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 06.30.14 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

For the quarterly period ended June 30, 2014



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 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

The number of shares outstanding of the Registrant's common stock as of July 31, 2014 were:

FNF Group Common Stock 277,474,875

FNFV Group Common Stock 91,711,237

FORM 10-Q

QUARTERLY REPORT

Quarter Ended June 30, 2014

TABLE OF CONTENTS




	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	1
B. Condensed Consolidated Statements of Earnings for the three-month and six-month periods ended June 30, 2014 and 2013	2
C. Condensed Consolidated Statements of Comprehensive Earnings for the three-month and six-month periods ended June 30, 2014 and 2013	3
D. Condensed Consolidated Statement of Equity for the six-month period ended June 30, 2014	4
E. Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2014 and 2013	5
F. Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3. Quantitative and Qualitative Disclosure About Market Risk	47
Item 4. Controls and Procedures	47
Part II: OTHER INFORMATION
Item 1. Legal Proceedings	48
Item 1a. Risk Factors	48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 6. Exhibits	52

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)



	June 30, 2014		December 31, 2013
	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value, at June 30, 2014 and December 31, 2013 includes pledged fixed maturity securities of $350 and $261, respectively, related to secured trust deposits	$	3,092	$	2,959
Preferred stock available for sale, at fair value	187		151
Equity securities available for sale, at fair value	144		136
Investments in unconsolidated affiliates	316		357
Other long-term investments	208		162
Short-term investments	23		26
Total investments	3,970		3,791
Cash and cash equivalents, at June 30, 2014 and December 31, 2013 includes $365 and $339, respectively, of pledged cash related to secured trust deposits	1,126		1,969
Trade and notes receivables, net of allowance of $25 and $21, at June 30, 2014 and December 31, 2013, respectively	742		482
Goodwill	4,917		1,901
Prepaid expenses and other assets	810		682
Capitalized software, net	593		39
Other intangible assets, net	1,517		619
Title plants	395		370
Property and equipment, net	773		645
Income taxes receivable	—		26
	$	14,843	$	10,524
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities, at December 31, 2013 includes accounts payable to related parties of $3	$	1,523	$	1,291
Notes payable	3,343		1,323
Reserve for title claim losses	1,661		1,636
Secured trust deposits	701		588
Income taxes payable	18		—
Deferred tax liability	541		144
Total liabilities	7,787		4,982
Commitments and Contingencies:
Redeemable non-controlling interest by 33% minority holder of Black Knight Financial Services, LLC and 35% minority holder of ServiceLink, LLC	687		—
Equity:
FNF Class A common stock, $0.0001 par value: authorized 600,000,000 as of December 31, 2013; issued 292,289,166 as of December 31, 2013	—		—
FNF Group common stock, $0.0001 par value; authorized 487,000,000 shares as of June 30, 2014; issued 277,462,875 as of June 30, 2014	—		—
FNFV Group common stock, $0.0001 par value; authorized 113,000,000 shares as of June 30, 2014; issued 91,711,237 as of June 30, 2014	—		—
Preferred stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none	—		—
Additional paid-in capital	4,807		4,642
Retained earnings	1,089		1,096
Accumulated other comprehensive earnings	59		37
Less: treasury stock, 5,925 shares as of June 30, 2014 and 41,948,518 shares as of and December 31, 2013, at cost	—		(707		)
Total Fidelity National Financial, Inc. shareholders’ equity	5,955		5,068
Non-controlling interests	414		474
Total equity	6,369		5,542
	$	14,843	$	10,524

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 June 30,						Six months ended June 30,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
Revenues:
Direct title insurance premiums	$	433		$	492		$	784		$	905
Agency title insurance premiums	518			625			922			1,149
Escrow, title related and other fees	716			489			1,362			924
Restaurant revenue	358			347			712			701
Auto parts revenue	300			284			602			568
Interest and investment income	35			37			65			70
Realized gains and losses, net	(1		)	5			1			3
Total revenues	2,359			2,279			4,448			4,320
Expenses:
Personnel costs	645			546			1,316			1,065
Agent commissions	395			473			702			870
Other operating expenses	417			366			846			691
Cost of auto parts revenue, includes $18 of depreciation and amortization for the three months ended June 30, 2014 and 2013, respectively, and $32 and $36 for the six months ended June 30, 2014 and 2013, respectively	251			241			505			481
Cost of restaurant revenue	303			295			603			597
Depreciation and amortization	85			35			203			68
Provision for title claim losses	57			79			110			144
Interest expense	38			21			74			44
Total expenses	2,191			2,056			4,359			3,960
Earnings from continuing operations before income taxes and equity in losses of unconsolidated affiliates	168			223			89			360
Income tax expense	57			72			20			118
Earnings from continuing operations before equity in losses of unconsolidated affiliates	111			151			69			242
Equity in losses of unconsolidated affiliates	(5		)	(3		)	(36		)	(6		)
Net earnings from continuing operations	106			148			33			236
Net loss from discontinued operations, net of tax	(1		)	(3		)	(1		)	(2		)
Net earnings	105			145			32			234
Less: Net (loss) earnings attributable to non-controlling interests	(10		)	7			(61		)	6
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	115		$	138		$	93		$	228
Earnings per share
Basic
Net earnings from continuing operations attributable to Fidelity National Financial, Inc. common shareholders	$	0.42		$	0.62		$	0.34		$	1.02
Net loss from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders	—			(0.01		)	—			(0.01		)
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	0.42		$	0.61		$	0.34		$	1.01
Diluted
Net earnings from continuing operations attributable to Fidelity National Financial, Inc. common shareholders	$	0.41		$	0.61		$	0.33		$	1.00
Net loss from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders	—			(0.01		)	—			(0.01		)
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	0.41		$	0.60		$	0.33		$	0.99
Weighted average shares outstanding, basic basis	275			225			275			225
Weighted average shares outstanding, diluted basis	283			229			282			230
Cash dividends paid per share	$	0.18		$	0.16		$	0.36		$	0.32

Amounts attributable to Fidelity National Financial, Inc. common shareholders
Basic and diluted net earnings from continuing operations attributable to Fidelity National Financial, Inc. common shareholders	$	116		$	141		$	94		$	231
Basic and diluted net loss from discontinued operations attributable to Fidelity National Financial, Inc. common shareholders	(1		)	(3		)	(1		)	(3		)
Basic and diluted net earnings attributable to Fidelity National Financial, Inc. common shareholders	$	115		$	138		$	93		$	228

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 June 30,						Six months ended June 30,
	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
Net earnings	$	105		$	145		$	32		$	234
Other comprehensive earnings (loss):
Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)	12			(37		)	21			(23		)
Unrealized gain (loss) on investments in unconsolidated affiliates (2)	5			(3		)	(1		)	(11		)
Unrealized gain (loss) on foreign currency translation and cash flow hedging (3)	6			(6		)	3			(9		)
Reclassification adjustments for change in unrealized gains and losses included in net earnings (4)	(1		)	(4		)	(1		)	(5		)
Minimum pension liability adjustment (5)	—			—			—			(1		)
Other comprehensive earnings (loss)	22			(50		)	22			(49		)
Comprehensive earnings	127			95			54			185
Less: Comprehensive (loss) earnings attributable to non-controlling interests	(10		)	7			(61		)	6
Comprehensive earnings attributable to Fidelity National Financial, Inc. common shareholders	$	137		$	88		$	115		$	179

_______________________________________


(1)	Net of income tax expense (benefit) of $7 million and $(22) million for the three-month periods ended June 30, 2014 and 2013, respectively, and $12 million and $(14) million for the six-month periods ended June 30, 2014 and 2013, respectively.


(2)	Net of income tax expense (benefit) of $3 million and $(2) million for the three-month periods ended June 30, 2014 and 2013, respectively, and $(1) million and $(7) million for the six-month periods ended June 30, 2014 and 2013, respectively.


(3)	Net of income tax expense (benefit) of $4 million and $(4) million for the three-month periods ended June 30, 2014 and 2013, respectively, and $2 million and $(6) million for the six-month periods ended June 30, 2014 and 2013, respectively.


(4)	Net of income tax expense of $2 million for the three-month period ended June 30, 2013, and less than $1 million and $3 million for the six-month periods ended June 30, 2014 and 2013, respectively.


(5)	Net of income tax benefit of less than $1 million for the six-month period ended June 30, 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
	FNF				FNF			FNFV									Accumulated
	Class A				Group			Group									Other														Redeemable
	Common				Common			Common			Additional						Comprehensive			Treasury					Non-						Non-
	Stock				Stock			Stock			Paid-in			Retained			Earnings			Stock					controlling			Total			controlling
	Shares		$		Shares	$		Shares	$		Capital			Earnings			(Loss)			Shares		$			Interests			Equity			Interests
Balance, December 31, 2013	292		$	—	—	$	—	—	$	—	$	4,642		$	1,096		$	37		42		$	(707	)	$	474		$	5,542		$	—
Acquisition of Lender Processing Services, Inc.	26		—		—	—		—	—		839			—			—			—		—			—			839			—
Exercise of stock options	1		—		—	—		—	—		16			—			—			—		—			—			16			—
Recapitalization of FNF stock	(277	)	—		277	—		92	—		(2		)	—			—			—		—			—			(2		)	—
Tax benefit associated with the exercise of stock options	—		—		—	—		—	—		2			—			—			—		—			—			2			—
Other comprehensive earnings — unrealized gain on investments and other financial instruments (excluding investments in unconsolidated affiliates)	—		—		—	—		—	—		—			—			20			—		—			—			20			—
Other comprehensive earnings — unrealized loss on investments in unconsolidated affiliates	—		—		—	—		—	—		—			—			(1		)	—		—			—			(1		)	—
Other comprehensive earnings — unrealized gain on foreign currency translation and cash flow hedging	—		—		—	—		—	—		—			—			3			—		—			3			6			—
Stock-based compensation	—		—		—	—		—	—		17			—			—			—		—			8			25			—
Retirement of treasury shares	(42	)	—		—	—		—	—		(707		)	—			—			(42	)	707			—			—
Dividends declared	—		—		—	—		—	—		—			(100		)	—			—		—			—			(100		)	—
Contribution by minority owner to acquire minority interest in Black Knight Financial Services, LLC and ServiceLink, LLC	—		—		—	—		—	—		—			—			—			—		—			—			—			687
Subsidiary dividends declared to non-controlling interests	—		—		—	—		—	—		—			—			—			—		—			(10		)	(10		)	—
Net earnings	—		—		—	—		—	—		—			93			—			—		—			(61		)	32			—
Balance, June 30, 2014	—		—		277	—		92	—		$	4,807		$	1,089		$	59		—		$	—		$	414		$	6,369		$	687

See Notes to Condensed Consolidated Financial Statements

Table of Contents

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)



	For the Six Months Ended June 30,

	2014			2013
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	32		$	234
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization	235			104
Equity in losses of unconsolidated affiliates	36			6
Gain on sales of investments and other assets, net	(1		)	(4		)
Stock-based compensation cost	25			16
Tax benefit associated with the exercise of stock options	(2		)	(2		)
Changes in assets and liabilities, net of effects from acquisitions:
Net decrease in pledged cash, pledged investments, and secured trust deposits	—			4
Net increase in trade receivables	(43		)	(12		)
Net increase in prepaid expenses and other assets	(75		)	(22		)
Net decrease in accounts payable, accrued liabilities, deferred revenue and other	(248		)	(45		)
Net decrease in reserve for title claim losses	(29		)	(55		)
Net change in income taxes	59			(10		)
Net cash (used in) provided by operating activities	(11		)	214
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale	454			401
Proceeds from calls and maturities of investment securities available for sale	160			182
Proceeds from sale of other assets	2			—
Additions to property and equipment and capitalized software	(83		)	(77		)
Purchases of investment securities available for sale	(607		)	(536		)
Net proceeds from short-term investment securities	4			40
Net purchases of other long-term investments	(39		)	(67		)
Distribution from (contributions to) investments in unconsolidated affiliates	20			(15		)
Net other investing activities	(3		)	11
Acquisition of Lender Processing Services, Inc., net of cash acquired	(2,248		)	—
Acquisition of USA Industries, Inc., net of cash acquired	(40		)	—
Other acquisitions/disposals of businesses, net of cash acquired	2			—
Net cash used in investing activities	(2,378		)	(61		)
Cash flows from financing activities:
Borrowings	1,509			304
Debt service payments	(584		)	(305		)
Additional investment in non-controlling interest	—			(14		)
Proceeds from sale of 4% ownership interest of Digital Insurance, Inc.	—			3
Proceeds from sale of 35% of Black Knight Financial Services, LLC and ServiceLink, LLC to minority interest holder	687			—
Dividends paid	(99		)	(73		)
Subsidiary dividends paid to non-controlling interest shareholders	(9		)	(9		)
Exercise of stock options	16			18
Equity and debt issuance costs	(2		)	(10		)
Tax benefit associated with the exercise of stock options	2			2
Purchases of treasury stock	—			(34		)
Net cash provided by (used in) financing activities	1,520			(118		)
Net (decrease) increase in cash and cash equivalents, excluding pledged cash related to secured trust deposits	(869		)	35
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at beginning of period	1,630			866
Cash and cash equivalents, excluding pledged cash related to secured trust deposits at end of period	$	761		$	901
Supplemental cash flow information:
Income taxes paid, net	$	(48	)	$	104
Interest paid	$	66		$	43

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 U.S. generally accepted accounting principles ("GAAP") 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, 2013.

Certain reclassifications have been made in the 2013 Condensed Consolidated Financial Statements to conform to classifications used in 2014.

Description of Business

We have organized our business into two groups, FNF Core Operations and FNF Ventures, known as "FNFV". We are a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries. We are the nation’s largest title insurance company through our title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. We also provide industry-leading mortgage technology solutions and transaction services, including MSP®, the leading residential mortgage servicing technology platform in the U.S., through our majority-owned subsidiaries, Black Knight Financial Services, LLC ("BKFS") and ServiceLink Holdings, LLC ("ServiceLink"). In addition, in our FNFV group, we own majority and minority equity investment stakes in a number of entities, including American Blue Ribbon Holdings, LLC ("ABRH"), J. Alexander’s, LLC ("J. Alexander's"), Remy International, Inc. ("Remy"), Ceridian HCM, Inc. and Comdata Inc. (collectively "Ceridian") and Digital Insurance, Inc. ("Digital Insurance").

Recent Developments

On June 30, 2014, we completed the recapitalization of FNF common stock into the two previously announced tracking stocks, FNF Group common stock and FNFV Group common stock. Each share of the previously outstanding FNF Class A common stock was converted into one share of FNF Group common stock, which now trades on the New York Stock Exchange under the current trading symbol "FNF," and 0.3333 of a share of FNFV Group common stock, which now trades on the New York Stock Exchange under the trading symbol "FNFV." Both FNF and FNFV began regular trading on July 1, 2014.

Effective June 1, 2014, we completed an internal reorganization to contribute our subsidiary Property Insight, a company which provides information used by title insurance underwriters, title agents and closing attorneys to underwrite title insurance policies for real property sales and transfer, from our Title segment to BKFS. As a result of this transfer, our ownership percentage in BKFS increased to 67%. The results presented for the month ended June 30, 2014, reflect our now 67% ownership interest in BKFS and Thomas H. Lee partners' now 33% ownership of BKFS.

On January 13, 2014, Remy acquired substantially all of the assets of United Starters and Alternators Industries, Inc. ("USA Industries") pursuant to the terms and conditions of the Asset Purchase Agreement. USA Industries is a leading North American distributor of premium quality remanufactured and new alternators, starters, constant velocity axles and disc brake calipers for the light-duty aftermarket. Total consideration paid was $40 million, net of cash acquired.

On January 2, 2014, we completed the purchase of Lender Processing Services, Inc. ("LPS"). The purchase consideration paid was $37.14 per share, of which $28.10 per share was paid in cash and the remaining $9.04 was paid in FNF common shares. The purchase consideration represented an exchange ratio of 0.28742 FNF Class A common shares per share of LPS common stock. Total consideration paid for LPS was $3.4 billion, which consisted of $2,248 million in cash, net of cash acquired of $287 million and $839 million in FNF common stock. In order to pay the stock component of the consideration, we issued 25,920,078 shares to the former LPS shareholders. See Note B for further discussion.

Discontinued Operations

The results from a small software company, which we acquired with LPS and which was sold during the second quarter of 2014, are included in the Condensed Consolidated Statements of Earnings as discontinued operations for all periods presented. Total revenues included in discontinued operations were $1 million and $2 million for the three months ended June 30, 2014 and 2013, respectively, and $2 million and $4 million for the six months ending June 30, 2014 and 2013, respectively. Pre-tax earnings included in discontinued operations are $1 million for the three months ending June 30, 2014 and there were no pre-tax earnings for the three months ended June 30, 2013. There were pre-tax earnings of $1 million for the six months ended June 30, 2013 and there were no pre-tax earnings in the six months ended June 30, 2014. The results from two closed J. Alexander's locations and a settlement services company closed in the second quarter of 2013 are reflected in the Condensed Consolidated Statements of Earnings as discontinued operations for all periods presented. There were no revenues included in discontinued operations during

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

the three and six months ended June 30, 2014. Total revenues included in discontinued operations were $1 million for the three months ending June 30, 2013, and $8 million for the six months ending June 30, 2013. There was no pre-tax loss included in discontinued operations for the three and six months ending June 30, 2014. Pre-tax loss included in discontinued operations was $2 million for the three months ending June 30, 2013.

Transactions with Related Parties

As we no longer have any officers in common with Fidelity National Information Services, Inc. ("FIS"), effective January 1, 2014, we no longer consider FIS a related party.

Agreements with FIS

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


•	Information Technology (“IT”) and data processing services from FIS. This agreement governs IT support services provided to us by FIS, primarily consisting of infrastructure support and data center management. Certain subsidiaries of FIS also provided technology consulting services to FNF during 2013.


•	Administrative aviation corporate support and cost-sharing services to FIS.

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 June 30, 2013			Six months ended June 30, 2013
	(in millions)
Corporate services and cost-sharing revenue	$	2		$	3
Data processing expense	(8		)	(16		)
Net expense	$	(6	)	$	(13	)

We believe the amounts earned by us or charged to us under each of the foregoing arrangements are fair and reasonable. The IT 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 amount due to FIS as a result of these agreements was $3 million as of December 31, 2013.

Included in equity securities available for sale at December 31, 2013, are 1,303,860 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 $70 million as of December 31, 2013.

Also included in fixed maturities available for sale are FIS bonds with a fair value of $42 million as of December 31, 2013.

Earnings Per Share

Basic earnings per share, as presented on the Condensed Consolidated Statement of Earnings, 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 as well as convertible debt instruments 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.

Options to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. There were no antidilutive options during the three and six month periods ended June 30, 2014. There were one million shares related to antidilutive options excluded for the three and six month periods ended June 30, 2013.

As of the close of business on June 30, 2014, we completed the recapitalization of FNF Class A common stock into the two previously announced tracking stocks, FNF Group common stock and FNFV Group common stock. As a result of the recapitalization, there were 277,462,875 shares of FNF Group common stock and 91,711,237 shares of FNFV Group common stock outstanding as of June 30, 2014. As the recapitalization did not occur until June 30, 2014, the weighted average shares

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outstanding presented on the Condensed Consolidated Statements of Earnings does not include any shares of FNF Group common stock or FNFV Group common stock. Earnings per share for the three and six months ending June 30, 2014 was fully attributed to the previous class of FNF common stock, known as FNF Class A common stock.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU provides a new comprehensive revenue recognition model that requires companies to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. This update is effective for annual and interim periods beginning on or after December 15, 2016, with early application not permitted.

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This ASU is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015, with early adoption permitted. We plan to adopt this ASU for the annual and interim periods beginning January 1, 2015 and do not expect this update to have a material impact on our financial statements.

Note B — Acquisition of Lender Processing Services, Inc.

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.

On January 2, 2014, we completed the purchase of LPS. The purchase consideration paid was $37.14 per share, of which $28.10 per share was paid in cash and the remaining $9.04 was paid in FNF common shares. The purchase consideration represented an exchange ratio of 0.28742 FNF Class A common shares per share of LPS common stock. Total consideration paid for LPS was $3.4 billion, which consisted of $2,248 million in cash, net of $287 million cash acquired and $839 million in FNF common stock. In order to pay the stock component of the consideration, we issued 25,920,078 shares to the former LPS shareholders. Goodwill has been recorded based on the amount that the purchase price exceeded the fair value of the net assets acquired.

The initial purchase price is as follows (in millions):



Cash paid for LPS outstanding shares	$	2,535
Less: cash acquired from LPS	(287		)
Net cash paid for LPS	2,248
FNF common stock issued (25,920,078 shares)	839
Total net consideration paid	$	3,087

The purchase price has been initially allocated to the LPS assets acquired and liabilities assumed based on our best estimates of their fair values as of the acquisition date. 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 we complete our valuation process with respect to capitalized software, intangible assets, legal contingencies, taxes and goodwill, which we expect to have complete by the end of 2014.

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The initial purchase price allocation is as follows (in millions):



Trade and notes receivable	$	184
Investments	77
Prepaid expenses and other assets	59
Property and equipment	150
Capitalized software	557
Intangible assets including title plants	1,007
Income tax receivable	40
Goodwill	3,004
Total assets	5,078
Notes payable	1,091
Reserve for title claims	54
Deferred tax liabilities	409
Other liabilities assumed	437
Total liabilities	1,991
Net assets acquired	$	3,087

Subsequent to the LPS acquisition, we formed a wholly-owned subsidiary, Black Knight Holdings, Inc. ("Black Knight"). Black Knight is the mortgage and finance industries' leading provider of integrated technology, data and analytics solutions, and transaction services. Black Knight has two operating businesses, ServiceLink and BKFS. We retained a 65% ownership interest in each of the subsidiaries and issued the remaining 35% minority ownership interest to funds affiliated with Thomas H. Lee Partners and certain related entities on January 3, 2014. ServiceLink and BKFS now own and operate the former LPS businesses and our legacy ServiceLink business.

The following table summarizes the intangible assets acquired (in millions, except for useful life):



	Fair Value as of Consolidation		Weighted Average Useful Life in Years as of Consolidation	Residual Value as of June 30, 2014
Amortizing intangible assets:
Developed technology	$	534	8	$	503
Purchased technology	23		3	19
Trade names	13		10	12
Customer relationships	911		10	829
Non-compete agreements	5		3	4

Non-amortizing intangible assets:
Developed technology	54			54
Title plants	24			24
Total intangible assets and capitalized software	$	1,564		$	1,445

Pro-forma Financial Results

For comparative purposes, selected unaudited pro-forma consolidated results of operations of FNF for the three and six months ending June 30, 2014 and 2013 are presented below. Pro-forma results presented assume the consolidation of Black Knight occurred

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as of the beginning of the 2013 period. Amounts reflect our 65% ownership interest in BKFS and our 65% ownership interest in ServiceLink and were adjusted to exclude costs directly attributable to the acquisition of LPS including transaction costs, severance costs and costs related to our synergy bonus program associated with the acquisition (in millions).



	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Total revenues	$	2,359	$	2,748	$	4,448	$	5,261
Net earnings attributable to Fidelity National Financial, Inc. common shareholders	146		157		175		301

As a result of our acquisition of LPS, the following additions have been made to our significant accounting policies during the first quarter of 2014:

BKFS Revenue Recognition

Within our BKFS segment, we recognize revenues in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition (“ASC 605”). Recording revenues requires judgment, including determining whether an arrangement includes multiple elements, whether any of the elements are essential to the functionality of any other elements, and the allocation of the consideration based on each element's relative selling price. Customers receive certain contract elements over time and changes to the elements in an arrangement, or in our determination of the relative selling price for these elements, could materially impact the amount of earned and unearned revenue reflected in our financial statements.

The primary judgments relating to our revenue recognition are determining when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Judgment is also required to determine whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting.

If the deliverables under a contract are software related, we determine the appropriate units of accounting and how the arrangement consideration should be measured and allocated to the separate units. This determination, as well as management’s ability to establish vendor specific objective evidence (“VSOE”) for the individual deliverables, can impact both the amount and the timing of revenue recognition under these agreements. The inability to establish VSOE for each contract deliverable results in having to record deferred revenues and/or applying the residual method. For arrangements where we determine VSOE for software maintenance using a stated renewal rate within the contract, we use judgment to determine whether the renewal rate represents fair value for that element as if it had been sold on a stand-alone basis. For a small percentage of revenues, we use contract accounting when the arrangement with the customer includes significant customization, modification, or production of software. For elements accounted for under contract accounting, revenue is recognized using the percentage-of-completion method since reasonably dependable estimates of revenues and contract hours applicable to various elements of a contract can be made.

We are often party to multiple concurrent contracts with the same customer. These situations require judgment to determine whether the individual contracts should be aggregated or evaluated separately for purposes of revenue recognition. In making this determination we consider the timing of negotiating and executing the contracts, whether the different elements of the contracts are interdependent and whether any of the payment terms of the contracts are interrelated.

Due to the large number, broad nature and average size of individual contracts we are a party to, the impact of judgments and assumptions that we apply in recognizing revenue for any single contract is not likely to have a material effect on our consolidated operations. However, the broader accounting policy assumptions that we apply across similar arrangements or classes of customers could significantly influence the timing and amount of revenue recognized in our result of operations.

Capitalized Software

Capitalized software includes the fair value of software acquired in business combinations, purchased software and capitalized software development costs. Purchased software is recorded at cost and amortized using the straight-line method over its estimated useful life. Software acquired in business combinations is recorded at its fair value and amortized using straight-line or accelerated methods over its estimated useful life, ranging from 5 to 10 years. In our BKFS segment we have significant internally developed software. These costs are amortized using the straight-line method over the estimated useful life. Useful lives of computer software range from 3 to 10 years. Capitalized software development costs are accounted for in accordance with either ASC Topic 985, Software, Subtopic 20, Costs of Software to Be Sold, Leased, or Marketed (“ASC 985-20”), or ASC 350, Subtopic 40, Internal-

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Use Software (“ASC 350-40”). For software products to be sold, leased, or otherwise marketed (ASC 985-20 software), all costs incurred to establish the technological feasibility are research and development costs, and are expensed as they are incurred. Costs incurred subsequent to establishing technological feasibility, such as programmers' salaries and related payroll costs and costs of independent contractors, are capitalized and amortized on a product by product basis commencing on the date of general release to customers. We do not capitalize any costs once the product is available for general release to customers. For internal-use computer software products (ASC 350-40 software), internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred during the application development stage are capitalized and amortized on a product by product basis commencing on the date the software is ready for its intended use. We do not capitalize any costs once the software is ready for its intended use.

We also assess the recorded value of computer software for impairment on a regular basis by comparing the carrying value to the estimated future cash flows to be generated by the underlying software asset. There is an inherent uncertainty in determining the expected useful life of or cash flows to be generated from computer software. We have not historically experienced material changes in these estimates but could be subject to them in the future.

Redeemable Non-controlling Interest

As discussed above, subsequent to the acquisition of LPS we issued 35% ownership interest in BKFS and ServiceLink to funds affiliated with Thomas H. Lee Partners ("THL" or "the minority interest holder"). As part of the Unit Purchase Agreement with THL, THL has an option to put their ownership interests of either or both of BKFS and ServiceLink to us if no public offering of the corresponding business has been consummated after four years from the date of FNF's purchase of LPS. The units owned by THL ("redeemable noncontrolling interests") may be settled in cash or common stock of FNF or a combination of both at our election. The redeemable noncontrolling interests will be settled at the current fair value at the time we receive notice of THL's put election as determined by the parties or by a third party appraisal under the terms of the Unit Purchase Agreement. As of June 30, 2014, we do not believe the exercise of this put right to be probable.

As these redeemable noncontrolling interests provide for redemption features not solely within the control of us, the issuer, we classify the redeemable noncontrolling interests outside of permanent equity in accordance with ASC 480-10, “Distinguishing Liabilities from Equity”. Redeemable noncontrolling interests held by third parties in subsidiaries owned or controlled by FNF is reported on the Condensed Consolidated Balance Sheet outside permanent equity; and the Condensed Consolidated Statement of Earnings reflects the respective redeemable noncontrolling interests in Net earnings (loss) attributable to non-controlling interests, the effect of which is removed from the net earnings attributable to Fidelity National Financial, Inc. common shareholders.

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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 June 30, 2014 and December 31, 2013, respectively:



	June 30, 2014
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Fixed maturity securities available for sale:
U.S. government and agencies	$	—	$	126	$	—	$	126
State and political subdivisions	—		1,056		—		1,056
Corporate debt securities	—		1,771		—		1,771
Mortgage-backed/asset-backed securities	—		101		—		101
Foreign government bonds	—		38		—		38
Preferred stock available for sale	40		147		—		187
Equity securities available for sale	144		—		—		144
Other long-term investments	—		—		40		40
Foreign currency contracts	—		7		—		7
Total assets	$	184	$	3,246	$	40	$	3,470

Liabilities:
Interest rate swap contracts	$	—	$	2	$	—	$	2
Commodity contracts	—		1		—		1
Foreign currency contracts	—		2		—		2
Total liabilities	$	—	$	5	$	—	$	5

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	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(In millions)
Fixed maturity securities available for sale:
U.S. government and agencies	$	—	$	126	$	—	$	126
State and political subdivisions	—		1,075		—		1,075
Corporate debt securities	—		1,606		—		1,606
Mortgage-backed/asset-backed securities	—		109		—		109
Foreign government bonds	—		43		—		43
Preferred stock available for sale	73		78		—		151
Equity securities available for sale	136		—		—		136
Other long-term investments	—		—		38		38
Foreign currency contracts	—		4		—		4
Interest rate swap contracts	—		2		—		2
Total assets	$	209	$	3,043	$	38	$	3,290

Liabilities:
Interest rate swap contracts	$	—	$	1	$	—	$	1
Commodity contracts	—		2		—		2
Total liabilities	$	—	$	3	$	—	$	3

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, and 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, 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 stocks: 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 currency 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 June 30, 2014, and a par value and a fair value of $38 million at December 31, 2013. The

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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 we believe they represent an exit price for the securities as of June 30, 2014.

The following table presents the changes in our investments that are classified as Level 3 for the period ended June 30, 2014 (in millions):



Balance, December 31, 2013	$	38
Net realized gain	2
Balance, June 30, 2014	$	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.

Note D — Investments

The carrying amounts and fair values of our available for sale securities at June 30, 2014 and December 31, 2013 are as follows:



	June 30, 2014
	Carrying		Cost		Unrealized		Unrealized			Fair
	Value		Basis		Gains		Losses			Value
	(In millions)
Fixed maturity securities available for sale:
U.S. government and agencies	$	126	$	121	$	5	$	—		$	126
State and political subdivisions	1,056		1,018		38		—			1,056
Corporate debt securities	1,771		1,720		54		(3		)	1,771
Foreign government bonds	38		38		1		(1		)	38
Mortgage-backed/asset-backed securities	101		97		4		—			101
Preferred stock available for sale	187		184		5		(2		)	187
Equity securities available for sale	144		71		73		—			144
Total	$	3,423	$	3,249	$	180	$	(6	)	$	3,423



	December 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	$	126	$	121	$	5	$	—		$	126
State and political subdivisions	1,075		1,042		36		(3		)	1,075
Corporate debt securities	1,606		1,565		47		(6		)	1,606
Foreign government bonds	43		44		1		(2		)	43
Mortgage-backed/asset-backed securities	109		105		4		—			109
Preferred stock available for sale	151		158		3		(10		)	151
Equity securities available for sale	136		71		65		—			136
Total	$	3,246	$	3,106	$	161	$	(21	)	$	3,246

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

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The following table presents certain information regarding contractual maturities of our fixed maturity securities at June 30, 2014:



	June 30, 2014
	Amortized		% of		Fair		% of
Maturity	Cost		Total		Value		Total
	(Dollars in millions)
One year or less	$	346	12	%	$	348	11	%
After one year through five years	1,990		67		2,056		67
After five years through ten years	550		18		574		19
After ten years	11		—		13		—
Mortgage-backed/asset-backed securities	97		3		101		3
Total	$	2,994	100	%	$	3,092	100	%
Subject to call	$	1,745	58	%	$	1,791	58	%

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 $1,399 million and $1,436 million in amortized cost and fair value, respectively, of fixed maturity securities with make-whole call provisions as of June 30, 2014.

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 $38 million as of June 30, 2014 and December 31, 2013, respectively. We recorded no gain or loss relating to the structured notes during the three month period ended June 30, 2014. We recorded a $2 million gain relating to the structured notes during the six month period ended June 30, 2014, and recorded a net loss of $1 million and $2 million in the three and six-month periods ended June 30, 2013, respectively.

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 June 30, 2014 and December 31, 2013, were as follows (in millions):



June 30, 2014
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Corporate debt securities	$	187	$	(2	)	$	47	$	(1	)	$	234	$	(3	)
Foreign government bonds	7		—			11		(1		)	18		(1		)
Preferred stock available for sale	44		(1		)	12		(1		)	56		(2		)
Total temporarily impaired securities	$	238	$	(3	)	$	70	$	(3	)	$	308	$	(6	)



December 31, 2013
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
States and political subdivisions	$	123	$	(3	)	$	—	$	—		$	123	$	(3	)
Corporate debt securities	367		(4		)	39		(2		)	406		(6		)
Foreign government bonds	17		(1		)	14		(1		)	31		(2		)
Preferred stock available for sale	95		(10		)	—		—			95		(10		)
Total temporarily impaired securities	$	602	$	(18	)	$	53	$	(3	)	$	655	$	(21	)

During the three and six month period ended June 30, 2014, we recorded no impairment charges relating to investments that were determined to be other-than-temporarily impaired. During the three-month period ended June 30, 2013, we recorded no impairment charges relating to investments that were determined to be other-than-temporarily impaired. During the

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six month period ended June 30, 2013, we recorded impairment charges on fixed maturity securities relating to investments that were determined to be other-than-temporarily impaired, which resulted in additional expense of $1 million. As of June 30, 2014, we held no fixed maturity securities for which an 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.

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 and six-month periods ending June 30, 2014 and 2013, respectively:



	Three months ended June 30, 2014										Six months ended June 30, 2014
	Gross Realized Gains		Gross Realized Losses			Net Realized Gains (Losses)			Gross Proceeds from Sale/Maturity		Gross Realized Gains		Gross Realized Losses			Net Realized Gains (Losses)			Gross Proceeds from Sale/Maturity
	(Dollars in millions)										(Dollars in millions)
Fixed maturity securities available for sale	$	1	$	—		$	1		$	255	$	3	$	—		$	3		$	556
Preferred stock available for sale	—		(1		)	(1		)	30		—		(3		)	(3		)	58
Other long-term investments						—										2			—
Other assets						(1		)								(1		)	2
Total						$	(1	)	$	285						$	1		$	616



	Three months ended June 30, 2013										Six months ended June 30, 2013
	Gross Realized Gains		Gross Realized Losses			Net Realized Gains (Losses)			Gross Proceeds from Sale/Maturity		Gross Realized Gains			Gross Realized Losses			Net Realized Gains (Losses)			Gross Proceeds from Sale/Maturity
	(Dollars in millions)										(Dollars in millions)
Fixed maturity securities available for sale	$	4	$	—		$	4		$	221	$	7		$	(3	)	$	4		$	466
Preferred stock available for sale	6		(2		)	4			110		6		—	(2		)	4			110
Equity securities available for sale	1		—			1			4		2		—	—			2			7
Other long-term investments						(1		)	—								(2		)	—
Debt extinguishment costs						(3		)	—								(3		)	—
Other assets						—			—								(2		)	—
Total						$	5		$	335							$	3		$	583

Investments in unconsolidated affiliates are recorded using the equity method of accounting. As of June 30, 2014 and December 31, 2013, investments in unconsolidated affiliates consisted of the following (dollars in millions):



	Current Ownership		June 30, 2014		December 31, 2013
Ceridian	32	%	$	258	$	295
Other	Various		58		62
Total			$	316	$	357

During the year ended December 31, 2013, we purchased $32 million in Ceridian bonds which are included in Fixed maturity securities available for sale on the Condensed Consolidated Balance Sheets and had a fair value of $36 million as of December 31, 2013. During the three month period ended June 30, 2014, we sold $2 million of the Ceridian bonds. Our remaining investment in Ceridian bonds had a fair value of $34 million as of June 30, 2014.

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

We have historically accounted for our equity in Ceridian on a three-month lag. However, during the first quarter of 2014, we began to account for our equity in Ceridian on a real-time basis. Accordingly, our net earnings for the three-month period ended June 30, 2014, includes our equity in Ceridian's earnings for the three-month period ended June 30, 2014. Our earnings for the three-month period ended June 30, 2013 includes our equity in Ceridian's earnings for the three-month period ended March 31, 2013. Our earnings for the six-month period ended June 30, 2014, includes our equity in Ceridian’s earnings for the three-month period ended December 31, 2013 and the six-month period ended June 30, 2014. Our net earnings for the six-month period ended June 30, 2013, includes our equity in Ceridian’s earnings for the six-month period ended March 31, 2013. During the three month periods ended June 30, 2014 and 2013, we recorded $5 million and $6 million, in equity in losses of Ceridian, respectively. During the six month periods ending June 30, 2014 and 2013, we recorded $35 million and $2 million, respectively, in equity in Ceridian's losses. There was zero equity in earnings for other unconsolidated affiliates during the three month period ending June 30, 2014, and there were $3 million in equity in earnings of other unconsolidated affiliates during the three months ending June 30, 2013. There were $1 million and $4 million in equity in losses of other unconsolidated affiliates during the six month periods ended June 30, 2014 and 2013, respectively.

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



	June 30, 2014		December 31, 2013
	(In millions)
Total current assets before customer funds	$	1,636	$	1,097
Customer funds	3,248		3,897
Goodwill and other intangible assets, net	4,407		4,452
Other assets	123		122
Total assets	$	9,414	$	9,568
Current liabilities before customer obligations	$	1,491	$