands):

		Ownership				September 30, 2009				December 31, 2008
Ceridian			33	%		$	379,320			$	453,129
Sedgwick			32	%			118,652				115,646
Remy			47	%			59,752				61,786
Other		Various					28,264				13,978
Total						$	585,988			$	644,539

     In addition, the Company records its share of the other comprehensive income (loss) of unconsolidated affiliates. As of September 30, 2009, included within the statement of equity, the Company had recorded accumulated other comprehensive losses of $74.9 million, $21.0 million, and $3.2 million related to its investments in Ceridian, Remy, and Sedgwick, respectively.

     On June 5, 2008, the Company sold 20% of its 40% interest in Sedgwick for proceeds of $53.9 million, resulting in a pre-tax gain of $24.8 million. Subsequent to this sale, the Company owns 32% of Sedgwick.

     The Company accounts for its equity in Ceridian’s earnings on a three-month lag. Accordingly, FNF’s net earnings for the three-month and nine-month periods ended September 30, 2009, include the Company’s equity in Ceridian’s earnings for the three-month and nine-month periods ended June 30, 2009, and FNF’s net earnings for the three-month and nine-month periods ended September 30, 2008, include the Company’s equity in Ceridian’s earnings for the three month period ended June 30, 2008 and the period from November 10, 2007 through June 30, 2008, respectively. Additionally, our investment in Ceridian at September 30, 2009, and December 31, 2008, reflects Ceridian’s statements of financial condition as of June 30, 2009, and September 30, 2008, respectively. Summarized financial information for Ceridian for the relevant dates and time periods included in the Company’s statements of financial condition and operations, is presented below.

Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

		June 30, 2009				September 30, 2008
		(In millions)
Total current assets		$	949.6			$	1,300.0
Goodwill and other intangible assets, net			4,673.9				4,755.5
Other assets			3,665.3				3,397.9
Total assets		$	9,288.8			$	9,453.4
Current liabilities		$	647.9			$	986.3
Long-term obligations, less current portion			3,490.2				3,516.5
Other long-term liabilities			3,976.9				3,557.7
Total liabilities			8,115.0				8,060.5
Equity			1,173.8				1,392.9
Total liabilities and equity		$	9,288.8			$	9,453.4

														Period from
		Three Months Ended				Three Months Ended				Nine Months Ended				November 10, 2007,
		June 30, 2009				June 30, 2008				June 30, 2009				through June 30, 2008
		(In millions)
Total revenues		$	362.2			$	383.8			$	1,109.0			$	1,027.3
Loss before income taxes			(23.0	)			(28.9	)			(123.1	)			(77.3	)
Net loss			(11.4	)			(17.6	)			(78.0	)			(52.1	)

     The Company recorded aggregate net gains (losses) of Ceridian, Sedgwick, and Remy, of $1.1 million and $(4.2) million in the three-month periods ended September 30, 2009 and 2008, respectively, and $(18.7) million and $(10.2) million in the nine-month periods ended September 30, 2009 and 2008, respectively. Equity in earnings of other unconsolidated affiliates was $1.6 million and $1.5 million for the three-month periods ended September 30, 2009 and 2008, respectively, and $4.7 million and $2.8 million for the nine-month periods ended September 30, 2009 and 2008, respectively.

Note F — Notes payable

     Notes payable consist of the following:

		September 30,				December 31,
		2009				2008
		(In thousands)
Unsecured notes, net of discount, interest payable semi-annually at 5.25%, due March 2013		$	245,167			$	249,217
Unsecured notes, net of discount, interest payable semi-annually at 7.30%, due August 2011			170,257				241,081
Syndicated credit agreement, unsecured, interest accrued monthly at LIBOR plus 0.475%, unused portion of $700 million at September 30, 2009, due October 2011			400,000				585,000
Bank promissory notes, nonrecourse, secured, interest payable monthly at various fixed rates			—				197,536
Subordinated note payable to LandAmerica Financial Group, Inc., interest payable annually at 2.36%, due December 2013			50,000				50,000
Other			2,547				28,015
Total		$	867,971			$	1,350,849

     Principal maturities of notes payable at September 30, 2009, are as follows (in thousands):

2009		$	964
2010			1,079
2011			570,491
2012			249
2013			295,188
Total		$	867,971