Edgar Filing: Fidelity National Financial, Inc.

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller reporting company)

FNF 03.31.13 10-Q

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

For the quarterly period ended March 31, 2013

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 þ 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):

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

YES o NO R

As of April 30, 2013, there were 227,552,466 shares of the Registrant’s Common Stock outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended March 31, 2013

TABLE OF CONTENTS




	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	1
B. Condensed Consolidated Statements of Earnings for the three-months ended March 31, 2013 and 2012	2
C. Condensed Consolidated Statements of Comprehensive Earnings for the three-month periods ended March 31, 2013 and 2012	3
D. Condensed Consolidated Statement of Equity for the three-month period ended March 31, 2013	4
E. Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2013 and 2012	5
F. Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosure About Market Risk	35
Item 4. Controls and Procedures	35
Part II: OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 6. Exhibits	37

Table of Contents

Part I: FINANCIAL INFORMATION


Item 1.	Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except share data)



	March 31, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at March 31, 2013 and December 31, 2012 includes $275 of pledged fixed maturity securities related to secured trust deposits	$	3,121		$	3,140
Preferred stock available for sale, at fair value	229			217
Equity securities available for sale, at fair value	152			138
Investments in unconsolidated affiliates	381			392
Other long-term investments	139			105
Short-term investments	19			62
Total investments	4,041			4,054
Cash and cash equivalents, at March 31, 2013 and December 31, 2012 includes $205 and $266, respectively, of pledged cash related to secured trust deposits	948			1,132
Trade and notes receivables, net of allowance of $22, at March 31, 2013 and December 31, 2012	467			479
Goodwill	1,883			1,909
Prepaid expenses and other assets	698			672
Other intangible assets, net	647			651
Title plants	374			374
Property and equipment, net	624			632
Total assets	$	9,682		$	9,903
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities, at March 31, 2013 and December 31, 2012 includes accounts payable to related parties of $5	$	1,212		$	1,308
Notes payable	1,354			1,344
Reserve for title claim losses	1,723			1,748
Secured trust deposits	468			528
Income taxes payable	47			103
Deferred tax liability	105			123
Total liabilities	4,909			5,154
Equity:
Common stock, Class A, $0.0001 par value; authorized 600,000,000 shares as of March 31, 2013 and December 31, 2012; issued 268,766,795 as of March 31, 2013 and 268,541,117 as of December 31, 2012	—			—
Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none	—			—
Additional paid-in capital	4,025			4,018
Retained earnings	902			849
Accumulated other comprehensive earnings	60			59
Less: treasury stock, 41,395,513 shares and 39,995,513 shares as of March 31, 2013 and December 31, 2012, respectively, at cost	(692		)	(658		)
Total Fidelity National Financial, Inc. shareholders’ equity	4,295			4,268
Noncontrolling interests	478			481
Total equity	4,773			4,749
Total liabilities and equity	$	9,682		$	9,903

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in millions, except per share data)



	Three months ended March 31,
	2013			2012
	(Unaudited)
Revenues:
Direct title insurance premiums	$	414		$	354
Agency title insurance premiums	524			414
Escrow, title related and other fees	443			382
Auto parts revenue	284			—
Restaurant revenue	356			—
Interest and investment income	33			36
Realized gains and losses, net	(4		)	4
Total revenues	2,050			1,190
Expenses:
Personnel costs	521			408
Agent commissions	397			316
Other operating expenses	327			275
Cost of auto parts revenue, includes $18 of depreciation and amortization in the three months ended March 31, 2013	240			—
Cost of restaurant revenue	305			—
Depreciation and amortization	34			17
Provision for title claim losses	65			54
Interest expense	23			15
Total expenses	1,912			1,085
Earnings from continuing operations before income taxes and equity in (losses) earnings of unconsolidated affiliates	138			105
Income tax expense	46			37
Earnings from continuing operations before equity in (losses) earnings of unconsolidated affiliates	92			68
Equity in (losses) earnings of unconsolidated affiliates	(3		)	6
Net earnings from continuing operations	89			74
Net earnings from discontinued operations, net of tax	—			3
Net earnings	89			77
Less: Net (losses) earnings attributable to noncontrolling interests	(1		)	3
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	90		$	74

Earnings per share
Basic
Net earnings from continuing operations attributable to Fidelity National Financial, Inc. common shareholders	$	0.40		$	0.33
Net earnings from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders	—			0.01
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	0.40		$	0.34
Diluted
Net earnings from continuing operations attributable to Fidelity National Financial, Inc. common shareholders	$	0.39		$	0.32
Net earnings from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders	—			0.01
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	0.39		$	0.33
Weighted average shares outstanding, basic basis	225			219
Weighted average shares outstanding, diluted basis	231			223
Cash dividends paid per share	$	0.16		$	0.14

Amounts attributable to Fidelity National Financial, Inc. common shareholders
Basic and diluted net earnings from continuing operations attributable to FNF common shareholders	$	90		$	71
Basic and diluted net earnings from discontinued operations attributable to FNF common shareholders	—			3
Basic and diluted net earnings attributable to FNF common shareholders	$	90		$	74

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In millions)



	Three months ended March 31,
	Three months ended March 31,
	2013			2012
	(Unaudited)
Net earnings	$	89		$	77
Other comprehensive earnings:
Unrealized gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)	14			27
Unrealized loss on investments in unconsolidated affiliates (2)	(8		)	—
Unrealized (loss) gain on foreign currency translation and cash flow hedging (3)	(3		)	1
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)	(1		)	(1		)
Minimum pension liability adjustment (5)	(1		)	—
Other comprehensive earnings	1			27
Comprehensive earnings	90			104
Less: Comprehensive (losses) earnings attributable to noncontrolling interests	(1		)	3
Comprehensive earnings attributable to Fidelity National Financial, Inc. common shareholders	$	91		$	101

_______________________________________


(1)	Net of income tax expense of $8 million and $16 million for the three-month periods ended March 31, 2013 and 2012, respectively.


(2)	Net of income tax benefit of $5 million and less than $1 million for the three-month periods ended March 31, 2013 and 2012, respectively.


(3)	Net of income tax (benefit) expense of $(2) million and $1 million for the three-month periods ended March 31, 2013 and 2012, respectively.


(4)	Net of income tax expense of less than $1 million and $1 million for the three-month periods ended March 31, 2013 and 2012, respectively.


(5)	Net of income tax benefit of less than $1 million for three-month period ended March 31, 2013.

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In millions)

(Unaudited)



	Fidelity National Financial, Inc. Common Shareholders
										Accumulated
				Additional						Other
	Common Stock			Paid-in			Retained			Comprehensive			Treasury Stock				Noncontrolling
	Shares	Amount		Capital			Earnings			Earnings (Loss)			Shares	Amount			Interests			Total Equity
Balance, December 31, 2012	269	$	—	$	4,018		$	849		$	59		40	$	(658	)	$	481		$	4,749
Exercise of stock options	—	—		4			—			—			—	—			—			4
Treasury stock repurchased	—	—		—			—			—			1	(34		)	—			(34		)
Other comprehensive earnings — unrealized gain on investments and other financial instruments (excluding investments in unconsolidated affiliates)	—	—		—			—			13			—	—			—			13
Other comprehensive earnings — unrealized loss on investments in unconsolidated affiliates	—	—		—			—			(8		)	—	—			—			(8		)
Other comprehensive earnings — unrealized loss on foreign currency translation and cash flow hedging	—	—		—			—			(3		)	—	—			(2		)	(5		)
Other comprehensive earnings — minimum pension liability adjustment	—	—		—			—			(1		)	—	—			(1		)	(2		)
Stock-based compensation	—	—		7			—			—			—	—			—			7
Dividends declared	—	—		—			(37		)	—			—	—			—			(37		)
Contributions to noncontrolling interests	—	—		(4		)	—			—			—	—			4			—
Subsidiary dividends paid to noncontrolling interests	—	—		—			—			—			—	—			(3		)	(3		)
Net earnings (loss)	—	—		—			90			—			—	—			(1		)	89
Balance, March 31, 2013	269	$	—	$	4,025		$	902		$	60		41	$	(692	)	$	478		$	4,773

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)



	Three months ended March 31,

	2013			2012
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	89		$	77
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	52			17
Equity in losses (earnings) of unconsolidated affiliates	3			(6		)
Loss (gain) on sales of investments and other assets, net	4			(3		)
Stock-based compensation	7			6
Tax benefit associated with the exercise of stock options	—			(5		)
Changes in assets and liabilities, net of effects from acquisitions:
Net decrease in pledged cash, pledged investments, and secured trust deposits	4			10
Net decrease (increase) in trade receivables	16			(7		)
Net increase in prepaid expenses and other assets	(21		)	(9		)
Net decrease in accounts payable, accrued liabilities, deferred revenue and other	(104		)	(101		)
Net decrease in reserve for title claim losses	(25		)	(54		)
Net change in income taxes	(61		)	30
Net cash used in operating activities	(36		)	(45		)
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale	169			148
Proceeds from calls and maturities of investment securities available for sale	79			99
Proceeds from sale of other assets	—			2
Additions to property and equipment	(27		)	(11		)
Purchases of investment securities available for sale	(239		)	(268		)
Net proceeds from (purchases of) short-term investment securities	43			(1		)
Net purchases of other long term investments	(36		)	—
Contributions to investments in unconsolidated affiliates	(9		)	—
Net other investing activities	(3		)	—
Other acquisitions/disposals of businesses, net of cash acquired	—			(11		)
Net cash used in investing activities	(23		)	(42		)
Cash flows from financing activities:
Borrowings	303			150
Debt service payments	(294		)	—
Dividends paid	(37		)	(30		)
Subsidiary dividends paid to noncontrolling interest shareholders	(3		)	(2		)
Exercise of stock options	4			20
Debt issuance costs	(3		)	—
Tax benefit associated with the exercise of stock options	—			5
Purchases of treasury stock	(34		)	—
Net cash (used in) provided by financing activities	(64		)	143
Net (decrease) increase in cash and cash equivalents, excluding pledged cash related to secured trust deposits	(123		)	56
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at beginning of period	866			504
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at end of period	$	743		$	560
Supplemental cash flow information:
Income taxes paid	$	92		$	9
Interest paid	$	26		$	14

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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, “we,” “us,” “our,” or “FNF”) prepared in accordance with 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 our Annual Report on Form 10-K for the year ended December 31, 2012.

Certain reclassifications have been made in the 2012 Condensed Consolidated Financial Statements to conform to classifications used in 2013.

Description of Business

We are a leading provider of title insurance, mortgage services and other diversified services. FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title - that collectively issue more title insurance policies than any other title company in the United States. We also hold a 55% ownership interest in American Blue Ribbon Holdings, LLC ("ABRH"), the owner and operator of the O'Charley's, Ninety Nine Restaurants, Max & Erma's, Village Inn and Bakers Square restaurant concepts, and an 87% ownership interest in J. Alexander's Holdings, LLC ("J. Alexander's"), an upscale dining restaurant owner and operator of the J. Alexander's and Stoney River Legendary Steaks ("Stoney River") concepts. In addition, we hold a 51% ownership interest in Remy International, Inc. ("Remy"), a leading designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. FNF also owns a minority interest in Ceridian Corporation ("Ceridian"), a leading provider of global human capital management and payment solutions.

Recent Developments

On February 25, 2013, we formed J. Alexander's, a restaurant company which is focused on the upscale dining segment. J. Alexander's consists of the current thirty J. Alexander's locations and the ten existing Stoney River locations. ABRH contributed the ten Stoney River locations to J. Alexanders for an approximate 28% ownership interest in the new company, giving us an 87% ownership interest in J. Alexanders. The operations of J. Alexander's will continue to be consolidated in our existing Restaurant Group segment.

Discontinued Operations

On May 1, 2012, we completed the sale of an 85% interest in our remaining subsidiaries that write personal lines insurance to WT Holdings, Inc. for $120 million. Accordingly, the results of this business through the date of sale (which we refer to as our "at-risk" insurance business) for all periods presented are reflected in the Condensed Consolidated Statements of Earnings as discontinued operations. Total revenues from the at-risk insurance business included in discontinued operations are $36 million for the three months ending March 31, 2012. Pre-tax earnings from the at-risk insurance business included in discontinued operations are $4 million for the three months ending March 31, 2012.

Transactions with Related Parties

Agreements with Fidelity National Information Services ("FIS")

A summary of the agreements that were in effect with FIS through March 31, 2013, is as follows:


•	Technology (“IT”) and data processing services from FIS. These agreements govern IT support services provided to us by FIS, primarily consisting of infrastructure support and data center management. Subject to certain early termination provisions, 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 FIS. We have provided certain administrative corporate support services such as corporate aviation and other administrative support services to FIS.

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

A detail of net revenues and expenses between us and FIS that were included in our results of operations for the periods presented is as follows:



	Three months ended March 31, 2013			Three months ended March 31, 2012
	(In millions)
Corporate services and cost-sharing revenue	$	1		$	1
Data processing expense	(8		)	(9		)
Net expense	$	(7	)	$	(8	)

We believe the amounts earned by us or charged to us under each of the foregoing arrangements are fair and reasonable. The information technology infrastructure support and data center management services provided to us 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 we earned or were charged under these arrangements were not negotiated at arm’s-length, and may not represent the terms that we might have obtained from an unrelated third party. The net amounts due to FIS as a result of these agreements were $5 million as of March 31, 2013 and December 31, 2012.

Included in equity securities available for sale are 1,603,860 shares of FIS stock which were purchased during the fourth quarter of 2009 in connection with a merger between FIS and Metavante Technologies, Inc. The fair value of our investment was $64 million and $56 million as of March 31, 2013 and December 31, 2012, respectively.

Also included in fixed maturities available for sale are FIS bonds with a fair value of $48 million and $53 million as of March 31, 2013 and December 31, 2012, respectively.

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02 which updated ASC Topic 220, Comprehensive Income, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not reclassified in their entirety to net income an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 is effective for annual reporting periods beginning on or after December 15, 2012 and interim periods within those annual periods. ASU No. 2013-02 did not have an impact on our consolidated financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11 which updated ASC Topic 210, Disclosures about Offsetting Assets and Liabilities, which requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. ASU No. 2011-11 did not have an impact on our consolidated financial position, results of operations or cash flows.

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Note B — 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. In periods when earnings are positive, 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. For periods when we recognize a net loss, diluted earnings per share is equal to basic earnings per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. We have granted certain options and shares of restricted stock which have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported.

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



		Three months ended March 31,
		2013		2012
	(In millions, except per share amounts)
Basic and diluted net earnings from continuing operations attributable to FNF common shareholders		$	90	$	71
Basic and diluted net earnings from discontinued operations attributable to FNF common shareholders		—		3
Basic and diluted net earnings attributable to FNF common shareholders		$	90	$	74

Weighted average shares outstanding during the period, basic basis		225		219
Plus: Common stock equivalent shares assumed from conversion of options		6		4
Weighted average shares outstanding during the period, diluted basis		231		223

Basic net earnings per share from continuing operations attributable to FNF common shareholders		$	0.40	$	0.33
Basic net earnings per share from discontinued operations attributable to FNF common shareholders		—		0.01
Basic earnings per share attributable to FNF common shareholders		$	0.40	$	0.34

Diluted net earnings per share from continuing operations attributable to FNF common shareholders		$	0.39	$	0.32
Diluted net earnings per share from discontinued operations attributable to FNF common shareholders		—		0.01
Diluted earnings per share attributable to FNF common shareholders		$	0.39	$	0.33

Options to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. Antidilutive options totaled 1 million shares and 4 million shares for the three months ended March 31, 2013 and 2012, respectively.

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Note C — Fair Value Measurements

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, respectively:



	March 31, 2013
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Fixed maturity securities available for sale:
U.S. government and agencies	$	—	$	136	$	—	$	136
State and political subdivisions	—		1,245		—		1,245
Corporate debt securities	—		1,550		—		1,550
Mortgage-backed/asset-backed securities	—		141		—		141
Foreign government bonds	—		49		—		49
Preferred stock available for sale	120		109		—		229
Equity securities available for sale	152		—		—		152
Other long-term investments	—		—		40		40
Foreign exchange contracts	—		6		—		6
Total assets	$	272	$	3,236	$	40	$	3,548

Liabilities:
Interest rate swap contracts	$	—	$	2	$	—	$	2
Foreign exchange contracts	—		1		—		1
Commodity contracts	—		4		—		4
Total liabilities	$	—	$	7	$	—	$	7



	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(In millions)
Fixed maturity securities available for sale:
U.S. government and agencies	$	—	$	140	$	—	$	140
State and political subdivisions	—		1,300		—		1,300
Corporate debt securities	—		1,499		—		1,499
Mortgage-backed/asset-backed securities	—		154		—		154
Foreign government bonds	—		47		—		47
Preferred stock available for sale	109		108		—		217
Equity securities available for sale	138		—		—		138
Other long-term investments	—		—		41		41
Foreign exchange contracts	—		5		—		5
Total assets	$	247	$	3,253	41		$	3,541

Liabilities:
Interest rate swap contracts	$	—	$	2	—		$	2
Commodity contracts	—		2		—		2
Total liabilities	$	—	$	4	—		$	4

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Our Level 2 fair value measures for fixed-maturities available for sale are provided by third-party pricing services. We utilize one firm for our taxable bond and preferred stock portfolio and another for our tax-exempt bond portfolio. These pricing services are leading global providers of financial market data, analytics and related services to financial institutions. We rely 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. We review the pricing methodologies for all of our Level 2 securities by obtaining an understanding of the valuation models and assumptions used by the third-party as well as independently comparing the resulting prices to other publicly available measures of fair value and internally developed models. The pricing methodologies used by the relevant third party pricing services are as follows:

U.S. government and agencies: These securities are valued based on data obtained for similar securities in active markets and from inter-dealer brokers.

State and political subdivisions: These securities are valued based on data obtained for similar securities in active markets and from inter-dealer brokers. Factors considered include relevant trade information, dealer quotes and other relevant market data.

Corporate debt securities: These securities are valued based on dealer quotes and related market trading activity. Factors considered include the bond's yield, its terms and conditions, or any other feature which may influence its risk and thus marketability, as well as relative credit information and relevant sector news.

Mortgage-backed/asset-backed securities: These securities are comprised of agency mortgage-backed securities, commercial mortgage-backed securities, collaterized mortgage obligations, and asset-backed securities. They are valued based on available trade information, dealer quotes, cash flows, relevant indices and market data for similar assets in active markets.

Foreign government bonds: These securities are valued based on a discounted cash flow model incorporating observable market inputs such as available broker quotes and yields of comparable securities.

Preferred stock: Preferred stocks are valued by calculating the appropriate spread over a comparable U.S. Treasury security. Inputs include benchmark quotes and other relevant market data.

Our Level 2 fair value measures for our interest rate swap, foreign exchange contracts, and commodity contracts are valued using the income approach. This approach uses techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option-pricing and excess earnings models).

Our Level 3 investments consist of structured notes that were purchased in 2009. The structured notes had a par value of $38 million and fair value of $40 million at March 31, 2013, and a par value of $38 million and fair value of $41 million at December 31, 2012. The structured notes are held for general investment purposes and represent approximately one percent of our total investment portfolio. 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 fair value of these instruments 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, and the value of the underlying commodity indices. We reviewed the pricing methodologies for our Level 3 investments to ensure that they are reasonable and believe they represent an exit price for the securities as of March 31, 2013.

The following table presents the changes in our investments that are classified as Level 3 for the period ended March 31, 2013 (in millions):



Balance, December 31, 2012	$	41
Net realized loss	(1		)
Balance, March 31, 2013	$	40

The carrying amounts of short-term investments, accounts receivable and notes receivable approximate fair value due to their short-term nature. Additional information regarding the fair value of our investment portfolio is included in Note D.

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Note D — Investments

The carrying amounts and fair values of our available for sale securities at March 31, 2013 and December 31, 2012 are as follows:



	March 31, 2013
	Carrying		Cost		Unrealized		Unrealized			Fair
	Value		Basis		Gains		Losses			Value
	(In millions)
Fixed maturity securities available for sale:
U.S. government and agencies	$	136	$	127	$	9	$	—		$	136
State and political subdivisions	1,245		1,186		59		—			1,245
Corporate debt securities	1,550		1,486		71		(7		)	1,550
Foreign government bonds	49		48		2		(1		)	49
Mortgage-backed/asset-backed securities	141		133		8		—			141
Preferred stock available for sale	229		217		12		—			229
Equity securities available for sale	152		101		53		(2		)	152
Total	$	3,502	$	3,298	$	214	$	(10	)	$	3,502



	December 31, 2012
	Carrying		Cost		Unrealized		Unrealized			Fair
	Value		Basis		Gains		Losses			Value
	(In millions)
Fixed maturity securities available for sale:
U.S. government and agencies	$	140	$	130	$	10	$	—		$	140
State and political subdivisions	1,300		1,240		60		—			1,300
Corporate debt securities	1,499		1,439		72		(12		)	1,499
Foreign government bonds	47		45		2		—			47
Mortgage-backed/asset-backed securities	154		145		9		—			154
Preferred stock available for sale	217		207		10		—			217
Equity securities available for sale	138		103		40		(5		)	138
Total	$	3,495	$	3,309	$	203	$	(17	)	$	3,495

The cost basis of fixed maturity securities available for sale includes an adjustment for amortized premium or discount since the date of purchase.

The following table presents certain information regarding contractual maturities of our fixed maturity securities at March 31, 2013:



	March 31, 2013
	Amortized		% of		Fair		% of
Maturity	Cost		Total		Value		Total
	(Dollars in millions)
One year or less	$	231	8	%	$	234	8	%
After one year through five years	1,730		58		1,804		58
After five years through ten years	869		29		925		29
After ten years	17		1		17		1
Mortgage-backed/asset-backed securities	133		4		141		4
Total	$	2,980	100	%	$	3,121	100	%
Subject to call	$	1,571	53	%	$	1,632	52	%

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Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Included above in amounts subject to call are $1,218 million and $1,265 million in amortized cost and fair value, respectively, of fixed maturity securities with make-whole call provisions as of March 31, 2013.

Equity securities available for sale includes an investment in FIS stock. The fair value of our investment in the FIS stock was $64 million and $56 million at March 31, 2013 and December 31, 2012, respectively.

Included in our other long-term investments are fixed maturity structured notes purchased in 2009 and various cost-method investments. The structured notes are carried at fair value (see Note C) and changes in the fair value of these structured notes are recorded as realized gains and losses in the Condensed Consolidated Statements of Earnings. The carrying value of the structured notes was $40 million and $41 million as of March 31, 2013 and December 31, 2012, respectively. We recorded a net loss of $1 million related to the structured notes in the three-month period ended March 31, 2013, and recorded a net gain of $1 million in three-month period ended March 31, 2012.

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 March 31, 2013 and December 31, 2012, were as follows (in millions):



March 31, 2013
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Corporate debt securities	$	124	$	(1	)	$	14	$	(6	)	$	138	$	(7	)
Foreign government bonds	14		(1		)	2		—			16		(1		)
Equity securities available for sale	7		—			4		(2		)	11		(2		)
Total temporarily impaired securities	$	145	$	(2	)	$	20	$	(8	)	$	165	$	(10	)



December 31, 2012
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Corporate debt securities	96		(5		)	34		(7		)	130		(12		)
Equity securities available for sale	31		(3		)	3		(2		)	34		(5		)
Total temporarily impaired securities	$	127	$	(8	)	$	37	$	(9	)	$	164	$	(17	)

During the three-month period ended March 31, 2013, we recorded impairment charges relating to investments that were determined to be other-than-temporarily impaired, which resulted in additional expense of $1 million. Impairment charges related to fixed maturity securities primarily related to our conclusion that the credit risk of these holdings was high and the ability of the issuer to pay the full amount of the principal outstanding was unlikely. As of March 31, 2013, we held $3 million in fixed maturity securities for which other-than-temporary impairment had been previously recognized. It is possible that future events may lead us to recognize potential future impairment losses related to our investment portfolio and that unanticipated future events may lead us to dispose of certain investment holdings and recognize the effects of any market movements in our condensed consolidated financial statements.

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The following table presents realized gains and losses on investments and other assets and proceeds from the sale or maturity of investments and other assets for the three-month periods ending March 31, 2013 and 2012, respectively:



	Three months ended March 31, 2013
	Gross Realized Gains		Gross Realized Losses			Net Realized Gains (Losses)			Gross Proceeds from Sale/Maturity
	(Dollars in millions)
Fixed maturity securities available for sale	$	3	$	(3	)	$	—		$	245
Equity securities available for sale	1		—			1			3
Other long-term investments						(1		)	—
Other assets						(4		)	—
Total						$	(4	)	$	248



	Three months ended March 31, 2012
	Gross Realized Gains		Gross Realized Losses		Net Realized Gains (Losses)		Gross Proceeds from Sale/Maturity
	(Dollars in millions)
Fixed maturity securities available for sale	$	2	$	—	$	2	$	247
Other assets					2		2
Total					$	4	$	249

Investments in unconsolidated affiliates are recorded using the equity method of accounting. As of March 31, 2013 and December 31, 2012, investments in unconsolidated affiliates consisted of the following (in millions):



	Current Ownership		March 31, 2013		December 31, 2012
Ceridian	32	%	$	335	$	351
Other	Various		46		41
Total			$	381	$	392

During the first quarter of 2013, we purchased $24 million in Ceridian bonds which are included in Fixed maturity securities available for sale, and have a fair value of $25 million as of March 31, 2013.

We account for our equity in Ceridian on a three-month lag. Accordingly, our net earnings for the three-month period ended March 31, 2013, includes our equity in Ceridian’s earnings for the three-month period ended December 31, 2012, and our net earnings for the three-month period ended March 31, 2012, includes our equity in Ceridian’s earnings for the three-month period ended December 31, 2011. During the three-month periods ended March 31, 2013 and 2012, we recorded $4 million and $7 million in equity in losses of Ceridian. Equity in earnings of other unconsolidated affiliates was $1 million and $13 million for the three-month periods ended March 31, 2013 and 2012.

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Summarized financial information for Ceridian for the relevant dates and time periods included in our Condensed Consolidated Financial Statements is presented below.



	December 31, 2012		September 30, 2012
	(In millions)		(In millions)
Total current assets	$	1,057	$	1,209
Goodwill and other intangible assets, net	4,572		4,630
Other assets	4,275		4,082
Total assets	$	9,904	$	9,921
Current liabilities	$	819	$	995
Long-term obligations, less current portion	3,443		3,445
Other long-term liabilities	4,575		4,363
Total liabilities	8,837		8,803
Equity	1,067		1,118
Total liabilities and equity	$	9,904	$	9,921



	Three Months Ended December 31, 2012			Three Months Ended December 30, 2011
	(In millions)
Total revenues	$	400		$	399
Loss before income taxes	(15		)	(23		)
Net loss	(16		)	(22		)

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Note E —Remy Derivative Financial Instruments and Concentration of Risk

The following describes risks based and derivative instruments held by Remy.

Foreign Currency Risk

Remy manufactures and sells products primarily in North America, South America, Asia, Europe and Africa. As a result, financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets in which Remy manufactures and sells products. Remy generally tries to use natural hedges within its foreign currency activities, including the matching of revenues and costs, to minimize foreign currency risk. Where natural hedges are not in place, Remy considers managing certain aspects of its foreign currency activities through the use of foreign exchange contracts. Remy primarily utilizes forward exchange contracts with maturities generally within twenty-four months to hedge against currency rate fluctuations, some of which are designated as hedges. As of March 31, 2013, Remy had the following outstanding foreign currency contracts to hedge forecasted purchases and revenues (in millions):



	Currency Denomination
Foreign currency contract	March 31, 2013		December 31, 2012
South Korean Won Forward	$	56	$	56
Mexican Peso Contracts	$	68	$	67
Brazilian Real Forward	$	18	$	18
Hungarian Forint Forward	€	13	€	14
British Pound Forward	£	2	£	1

Accumulated unrealized net gains of $3 million were recorded in Accumulated other comprehensive earnings (loss) as of March 31, 2013 and December 31, 2012, related to these instruments. As of March 31, 2013, gains related to these instruments of $3 million are expected to be reclassified to the Condensed Consolidated Statement of Earnings within the next 12 months. Any ineffectiveness during the three months ended March 31, 2013 was immaterial.

Interest rate risk

During 2010, Remy entered into an interest rate swap agreement in respect of 50% of the outstanding principal balance of its Term B Loan under which a variable LIBOR rate with a floor of 1.750% was swapped to a fixed rate of 3.345%. The Term B Loan $150 million notional value interest rate swap expires December 31, 2013. This interest rate swap is an undesignated hedge and changes in the fair value are recorded as interest expense in the accompanying Condensed Consolidated Statement of Earnings.

On March 27, 2013, Remy terminated its undesignated Term B Loan interest rate swap and transferred the value into a new undesignated interest rate swap agreement of $72 million of the outstanding principal loan balance under which Remy will swap a variable LIBOR rate with a floor of 1.25% to a fixed rate of 4.045% with an effective date of December 30, 2016 and expiration date of December 31, 2019. The notional value of this interest rate swap is $72 million. Due to the significant value of the terminated swaps which were transferred into this new swap, this interest rate swap is an undesignated hedge and changes in the fair value are recorded as Interest expense in the accompanying Condensed Consolidated Statements of Earnings.

On March 27, 2013, Remy also entered into a designated interest rate swap agreement for $72 million of the outstanding principal balance of their long term debt. Under the terms of the new interest rate swap agreement, Remy will swap a variable LIBOR rate with a floor of 1.25% to a fixed rate of 2.75% with an effective date of December 30, 2016 and expiration date of December 31, 2019. The notional value of this interest rate swap is $72 million. This interest rate swap has been designated as a cash flow hedging instrument. There were no accumulated unrealized net losses recorded in Accumulated other comprehensive income (loss) as of March 31, 2013 or December 31, 2012. As of March 31, 2013, no losses are expected to be reclassified to the Condensed Consolidated Statement of Earnings within the next twelve months. Any ineffectiveness during the three months ended March 31, 2013 was immaterial.

The interest rate swaps reduce Remy's overall interest rate risk.

Commodity price risk

Remy production processes are dependent upon the supply of certain components whose raw materials are exposed to price fluctuations on the open market. The primary purpose of Remy's commodity price forward contract activity is to manage the volatility associated with forecasted purchases. Remy monitors commodity price risk exposures regularly to maximize the overall

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effectiveness of commodity forward contracts. The principal raw material hedged is copper. Forward contracts are used to mitigate commodity price risk associated with raw materials, generally related to purchases forecast for up to twenty-four months in the future. Additionally, Remy purchases certain commodities during the normal course of business which result in physical delivery and are excluded from hedge accounting.

Remy had thirty-five commodity price hedge contracts outstanding at March 31, 2013, and thirty-six commodity price hedge contracts outstanding at December 31, 2012, with combined notional quantities of 6,805 and 6,566 metric tons of copper, respectively. These contracts mature within the next eighteen months and were designated as cash flow hedging instruments. Accumulated unrealized net losses of $1 million were recorded in Accumulated other comprehensive earnings as of March 31, 2013 related to these contracts. As of March 31, 2013, net losses related to these contracts of $2 million are expected to be reclassified to the accompanying Condensed Consolidated Statement of Earnings within the next 12 months. Hedging ineffectiveness during the three month period ended March 31, 2013 was immaterial.

Other

Remy's derivative positions and any related material collateral under master netting agreements are presented on a net basis.

For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness. Unrealized gains and losses associated with ineffective hedges, determined using the change in fair value method, are recognized in the accompanying Condensed Consolidated Statement of Earnings. Derivative gains and losses included in Accumulated other comprehensive earnings for effective hedges are reclassified into the accompanying Condensed Consolidated Statement of Earnings upon recognition of the hedged transaction.

Any derivative instrument designated initially, but no longer effective as a hedge, or initially not effective as a hedge, is recorded at fair value and the related gains and losses are recognized in the accompanying Condensed Consolidated Statement of Earnings. Remy's undesignated hedges are primarily Remy's interest rate swaps whose fair value at inception of the instrument due to the rollover of existing interest rate swaps resulted in ineffectiveness. All asset and liability derivatives are included in Prepaid expenses and other assets and Accounts payable and accrued liabilities, respectively, on the Condensed Consolidated Balance Sheets. The following table discloses the fair values of Remy's derivative instruments (in millions):



	March 31, 2013				December 31, 2012
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Derivatives designated as hedging instruments:
Commodity contracts	$	—	$	4	$	1	$	2
Foreign currency contracts	6		1		6		—
Total derivatives designated as hedging instruments	$	6	$	5	$	7	$	2

Derivatives not designated as hedging instruments:
Interest rate swap contracts	$	—	$	2	$	—	$	2

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Gains and losses on Remy's derivative instruments, which are reclassified from Accumulated other comprehensive earnings (OCI) into earnings, are included in Cost of auto parts revenue for commodity and foreign currency contracts, and Interest expense for interest rate swap contracts on the accompanying Condensed Consolidated Statement of Earnings. The following table discloses the effect of Remy's derivative instruments for the three months ended March 31, 2013 (in millions):



	Amount of gain (loss) recognized in OCI (effective portion)			Amount of gain (loss) reclassified from OCI into income (effective portion		Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income
Derivatives designated as cash flow hedging instruments:
Commodity contracts	$	(3	)	$	—	$	—	$	—
Foreign currency contracts	2			2		—		—
Total derivatives designated as hedging instruments	$	(1	)	$	2	$	—	$	—

Derivatives not designated as hedging instruments:
Interest rate swap contracts	$	—		$	—	$	—	$	—

Note F —Notes Payable

Notes payable consists of the following:



	March 31, 2013		December 31, 2012
	(In millions)
Unsecured notes, net of discount, interest payable semi-annually at 5.50%, due September 2022	$	398	$	398
Unsecured convertible notes, net of discount, interest payable semi-annually at 4.25%, due August 2018	283		282
Unsecured notes, net of discount, interest payable semi-annually at 6.60%, due May 2017	300		300
Revolving Credit Facility, unsecured, unused portion of $800 at March 31, 2013, due April 2016 with interest payable monthly at LIBOR + 1.45%	—		—
Remy Term B Loan, interest payable quarterly at LIBOR (floor of 1.75%) + 4.50%, due December 2016	—		259
Remy Amended and Restated Term B Loan, interest payable quarterly at LIBOR (floor of 1.25%) + 3.00% (4.25% at March 31, 2013), due March 2020	269		—
Remy Revolving Credit Facility, unused portion of $86 at March 31, 2013 due September 2018 with interest payable monthly at base rate 3.25% + base rate margin .50% (3.75% at March 31, 2013)	—		—
Restaurant Group Term Loan, interest payable monthly at LIBOR + 3.50% (3.70% at March 31, 2013), due May 2017	71		72
Restaurant Group Revolving Credit Facility, unused portion of $60 at March 31, 2013 due May 2017 with interest payable monthly at base rate 3.25% + base rate margin 2.50% (5.75% at March 31, 2013)	—		—
Other	33		33
	$	1,354	$	1,344

At March 31, 2013, the estimated fair value of our long-term debt was approximately $1,547 million or $193 million higher than its carrying value. The fair value of our long-term debt at December 31, 2012 was approximately $1,504 million or $160 million higher than its estimated carrying value. The fair value of our unsecured notes payable was $1,174 million as of March 31, 2013. The fair values of our unsecured notes payable are based on established market prices for the securities on March 31, 2013 and are considered Level 2 financial liabilities. The fair value of our Remy Term Loan was $269 million, based on established market prices for the securities on March 31, 2013 and is considered a Level 2 financial liability. The fair value of our Restaurant

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Group Term Loan was $71 million, based on established market prices for the securities on March 31, 2013 and is considered a Level 2 financial liability.

On March 5, 2013, Remy entered into a First Amendment to its existing five year Asset-Based Revolving Credit Facility (the "Remy Credit Facility" and "Remy Credit Facility First Amendment") to extend the maturity date of the Remy Credit Facility from December 17, 2015 to September 5, 2018 and reduce the interest rate. The Remy Credit Facility now bears interest at a defined Base Rate plus0.50%-1.00% per year or, at Remy's election, at an applicable LIBOR Rate plus 1.50%-2.00% per year and is paid monthly. The Remy Credit Facility First Amendment maintains the current maximum availability at $95 million, which may be increased, under certain circumstances, by $20 million, though the actual amount that may be borrowed is based on the amount of collateral. The Remy Credit Facility is secured by substantially all domestic accounts receivable and inventory held by Remy. Remy will incur an unused commitment fee of 0.375% on the unused amount of commitments under the Remy Credit Facility First Amendment. At March 31, 2013, the Remy Credit Facility balance was zero. Based upon the collateral supporting the Remy Credit Facility, the amount borrowed, and the outstanding letters of credit of $3 million, there was additional availability for borrowing of $86 million on March 31, 2013. The Remy Credit Facility contains various restrictive covenants, which include, among other things: (i) a maximum leverage ratio, decreasing over the term of the facility; (ii) a minimum interest coverage ratio, increasing over the term of the facility; (iii) limitations on capital expenditures; (iv) mandatory prepayments upon certain asset sales and debt issuances; (v) requirements for minimum liquidity; and (vi) limitations on the payment of dividends in excess of a specified amount.

On March 5, 2013, Remy entered into a $300 million Amended and Restated Term B Loan Credit Agreement ("Term B Amendment") to refinance the existing $287 million Term B Loan, extend the maturity from December 17, 2016 to March 5, 2020, and reduce the interest rate. The Term B Loan now bears interest at LIBOR (subject to a floor of 1.25%) plus 3% per year, with an original issue discount of approximately $1 million. The Term B Amendment also contains an option to increase the borrowing provided certain conditions are satisfied, including maintaining a maximum leverage ratio. The Term B Loan is secured by a first priority lien on the stock of Remy's subsidiaries and substantially all domestic assets other than accounts receivable and inventory pledged to the Remy Credit Facility. Principal payments in the amount of approximately $1 million are due at the end of each calendar quarter with termination and final payment no later than March 5, 2020. The Term B Loan also includes covenants and events of default customary for a facility of this type, including a cross-default provision under which the lenders may declare the loan in default if we (i) fail to make a payment when due under any debt having a principal amount greater than $5 million or (ii) breach any other covenant in any such debt as a result of which the holders of such debt are permitted to accelerate its maturity. Remy is in compliance with all covenants as of March 31, 2013. The Term B Loan is subject to an excess cash calculation which may require the payment of additional principal on an annual basis. At March 31, 2013, the average borrowing rate, including the impact of the interest rate swaps, was 4.25%.



Principal maturities of notes payable at March 31, 2013 are as follows (in millions):
2013	$	26
2014	11
2015	11
2016	11
2017	340
Thereafter	974
	$	1,373

Note G — Commitments and Contingencies

Legal and Regulatory Contingencies

In the ordinary course of business, we are involved in various pending and threatened litigation matters related to our title operations, some of which include claims for punitive or exemplary damages. This customary litigation includes but is not limited to a wide variety of cases arising out of or related to title and escrow claims, for which we make provisions through our loss reserves. Additionally, like other insurance companies, our ordinary course litigation includes a number of class action and purported class action lawsuits, which make allegations related to aspects of our insurance operations. We believe that no actions depart from customary litigation incidental to our insurance business.

Remy is a defendant from time to time in various legal proceedings arising in the ordinary course of business, including claims relating to commercial transactions, product liability, safety, health, taxes, environmental, intellectual property and other matters.

Our Restaurant Group companies are a defendant from time to time in various legal proceedings arising in the ordinary course of business, including claims relating to injury or wrongful death under “dram shop” laws that allow a person to sue us based on

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any injury caused by an intoxicated person who was wrongfully served alcoholic beverages at one of the restaurants and claims from guests or employees alleging illness, injury or other food quality, health or operational concerns.

We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. None of the amounts we have currently recorded are considered to be individually or in the aggregate material to our financial condition. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe that the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

From time to time we receive inquiries and requests for information from state insurance departments, attorneys general and other regulatory agencies about various matters relating to our business. Sometimes these take the form of civil investigative demands or subpoenas. We cooperate with all such inquiries and we have responded to or are currently responding to inquiries from multiple governmental agencies. Also, regulators and courts have been dealing with issues arising from foreclosures and related processes and documentation. Various governmental entities are studying the title insurance product, market, pricing, and business practices, and potential regulatory and legislative changes, which may materially affect our business and operations. From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities which may require us to pay fines or claims or take other actions.

Note H — Dividends

On April 24, 2013, our Board of Directors declared cash dividends of $0.16 per share, payable on June 28, 2013, to shareholders of record as of June 14, 2013.

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Note I — Segment Information

Summarized financial information concerning our reportable segments is presented in the following tables. As a result of combining O'Charley's with our investment in ABRH, which increased our ownership of ABRH to 55%, we have consolidated the operations of ABRH, including the O'Charley's group of companies, and added the restaurant group reporting segment. Restaurant group results include the results of operations of O'Charley's beginning April 9, 2012, ABRH beginning May 11, 2012, and J. Alexanders beginning September 26, 2012 . As a result of our increase in ownership of Remy to 51%, we have consolidated the operations of Remy and added the Remy reporting segment. Remy results include the results of operations of Remy beginning August 14, 2012. Prior period segment information has been restated to conform to the current segment presentation.

As of and for the three months ended March 31, 2013:



	Fidelity
	National					Restaurant			Corporate
	Title Group		Remy			Group			and Other			Total
	(In millions)
Title premiums	$	938	$	—		$	—		$	—		$	938
Other revenues	414		—			—			29			443
Auto parts revenues	—		284			—			—			284
Restaurant revenues	—		—			356			—			356
Revenues from external customers	1,352		284			356			29			2,021
Interest and investment income, including net realized gains and losses	33		1			(5		)	—			29
Total revenues	1,385		285			351			29			2,050
Depreciation and amortization	17		1			13			3			34
Interest expense	—		7			2			14			23
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated affiliates	171		(1		)	(4		)	(28		)	138
Income tax expense	61		—			—			(15		)	46
Earnings (loss) from continuing operations before equity in earnings (loss) of unconsolidated affiliates	110		(1		)	(4		)	(13		)	92
Equity in earnings (loss) of unconsolidated affiliates	1		—			—			(4		)	(3		)
Earnings (loss) from continuing operations	$	111	$	(1	)	$	(4	)	$	(17	)	$	89
Assets	$	6,831	$	1,278		$	600		$	973		$	9,682
Goodwill	1,449		248			119			67			1,883

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

As of and for the three months ended March 31, 2012:



	Fidelity
	National				Restaurant		Corporate
	Title Group		Remy		Group		and Other			Total
	(In millions)
Title premiums	$	768	$	—	$	—	$	—		$	768
Other revenues	368		—		—		14			382
Revenues from external customers	1,136		—		—		14			1,150
Interest and investment income, including realized gains and losses	39		—		—		1			40
Total revenues	1,175		—		—		15			1,190
Depreciation and amortization	16		—		—		1			17
Interest expense	—		—		—		15			15
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated affiliates	129		—		—		(24		)	105
Income tax expense (benefit)	45		—		—		(8		)	37
Earnings (loss) from continuing operations before equity in earnings (loss) of unconsolidated affiliates	84		—		—		(16		)	68
Equity in earnings (loss) of unconsolidated affiliates	2		10		1		(7		)	6
Earnings (loss) from continuing operations	$	86	$	10	$	1	$	(23	)	$	74
Assets	$	6,498	$	150	$	36	$	1,318		$	8,002
Goodwill	1,442		—		—		19			1,461

The activities of the reportable segments include the following:

Fidelity National Title Group

This segment consists of the operations of our title insurance underwriters and related businesses. This segment provides core title insurance and escrow and other title related services including collection and trust activities, trustee’s sales guarantees, recordings and reconveyances, and home warranty insurance.

Remy

This segment consists of the operations of Remy, a publicly traded company on the NASDAQ stock exchange, in which we have a 51% ownership interest. Remy is a leading designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles.