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1、FIDELITY NATIONAL FINANCIAL,INC.2014 Annual ReportFIDELITY NATIONAL FINANCIAL,INC.1FINANCIAL HIGHLIGHTS(Dollars in millions,except per share amounts)2014 2013 2012INCOME STATEMENT:Year Ended December 31,Total Revenue$8,024$7,440$6,668 Net Earnings Attributable to FNF Common Shareholders$583$394$607
2、Cash Flow from Operations$567$484$620BALANCE SHEET:At December 31,Total Assets$13,868$10,528$9,903 Cash and Investment Portfolio$5,369$5,760$5,185 Reserve for Claim Losses$1,621$1,636$1,748 Total Equity$6,073$5,535$4,749Cash and Investment PortfolioNet Earnings Attributable to FNF Common Shareholder
3、sTotal RevenueTotal Equity$5,185$607$6,668$4,749$5,369$583$8,024$6,073131313131212121214141414$5,760$394$7,440$5,535William P.Foley,II andRaymond R.Quirk2 FIDELITY NATIONAL FINANCIAL,INC.TO OUR SHAREHOLDERS2014 was an eventful and successful year for Fidelity National Financial.We formed two new com
4、panies and continued to manage our industry-leading title insurance business.2014 was a strong year for our title insurance business.Despite a continued sluggish real estate market,we achieved a 14.3%pre-tax title margin for the last three quarters of 2014 and a 12.5%pre-tax title margin for the ful
5、l-year 2014.We generated more than$520 million in commercial revenue,our largest commercial revenue year ever.Also,title claims paid declined by$99 million,or 25%,versus 2013.Overall,we are proud of the financial results we posted in our title business in 2014 and we remain confident in our ability
6、to generate a 15%-20%pre-tax title margin in an improving real estate market.We formed Black Knight on January 2,2014 after the closing of the acquisition of Lender Processing Services(“LPS”).We have set aspirational goals of 10%organic growth and a mid-40s%EBITDA margin for Black Knight for the nex
7、t several years.In the fourth quarter of 2014,we generated revenue growth and an adjusted EBITDA margin in-line with those goals.We remain excited about the organic revenue growth opportunity at Black Knight,as the sales pipeline is strong across our technology and data and analytics businesses as w
8、e enter 2015.On the expense side of the equation,we originally set a cost synergy goal of$100 million for the LPS acquisition and ultimately achieved more than$300 million in total cost synergies,significantly exceeding our original expectation.We expect to continue to see the benefits of those cost
9、 synergies in our EBITDA margins in 2015.In December,we announced the initial filing of a Black Knight IPO registration statement with the SEC and are working towards having Black Knight operate as an FNF majority-owned,publicly-traded company in 2015.FNFV was formed and distributed as a tracking st
10、ock to FNF shareholders in July 2014.We experienced several monetization events in 2014 and early 2015.We completed the sale of Comdata to Fleetcor in November 2014 and FNFV currently indirectly owns approximately 2.4 million Fleetcor common shares currently valued at approximately$360 million which
11、 we believe is an attractive investment in an innovative,industry-leading payments company.In December 2014,FNFV completed the tax-free distribution of our interests in Remy International to FNFV shareholders in a distribution valued at approximately$350 million which provided a tax-efficient moneti
12、zation event for our shareholders.We now intend to pursue a tax-free spin-off of J.Alexanders to FNFV We look forward to continuing to create value in 2015 and beyond in our title business,Black Knight and FNFV.FIDELITY NATIONAL FINANCIAL,INC.3shareholders.That will make it a publicly traded common
13、stock that will provide liquidity and a market valuation for that business.J.Alexanders also distributed approximately$14.6 million in cash to FNFV in December 2014,including$10 million in principal repayment and$4.6 million in accrued interest.FNFV also announced a 10 million share stock repurchase
14、 authorization during the fourth quarter of 2014 and we have repurchased approximately 539,000 shares to date.On February 18th,FNFV announced that we completed the sale of our investment in Cascade Timberlands.FNFV received approxi-mately$63 million in total cash proceeds which was equivalent to our
15、 book value as of December 31,2014.After the Cascasde Timberlands sale,FNFV has approximately$210 million in cash on hand.We intend to use a significant percentage of this cash to pursue a Dutch auction tender offer to repurchase up to$185 million of FNFV common stock.Other monetization efforts we a
16、re pursuing in the first six months of 2015 include getting repayment from J.Alexanders on the remaining$10 million in debt outstanding to FNFV and arranging a third party credit facility at Digital Insurance which will enable Digital to repay the$78.5 million in debt outstanding to FNFV.2014 was tr
17、uly a very successful year for FNF on a number of fronts.We look forward to continuing to create value in 2015 and beyond in our title business,Black Knight and FNFV.We thank all of our employees for their efforts in 2014 and we thank all of our shareholders for their continued support.William P.Fol
18、ey,II Raymond R.QuirkExecutive Chairman of the Board Chief Executive Officer4 FIDELITY NATIONAL FINANCIAL,INC.FIDELITY NATIONAL TITLE GROUPFIDELITY NATIONAL FINANCIAL,INC.5When a consumer purchases a house,their focus is rightly on the actual home.Meanwhile,Fidelity National Title Group and its Serv
19、iceLink subsidiary are working behind the scenes on their behalf.We provide the peace of mind of title insurance and home warranty insurance,as well as the closing and escrow services to make that home purchase a reality.Additionally,we provide mortgage lenders numerous products and services that sp
20、an the life cycle of a mortgage loan,including refinance title and close,appraisals and valuations,recordings and reconveyances,trustee sales guarantees,field services and other foreclosure related services and subservicing of mortgage loans.Fidelity National Title Group and ServiceLink are a rarely
21、 noticed,but integral part of the American dream of home ownership.6 FIDELITY NATIONAL FINANCIAL,INC.BLACK KNIGHT FINANCIAL SERVICESFIDELITY NATIONAL FINANCIAL,INC.7Black Knight Financial Services(Black Knight)is the#1 provider of technology,data and analytics to the U.S.mortgage industry.MSP is the
22、 standard of servicing in the mortgage industry and 50%of all first mortgages are processed using MSP servicing technology,making us the trusted technology partner to some of the largest financial institutions in the country.Our origination technology allows for efficient loan processing and documen
23、t administration,while RealEC is the leading online vendor management network for the mortgage industry.Finally,Black Knight offers the leading source of comprehensive property and mortgage performance data and intelligence and an array of analytics offerings to the entire mortgage industry.Simply p
24、ut,Black Knight helps our clients improve profitability and efficiency and manage and mitigate risk.FIDELITY NATIONAL FINANCIAL,INC.F O R M10kUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE
25、ACT OF 1934For the Fiscal Year Ended December 31,2014 orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934 Commission File No.1-32630 _ Fidelity National Financial,Inc.(Exact name of registrant as specified in its charter)Delaware16-1725106(State or other jurisdic
26、tion of incorporation or organization)(I.R.S.Employer Identification No.)601 Riverside AvenueJacksonville,Florida 32204(Address of principal executive offices,including zip code)(904)854-8100(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:T
27、itle of Each Class Name of Each Exchange on Which RegisteredCommon Stock,$0.0001 par valueNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No
28、 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No 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 preced
29、ing 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 No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every
30、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 No Indicate by check mark if disclosure of delinquent
31、 filers pursuant to Item 405 of Regulation S-K(229.405)is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K,or any amendment to this Form 10-K.Indicate by check mar
32、k whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Acc
33、elerated filer Non-accelerated filer(Do not check if a smaller reporting company)Smaller reporting company Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the shares of the Old FNF common stock held b
34、y non-affiliates of the registrant as of June 30,2014 was$8,712,752,860 based on the closing price of$32.76 as reported by the New York Stock Exchange.As of February 28,2015 there were 279,934,287 shares of FNF Group common stock outstanding and 92,405,120 shares of FNFV Group common stock outstandi
35、ng.The information in Part III hereof for the fiscal year ended December 31,2014,will be filed within 120 days after the close of the fiscal year that is the subject of this Report.iFIDELITY NATIONAL FINANCIAL,INC.FORM 10-KTABLE OF CONTENTS PageNumberPART IItem 1.BusinessItem 1A.Risk FactorsItem 1B.
36、Unresolved Staff CommentsItem 2.PropertiesItem 3.Legal ProceedingsPART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6.Selected Financial DataItem 7.Managements Discussion and Analysis of Financial Condition and Results of Ope
37、rationsItem 7A.Quantitative and Qualitative Disclosure About Market RiskItem 8.Financial Statements and Supplementary DataItem 9.Changes in and Disagreements With Accountants on Accounting and Financial DisclosureItem 9A.Controls and ProceduresItem 9B.Other InformationPART IIIItem 10.Directors and E
38、xecutive Officers of the RegistrantItem 11.Executive CompensationItem 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13.Certain Relationships and Related Transactions,and Director IndependenceItem 14.Principal Accounting Fees and ServicesPART IV
39、Item 15.Exhibits,Financial Statement Schedules1152626262631355860113113113113113113113113114Table of Contents1PART IItem 1.Business We have organized our business into two groups,FNF Core Operations and FNF Ventures,known as FNFV.Through our Core operations,FNF is a leading provider of title insuran
40、ce,technology and transaction services to the real estate and mortgage industries.FNF is the nations largest title insurance company through its title insurance underwriters-Fidelity National Title,Chicago Title,Commonwealth Land Title,Alamo Title and National Title of New York Inc.-that collectivel
41、y issue more title insurance policies than any other title company in the United States.FNF also provides industry-leading mortgage technology solutions and transaction services,including MSP,the leading residential mortgage servicing technology platform in the U.S.,through its majority-owned subsid
42、iaries,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.Alexanders,LLC(J.Alexanders),Ceridian HCM,Inc.and
43、Fleetcor Technologies Inc.(collectively Ceridian)and Digital Insurance,Inc.(Digital Insurance).As of December 31,2014,we had the following reporting segments:FNF Core Operations Title.This segment consists of the operations of our title insurance underwriters and related businesses.This segment prov
44、ides core title insurance and escrow and other title related services including collection and trust activities,trustee sales guarantees,recordings and reconveyances,and home warranty insurance.This segment also includes the transaction services business acquired from Lender Processing Services(LPS)
45、,now combined with our ServiceLink business.Transaction services include other title related services used in production and management of mortgage loans,including mortgage loans that go into default.BKFS.This segment consists of the operations of BKFS.This segment provides core technology and data
46、and analytics services through leading software systems and information solutions that facilitate and automate many of the business processes across the life cycle of a mortgage.FNF Core Corporate and Other.This segment consists of the operations of the parent holding company,certain other unallocat
47、ed corporate overhead expenses,and other smaller real estate and insurance related operations.FNFV Restaurant Group.This segment consists of the operations of ABRH,in which we have a 55%ownership interest.ABRH is the owner and operator of the OCharleys,Ninety Nine Restaurants,Max&Ermas,Village Inn a
48、nd Bakers Square concepts.This segment also includes J.Alexanders,which includes the J.Alexanders and Stoney River Steakhouse and Grill concepts.FNFV Corporate and Other.This segment primarily consists of our share in the operations of certain equity investments,including Ceridian,as well as Digital
49、 Insurance in which we own 96%and other smaller operations which are not title related.Acquisition of Lender Processing Services,IncOn January 2,2014,we completed the purchase of LPS.The purchase consideration paid was$37.14 per share of LPS common stock,of which$28.10 per share was paid in cash and
50、 the remaining$9.04 was paid in Old FNF common shares.The purchase consideration represented an exchange ratio of 0.28742 Old FNF common shares per share of LPS common stock.Total consideration paid for LPS was$3.4 billion,which consisted of$2,535 million in cash and$839 million in Old FNF common st
51、ock.In order to pay the stock component of the consideration,we issued 25,920,078 Old FNF shares to the former LPS shareholders.See Note B to our Consolidated Financial Statements for further discussion.In connection with the LPS acquisition,we formed a wholly-owned subsidiary,Black Knight Financial
52、 Services,Inc.(now known as Black Knight Holdings,Inc.,Black Knight).Black Knight has two operating businesses,ServiceLink Holdings,LLC(ServiceLink)and Black Knight Financial Services,LLC(BKFS).We retained a 65%ownership interest in each of the subsidiaries and issued the remaining 35%ownership inte
53、rest to funds affiliated with Thomas H.Lee Partners,and certain related entities on January 3,2014.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 cl
54、osing 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%.Our results for periods since June 1,2014,reflect our now 67%ownership interest in BKFS.Table of C
55、ontents2Competitive StrengthsWe believe that our competitive strengths position us well to take advantage of future changes to the real estate market.We believe that our competitive strengths include the following:Corporate principles.A cornerstone of our management philosophy and operating success
56、is the six fundamental precepts upon which we were founded,which are:Autonomy and entrepreneurship;Bias for action;Customer-oriented and motivated;Minimize bureaucracy;Employee ownership;and Highest standard of conduct.These six precepts are emphasized to our employees from the first day of employme
57、nt and are integral to many of our strategies described below.Competitive cost structure.We have been able to maintain competitive operating margins in part by monitoring our businesses in a disciplined manner through continual evaluation of title order activity and management of our cost structure.
58、When compared to our industry competitors,we also believe that our structure is more efficiently designed,which allows us to operate with lower overhead costs.Title Leading title insurance company.We are the largest title insurance company in the United States and a leading provider of title insuran
59、ce and escrow and other title-related services for real estate transactions.Through the third quarter of 2014,our insurance companies had a 32.8%share of the U.S.title insurance market,according to the American Land Title Association(ALTA).Established relationships with our customers.We have strong
60、relationships with the customers who use our title services.Our distribution network,which includes approximately 1,200 direct residential title offices and approximately 5,000 agents,is among the largest in the United States.We also benefit from strong brand recognition in our multiple title brands
61、 that allows us to access a broader client base than if we operated under a single consolidated brand and provides our customers with a choice among brands.Strong value proposition for our customers.We provide our customers with title insurance and escrow and other title-related services that suppor
62、t their ability to effectively close real estate transactions.We help make the real estate closing more efficient for our customers by offering a single point of access to a broad platform of title-related products and resources necessary to close real estate transactions.Proven management team.The
63、managers of our operating businesses have successfully built our title business over an extended period of time,resulting in our business attaining the size,scope and presence in the industry that it has today.Our managers have demonstrated their leadership ability during numerous acquisitions throu
64、gh which we have grown and throughout a number of business cycles and significant periods of industry change.Commercial title insurance.While residential title insurance comprises the majority of our business,we are also a significant provider of commercial real estate title insurance in the United
65、States.Our network of agents,attorneys,underwriters and closers that service the commercial real estate markets is one of the largest in the industry.Our commercial network combined with our financial strength makes our title insurance operations attractive to large national lenders that require the
66、 underwriting and issuing of larger commercial title policies.BKFS Market leadership with comprehensive and integrated solutions.BKFS is a leading provider of comprehensive and integrated solutions to the mortgage industry.BKFS solutions are utilized by 21 of the top 25 largest mortgage originators
67、and all of the top 25 largest U.S.mortgage servicers as of June 30,2014 according to the National Mortgage News Report,service over 50%of all U.S.first lien mortgages as of December 31,2014 according to the BKFS Mortgage Monitor Report,and operate one of the industrys largest exchanges connecting or
68、iginators,agents,settlement services providers and investors.BKFS believes its leadership position is,in part,the result of its unique expertise and insight developed from over 50 years serving the needs of customers in the mortgage industry.BKFS has used this insight to develop an integrated and co
69、mprehensive suite of proprietary technology,data,and analytics solutions to automate many of the mission-critical business processes across the entire mortgage loan life cycle.These integrated solutions are designed to reduce manual processes,assist in improving organizational compliance and mitigat
70、ing risk,and ultimately deliver significant cost savings to its clients.Table of Contents3Broad and deep client relationships with significant recurring revenue.BKFS has deep and long-standing relationships with its largest clients.BKFS average relationship with its top 10 servicer clients is over 2
71、5 years,and these clients utilize an average of 6 products across its comprehensive solutions.BKFS typically enters into long-term contracts with its clients and its products are typically embedded within its clients mission-critical workflow and decision processes across various parts of their orga
72、nizations.As a result,BKFS has developed recurring and long-lasting relationships with its clients.Given these deep relationships,BKFS believes that it is well-positioned to continue to develop and cross-sell new products and services that will meet the evolving needs of the mortgage industry.Scalab
73、le and cost effective operating model.BKFS believes it has a highly attractive and scalable operating model derived from its market leadership,hosted technology platforms and the large number of clients it serves across the mortgage industry.BKFS scalable operating model provides it with significant
74、 benefits.BKFS scale and operating leverage allows it to add incremental clients to its existing platforms with limited incremental cost.As a result,BKFS operating model drives attractive margins and generates significant cash flow.Also,by leveraging its scale and leading market position,it is able
75、to make cost effective investments in its technology platform to meet evolving regulatory and compliance requirements,further increasing its value proposition to clients.World class management team with depth of experience and track record of success.BKFS management team has an average of over 20 ye
76、ars of experience in the banking technology and mortgage processing industries and a proven track record of strong execution capabilities.Following the acquisition of LPS,BKFS has significantly improved its operations and enhanced its go-to-market strategy,further integrated its technology platforms
77、,expanded its data and analytics capabilities and introduced several new innovative products.BKFS executed all of these projects while delivering attractive revenue growth and strong profitability.Strategy TitleOur strategy in the title business is to maximize operating profits by increasing our mar
78、ket share and managing operating expenses throughout the real estate business cycle.To accomplish our goals,we intend to do the following:Continue to operate multiple title brands independently.We believe that in order to maintain and strengthen our title insurance customer base,we must operate our
79、strongest brands in a given marketplace independently of each other.Our national and regional brands include Fidelity National Title,Chicago Title,Commonwealth Land Title,Lawyers Title,Ticor Title,Alamo Title,and National Title of New York Inc.In our largest markets,we operate multiple brands.This a
80、pproach allows us to continue to attract customers who identify with a particular brand and allows us to utilize a broader base of local agents and local operations than we would have with a single consolidated brand.Consistently deliver superior customer service.We believe customer service and cons
81、istent product delivery are the most important factors in attracting and retaining customers.Our ability to provide superior customer service and consistent product delivery requires continued focus on providing high quality service and products at competitive prices.Our goal is to continue to impro
82、ve the experience of our customers,in all aspects of our business.Manage our operations successfully through business cycles.We operate in a cyclical industry and our ability to diversify our revenue base within our core title insurance business and manage the duration of our investments may allow u
83、s to better operate in this cyclical business.Maintaining a broad geographic revenue base,utilizing both direct and independent agency operations and pursuing both residential and commercial title insurance business help diversify our title insurance revenues.We continue to monitor,evaluate and exec
84、ute upon the consolidation of administrative functions,legal entity structure,and office consolidation,as necessary,to respond to the continually changing marketplace.We maintain shorter durations on our investment portfolio to mitigate our interest rate risk.A more detailed discussion of our invest
85、ment strategies is included in“Investment Policies and Investment Portfolio.”Continue to improve our products and technology.As a national provider of real estate transaction products and services,we participate in an industry that is subject to significant change,frequent new product and service in
86、troductions and evolving industry standards.We believe that our future success will depend in part on our ability to anticipate industry changes and offer products and services that meet evolving industry standards.In connection with our service offerings,we are continuing to deploy new information
87、system technologies to our direct and agency operations.We expect to improve the process of ordering title and escrow services and improve the delivery of our products to our customers.Maintain values supporting our strategy.We believe that our continued focus on and support of our long-established
88、corporate culture will reinforce and support our business strategy.Our goal is to foster and support a corporate culture where our employees and agents seek to operate independently and maintain profitability at the local level while forming close customer relationships by meeting customer needs and
89、 improving customer service.Utilizing a relatively flat managerial structure and providing our employees with a sense of individual ownership support this goal.Effectively manage costs based on economic factors.We believe that our focus on our operating margins is essential to our continued success
90、in the title insurance business.Regardless of the business cycle in which we may be operating,we Table of Contents4seek to continue to evaluate and manage our cost structure and make appropriate adjustments where economic conditions dictate.This continual focus on our cost structure helps us to bett
91、er maintain our operating margins.BKFSBKFS comprehensive and integrated technology platforms,robust data and analytic capabilities,differentiated business model,broad and deep client relationships and other competitive strengths enable it to pursue multiple growth opportunities.BKFS intends to conti
92、nue to expand its business and grow through the following key strategies:Further penetration of its solutions with existing clients.BKFS believes its established client base presents a substantial opportunity for growth.BKFS seeks to capitalize on the trend of standardization and increased adoption
93、of leading third-party solutions and increase the number of solutions provided to its existing client base.BKFS intends to broaden and deepen its client relationships by cross-selling its suite of end-to-end technology solutions,as well as its robust data and analytics.BKFS has established incentive
94、s within its sales force,as well as a core team of account managers,to encourage cross-selling of its full range of solutions to its existing clients.By helping its clients understand the full extent of its comprehensive solutions and the value of leveraging the multiple solutions that it offers,BKF
95、S believes it can expand its existing relationships by freeing its clients to focus on their core businesses and their customers.Win new clients in existing markets.BKFS intends to attract new clients in the mortgage industry by leveraging the value proposition provided by its technology platform an
96、d comprehensive solutions offering.In particular,BKFS believes there is a significant opportunity to penetrate the underserved mid-tier mortgage originators and servicers market.BKFS believes that these institutions can benefit from its proven solutions suite in order to address increasingly complex
97、 regulatory requirements and compete more effectively in the evolving mortgage market.BKFS intends to continue to pursue this channel and benefit from the low incremental cost of adding new customers to its scaled technology infrastructure.Continue to innovate and introduce new solutions.BKFS long-t
98、erm vision is to be the industry leading provider for participants of the mortgage industry for their platform,data,and analytic needs.BKFS intends to enhance what it believes is a leadership position in the industry by continuing to innovate its solutions and refine the insight it provides to its c
99、lients.BKFS has a strong track record of introducing and developing new solutions that span the mortgage loan life cycle,are tailored to specific industry trends and that enhance its clients core operating functions.By working in partnership with key clients,BKFS has been able to develop and market
100、new and advanced solutions to its client base that meet the evolving demands of the mortgage industry.In addition,BKFS will continue to develop and leverage insights from its large public and proprietary data assets to further improve its customer value proposition.Powerful focus and dedication to s
101、taying up-to-date with regulatory requirements.BKFS has dedicated significant technological and management resources to build and maintain a regulatory infrastructure and human capital base to assist its clients with increased regulatory oversight and requirements.BKFS is able to leverage its consis
102、tent investment in this area through its software as a service(Saas)technology solutions and its market-leading scale.BKFS intends to continue its strategy of building and investing in solutions that help its clients with the regulatory environment.FNFVOn June 30,2014,we completed the recapitalizati
103、on of FNF common stock into two tracking stocks,FNF Group common stock and FNFV Group common stock.Through FNFV we actively manage a group of companies and investments with a net asset value of approximately$1.3 billion as of December 31,2014.The businesses within FNFV primarily consist of our major
104、ity ownership positions in ABRH,J.Alexanders,and Digital Insurance and our 32%minority investment in Ceridian.Our strategy for the Group is to continue our activities with respect to such business investments to achieve superior financial performance,maximize and ultimately monetize the value of tho
105、se assets and to continue to pursue similar investments in businesses and to grow and achieve superior financial performance with respect to such newly acquired businesses.Restaurant GroupOur restaurant operations are focused in the family dining,casual dining and upscale-casual dining segments.The
106、Restaurant Groups strategy is to achieve long-term profit growth and drive increases in same store sales and guest counts.We have a highly experienced management team that is focused on enhancing the guest experience at our restaurants and building team member engagement.We also utilize a shared ser
107、vice platform that takes advantage of the combined synergies of our operating companies to provide purchasing power and other shared service functions.We expect to continue to maintain a strong balance sheet for our Restaurant Group to support future acquisitions and to provide stability in all oper
108、ating environments.On February 19,2015,we announced our intention to pursue a tax-free spin-off of J.Alexanders to FNFV shareholders.FNFV Corporate and OtherOn December 31,2014,we closed the previously announced distribution(the Spin-off)of all of the outstanding shares of common stock of New Remy C
109、orp.(New Remy)to FNFV shareholders.As part of the Spin-off,FNFV combined all of the Table of Contents516,342,508 shares of Remy common stock that FNFV owned and a small company called Fidelity National Technology Imaging,LLC(Imaging)into New Remy.Immediately following the Spin-off,New Remy and Remy
110、International,Inc.(Old Remy)engaged in a series of stock-for-stock transactions ending with a new publicly-traded holding company,New Remy Holdco Corp.(New Remy Holdco).In the Spin-off,FNFV shareholders ultimately received a total of approximately 16.6 million shares of New Remy Holdco common stock,
111、or approximately 0.17879 shares of New Remy Holdco common stock for each share of FNFV that they owned.As a result of the spin-off,the operations of Remy are now presented in discontinued operations for all periods presented.This spin-off was tax free to FNFV shareholders.On December 31,2012,we acqu
112、ired Digital Insurance.Total consideration paid was$98 million in cash,net of cash acquired of$3 million.We have consolidated the operations of Digital Insurance as of December 31,2012.Digital Insurance is a leading employee benefits platform specializing in health insurance distribution and benefit
113、s management for small and mid-sized businesses.Acquisitions,Dispositions,Minority Owned Operating Subsidiaries and FinancingsAcquisitions have been an important part of our growth strategy.On an ongoing basis,with assistance from our advisors,we actively evaluate possible transactions,such as acqui
114、sitions and dispositions of business units and operating assets and business combination transactions.In the future,we may seek to sell certain investments or other assets to increase our liquidity.Further,our management has stated that we may make acquisitions in lines of business that are not dire
115、ctly tied to,or synergistic with,our core operating segments.In the past we have obtained majority and minority investments in entities and securities where we see the potential to achieve above market returns.Fundamentally our goal is to acquire quality companies that are well-positioned in their r
116、espective industries,run by best in class management teams in industries that have attractive organic and acquired growth opportunities.We leverage our operational expertise and track record of growing industry leading companies and also our active interaction with the acquired companys management d
117、irectly or through our board of directors,to ultimately provide value for our shareholders.There can be no assurance that any suitable opportunities will arise or that any particular transaction will be completed.We have made a number of acquisitions over the past three years to strengthen and expan
118、d our service offerings and customer base in our various businesses,and to expand into other businesses or where we otherwise saw value.Title Insurance Market for title insurance.According to Demotech Performance of Title Insurance Companies 2014 Edition,an annual compilation of financial informatio
119、n from the title insurance industry that is published by Demotech Inc.,an independent firm(Demotech),total operating income for the entire U.S.title insurance industry has decreased from its highest at$17.8 billion in 2005 to$13.4 billion in 2013,which is a$1.2 billion increase from 2012.The size of
120、 the industry is closely tied to various macroeconomic factors,including,but not limited to,growth in the gross domestic product,inflation,unemployment,the availability of credit,consumer confidence,interest rates,and sales volumes and prices for new and existing homes,as well as the volume of refin
121、ancing of previously issued mortgages.Most real estate transactions consummated in the U.S.require the use of title insurance by a lending institution before the transaction can be completed.Generally,revenues from title insurance policies are directly correlated with the value of the property under
122、lying the title policy,and appreciation or depreciation in the overall value of the real estate market are major factors in total industry revenues.Industry revenues are also driven by factors affecting the volume of real estate closings,such as the state of the economy,the availability of mortgage
123、funding,and changes in interest rates,which affect demand for new mortgage loans and refinancing transactions.Both the volume and the average price of residential real estate transactions declined from 2007-2011.Beginning in 2008 and continuing through 2011,the mortgage delinquency and default rates
124、 caused negative operating results at a number of banks and financial institutions.Multiple banks failed during this time,reducing the capacity of the mortgage industry to make loans.Since this time,lenders have tightened their underwriting standards which has made it more difficult for buyers to qu
125、alify for new loans.However,during this same period,interest rates declined to historically low levels,which spurred higher refinance activity in the period 2009 through 2012.During 2013 and continuing through 2014,refinance activity declined due to rising interest rates;however,we experienced an in
126、crease in the purchase volume and average price of residential real estate.Overall,our title premiums declined in 2014 compared to 2013.Our revenues in future periods will continue to be subject to these and other factors which are beyond our control and,as a result,are likely to fluctuate.The U.S.t
127、itle insurance industry is concentrated among a handful of industry participants.According to Demotech,the top four title insurance groups accounted for 87%of net premiums written in 2013.Approximately 30 independent title insurance companies accounted for the remaining 13%of net premiums written in
128、 2013.Consolidation has created opportunities for increased financial and operating efficiencies for the industrys largest participants and should continue to drive profitability and market share in the industry.Table of Contents6Title Insurance Policies.Generally,real estate buyers and mortgage len
129、ders purchase title insurance to insure good and marketable title to real estate and priority of lien.A brief generalized description of the process of issuing a title insurance policy is as follows:The customer,typically a real estate salesperson or broker,escrow agent,attorney or lender,places an
130、order for a title policy.Company personnel note the specifics of the title policy order and place a request with the title company or its agents for a preliminary report or commitment.After the relevant historical data on the property is compiled,the title officer prepares a preliminary report that
131、documents the current status of title to the property,any exclusions,exceptions and/or limitations that the title company might include in the policy,and specific issues that need to be addressed and resolved by the parties to the transaction before the title policy will be issued.The preliminary re
132、port is circulated to all the parties for satisfaction of any specific issues.After the specific issues identified in the preliminary report are satisfied,an escrow agent closes the transaction in accordance with the instructions of the parties and the title companys conditions.Once the transaction
133、is closed and all monies have been released,the title company issues a title insurance policy.In real estate transactions financed with a mortgage,virtually all real property mortgage lenders require their borrowers to obtain a title insurance policy at the time a mortgage loan is made.This lenders
134、policy insures the lender against any defect affecting the priority of the mortgage in an amount equal to the outstanding balance of the related mortgage loan.An owners policy is typically also issued,insuring the buyer against defects in title in an amount equal to the purchase price.In a refinanci
135、ng transaction,only a lenders policy is generally purchased because ownership of the property has not changed.In the case of an all-cash real estate purchase,no lenders policy is issued but typically an owners title policy is issued.Title insurance premiums paid in connection with a title insurance
136、policy are based on(and typically are a percentage of)either the amount of the mortgage loan or the purchase price of the property insured.Applicable state insurance regulations or regulatory practices may limit the maximum,or in some cases the minimum,premium that can be charged on a policy.Title i
137、nsurance premiums are due in full at the closing of the real estate transaction.A lenders policy generally terminates upon the refinancing or resale of the property.The amount of the insured risk or“face amount”of insurance under a title insurance policy is generally equal to either the amount of th
138、e loan secured by the property or the purchase price of the property.The title insurer is also responsible for the cost of defending the insured title against covered claims.The insurers actual exposure at any given time,however,generally is less than the total face amount of policies outstanding be
139、cause the coverage of a lenders policy is reduced and eventually terminated as a result of payments on the mortgage loan.A title insurer also generally does not know when a property has been sold or refinanced except when it issues the replacement coverage.Because of these factors,the total liabilit
140、y of a title underwriter on outstanding policies cannot be precisely determined.Title insurance companies typically issue title insurance policies directly through branch offices or through affiliated title agencies,or indirectly through independent third party agencies unaffiliated with the title i
141、nsurance company.Where the policy is issued through a branch or wholly-owned subsidiary agency operation,the title insurance company typically performs or directs the title search,and the premiums collected are retained by the title company.Where the policy is issued through an independent agent,the
142、 agent generally performs the title search(in some areas searches are performed by approved attorneys),examines the title,collects the premium and retains a majority of the premium.The remainder of the premium is remitted to the title insurance company as compensation,part of which is for bearing th
143、e risk of loss in the event a claim is made under the policy.The percentage of the premium retained by an agent varies from region to region and is sometimes regulated by the states.The title insurance company is obligated to pay title claims in accordance with the terms of its policies,regardless o
144、f whether the title insurance company issues policies through its direct operations or through independent agents.Prior to issuing policies,title insurers and their agents attempt to reduce the risk of future claim losses by accurately performing title searches and examinations.A title insurance com
145、panys predominant expense relates to such searches and examinations,the preparation of preliminary title reports,policies or commitments,the maintenance of title plants,”which are indexed compilations of public records,maps and other relevant historical documents,and the facilitation and closing of
146、real estate transactions.Claim losses generally result from errors made in the title search and examination process,from hidden defects such as fraud,forgery,incapacity,or missing heirs of the property,and from closing related errors.Residential real estate business results from the construction,sal
147、e,resale and refinancing of residential properties,while commercial real estate business results from similar activities with respect to properties with a business or commercial use.Commercial real estate title insurance policies insure title to commercial real property,and generally involve higher
148、coverage amounts and yield higher premiums.Residential real estate transaction volume is primarily affected by macroeconomic and seasonal factors while commercial real estate transaction volume is affected primarily by fluctuations in local supply and demand conditions for commercial space.Table of
149、Contents7Direct and Agency Operations.We provide title insurance services through our direct operations and through independent title insurance agents who issue title policies on behalf of our title insurance companies.Our title insurance companies determine the terms and conditions upon which they
150、will insure title to the real property according to our underwriting standards,policies and procedures.Direct Operations.In our direct operations,the title insurer issues the title insurance policy and retains the entire premium paid in connection with the transaction.Our direct operations provide t
151、he following benefits:higher margins because we retain the entire premium from each transaction instead of paying a commission to an independent agent;continuity of service levels to a broad range of customers;and additional sources of income through escrow and closing services.We have approximately
152、 1,200 offices throughout the U.S.primarily providing residential real estate title insurance.We continuously monitor the number of direct offices to make sure that it remains in line with our strategy and the current economic environment.Our commercial real estate title insurance business is operat
153、ed almost exclusively through our direct operations.We maintain direct operations for our commercial title insurance business in all the major real estate markets including Atlanta,Boston,Chicago,Dallas,Houston,Los Angeles,New York,Philadelphia,Phoenix,Seattle and Washington D.C.Agency Operations.In
154、 our agency operations,the search and examination function is performed by an independent agent or the agent may purchase the search and examination from us.In either case,the agent is responsible to ensure that the search and examination is completed.The agent thus retains the majority of the title
155、 premium collected,with the balance remitted to the title underwriter for bearing the risk of loss in the event that a claim is made under the title insurance policy.Independent agents may select among several title underwriters based upon their relationship with the underwriter,the amount of the pr
156、emium“split”offered by the underwriter,the overall terms and conditions of the agency agreement and the scope of services offered to the agent.Premium splits vary by geographic region,and in some states are fixed by insurance regulatory requirements.Our relationship with each agent is governed by an
157、 agency agreement defining how the agent issues a title insurance policy on our behalf.The agency agreement also sets forth the agents liability to us for policy losses attributable to the agents errors.An agency agreement is usually terminable without cause upon 30 days notice or immediately for ca
158、use.In determining whether to engage or retain an independent agent,we consider the agents experience,financial condition and loss history.For each agent with whom we enter into an agency agreement,we maintain financial and loss experience records.We also conduct periodic audits of our agents and st
159、rategically manage the number of agents with which we transact business in an effort to reduce future expenses and manage risks.As of December 31,2014,we transact business with approximately 5,000 agents.Fees and Premiums.One method of analyzing our business is to examine the level of premiums gener
160、ated by direct and agency operations.The following table presents the percentages of our title insurance premiums generated by direct and agency operations:Year Ended December 31,201420132012 Amount%Amount%Amount%(Dollars in millions)Direct$1,72747.0%$1,80043.4%$1,73245.2%Agency1,94453.02,35256.62,1
161、0154.8 Total title insurance premiums$3,671100.0%$4,152100.0%$3,833100.0%The premium for title insurance is due in full when the real estate transaction is closed.We recognize title insurance premium revenues from direct operations upon the closing of the transaction,whereas premium revenues from ag
162、ency operations include an accrual based on estimates of the volume of transactions that have closed in a particular period for which premiums have not yet been reported to us.The accrual for agency premiums is necessary because of the lag between the closing of these transactions and the reporting
163、of these policies to us by the agent,and is based on estimates utilizing historical information.Escrow,Title-Related and Other Fees.In addition to fees for underwriting title insurance policies,we derive a significant amount of our revenues from escrow and other title-related services including coll
164、ection and trust activities,trustees sales guarantees,recordings and reconveyances,and home warranty services.The escrow and other services provided by us include all of those typically required in connection with residential and commercial real estate purchases and refinance activities.Escrow,title
165、-related and other fees included our Title segment represented approximately 32.8%,27.1%,and 28.9%of our revenues in 2014,2013,and 2012,respectively.Sales and Marketing.We market and distribute our title and escrow products and services to customers in the residential and commercial market sectors o
166、f the real estate industry through customer solicitation by sales personnel.Although in many instances the individual homeowner is the beneficiary of a title insurance policy,we do not focus our marketing efforts on the homeowner.Table of Contents8We actively encourage our sales personnel to develop
167、 new business relationships with persons in the real estate community,such as real estate sales agents and brokers,financial institutions,independent escrow companies and title agents,real estate developers,mortgage brokers and attorneys who order title insurance policies for their clients.While our
168、 smaller,local clients remain important,large customers,such as national residential mortgage lenders,real estate investment trusts and developers are an important part of our business.The buying criteria of locally based clients differ from those of large,geographically diverse customers in that th
169、e former tend to emphasize personal relationships and ease of transaction execution,while the latter generally place more emphasis on consistent product delivery across diverse geographical regions and the ability of service providers to meet their information systems requirements for electronic pro
170、duct delivery.Claims.An important part of our operations is the handling of title and escrow claims.We employ a large staff of attorneys in our claims department.Our claims processing centers are located in Omaha,Nebraska and Jacksonville,Florida.In-house claims counsel are also located in other par
171、ts of the country.Claims result from a wide range of causes.These causes generally include,but are not limited to,search and exam errors,forgeries,incorrect legal descriptions,signature and notary errors,unrecorded liens,mechanics liens,the failure to pay off existing liens,mortgage lending fraud,mi
172、shandling or theft of settlement funds(including independent agency theft),and mistakes in the escrow process.Under our policies,we are required to defend insureds when covered claims are filed against their interest in the property.Some claimants seek damages in excess of policy limits.Those claims
173、 are based on various legal theories,including in some cases allegations of negligence or an intentional tort.We occasionally incur losses in excess of policy limits.Experience shows that most policy claims and claim payments are made in the first five years after the policy has been issued,although
174、 claims may also be reported and paid many years later.Title losses due to independent agency defalcations typically occur when the independent agency misappropriates funds from escrow accounts under its control.Such losses are usually discovered when the independent agency fails to pay off an outst
175、anding mortgage loan at closing(or immediately thereafter)from the proceeds of the new loan.Once the previous lender determines that its loan has not been paid off timely,it will file a claim against the title insurer.Claims can be complex,vary greatly in dollar amounts and are affected by economic
176、and market conditions and the legal environment existing at the time claims are processed.In our commercial title business,we may issue polices with face amounts well in excess of$100 million,and from time to time claims are submitted with respect to large policies.We believe we are appropriately re
177、served with respect to all claims(large and small)that we currently face.Occasionally we experience large losses from title policies that have been issued or from our escrow operations,or overall worsening loss payment experience,which require us to increase our title loss reserves.These events are
178、unpredictable and adversely affect our earnings.Claims can result in litigation in which we may represent our insured and/or ourselves.We consider this type of litigation to be an ordinary course aspect of the conduct of our business.Reinsurance and Coinsurance.We limit our maximum loss exposure by
179、reinsuring risks with other insurers under excess of loss and case-by-case(“facultative”)reinsurance agreements.Reinsurance agreements generally provide that the reinsurer is liable for loss and loss adjustment expense payments exceeding the amount retained by the ceding company.However,the ceding c
180、ompany remains primarily liable to the insured whether or not the reinsurer is able to meet its contractual obligations.Facultative reinsurance agreements are entered into with other title insurers when the transaction to be insured will exceed state statutory or self-imposed limits.Excess of loss r
181、einsurance protects us from a loss from a single loss occurrence.Through March 1,2015,our excess of loss coverage is split into two tiers.The first tier provides coverage for residential and commercial transactions up to$100 million per loss occurrence,subject to a$20 million retention per loss.The
182、second tier provides additional coverage for commercial transactions in excess of$100 million of loss per occurrence up to$400 million per occurrence,with the Company participating at approximately 10%.We are currently in process of negotiating the terms and conditions of our 2015-2016 coverages,but
183、 do not expect there to be substantial changes in the terms and conditions.In addition to reinsurance,we carry errors and omissions insurance and fidelity bond coverage,each of which can provide protection to us in the event of certain types of losses that can occur in our businesses.Our policy is t
184、o be selective in choosing our reinsurers,seeking only those companies that we consider to be financially stable and adequately capitalized.In an effort to minimize exposure to the insolvency of a reinsurer,we periodically review the financial condition of our reinsurers.We also use coinsurance in o
185、ur commercial title business to provide coverage in amounts greater than we would be willing or able to provide individually.In coinsurance transactions,each individual underwriting company issues a separate policy and assumes a portion of the overall total risk.As a coinsurer we are only liable for
186、 the portion of the risk we assume.We also earn a small amount of additional income,which is reflected in our direct premiums,by assuming reinsurance for certain risks of other title insurers.Competition.Competition in the title insurance industry is based primarily on expertise,service and price.In
187、 addition,the financial strength of the insurer has become an increasingly important factor in decisions relating to the purchase of title insurance,Table of Contents9particularly in multi-state transactions and in situations involving real estate-related investment vehicles such as real estate inve
188、stment trusts and real estate mortgage investment conduits.The number and size of competing companies varies in the different geographic areas in which we conduct our business.In our principal markets,competitors include other major title underwriters such as First American Financial Corporation,Old
189、 Republic International Corporation and Stewart Information Services Corporation,as well as numerous smaller title insurance companies,underwritten title companies and independent agency operations at the regional and local level.Several of our smaller competitors have closed their operations in the
190、 past few years as a result of the significant decrease in activity in the residential real estate market.The addition or removal of regulatory barriers might result in changes to competition in the title insurance business.New competitors may include diversified financial services companies that ha
191、ve greater financial resources than we do and possess other competitive advantages.Competition among the major title insurance companies,expansion by smaller regional companies and any new entrants with alternative products could affect our business operations and financial condition.Regulation.Our
192、insurance subsidiaries,including title insurers,underwritten title companies and insurance agencies,are subject to extensive regulation under applicable state laws.Each of the insurers is subject to a holding company act in its state of domicile,which regulates,among other matters,the ability to pay
193、 dividends and enter into transactions with affiliates.The laws of most states in which we transact business establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business,regulating trade practices,licensing agents,approving policy for
194、ms,accounting practices,financial practices,establishing reserve and capital and surplus as regards policyholders(“capital and surplus”)requirements,defining suitable investments for reserves and capital and surplus and approving rate schedules.The process of state regulation of changes in rates ran
195、ges from states which set rates,to states where individual companies or associations of companies prepare rate filings which are submitted for approval,to a few states in which rate changes do not need to be filed for approval.Since we are governed by both state and federal governments and the appli
196、cable insurance laws and regulations are constantly subject to change,it is not possible to predict the potential effects on our insurance operations of any laws or regulations that may become more restrictive in the future or if new restrictive laws will be enacted.Pursuant to statutory accounting
197、requirements of the various states in which our title insurers are domiciled,these insurers must defer a portion of premiums as an unearned premium reserve for the protection of policyholders(in addition to their reserves for known claims)and must maintain qualified assets in an amount equal to the
198、statutory requirements.The level of unearned premium reserve required to be maintained at any time is determined by a statutory formula based upon either the age,number of policies,and dollar amount of policy liabilities underwritten,or the age and dollar amount of statutory premiums written.As of D
199、ecember 31,2014,the combined statutory unearned premium reserve required and reported for our title insurers was$1,736 million.In addition to statutory unearned premium reserves and reserves for known claims,each of our insurers maintains surplus funds for policyholder protection and business operat
200、ions.Each of our insurance subsidiaries is regulated by the insurance regulatory authority in its respective state of domicile,as well as that of each state in which it is licensed.The insurance commissioners of their respective states of domicile are the primary regulators of our insurance subsidia
201、ries.Each of the insurers is subject to periodic regulatory financial examination by regulatory authorities.Under the statutes governing insurance holding companies in most states,insurers may not enter into certain transactions,including sales,reinsurance agreements and service or management contra
202、cts,with their affiliates unless the regulatory authority of the insurers state of domicile has received notice at least 30 days prior to the intended effective date of such transaction and has not objected to,or has approved,the transaction within the 30-day period.As a holding company with no sign
203、ificant business operations of our own,we depend on dividends or other distributions from our subsidiaries as the principal source of cash to meet our obligations,including the payment of interest on and repayment of principal of any debt obligations,and to pay any dividends to our shareholders.The
204、payment of dividends or other distributions to us by our insurers is regulated by the insurance laws and regulations of their respective states of domicile.In general,an insurance company subsidiary may not pay an“extraordinary”dividend or distribution unless the applicable insurance regulator has r
205、eceived notice of the intended payment at least 30 days prior to payment and has not objected to or has approved the payment within the 30-day period.In general,an“extraordinary”dividend or distribution is statutorily defined as a dividend or distribution that,together with other dividends and distr
206、ibutions made within the preceding 12 months,exceeds the greater of:10%of the insurers statutory surplus as of the immediately prior year end;or the statutory net income of the insurer during the prior calendar year.The laws and regulations of some jurisdictions also prohibit an insurer from declari
207、ng or paying a dividend except out of its earned surplus or require the insurer to obtain prior regulatory approval.During 2015,our directly owned title insurers can pay dividends or make distributions to us of approximately$236 million without prior regulatory approval;however,insurance regulators
208、have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us(such as a payment under a tax sharing agreement or for other services)if they determine that such payment could be adverse to our policyholders.There are no restrictions on our retained ear
209、nings regarding our ability to pay dividends to shareholders.Table of Contents10The combined statutory capital and surplus of our title insurers was approximately$1,472 million and$1,409 million as of December 31,2014 and 2013,respectively.The combined statutory earnings of our title insurers were$2
210、76 million,$352 million,and$281 million for the years ended December 31,2014,2013,and 2012,respectively.As a condition to continued authority to underwrite policies in the states in which our insurers conduct their business,they are required to pay certain fees and file information regarding their o
211、fficers,directors and financial condition.Pursuant to statutory requirements of the various states in which our insurers are domiciled,such insurers must maintain certain levels of minimum capital and surplus.Required levels of minimum capital and surplus are not significant to the insurers individu
212、ally or in the aggregate.Each of our insurers has complied with the minimum statutory requirements as of December 31,2014.Our underwritten title companies are also subject to certain regulation by insurance regulatory or banking authorities,primarily relating to minimum net worth.Minimum net worth r
213、equirements for each underwritten title company is less than$1 million.These companies were in compliance with their respective minimum net worth requirements at December 31,2014.From time to time we receive inquiries and requests for information from state insurance departments,attorneys general an
214、d 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,regulat
215、ors 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
216、 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.For further discussion,see item 3,Legal Proceedings.Before a person can ac
217、quire control of a U.S.insurance company,prior written approval must be obtained from the insurance commissioner of the state in which the insurer is domiciled.Prior to granting approval of an application to acquire control of a domestic insurer,the state insurance commissioner will consider such fa
218、ctors as the financial strength of the applicant,the integrity and management of the applicants Board of Directors and executive officers,the acquirers plans for the insurers Board of Directors and executive officers,the acquirers plans for the future operations of the domestic insurer and any anti-
219、competitive results that may arise from the consummation of the acquisition of control.Generally,state statutes provide that control over a domestic insurer is presumed to exist if any person,directly or indirectly,owns,controls,holds with the power to vote,or holds proxies representing 10%or more o
220、f the voting securities of the domestic insurer.Because a person acquiring 10%or more of our common shares would indirectly control the same percentage of the stock of our insurers,the insurance change of control laws would likely apply to such a transaction.The National Association of Insurance Com
221、missioners(NAIC)has adopted an instruction requiring an annual certification of reserve adequacy by a qualified actuary.Because all of the states in which our title insurers are domiciled require adherence to NAIC filing procedures,each such insurer,unless it qualifies for an exemption,must file an
222、actuarial opinion with respect to the adequacy of its reserves.Title Insurance RatingsOur title insurance underwriters are regularly assigned ratings by independent agencies designed to indicate their financial condition and/or claims paying ability.The rating agencies determine ratings by quantitat
223、ively and qualitatively analyzing financial data and other information.Our title subsidiaries include Alamo Title,Chicago Title,Commonwealth Land Title,and Fidelity National Title.Standard&Poors Ratings Group(“S&P”),Moodys Investors Service(“Moodys”),and A.M.Best Company(A.M.Best)provide ratings for
224、 the entire FNF family of companies as a whole as follows:S&P Moodys A.M.BestFNF family of companiesA A3 A-The relative position of each of our ratings among the ratings scale assigned by each rating agency is as follows:An S&P A rating is the third highest rating of 17 ratings for S&P.S&P states th
225、at an“A”rating means that,in its opinion,the insurer is highly likely to have the ability to meet its financial obligations.A Moodys A3 rating is the fourth highest rating of 21 ratings for Moodys.Moodys states that insurance companies rated“A3”offer good financial security.An A.M.Best A-rating is t
226、he fourth highest rating of 17 ratings for A.M.Best.A.M.Best states that its“A-(Excellent)”rating is assigned to those companies that have,in its opinion,an excellent ability to meet their ongoing obligations to policyholders.Table of Contents11Demotech provides financial strength/stability ratings
227、for each of our principal title insurance underwriters individually,as follows:Alamo Title InsuranceAChicago Title Insurance CompanyACommonwealth Land Title Insurance CompanyAFidelity National Title Insurance CompanyANational Title Insurance of New YorkA Demotech states that its ratings of A(A doubl
228、e prime)and A(A prime)reflect its opinion that,regardless of the severity of a general economic downturn or deterioration in the insurance cycle,the insurers assigned either of those ratings possess Unsurpassed financial stability related to maintaining positive surplus as regards policyholders.The
229、A(A double prime)and A(A prime)ratings are the two highest ratings of Demotechs five ratings.The ratings of S&P,Moodys,A.M.Best,and Demotech described above are not designed to be,and do not serve as,measures of protection or valuation offered to investors.These financial strength ratings should not
230、 be relied on with respect to making an investment in our securities.See“Item 1A.Risk Factors If the rating agencies downgrade our Company,our results of operations and competitive position in the title insurance industry may suffer”for further information.BKFSOur BKFS segment offers technology and
231、data and analytics services through leading software systems and information solutions that facilitate and automate many of the business processes across the life cycle of a mortgage.Our customers use our technology and services to reduce their operating costs,improve their customer service and enha
232、nce the quality and consistency of various aspects of their mortgage servicing.We continually work with our customers to customize and integrate our software and services in order to assist them in achieving the value proposition that we offer to them.Our principal technology solutions are software
233、applications provided to mortgage lenders and other lending institutions,together with related support and services.Our technology solutions primarily consist of mortgage processing and workflow management software applications.The long term nature of most of our contracts in this business provides
234、us with substantial recurring revenues.Our revenues from servicing technology are generally based on the number of active mortgages on our mortgage servicing platform in a given period.Our other technology solutions include our origination and default technology,from which we generally earn revenues
235、 on a per transaction basis.Our data and analytics offerings primarily consist of our alternative valuation services,real estate and mortgage data,modeling and forecasting and analytical tools.The U.S.mortgage market has seen significant change over the past few years and is expected to continue to
236、evolve going forward.Increased origination volatility and key regulatory actions arising from the recent financial crisis,such as the Dodd-Frank Act and the establishment of the Consumer Financial Protection Bureau(the CFPB),impose new and evolving standards for market participants.These regulatory
237、changes have spurred lenders and servicers to seek technology solutions that facilitate compliance obligations in the face of a changing regulatory environment while remaining efficient and profitable.The current market conditions for BKFS services include the following:Increased regulation.Most U.S
238、.mortgage market participants have become subject to increasing regulatory oversight and regulatory requirements as federal and state governments have enacted various new laws,rules and regulations.One example of such legislation is the Dodd-Frank Act,which contains broad changes for many sectors of
239、 the financial services and lending industries and established the CFPB,a new federal regulatory agency responsible for regulating consumer financial protection within the United States.It is our experience that mortgage lenders have become more focused on the risk of non-compliance with these evolv
240、ing regulations and are focused on technologies and solutions that help them to comply with the increased regulatory oversight and burdens.Lenders increasingly focused on core operations.As a result of greater regulatory scrutiny and the higher cost of doing business,we believe lenders have become i
241、ncreasingly focused on their core operations and customers.We believe lenders are increasingly shifting from affiliate business models and in-house technologies to solutions with third-party providers who can provide better technology and services more efficiently.Lenders require these vendors to pr
242、ovide best-in-class technology and deep domain expertise and to assist them in maintaining regulatory compliance.We believe that very few of these providers have the scale and regulatory infrastructure to meet both the technological efficiency and high regulatory standards that lenders require.Growi
243、ng role of technology in the U.S.mortgage industry.Banks and other lenders and servicers have become increasingly focused on technology automation and workflow management to operate more efficiently and meet their regulatory guidelines.We believe that vendors must be able to support the complexity i
244、n the market,display extensive industry knowledge and possess the financial resources to make the necessary investments in technology to support lenders.Table of Contents12 Increased demand for enhanced transparency and analytic insight.As U.S.mortgage market participants work to minimize the risk i
245、n lending,servicing and capital markets,they increasingly rely on data and analytics to integrate with technologies that enhance the decision making process.These industry participants rely on large comprehensive third party databases coupled with enhanced analytics to achieve these goals.Intellectu
246、al PropertyWe rely on a combination of contractual restrictions,internal security practices,and copyright and trade secret law to establish and protect our software,technology,and expertise across our businesses.Further,we have developed a number of brands that have accumulated substantial goodwill
247、in the marketplace,and we rely on trademark law to protect our rights in that area.We intend to continue our policy of taking all measures we deem necessary to protect our copyright,trade secret,and trademark rights.These legal protections and arrangements afford only limited protection of our propr
248、ietary rights,and there is no assurance that our competitors will not independently develop or license products,services,or capabilities that are substantially equivalent or superior to ours.Technology and Research and DevelopmentTitle Business As a national provider of real estate transaction produ
249、cts and services,we participate in an industry that is subject to significant regulatory requirements,frequent new product and service introductions,and evolving industry standards.We believe that our future success depends in part on our ability to anticipate industry changes and offer products and
250、 services that meet evolving industry standards.In connection with our title segment service offerings,we are continuing to deploy new information system technologies to our direct and agency operations.We continue to improve the process of ordering title and escrow services and improve the delivery
251、 of our products to our customers.In order to meet new regulatory requirements,we also continue to expand our data collection and reporting abilities.We have made enhancements to certain of our systems to comply with the CFPBs Integrated Mortgage Disclosure rules that will go into effect on August 1
252、,2015.BKFSOur research and development activities relate primarily to the design,development and enhancement of our processing systems and related software applications.We expect to continue our practice of investing an appropriate level of resources to maintain,enhance and extend the functionality
253、of our proprietary systems and existing software applications,to develop new and innovative software applications and systems in response to the needs of our clients,and to enhance the capabilities surrounding our infrastructure.We work with our clients to determine the appropriate timing and approa
254、ch to introducing technology or infrastructure changes to our applications and services.We have made enhancements to certain of our systems products,including a web-based solution designed to support lender and service provider efforts to comply with the CFPBs Integrated Mortgage Disclosure rules th
255、at will go into effect on August 1,2015.Investment Policies and Investment Portfolio Our investment policy is designed to maximize total return through investment income and capital appreciation consistent with moderate risk of principal,while providing adequate liquidity.Our insurance subsidiaries,
256、including title insurers,underwritten title companies and insurance agencies,are subject to extensive regulation under applicable state laws.The various states in which we operate our underwriters regulate the types of assets that qualify for purposes of capital,surplus,and statutory unearned premiu
257、m reserves.Our investment policy specifically limits duration and non-investment grade allocations in the FNF core fixed-income portfolio.Maintaining shorter durations on the investment portfolio allows for the mitigation of interest rate risk.Equity securities and preferred stock are utilized to ta
258、ke advantage of perceived value or for strategic purposes.Due to the magnitude of the investment portfolio in relation to our claims loss reserves,durations of investments are not specifically matched to the cash outflows required to pay claims.As of December 31,2014 and 2013,the carrying amount of
259、total investments,which approximates the fair value,excluding investments in unconsolidated affiliates,was$3.9 billion and$3.4 billion,respectively.We purchase investment grade fixed maturity securities,selected non-investment grade fixed maturity securities,preferred stock and equity securities.The
260、 securities in our portfolio are subject to economic conditions and normal market risks and uncertainties.Table of Contents13The following table presents certain information regarding the investment ratings of our fixed maturity securities and preferred stock portfolio at December 31,2014 and 2013:D
261、ecember 31,20142013 Amortized%ofFair%ofAmortized%ofFair%ofRating(1)CostTotalValueTotalCostTotalValueTotal(Dollars in millions)Aaa/AAA$37311.7%$37911.7%$37712.4%$38812.5%Aa/AA70122.072122.166822.069022.2A1,06133.31,08533.41,03234.01,05634.0Baa/BBB76424.077824.078725.980325.8Ba/BB/B1865.81845.7872.985
262、2.7Lower601.9601.8842.8872.8Other(2)411.3411.311$3,186100.0%$3,248100.0%$3,036100.0%$3,110100.0%_(1)Ratings as assigned by Moodys Investors Service or Standard&Poors Ratings Group if a Moodys rating is unavailable.(2)This category is composed of unrated securities.The following table presents certai
263、n information regarding contractual maturities of our fixed maturity securities:December 31,2014 Amortized%ofFair%ofMaturityCostTotalValueTotal(Dollars in millions)One year or less$30710.4%$30910.2%After one year through five years2,03568.72,07768.7After five years through ten years50817.152117.2Aft
264、er ten years130.4130.4Mortgage-backed/asset-backed securities1013.41053.5$2,964100%$3,025100%At December 31,2014,all of our mortgage-backed and asset-backed securities are rated AAA by Moodys.The mortgage-backed and asset-backed securities are made up of$65 million of agency-backed mortgage-backed s
265、ecurities,$25 million of agency-backed collateralized mortgage obligations,and$15 million in asset-backed securities.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.Because
266、of the potential for prepayment on mortgage-backed and asset-backed securities,they are not categorized by contractual maturity.Fixed maturity securities with an amortized cost of$1,772 million and a fair value of$1,796 million were callable or had make-whole call provisions at December 31,2014.Our
267、equity securities at December 31,2014 and 2013 consisted of investments with a cost basis of$72 million and$71 million,respectively,and fair value of$145 million and$136 million,respectively.At December 31,2014 and 2013,we also held$770 million and$357 million,respectively,in investments that are ac
268、counted for using the equity method of accounting,principally our ownership interests in Ceridian.As of December 31,2013,Other long-term investments included structured notes at a fair value of$38 million,which were purchased in the third quarter of 2009.During the third quarter of 2014,all of our o
269、utstanding structured notes matured and we received$39 million in cash upon maturity,resulting in a net realized gain of$1 million for the year ending December 31,2014.We held no structured notes at December 31,2014.Also included in Other long-term investments were investments accounted for using th
270、e cost method of accounting of$144 million and$124 million,as of December 31,2014 and 2013,respectively.Short-term investments,which consist primarily of commercial paper and money market instruments which have an original maturity of one year or less,are carried at amortized cost,which approximates
271、 fair value.As of December 31,2014 and 2013,short-term investments amounted to$334 million and$26 million,respectively.Table of Contents14Our investment results for the years ended December 31,2014,2013 and 2012 were as follows:December 31,201420132012(Dollars in millions)Net investment income(1)$13
272、9$147$163Average invested assets$3,819$3,627$3,698Effective return on average invested assets3.6%4.1%4.4%_(1)Net investment income as reported in our Consolidated Statements of Earnings has been adjusted in the presentation above to provide the tax equivalent yield on tax exempt investments.Loss Res
273、erves For information about our loss reserves,see Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates.Geographic OperationsOur direct title operations are divided into approximately 150 profit centers.Each profit center processes
274、title insurance transactions within its geographical area,which is usually identified by a county,a group of counties forming a region,or a state,depending on the management structure in that part of the country.We also transact title insurance business through a network of approximately 5,000 agent
275、s,primarily in those areas in which agents are the more prevalent title insurance provider.Substantially all of our revenues are generated in the United States.The following table sets forth the approximate dollar and percentage volumes of our title insurance premium revenue by state:Year Ended Dece
276、mber 31,201420132012 Amount%Amount%Amount%(Dollars in millions)Texas$56715.4%$59714.4%49612.9California55215.063215.2$66017.2%New York2897.93057.42827.4Florida2867.83167.62556.6Illinois2145.82225.31834.8All others1,76248.12,08050.11,95751.1Totals$3,671100.0%$4,152100.0%$3,833100.0%Our Restaurant Gro
277、up operates and franchises restaurants in 42 states throughout the United States.All of our Restaurant Groups revenues are generated in those states.EmployeesAs of January 24,2015,we had 56,883 full-time equivalent employees,which includes 19,289 in our Title segment,32,778 in our Restaurant Group s
278、egment,4,124 in the BKFS segment and 692 in our remaining businesses.We monitor our staffing levels based on current economic activity.None of our employees are subject to collective bargaining agreements.We believe that our relations with employees are generally good.Financial Information by Operat
279、ing SegmentFor financial information by operating segment,see Note S of the Notes to Consolidated Financial Statements.Statement Regarding Forward-Looking Information The statements contained in this Form 10-K or in our other documents or in oral presentations or other statements made by our managem
280、ent that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,including statements regarding our expectations,hopes,intentions,or strategies regarding the future.These statement
281、s relate to,among other things,future financial and operating results of the Company.In many cases,you can identify forward-looking statements by terminology such as“may,”“will,”“should,”“expect,”“plan,”“anticipate,”“believe,”“estimate,”“predict,”“potential,”or“continue,”or the negative of these ter
282、ms and other Table of Contents15comparable terminology.Actual results could differ materially from those anticipated in these statements as a result of a number of factors,including,but not limited to the following:changes in general economic,business,and political conditions,including changes in th
283、e financial markets;the severity of our title insurance claims;downgrade of our credit rating by rating agencies;adverse changes in the level of real estate activity,which may be caused by,among other things,high or increasing interest rates,a limited supply of mortgage funding,increased mortgage de
284、faults,or a weak U.S.economy;compliance with extensive government regulation of our operating subsidiaries and adverse changes in applicable laws or regulations or in their application by regulators;regulatory investigations of the title insurance industry;loss of key personnel that could negatively
285、 affect our financial results and impair our operating abilities;our business concentration in the States of Texas and California are the source of approximately 15.2%and 15.0%,respectively,of our title insurance premiums;our potential inability to find suitable acquisition candidates,as well as the
286、 risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus,or difficulties integrating acquisitions;our dependence on distributions from our title insurance underwriters as our main source of cash flow;competition from other title
287、insurance companies;and other risks detailed in Risk Factors below and elsewhere in this document and in our other filings with the SEC.We are not under any obligation(and expressly disclaim any such obligation)to update or alter our forward-looking statements,whether as a result of new information,
288、future events or otherwise.You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.Additional Information Our website address is .We make available free of charge on or through our website our Annual Report on Form 10-K,Quarterly Re
289、ports on Form 10-Q,Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as amended,as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities a
290、nd Exchange Commission.However,the information found on our website is not part of this or any other report.Item 1A.Risk FactorsIn addition to the normal risks of business,we are subject to significant risks and uncertainties,including those listed below and others described elsewhere in this Annual
291、 Report on Form 10-K.Any of the risks described herein could result in a significant or material adverse effect on our results of operations or financial condition.General We have recorded goodwill as a result of prior acquisitions,and an economic downturn could cause these balances to become impair
292、ed,requiring write-downs that would reduce our operating income.Goodwill aggregated approximately$4,721 million,or 34.0%of our total assets,as of December 31,2014.Current accounting rules require that goodwill be assessed for impairment at least annually or whenever changes in circumstances indicate
293、 that the carrying amount may not be recoverable from estimated future cash flows.Factors that may be considered a change in circumstance indicating the carrying value of our intangible assets,including goodwill,may not be recoverable include,but are not limited to,significant underperformance relat
294、ive to historical or projected future operating results,a significant decline in our stock price and market capitalization,and negative industry or economic trends.No goodwill impairment charge was recorded in 2014.However,if there is an economic downturn in the future,the carrying amount of our goo
295、dwill may no longer be recoverable,and we may be required to record an impairment charge,which would have a negative impact on our results of operations and financial condition.We will continue to monitor our market capitalization and the impact of the economy to determine if there is an impairment
296、of goodwill in future periods.Our management has articulated a willingness to seek growth through acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus or geographic areas.This expansion of our business subjects us to associated risks,such as the di
297、version of managements attention and lack of experience in operating such businesses,and may affect our credit and ability to repay our debt.Our management has stated that we may make acquisitions in lines of business that are not directly tied to or synergistic with our core operations.Accordingly,
298、we have in the past acquired,and may in the future acquire,businesses in industries or geographic areas with which management is less familiar than we are with our core businesses.These activities involve risks that could adversely affect our operating results,such as diversion of managements attent
299、ion and lack of substantial experience in operating such businesses.There can be no guarantee that we will not enter into transactions or make acquisitions that will cause us to incur additional debt,increase our exposure to market and other risks and cause our credit or financial strength ratings t
300、o decline.Table of Contents16We are a holding company and depend on distributions from our subsidiaries for cash.We are a holding company whose primary assets are the securities of our operating subsidiaries.Our ability to pay interest on our outstanding debt and our other obligations and to pay div
301、idends is dependent on the ability of our subsidiaries to pay dividends or make other distributions or payments to us.If our operating subsidiaries are not able to pay dividends to us,we may not be able to meet our obligations or pay dividends on our common stock.Our title insurance subsidiaries mus
302、t comply with state laws which require them to maintain minimum amounts of working capital,surplus and reserves,and place restrictions on the amount of dividends that they can distribute to us.Compliance with these laws will limit the amounts our regulated subsidiaries can dividend to us.During 2015
303、,our title insurers may pay dividends or make distributions to us without prior regulatory approval of approximately$236 million.The maximum dividend permitted by law is not necessarily indicative of an insurers actual ability to pay dividends,which may be constrained by business and regulatory cons
304、iderations,such as the impact of dividends on surplus,which could affect an insurers ratings or competitive position,the amount of premiums that can be written and the ability to pay future dividends.Further,depending on business and regulatory conditions,we may in the future need to retain cash in
305、our underwriters or even contribute cash to one or more of them in order to maintain their ratings or their statutory capital position.Such a requirement could be the result of investment losses,reserve charges,adverse operating conditions in the current economic environment or changes in interpreta
306、tion of statutory accounting requirements by regulators.The loss of key personnel could negatively affect our financial results and impair our operating abilities.Our success substantially depends on our ability to attract and retain key members of our senior management team and officers.If we lose
307、one or more of these key employees,our operating results and in turn the value of our common stock could be materially adversely affected.Although we have employment agreements with many of our officers,there can be no assurance that the entire term of the employment agreement will be served or that
308、 the employment agreement will be renewed upon expiration.Failure of our information security systems or processes could result in a loss or disclosure of confidential information,damage to our reputation,monetary losses,additional costs and impairment of our ability to conduct business effectively.
309、Our core operations are highly dependent upon the effective operation of our computer systems.As part of our core operations,we electronically receive,process,store and transmit sensitive personal consumer data(such as names and addresses,social security numbers,drivers license numbers,credit card a
310、nd bank account information)and important business information of our customers.We also electronically manage substantial cash,investment asset and escrow account balances on behalf of ourselves and our customers,as well as financial information about our businesses generally.The integrity of our in
311、formation systems and the protection of the information that resides on such systems are important to our successful operation.If we fail to maintain an adequate security infrastructure,adapt to emerging security threats or follow our internal business processes with respect to security,the informat
312、ion or assets we hold could be compromised.Further,even if we(or third parties to which we outsource certain IT services)maintain a reasonable,industry standard information security infrastructure,it is possible that unauthorized persons still could obtain access to information or assets we hold.The
313、se risks are increased when we transmit information over the Internet and due to increasing security risks posed by organized crime.While,to date,we believe that we have not experienced a material breach of our information security systems,the existence or scope of such events is not always apparent
314、.If additional information regarding an incident previously considered immaterial is discovered,or a new event were to occur,it could potentially have a material adverse effect on us.In addition,some laws and certain of our contracts require notification of various parties,including consumers or cus
315、tomers,in the event that confidential or personal information has or may have been taken or accessed by unauthorized third parties.Such notifications can result,among other things,in adverse publicity,distraction of managements time and energy,the attention of regulatory authorities,and fines and di
316、sruptions in sales,the effects of which may be material.Further,our financial institution customers have obligations to safeguard their information technology systems and information.In certain of our businesses,we are bound contractually and/or by regulation to comply with the same requirements.If
317、we fail to comply with these regulations and requirements,we could be exposed to suits for breach of contract,governmental proceedings or the imposition of fines.In addition,if more restrictive privacy laws,rules or industry security requirements are adopted in the future on the federal or state lev
318、el or by a specific industry in which we do business,that could have an adverse impact on us through increased costs or restrictions on business processes.Any inability to prevent security or privacy breaches,or the perception that such breaches may occur,could inhibit our ability to retain existing
319、 customers or attract new customers and/or result in financial losses,litigation,increased costs or other adverse consequences to our business.If economic and credit market conditions deteriorate,it could have a material adverse impact on our investment portfolio.Our investment portfolio is exposed
320、to economic and financial market risks,including changes in interest rates,credit markets and prices of marketable equity and fixed-income securities.Our investment policy is designed to maximize total return through investment income and capital appreciation consistent with moderate risk of princip
321、al,while providing adequate liquidity and complying with internal and regulatory guidelines.To achieve this objective,our marketable debt investments are primarily investment grade,liquid,fixed-income securities and money market instruments denominated in U.S.dollars.We make investments Table of Con
322、tents17in certain equity securities and preferred stock in order to take advantage of perceived value and for strategic purposes.In the past,economic and credit market conditions have adversely affected the ability of some issuers of investment securities to repay their obligations and have affected
323、 the values of investment securities.If the carrying value of our investments exceeds the fair value,and the decline in fair value is deemed to be other-than-temporary,we will be required to write down the value of our investments,which could have a material negative impact on our results of operati
324、ons and financial condition.We own a minority interest in Ceridian,a leading provider of global human capital management and payment solutions.If the fair value of this company were to decline below book value,we would be required to write down the value of our investment,which could have a material
325、 negative impact on our results of operations and financial condition.If this company were to experience significant negative volatility in its results of operations it would have a material adverse effect on our own results of operations due to our inclusion of our portion of its earnings in our re
326、sults of operations.Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations,limit our ability to react to changes in the economy or our industry,expose us to interest rate risk to the extent of our variable rate debt and prevent us from meet
327、ing our obligations under our indebtedness.As of December 31,2014,our outstanding debt was$2,826 million,including$1,208 million in variable rate debt.Our high degree of leverage could have important consequences,including the following:(i)a substantial portion of our cash flow from operations is de
328、dicated to the payment of principal and interest on indebtedness,thereby reducing the funds available for operations,future business opportunities and capital expenditures;(ii)our ability to obtain additional financing for working capital,capital expenditures,debt service requirements,acquisitions a
329、nd general corporate purposes in the future may be limited;(iii)certain of the borrowings are at variable rates of interest,which will increase our vulnerability to increases in interest rates;(iv)we may be unable to adjust rapidly to changing market conditions;(v)the debt service requirements of ou
330、r other indebtedness could make it more difficult for us to satisfy our financial obligations;and(vi)we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth.Our ability to make scheduled paymen
331、ts of the principal of,or to pay interest on,or to refinance indebtedness depends on and is subject to our financial and operating performance,which in turn is affected by general and regional economic,financial,competitive,business and other factors beyond our control.If we are unable to generate s
332、ufficient cash flow to service our debt or to fund our other liquidity needs,we will need to restructure or refinance all or a portion of our debt,which could cause us to default on our obligations and impair our liquidity.Any refinancing of our indebtedness could be at higher interest rates and may
333、 require us to comply with more stringent covenants that could further restrict our business operations.We from time to time may increase the amount of our indebtedness,modify the terms of our financing arrangements,issue dividends,make capital expenditures and take other actions that may substantially increase our leverage.TitleIf adverse changes in the levels of real estate activity occur,our re
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