1、FIDELITY NATIONAL FINANCIAL,INC.2017 Annual ReportFIDELITY NATIONAL FINANCIAL,INC.1$540$6,664$13,93114.3%$662$7,663$9,15114.5%$654$7,257$14,52114.7%Net EarningsTotal RevenueTotal AssetsAdjusted Pre-Tax Title Margin161616161515151517171717FINANCIAL HIGHLIGHTS(Dollars in millions)201720162015INCOME ST
2、ATEMENT:Year Ended December 31,Total Revenue$7,663$7,257$6,664 Net Earnings Attributable to FNF Group Common Shareholders$662$654$540 Adjusted Pre-Tax Title Margin 14.5%14.7%14.3%Cash Flow from Operations$737$1,162$951BALANCE SHEET:At December 31,Total Assets$9,151$14,521$13,931 Cash and Investment
3、Portfolio$4,481$4,831$4,711 Reserve for Claim Losses$1,490$1,487$1,583 Total Equity$4,467$6,898$6,588TO OUR SHAREHOLDERSWilliam P.Foley,IIRaymond R.Quirk2 FIDELITY NATIONAL FINANCIAL,INC.2017 was a very successful strategic year for our company on a number of fronts,as we continued to deploy capital
4、 in our ongoing quest to create value for our shareholders.We simplified our corporate structure through the completion of two transactions during the year.On September 29,we completed the tax-free distribution of Black Knight,as FNF shareholders received approximately 0.3 shares of Black Knight com
5、mon stock for each share of FNF common stock.Black Knight is now a stand-alone public company,with no FNF ownership.On November 17,the exchange of the FNFV tracking stock for a new Cannae Holdings common stock and then subsequent split-off of Cannae Holdings was completed.Cannae is now a separate le
6、gal entity and a stand-alone public company.We believe these transactions have created a streamlined FNF corporate structure that has already provided meaningful value for our shareholders.We also continued to make acquisitions to strengthen our title insurance business.In 2017,we acquired ten title
7、 and escrow companies for a total of approximately$130 million,the most significant being the Title Guaranty of Hawaii deal in August.We believe there will be a number of appealing title and escrow company targets to continue this title agent acquisition strategy in 2018.For full-year 2017,our title
8、 business generated more than$1 billion in adjusted pre-tax title earnings and an adjusted pre-tax title margin of 14.5%We continued building our real estate technology platform aimed at the real estate broker and agent markets through the Real Geeks and SkySlope acquisitions.Real Geeks provides a c
9、ustomer relationship management platform and other SaaS-based internet marketing solutions to real estate professionals and is a great complement for our existing CINC business.While CINC focuses on elite real estate teams,Real Geeks focuses on elite single agents at a lower price point.We believe t
10、he combined capabilities of Real Geeks and CINC will allow us to provide valuable technology solutions to a much larger universe of our real estate customers.SkySlope is a leading provider of digital transaction management and closing solutions to real estate professionals that will broaden FNFs ser
11、vice offerings to real estate professionals and further advance our strategy of helping real estate agents and brokers gain more customers and more efficiently close transactions.As we enter 2018,we expect to continue to seek ways to deploy capital that will maximize returns for our shareholders.FID
12、ELITY NATIONAL FINANCIAL,INC.3We are now focused on integrating our lead management,CRM and digital transaction management technologies to offer a suite of best of breed technology solutions to our real estate agent customers and further solidify our relationships with this vital group of clients.We
13、 also devoted a significant amount of cash for the repurchase of our outstanding convertible bonds during the year.In total,we repurchased$230 million in face value of the convertible notes for a total purchase price of$549 million,leaving$65 million of the notes currently outstanding at the end of
14、2017.This eliminated the need to issue nearly 12 million shares of FNF stock if the notes had been converted.Finally,for the sixth straight year,our board elected to increase our quarterly cash dividend,with our fourth quarter 2017 dividend increasing to$0.27 per share,an 8%increase from the previou
15、s quarterly cash dividend of$0.25.Additionally,in January,our board also decided to raise our first quarter 2018 cash dividend to$0.30 per share,an 11%increase from the fourth quarter 2017 dividend.The outlook for our title business and recent federal tax reform leave us confident in our ability to
16、continue to generate the strong cash flow necessary to support the higher dividend.As we enter 2018,we expect to continue to seek ways to deploy capital that will maximize returns for our shareholders.We thank all of our employees for their efforts in 2017 and we thank all of our share-holders for t
17、heir continued support.The following pages illustrate our intent to focus on being the leading provider of title insurance and transaction services to the real estate and mortgage industries in the country.William P.Foley,II Raymond R.QuirkChairman of the Board Chief Executive Officer4 FIDELITY NATI
18、ONAL FINANCIAL,INC.FIDELITY NATIONAL FINANCIAL,INC.56 FIDELITY NATIONAL FINANCIAL,INC.FIDELITY NATIONAL FINANCIAL,INC.7FIDELITY 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
19、SECURITIES EXCHANGEACT OF 1934For the Fiscal Year Ended December 31,2017 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(Stat
20、e or other jurisdiction 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 Sectio
21、n 12(b)of the Act:Title of Each Class Name of Each Exchange on Which RegisteredFNF Common 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 th
22、e Securities Act.Yes No 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
23、 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate
24、 Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes No Indicate by check mark if d
25、isclosure of delinquent 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-
26、K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company
27、”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Accelerated filer Non-accelerated filer(Do not check if a smaller reporting company)Smaller reporting company Emerging growth company Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of th
28、e Exchange Act).Yes No The aggregate market value of the shares of FNF common stock held by non-affiliates of the registrant as of June 30,2017 was$8,461,286,198 based on the closing price of$32.37 as reported by The New York Stock Exchange.As of January 31,2018 there were 274,438,819 shares of FNF
29、common stock outstanding.The information in Part III hereof for the fiscal year ended December 31,2017,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 1
30、A.Risk FactorsItem 1B.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 Condit
31、ion and Results of OperationsItem 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 IIII
32、tem 10.Directors and Executive 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 Fe
33、es and ServicesPART IVItem 15.Exhibits,Financial Statement Schedules1121717171821254244929292939393939394Table of Contents1PART IItem 1.Business Introductory NoteThe following describes the business of Fidelity National Financial,Inc.and its subsidiaries.Except where otherwise noted,all references t
34、o“we,”“us,”“our,”the Company or“FNF”are to Fidelity National Financial,Inc.and its subsidiaries,taken together.OverviewWe are a leading provider of(i)title insurance,escrow and other title-related services,including trust activities,trustee sales guarantees,recordings and reconveyances and home warr
35、anty products and(ii)technology and transaction services to the real estate and mortgage industries.FNF is the nations largest title insurance company operating through its title insurance underwriters-Fidelity National Title Insurance Company(FNTIC),Chicago Title Insurance Company(Chicago Title),Co
36、mmonwealth Land Title Insurance Company(Commonwealth Title),Alamo Title Insurance and National Title Insurance of New York Inc.-which collectively issue more title insurance policies than any other title company in the United States.Through our subsidiary ServiceLink Holdings,LLC(ServiceLink),we pro
37、vide mortgage transaction services including title-related services and facilitation of production and management of mortgage loans.As of December 31,2017,we had the following reporting segments:Title.This segment consists of the operations of our title insurance underwriters and related businesses.
38、This segment provides core title insurance and escrow and other title-related services including trust activities,trustee sales guarantees,recordings and reconveyances,and home warranty products.This segment also includes our transaction services business,which includes other title-related services
39、used in the production and management of mortgage loans,including mortgage loans that experience default.Corporate and Other.This segment consists of the operations of the parent holding company,our various real estate brokerage businesses,and Commissions,Inc.(CINC)and other real estate technology s
40、ubsidiaries.This segment also includes certain other unallocated corporate overhead expenses and eliminations of revenues and expenses between it and our Title segment.In the year ended December 31,2017,we completed two significant transactions which simplified the structure of our business.On Novem
41、ber 17,2017 we completed our previously announced split-off(the“FNFV Split-Off”)of our former wholly-owned subsidiary Cannae Holdings,Inc.(“Cannae”)which consisted of the businesses,assets and liabilities formerly attributed to our FNF Ventures(FNFV)Group including Ceridian Holding,LLC,American Blue
42、 Ribbon Holdings,LLC and T-System Holding LLC.The FNFV Split-Off was accomplished by the Companys redemption(the“Redemption”)of all of the outstanding shares of FNFV Group common stock,par value$0.0001 per share(“FNFV common stock”)for outstanding shares of common stock of Cannae,par value$0.0001 pe
43、r share(“Cannae common stock”),amounting to a redemption on a per share basis of each outstanding share of FNFV common stock for one share of Cannae common stock,as of November 17,2017.As a result of the FNFV Split-Off,Cannae is a separate,publicly traded company(NYSE:CNNE).All of the Companys core
44、title insurance,real estate,technology and mortgage related businesses,assets and liabilities previously attributed to the Companys FNF Group common stock that were not held by Cannae remain with the Company.As a result of the FNFV Split-Off,we have reclassified the assets and liabilities divested a
45、s assets and liabilities of discontinued operations in our Consolidated Balance Sheet as of December 31,2016.Further,the financial results of FNFV Group have been reclassified to discontinued operations for all periods presented in our Consolidated Statements of Earnings.See Note G.Discontinued Oper
46、ations to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further details of the results of FNFV Group.On September 29,2017 we completed our tax-free distribution to FNF Group shareholders,of all 83.3 million shares of New BKH Corp.(New BKH)common stock
47、that we previously owned(the“BK Distribution”).Immediately following the BK Distribution,New BKH and Black Knight Financial Services,Inc.(Black Knight)engaged in a series of transactions resulting in the formation of a new publicly-traded holding company,Black Knight,Inc.(New Black Knight).Holders o
48、f FNF Group common stock received approximately 0.30663 shares of New Black Knight common stock for every one share of FNF Group common stock held at the close of business on September 20,2017,the record date for the BK Distribution.New Black Knights common stock is now listed under the symbol“BKI”o
49、n the New York Stock Exchange.The BK Distribution is expected to generally be tax-free to FNF Group shareholders for U.S.federal income tax purposes,except to the extent of any cash received in lieu of New Black Knights fractional shares.As a result of the BK Distribution,we have reclassified the as
50、sets and liabilities divested as assets and liabilities of discontinued operations in our Consolidated Balance Sheet as of December 31,2016.Further,the financial results of Black Knight have been reclassified to discontinued operations for all periods presented in our Consolidated Table of Contents2
51、Statements of Earnings.See Note G.Discontinued Operations to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further details of the results of Black Knight.Competitive StrengthsWe believe that our competitive strengths include the following:Corporate pri
52、nciples.A cornerstone of our management philosophy and operating success 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 si
53、x precepts are emphasized to our employees from the first day of employment 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
54、 evaluation of title order activity and management of our cost structure.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.We believe that our competitive strengths position us well to take a
55、dvantage of future changes to the real estate market.Leading title insurance company.We are the largest title insurance company in the United States and a leading provider of title insurance and escrow and other title-related services for real estate transactions.Through the third quarter of 2017,ou
56、r insurance companies had a 33.4%share of the U.S.title insurance market,according to the American Land Title Association(ALTA).Established relationships with our customers.We have strong relationships with the customers who use our title services.Our distribution network,which includes approximatel
57、y 1,400 direct residential title offices and more than 5,200 agents,is among the largest in the United States.We also benefit from strong brand recognition in our multiple title brands that allows us to access a broader client base than if we operated under a single consolidated brand and provides o
58、ur 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 support their ability to effectively close real estate transactions.We help make the real estate closing more efficient fo
59、r 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 managers of our operating businesses have successfully built our title business over an extended period of time,resu
60、lting 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 through which we have grown and throughout a number of business cycles and significant periods of industry change.Commerc
61、ial 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 States.Our network of agents,attorneys,underwriters and closers that service the commercial real estate markets is o
62、ne 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 underwriting and issuing of larger commercial title policies.StrategyOur strategy in the title business is to maxim
63、ize operating profits by increasing our market 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 i
64、nsurance customer base,we must operate our 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.In our largest ma
65、rkets,we operate multiple brands.This approach 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 servi
66、ce.We believe customer service and consistent product delivery are the most important factors in attracting and retaining customers.Our ability to provide superior customer service and consistent Table of Contents3product delivery requires continued focus on providing high quality service and produc
67、ts at competitive prices.Our goal is to continue to improve 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 busine
68、ss and manage the duration of our investments may allow us 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 in
69、surance revenues.We continue to monitor,evaluate and execute 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 in
70、terest rate risk.A more detailed discussion of our investment 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
71、to significant change,frequent new product and service introductions 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 servi
72、ce offerings,we are continuing to deploy new information 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 ou
73、r continued focus on and support of our long-established 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 c
74、lose customer relationships by meeting customer needs and 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
75、 operating margins is essential to our continued success in the title insurance business.Regardless of the business cycle in which we may be operating,we seek to continue to evaluate and manage our cost structure and make appropriate adjustments where economic conditions dictate.This continual focus
76、 on our cost structure helps us to better maintain our operating margins.Acquisitions,Dispositions,Minority Owned Operating Subsidiaries and FinancingsAcquisitions have been an important part of our growth strategy and dispositions have been an important aspect of our strategy of returning value to
77、shareholders.On an ongoing basis,with assistance from our advisors,we actively evaluate possible transactions,such as acquisitions 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 in
78、crease our liquidity.Further,our management has stated that we may make acquisitions in lines of business that are not directly tied to,or synergistic with,our core operating segment.In the past we have obtained majority and minority investments in entities and securities where we see the potential
79、to achieve above market returns.Fundamentally our goal is to acquire quality companies that are well-positioned in their respective industries,run by best in class management teams in industries that have attractive organic and acquired growth opportunities.We leverage our operational expertise and
80、track record of growing industry leading companies and also our active interaction with the acquired companys management directly 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 partic
81、ular transaction will be completed.We have made a number of acquisitions and dispositions over the past several years to strengthen and expand our service offerings and customer base in our various businesses,to expand into other businesses or where we otherwise saw value,and to monetize investments
82、 in assets and businesses.Title Insurance Market for title insurance.According to Demotech Performance of Title Insurance Companies 2017 Edition,an annual compilation of financial information from the title insurance industry that is published by Demotech Inc.,an independent firm(Demotech),total ope
83、rating income for the entire U.S.title insurance industry has increased over the last five years from approximately$12.2 billion in 2012 to$14.9 billion in 2016,which represents a$1.2 billion increase from 2015.The size of the industry is closely tied to various macroeconomic factors,including,but n
84、ot 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 refinancing of previously issued mortgages.Most real estate transactions consummate
85、d 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 underlying the title policy,and appreciation or depreciation in the overall value o
86、f 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 funding,and changes in interest rates,which affect demand for new mortgage loa
87、ns and refinancing transactions.Table of Contents4The U.S.title insurance industry is concentrated among a handful of industry participants.According to Demotech,the top four title insurance groups accounted for 85%of net premiums written in 2016.Approximately 34 independent title insurance companie
88、s accounted for the remaining 15%of net premiums written in 2016.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.Our Title segment revenue is
89、closely related to the level of real estate activity which includes sales,mortgage financing and mortgage refinancing.For further discussion of current trends in real estate activity in the United States,see discussion under Business Trends and Conditions included in Item 7 of Part II of this Report
90、,which is incorporated by reference into this Part I,Item 1.Title Insurance Policies.Generally,real estate buyers and mortgage lenders 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 in
91、surance policy is as follows:The customer,typically a real estate salesperson or broker,escrow agent,attorney or lender,places an 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
92、or commitment.After the relevant historical data on the property is compiled,the title officer prepares a preliminary report that 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
93、that need to be addressed and resolved by the parties to the transaction before the title policy will be issued.The preliminary report 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
94、 closes the transaction in accordance with the instructions of the parties and the title companys conditions.Once the transaction 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 prop
95、erty mortgage lenders require their borrowers to obtain a title insurance policy at the time a mortgage loan is made.This lenders 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 p
96、olicy is typically also issued,insuring the buyer against defects in title in an amount equal to the purchase price.In a refinancing 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 p
97、olicy is issued but typically an owners title policy is issued.Title insurance premiums paid in connection with a title insurance 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 regu
98、lations or regulatory practices may limit the maximum,or in some cases the minimum,premium that can be charged on a policy.Title insurance premiums are due in full at the closing of the real estate transaction.The amount of the insured risk or“face amount”of insurance under a title insurance policy
99、is generally equal to either the amount of the 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
100、 total face amount of policies outstanding because 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 coverag
101、e.Because of these factors,the total liability 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
102、 party agencies unaffiliated with the title insurance 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 poli
103、cy is issued through an independent agent,the 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
104、 compensation,part of which is for bearing the 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 accordanc
105、e with the terms of its policies,regardless of 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 se
106、arches and examinations.A title insurance companys 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 d
107、ocuments,and the facilitation and closing of real estate transactions.Claim Table of Contents5losses 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.Res
108、idential real estate business results from the construction,sale,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
109、title to commercial real property,and generally involve higher 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 lo
110、cal supply and demand conditions for commercial space.Direct 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 determ
111、ine the terms and conditions upon which they will insure title to the real property according to our underwriting standards,policies and procedures.Direct Operations.Our direct operations include both the operations of our underwriters as well as affiliated agencies.In our direct operations,the titl
112、e insurer issues the title insurance policy and retains the entire premium paid in connection with the transaction.Our direct operations provide the following benefits:higher margins because we retain the entire premium from each transaction instead of paying a commission to an independent agent;con
113、tinuity of service levels to a broad range of customers;and additional sources of income through escrow and closing services.We have approximately 1,400 offices throughout the U.S.primarily providing residential real estate title insurance.We continuously monitor the number of direct offices to make
114、 sure that it remains in line with our strategy and the current economic environment.Our commercial real estate title insurance business is operated almost exclusively through our direct operations.We maintain direct operations for our commercial title insurance business in all the major real estate
115、 markets including Atlanta,Boston,Chicago,Dallas,Houston,Los Angeles,New York,Philadelphia,Phoenix,Seattle and Washington D.C.Agency Operations.In our agency operations,the search and examination function is performed by an independent agent or the agent may purchase the search product from us.In ei
116、ther case,the agent is responsible to ensure that the search and examination is completed.The agent thus retains the majority of the title 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 pol
117、icy.Independent agents may select among several title underwriters based upon their relationship with the underwriter,the amount of the premium“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
118、 by geographic region,and in some states are fixed by insurance regulatory requirements.Our relationship with each agent is governed by an 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
119、losses attributable to the agents errors.An agency agreement is usually terminable without cause upon 30 days notice or immediately for cause.In determining whether to engage or retain an independent agent,we consider the agents experience,financial condition and loss history.For each agent with who
120、m we enter into an agency agreement,we maintain financial and loss experience records.We also conduct periodic audits of our agents and strategically manage the number of agents with which we transact business in an effort to reduce future expenses and manage risks.As of December 31,2017,we transact
121、 business with approximately 5,200 agents.Fees and Premiums.One method of analyzing our business is to examine the level of premiums generated by direct and agency operations.The following table presents the percentages of our title insurance premiums generated by direct and agency operations:Year E
122、nded December 31,201720162015 Amount%Amount%Amount%(Dollars in millions)Direct$2,17044.3%$2,09744.4%$2,00946.9%Agency2,72355.72,62655.62,27753.1 Total title insurance premiums$4,893100.0%$4,723100.0%$4,286100.0%The premium for title insurance is due in full when the real estate transaction is closed
123、.We recognize title insurance premium revenues from direct operations upon the closing of the transaction,whereas premium revenues from agency 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 r
124、eported to us.The accrual for agency premiums is necessary because of the lag between the closing of these transactions and the reporting of these policies to us by the agent,and is based on estimates utilizing historical information.Table of Contents6Escrow,Title-Related and Other Fees.In addition
125、to fees for underwriting title insurance policies,we derive a significant amount of our revenues from escrow and other title-related services including trust activities,trustee sales guarantees,recordings and reconveyances,and home warranty products.The escrow and other services provided by us inclu
126、de all of those typically required in connection with residential and commercial real estate purchases and refinance activities.Escrow,title-related and other fees included in our Title segment represented approximately 30.2%,30.5%,and 31.2%of total title segment revenues in 2017,2016,and 2015,respe
127、ctively.Sales and Marketing.We market and distribute our title and escrow products and services to customers in the residential and commercial market sectors of the real estate industry through customer solicitation by sales personnel.Although in many instances the individual homeowner is the benefi
128、ciary of a title insurance policy,we do not focus our marketing efforts on the homeowner.We actively encourage our sales personnel to develop new business relationships with persons in the real estate community,such as real estate sales agents and brokers,financial institutions,independent escrow co
129、mpanies and title agents,real estate developers,mortgage brokers and attorneys who order title insurance policies for their clients.While our smaller,local clients remain important,large customers,such as national residential mortgage lenders,real estate investment trusts and developers are an impor
130、tant part of our business.The buying criteria of locally based clients differ from those of large,geographically diverse customers in that the former tend to emphasize personal relationships and ease of transaction execution,while the latter generally place more emphasis on consistent product delive
131、ry across diverse geographical regions and the ability of service providers to meet their information systems requirements for electronic product 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 departme
132、nt.Our claims processing centers are located in Omaha,Nebraska and Jacksonville,Florida.In-house claims counsel are also located in other parts 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 le
133、gal descriptions,signature and notary errors,unrecorded liens,mechanics liens,the failure to pay off existing liens,mortgage lending fraud,mishandling or theft of settlement funds(including independent agency theft),and mistakes in the escrow process.Under our policies,we are required to defend insu
134、reds when covered claims are filed against their interest in the property.Some claimants seek damages in excess of policy limits.Those claims 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
135、limits.Experience shows that most policy claims and claim payments are made in the first five years after the policy has been issued,although claims may also be reported and paid many years later.Title losses due to independent agency defalcations typically occur when the independent agency misappro
136、priates funds from escrow accounts under its control.Such losses are usually discovered when the independent agency fails to pay off an outstanding 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
137、 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 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 amoun
138、ts well in excess of$100 million,and from time to time claims are submitted with respect to large policies.We believe we are appropriately reserved 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 f
139、rom our escrow operations,or overall worsening loss payment experience,which require us to increase our title loss reserves.These events are 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
140、 litigation to be an ordinary course aspect of the conduct of our business.Reinsurance and Coinsurance.We limit our maximum loss exposure by reinsuring risks with other insurers under excess of loss and case-by-case(“facultative”)reinsurance agreements.Reinsurance agreements generally provide that t
141、he reinsurer is liable for loss and loss adjustment expense payments exceeding the amount retained by the ceding company.However,the ceding company remains primarily liable to the insured whether or not the reinsurer is able to meet its contractual obligations.Facultative reinsurance agreements are
142、entered into with other title insurers when the transaction to be insured will exceed state statutory or self-imposed limits.Excess of loss reinsurance coverage protects us from a large loss from a single loss occurrence.Our excess of loss reinsurance coverage is split into two contracts.The first e
143、xcess of loss reinsurance contract provides an$80 million aggregate limit of coverage from a single loss occurrence for residential and commercial losses in excess of a$20 million retention per single loss occurrence(First XOL Contract).The second excess of loss reinsurance contract(Second XOL Contr
144、act)provides an additional$300 million aggregate limit of coverage,with the Company co-participating at approximately 10%.Subject to the Companys retention and co-participation on the Second XOL Contract,the maximum coverage provided under the First and Second XOL Contracts is$350 million.In additio
145、n 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.Table of Contents7Our policy is to be selective in choosing our reinsurers,seeking only those compan
146、ies 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 our commercial title business to provide coverage in amounts greater
147、 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 the portion of the risk we assume.We also earn a small amount of a
148、dditional 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 addition,the financial strength of the insurer has become an incre
149、asingly important factor in decisions relating to the purchase of title insurance,particularly in multi-state transactions and in situations involving real estate-related investment vehicles such as real estate investment trusts and real estate mortgage investment conduits.The number and size of com
150、peting 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 Republic International Corporation and Stewart Information Services Corporation,as w
151、ell as numerous smaller title insurance companies,underwritten title companies and independent agency operations at the regional and local level.The addition or removal of regulatory barriers might result in changes to competition in the title insurance business.New competitors may include diversifi
152、ed financial services companies that have 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
153、and financial condition.Regulation.Our 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
154、,among other matters,the ability to pay 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 practice
155、s,licensing agents,approving policy forms,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 s
156、tate regulation of changes in rates ranges 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 stat
157、e and federal governments and the applicable 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 en
158、acted.Pursuant to statutory accounting 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 qual
159、ified assets in an amount equal to the 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 amoun
160、t of statutory premiums written.As of December 31,2017,the combined statutory unearned premium reserve required and reported for our title insurers was$1,400 million.In addition to statutory unearned premium reserves and reserves for known claims,each of our insurers maintains surplus funds for poli
161、cyholder protection and business operations.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 prima
162、ry regulators of our insurance subsidiaries.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 agre
163、ements and service or management contracts,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 p
164、eriod.In addition to state-level regulation,our title insurance and certain other real estate businesses are subject to regulation by federal agencies,including the Consumer Financial Protection Bureau(“CFPB”).The CFPB was established under the Dodd-Frank Wall Street Reform and Consumer Protection A
165、ct of 2010(Dodd-Frank)which also included regulation over financial services and other lending related businesses.The CFPB has broad authority to regulate,among other areas,the mortgage and real estate markets in matters pertaining to consumers.This authority includes the enforcement of the Truth-in
166、-Lending Act(TILA)and the Real Estate Settlement Procedures Act(individually,RESPA,and together,TILA-RESPA Integrated Disclosure or TRID)formerly placed with the Department of Housing and Urban Development.Table of Contents8 As a holding company with no significant business operations of our own,we
167、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 payment of dividends or other distribution
168、s 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 received notice of the intended payment at
169、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 distributions made within the preceding 12 mont
170、hs,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 declaring or paying a dividend except out of its
171、earned surplus or require the insurer to obtain prior regulatory approval.During 2018,our directly owned title insurers can pay dividends or make distributions to us of approximately$363 million;however,insurance regulators have the authority to prohibit the payment of ordinary dividends or other pa
172、yments 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 earnings regarding our ability to pay dividends to shareholders.The combined st
173、atutory capital and surplus of our title insurers was approximately$1,389 million and$1,469 million as of December 31,2017 and 2016,respectively.The combined statutory earnings of our title insurers were$434 million,$541 million,and$381 million for the years ended December 31,2017,2016,and 2015,resp
174、ectively.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 officers,directors and financial condition.Pursuant to statutory requirements of the various sta
175、tes 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 individually or in the aggregate.Each of our insurers has complied with the minimum statutory requireme
176、nts as of December 31,2017.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 requirements for each underwritten title company is less than$1 million.These companies were in
177、compliance with their respective minimum net worth requirements at December 31,2017.From time to time we receive inquiries and requests for information from state insurance departments,attorneys general and other regulatory agencies about various matters relating to our business.Sometimes these take
178、 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.Various governmental entities are studying the title insurance product,market,pricing,and business practice
179、s,and potential regulatory and legislative changes,which may materially affect our business and operations.From time to time,we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities which may require us to pay fines or claims or take other
180、actions.For further discussion,see Item 3,Legal Proceedings.Before a person can acquire 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 co
181、ntrol of a domestic insurer,the state insurance commissioner will consider such factors 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,t
182、he acquirers plans for the future operations of the domestic insurer and any anti-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,own
183、s,controls,holds with the power to vote,or holds proxies representing 10%or more of 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
184、would likely apply to such a transaction.The National Association of Insurance Commissioners(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 fili
185、ng procedures,each such insurer,unless it qualifies for an exemption,must file an actuarial opinion with respect to the adequacy of its reserves.Table of Contents9Title Insurance Ratings.Our title insurance underwriters are regularly assigned ratings by independent agencies designed to indicate thei
186、r financial condition and/or claims paying ability.The rating agencies determine ratings by quantitatively and qualitatively analyzing financial data and other information.Our title subsidiaries include Alamo Title,Chicago Title,Commonwealth Land Title,Fidelity National Title and National Title of N
187、ew York.Standard&Poors Ratings Group(“S&P”)and Moodys Investors Service(“Moodys”)provide ratings for the entire FNF family of companies as a whole as follows:S&P MoodysFNF family of companiesA A3The relative position of each of our ratings among the ratings scale assigned by each rating agency is as
188、 follows:An S&P A rating is the third highest rating of 10 ratings for S&P.According to S&P,an“A”rating represents an investment grade company that,in its opinion,has strong capacity to meet financial commitments,but is somewhat susceptible to adverse economic conditions.A Moodys A3 rating is the th
189、ird highest rating of 9 ratings for Moodys.Moodys states that companies rated“A3”are judged to be upper-medium grade and are subject to low credit risk.Demotech provides financial strength/stability ratings for each of our principal title insurance underwriters individually,as follows:Alamo Title In
190、suranceAChicago Title Insurance CompanyACommonwealth Land Title Insurance CompanyAFidelity National Title Insurance CompanyANational Title Insurance of New YorkA Demotech states that its ratings of A(A double prime)and A(A prime)reflect its opinion that,regardless of the severity of a general econom
191、ic 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 A and A ratings are the two highest ratings of Demotechs six ratings.The ratings of S&P,Moody
192、s,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 be relied on with respect to making an investment in our securities.See“Item 1A.Risk Factors If the rating agencies downgrade
193、 our Company,our results of operations and competitive position in the title insurance industry may suffer”for further information.Intellectual PropertyWe rely on a combination of contractual restrictions,internal security practices,and copyright and trade secret law to establish and protect our sof
194、tware,technology,and expertise across our businesses.Further,we have developed a number of brands that have accumulated substantial goodwill 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
195、 protect our copyright,trade secret,and trademark rights.These legal protections and arrangements afford only limited protection of our proprietary rights,and there is no assurance that our competitors will not independently develop or license products,services,or capabilities that are substantially
196、 equivalent or superior to ours.Technology and Research and Development As a national provider of real estate transaction products and services,we participate in an industry that is subject to significant regulatory requirements,frequent new product and service introductions,and evolving industry st
197、andards.We believe that our future success depends in part on our ability to anticipate industry changes and offer products and 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
198、 direct and agency operations.We continue to improve the process of ordering title and escrow services and improve the delivery of our products to our customers.In order to meet new regulatory requirements,we also continue to expand our data collection and reporting abilities.Investment Policies and
199、 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,including title insurers,underwritten title companies and insur
200、ance agencies,are subject to extensive regulation under applicable state laws.The various states in which Table of Contents10we operate our underwriters regulate the types of assets that qualify for purposes of capital,surplus,and statutory unearned premium reserves.Our investment policy specificall
201、y 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 take advantage of perceived value or for strat
202、egic 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 31,2017 and 2016,the carrying amount of total investments,which approximates the fai
203、r value,excluding investments in unconsolidated affiliates,was$3.2 billion and$3.6 billion,respectively.We purchase investment grade fixed maturity securities,selected non-investment grade fixed maturity securities,preferred stock and equity securities.The securities in our portfolio are subject to
204、economic conditions and normal market risks and uncertainties.The following table presents certain information regarding the investment ratings of our fixed maturity securities and preferred stock portfolio at December 31,2017 and 2016:December 31,20172016 Amortized%ofFair%ofAmortized%ofFair%ofRatin
205、g(1)CostTotalValueTotalCostTotalValueTotal(Dollars in millions)Aaa/AAA$39818.8%$39618.5%$41815.4%$41215.1%Aa/AA33515.933715.851919.252519.3A57527.357827.284931.485631.5Baa/BBB51024.151924.372326.672826.7Ba/BB/B1557.31597.4983.6973.6Lower452.1492.3532.0552.0Other(2)954.5974.5481.8491.8$2,113100.0%$2,
206、135100.0%$2,708100.0%$2,722100.0%_(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 certain information regarding contractual maturities of our fixed mat
207、urity securities:December 31,2017 Amortized%ofFair%ofMaturityCostTotalValueTotal(Dollars in millions)One year or less$49627.5%$49627.3%After one year through five years1,21967.51,22767.5After five years through ten years311.7321.8After ten years50.350.3Mortgage-backed/asset-backed securities553.0563
208、.1$1,806100%$1,816100%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 of the potential for prepayment on mortgage-backed and asset-backed securities,they are not cat
209、egorized by contractual maturity.Our equity securities at December 31,2017 and 2016 consisted of investments with a cost basis of$517 million and$278 million,respectively,and fair value of$681 million and$386 million,respectively.At December 31,2017 and 2016,we also held$150 million in investments t
210、hat are accounted for using the equity method of accounting.Table of Contents11 As of December 31,2017 and 2016,other long-term investments were$110 million and$42 million,respectively.Other long-term investments include investments accounted for using the cost method of accounting and company-owned
211、 life insurance policies carried at cash surrender value.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 fair value.As of December 31,2017 and 2016,sho
212、rt-term investments amounted to$295 million and$482 million,respectively.Our investment results for the years ended December 31,2017,2016 and 2015 were as follows:December 31,201720162015(Dollars in millions)Net investment income(1)$139$141$137Average invested assets$3,296$3,936$4,020Effective retur
213、n on average invested assets4.2%3.6%3.4%_(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 and to exclude interest earned on cash and cash equivalents.Loss Reserves
214、 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 180 profit centers.Each profit center processes title
215、 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 5,200 agents,pri
216、marily 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 December
217、31,201720162015 Amount%Amount%Amount%(Dollars in millions)California$70814.5%$69014.6%$64915.1%Texas69314.267014.261614.4Florida3928.03647.73498.1New York3116.33367.13498.1Illinois2835.82675.72435.7All others2,50651.22,39650.72,08048.6Totals$4,893100.0%$4,723100.0%$4,286100.0%EmployeesAs of February
218、 2,2018,we had 24,367 full-time equivalent employees,which includes 23,617 in our Title segment and 750 in our Corporate and other segment.We monitor our staffing levels based on current economic activity.None of our employees are subject to collective bargaining agreements.We believe that our relat
219、ions with employees are generally good.Financial Information by Operating SegmentFor financial information by operating segment,see Note R Segment Information to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.Statement Regarding Forward-Looking Information
220、The statements contained in this Form 10-K or in our other documents or in oral presentations or other statements made by our management that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Table of Contents12Act of 1933 and Section 21E of
221、 the Securities Exchange Act of 1934,including statements regarding our expectations,hopes,intentions,or strategies regarding the future.These statements relate to,among other things,future financial and operating results of the Company.In many cases,you can identify forward-looking statements by te
222、rminology such as“may,”“will,”“should,”“expect,”“plan,”“anticipate,”“believe,”“estimate,”“predict,”“potential,”or“continue,”or the negative of these terms and other comparable terminology.Actual results could differ materially from those anticipated in these statements as a result of a number of fac
223、tors,including,but not limited to the following:changes in general economic,business,and political conditions,including changes in the 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,w
224、hich may be caused by,among other things,high or increasing interest rates,a limited supply of mortgage funding,increased mortgage defaults,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
225、their application by regulators;regulatory investigations of the title insurance industry;loss of key personnel that could negatively affect our financial results and impair our operating abilities;our business concentration in the States of California and Texas are the source of approximately 14.5%
226、and14.2%,respectively,of our title insurance premiums;our potential inability to find suitable acquisition candidates,as well as the risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus,or difficulties integrating acquisitions
227、;our dependence on distributions from our title insurance underwriters as our main source of cash flow;competition from other title 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(
228、and expressly disclaim any such obligation)to update or alter our forward-looking statements,whether as a result of new information,future events or otherwise.You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.Additional Inform
229、ation Our website address is .We make available free of charge on or through our website our Annual Report on Form 10-K,Quarterly Reports 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
230、 1934,as amended,as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and 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 busin
231、ess,we are subject to significant risks and uncertainties,including those listed below and others described elsewhere in this Annual 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.Gene
232、ral We have recorded goodwill as a result of prior acquisitions,and an economic downturn could cause these balances to become impaired,requiring write-downs that would reduce our operating income.Goodwill aggregated approximately$2,746 million,or 30.0%of our total assets,as of December 31,2017.Curre
233、nt accounting rules require that goodwill be assessed for impairment at least annually or whenever changes in circumstances indicate 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
234、of our intangible assets,including goodwill,may not be recoverable include,but are not limited to,significant underperformance relative to historical or projected future operating results,a significant decline in our stock price and market capitalization,and negative industry or economic trends.No g
235、oodwill impairment charge was recorded in the years ended December 31,2017,2016,or 2015.However,if there is an economic downturn in the future,the carrying amount of our goodwill may no longer be recoverable,and we may be required to record an impairment charge,which would have a negative impact on
236、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 of goodwill in future periods.Table of Contents13Our management has articulated a willingness to seek growth through acquisitio
237、ns,both in our current lines of business as well as in lines of business outside of our traditional areas of focus or geographic areas.This expansion of our business subjects us to associated risks,such as risks and uncertainties associated with new companies,the diversion of managements attention a
238、nd lack of experience in operating unrelated businesses,and may affect our credit and ability to repay our debt.Our management has stated that we may make acquisitions,both in our current lines of business,as well as lines of business that are not directly tied to or synergistic with our core operat
239、ions.Accordingly,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,due to uncertainties i
240、nvolved with new companies,diversion of managements attention 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
241、risks and cause our credit or financial strength ratings to decline.We 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 a
242、nd our other obligations and to pay dividends 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 sto
243、ck.Our title insurance subsidiaries must 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 subs
244、idiaries can dividend to us.During 2018,our title insurers may pay dividends or make distributions to us of approximately$363 million;however,insurance regulators have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us if they determine that suc
245、h payment could be adverse to our policyholders.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 considerations,such as the impact of dividends on surplus,which could affect an insur
246、ers 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 our underwriters or even contribute cash to one or more of them in order to maint
247、ain 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 interpretation of statutory accounting requirements by regulators.The loss of key personnel
248、 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 one or more of these key employees,our operating results and in turn the value of
249、 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 the employment agreement will be renewed upon expiration.Failure of our informat
250、ion 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.Our operations are highly dependent upon the effective operation of our computer
251、systems.We use our computer systems to receive,process,store and transmit sensitive personal consumer data(such as names and addresses,social security numbers,drivers license numbers,credit cards and bank account information)and important business information of our customers.We also electronically
252、manage substantial cash,investment assets and escrow account balances on behalf of ourselves and our customers,as well as financial information about our businesses generally.The integrity of our computer systems and the protection of the information that resides on such systems are important to our
253、 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 information or assets we hold could be compromised.Further,even if we,or third parties to which we outsource cert
254、ain information technology services,maintain a reasonable,industry-standard information security infrastructure to mitigate these risks,the inherent risk that unauthorized access to information or assets remains.This risk is increased by transmittal of information over the internet and the increased
255、 threat and sophistication of cyber criminals.While,to date,we believe that we have not experienced a material breach of our computer systems,the occurrence or scope of such events is not always apparent.If additional information regarding an event previously considered immaterial is discovered,or a
256、 new event were to occur,it could potentially have a material adverse effect on our operations or financial condition.In addition,some laws and certain of our contracts require notification of various parties,including regulators,consumers or customers,in the event that confidential or personal info
257、rmation has or may have been taken or accessed by unauthorized parties.Such notifications can potentially result,among other things,in adverse publicity,diversion of management and other resources,the attention of regulatory authorities,the imposition of fines,and disruptions in business operations,
258、the effects of which may be material.Any inability to prevent security or privacy breaches,or the perception Table of Contents14that such breaches may occur,could inhibit our ability to retain or attract new clients and/or result in financial losses,litigation,increased costs,negative publicity,or o
259、ther adverse consequences to our business.Further,our financial institution clients have obligations to safeguard their information technology systems and the confidentiality of customer information.In certain of our businesses,we are bound contractually and/or by regulation to comply with the same
260、requirements.If 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,future adoption of more restrictive privacy laws,rules or industry security requirements by federal or state r
261、egulatory bodies or by a specific industry in which we do business could have an adverse impact on us through increased costs or restrictions on business processes.If economic and credit market conditions deteriorate,it could have a material adverse impact on our investment portfolio.Our investment
262、portfolio is exposed 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 mod
263、erate risk of principal,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 inv
264、estments in 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 affect
265、ed 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 opera
266、tions and financial condition.Failure of our enterprise-wide risk management processes could result in unexpected monetary losses,damage to our reputation,additional costs or impairment of our ability to conduct business effectively.As a large insurance entity and a publicly traded company,the Compa
267、ny has always had risk management functions,policies and procedures throughout its operations and management.These functions include but are not limited to departments dedicated to enterprise risk management and information technology risk management,information security,business continuity,lender s
268、trategy and development,and vendor risk management.These policies and procedures have evolved over the years as we continually reassess our processes both internally and to comply with changes in the regulatory environment.Due to limitations inherent in any internal process,if the Companys risk mana
269、gement processes prove unsuccessful at identifying and responding to risks,we could incur unexpected monetary losses,damage to our reputation,additional costs or impairment of our ability to conduct business effectively.We are the subject of various legal proceedings that could have a material adver
270、se effect on our results of operations.We are involved from time to time in various legal proceedings,including in some cases class-action lawsuits and regulatory inquiries,investigations or other proceedings.If we are unsuccessful in our defense of litigation matters or regulatory proceedings,we ma
271、y be forced to pay damages,fines or penalties and/or change our business practices,any of which could have a material adverse effect on our business and results of operations.See Note M Commitments and Contingencies to our Consolidated Financial Statements included in Item 8 of Part II of this Annua
272、l Report for further discussion of pending litigation and regulatory matters and our related accrual.If adverse changes in the levels of real estate activity occur,our revenues may decline.Title insurance revenue is closely related to the level of real estate activity which includes sales,mortgage f
273、inancing and mortgage refinancing.The levels of real estate activity are primarily affected by the average price of real estate sales,the availability of funds to finance purchases and mortgage interest rates.We have found that residential real estate activity generally decreases in the following si
274、tuations:when mortgage interest rates are high or increasing;when the mortgage funding supply is limited;and when the United States economy is weak,including high unemployment levels.Declines in the level of real estate activity or the average price of real estate sales are likely to adversely affec
275、t our title insurance revenues.The Mortgage Bankers Associations(MBA)Mortgage Finance Forecast as of January 20,2018 estimates an approximately$1.6 trillion mortgage origination market for 2018,which would be a decrease of 5.9%from 2017.The MBA forecasts that the 5.9%decrease will result from a decr
276、ease in refinance activity,offset by a slight increase in forecast purchase transactions.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.If financial institutions at which we hold escrow funds
277、fail,it could have a material adverse impact on our company.We hold customers assets in escrow at various financial institutions,pending completion of real estate transactions.These assets are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance
278、Sheets.Table of Contents15We have a contingent liability relating to proper disposition of these balances for our customers,which amounted to$15.4 billion at December 31,2017.Failure of one or more of these financial institutions may lead us to become liable for the funds owed to third parties and t
279、here is no guarantee that we would recover the funds deposited,whether through Federal Deposit Insurance Corporation coverage or otherwise.If we experience changes in the rate or severity of title insurance claims,it may be necessary for us to record additional charges to our claim loss reserve.This
280、 may result in lower net earnings and the potential for earnings volatility.By their nature,claims are often complex,vary greatly in dollar amounts and are affected by economic and market conditions and the legal environment existing at the time of settlement of the claims.Estimating future title lo
281、ss payments is difficult because of the complex nature of title claims,the long periods of time over which claims are paid,significantly varying dollar amounts of individual claims and other factors.From time to time,we experience large losses or an overall worsening of our loss payment experience i
282、n regard to the frequency or severity of claims that require us to record additional charges to our claims loss reserve.There are currently pending several large claims which we believe can be defended successfully without material loss payments.However,if unanticipated material payments are require
283、d to settle these claims,it could result in or contribute to additional charges to our claim loss reserves.These loss events are unpredictable and adversely affect our earnings.At each quarter end,our recorded reserve for claim losses is initially the result of taking the prior recorded reserve for
284、claim losses,adding the current provision to that balance and subtracting actual paid claims from that balance,resulting in an amount that management then compares to our actuarys central estimate provided in the actuarial calculation.Due to the uncertainty and judgment used by both management and o
285、ur actuary,our ultimate liability may be greater or less than our current reserves and/or our actuarys calculation.If the recorded amount is within a reasonable range of the actuarys central estimate,but not at the central estimate,management assesses other factors in order to determine our best est
286、imate.These factors,which are both qualitative and quantitative,can change from period to period and include items such as current trends in the real estate industry(which management can assess,but for which there is a time lag in the development of the data used by our actuary),any adjustments from
287、 the actuarial estimates needed for the effects of unusually large or small claims,improvements in our claims management processes,and other cost saving measures.Depending upon our assessment of these factors,we may or may not adjust the recorded reserve.If the recorded amount is not within a reason
288、able range of the actuarys central estimate,we would record a charge or credit and reassess the provision rate on a go forward basis.Our subsidiaries must comply with extensive regulations.These regulations may increase our costs or impede or impose burdensome conditions on actions that we might see
289、k to take to increase the revenues of those subsidiaries.Our insurance businesses are subject to extensive regulation by state insurance authorities in each state in which they operate.These agencies have broad administrative and supervisory power relating to the following,among other matters:licens
290、ing requirements;trade and marketing practices;accounting and financing practices;disclosure requirements on key terms of mortgage loans;capital and surplus requirements;the amount of dividends and other payments made by insurance subsidiaries;investment practices;rate schedules;deposits of securiti
291、es for the benefit of policyholders;establishing reserves;and regulation of reinsurance.Most states also regulate insurance holding companies like us with respect to acquisitions,changes of control and the terms of transactions with our affiliates.State regulations may impede or impose burdensome co
292、nditions on our ability to increase or maintain rate levels or on other actions that we may want to take to enhance our operating results.In addition,we may incur significant costs in the course of complying with regulatory requirements.Further,various state legislatures have in the past considered
293、offering a public alternative to the title industry in their states,as a means to increase state government revenues.Although we think this situation is unlikely,if one or more such takeovers were to occur they could adversely affect our business.We cannot be assured that future legislative or regul
294、atory changes will not adversely affect our business operations.See“Item 1.Business Regulation”for further discussion of the current regulatory environment.Our ServiceLink subsidiary provides mortgage transaction services including title-related services and facilitation of production and management
295、 of mortgage loans.Certain of these businesses are subject to federal and state regulatory oversight.For example,ServiceLinks LoanCare business services and subservices mortgage loans secured primarily by residential real estate throughout the United States.LoanCare is subject to extensive federal,s
296、tate and local regulatory oversight,including federal and state regulatory examinations,information gathering requests,inquiries,and investigations by governmental and regulatory agencies,including the CFPB.In connection with formal and informal inquiries by those agencies,LoanCare receives numerous
297、 Table of Contents16requests,subpoenas,and orders for documents,testimony and information in connection with various aspects of its or its clients regulated activities.The ongoing implementation of the Dodd Frank Act,including the implementation of the originations and servicing rules by the CFPB,co
298、uld increase our regulatory compliance burden and associated costs and place restrictions on our ability to operate the LoanCare business.LoanCare is also required to maintain a variety of licenses,both federal and state.License requirements are in a frequent state of renewal and reexamination as re
299、gulations change or are reinterpreted.In addition,federal and state statutes establish specific guidelines and procedures that debt collectors must follow when collecting consumer accounts.LoanCares failure to comply with any of these laws,should the states take an opposing interpretation,could have
300、 an adverse effect on LoanCare in the event and to the extent that they apply to some or all of its servicing activities.State regulation of the rates we charge for title insurance could adversely affect our results of operations.Our title insurance subsidiaries are subject to extensive rate regulat
301、ion by the applicable state agencies in the jurisdictions in which they operate.Title insurance rates are regulated differently in various states,with some states requiring the subsidiaries to file and receive approval of rates before such rates become effective and some states promulgating the rate
302、s that can be charged.In general,premium rates are determined on the basis of historical data for claim frequency and severity as well as related production costs and other expenses.In all states in which our title subsidiaries operate,our rates must not be excessive,inadequate or unfairly discrimin
303、atory.Premium rates are likely to prove insufficient when ultimate claims and expenses exceed historically projected levels.Premium rate inadequacy may not become evident quickly and may take time to correct,and could adversely affect the Companys business operating results and financial conditions.
304、Regulatory investigations of the insurance industry may lead to fines,settlements,new regulation or legal uncertainty,which could negatively affect our results of operations.From time to time we receive inquiries and requests for information from state insurance departments,attorneys general and oth
305、er regulatory agencies about various matters relating to our business.Sometimes these take the form of civil investigative demands or subpoenas.We cooperate with all such inquiries and we have responded to or are currently responding to inquiries from multiple governmental agencies.Also,regulators a
306、nd 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 busi
307、ness 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.Because we are dependent upon California and Texas for approximately 14.5%and 1
308、4.2%and of our title insurance premiums,respectively,our business may be adversely affected by regulatory conditions in California and/or Texas.California and Texas are the two largest sources of revenue for our title segment and,in 2017,California-based premiums accounted for 29.5%of premiums earne
309、d by our direct operations and 0.7%of our agency premium revenues.Texas-based premiums accounted for 18.2%of premiums earned by our direct operations and 10.3%of our agency premium revenues.In the aggregate,California and Texas accounted for approximately 14.5%and 14.2%,respectively,of our total tit
310、le insurance premiums for 2017.A significant part of our revenues and profitability are therefore subject to our operations in California and Texas and to the prevailing regulatory conditions in these states.Adverse regulatory developments in California and Texas,which could include reductions in th
311、e maximum rates permitted to be charged,inadequate rate increases or more fundamental changes in the design or implementation of the California and Texas title insurance regulatory framework,could have a material adverse effect on our results of operations and financial condition.If the rating agenc
312、ies downgrade our insurance companies,our results of operations and competitive position in the title insurance industry may suffer.Ratings have always been an important factor in establishing the competitive position of insurance companies.Our title insurance subsidiaries are rated by S&P,Moodys,an
313、d Demotech.Ratings reflect the opinion of a rating agency with regard to an insurance companys or insurance holding companys financial strength,operating performance and ability to meet its obligations to policyholders and are not evaluations directed to investors.Our ratings are subject to continue
314、d periodic review by rating agencies and the continued retention of those ratings cannot be assured.If our ratings are reduced from their current levels by those entities,our results of operations could be adversely affected.If the Companys claim loss prevention procedures fail,we could incur signif
315、icant claim losses.In the ordinary course of our title insurance business,we assume risks related to insuring clear title to residential and commercial properties.The Company has established procedures to mitigate the risk of loss from title claims,including extensive underwriting and risk assessmen
316、t procedures.We also mitigate the risk of large claim losses by 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 exceedin
317、g the amount retained by the ceding company.However,the ceding company remains primarily liable to the insured whether or not the reinsurer is able to meet its contractual obligations.If inherent Table of Contents17limitations cause our claim loss risk mitigation procedures to fail,we could incur su
318、bstantial losses having an adverse effect on our results of operations or financial condition.The Companys use of independent agents for a significant amount of our title insurance policies could adversely impact the frequency and severity of title claims.In the Companys agency operations,an indepen
319、dent agent performs the search and examination function or the agent may purchase a search product from the Company.In either case,the agent is responsible for ensuring that the search and examination is completed.The agent thus retains the majority of the title premium collected,with the balance re
320、mitted to the title underwriter for bearing the risk of loss in the event that a claim is made under the title insurance policy.The Companys relationship with each agent is governed by an agency agreement defining how the agent issues a title insurance policy on the Companys behalf.The agency agreem
321、ent also sets forth the agents liability to the Company for policy losses attributable to the agents errors.For each agent with whom the Company enters into an agency agreement,financial and loss experience records are maintained.Periodic audits of our agents are also conducted and the number of age
322、nts with which the Company transacts business is strategically managed in an effort to reduce future expenses and manage risks.Despite efforts to monitor the independent agents with which we transact business,there is no guarantee that an agent will comply with their contractual obligations to the C
323、ompany.Furthermore,we cannot be certain that,due to changes in the regulatory environment and litigation trends,the Company will not be held liable for errors and omissions by agents.Accordingly,our use of independent agents could adversely impact the frequency and severity of title claims.Failure t
324、o respond to rapid changes in technology could adversely affect the CompanyRapidly evolving technologies and innovations in software and financial technology could drive changes in how real estate transactions are recorded and processed throughout the mortgage life cycle.There is no guarantee that w
325、e will be able to effectively adapt to and utilize changing technology.Our competitors may be able to utilize technology more effectively than us which could result in the loss of market share.Item 1B.Unresolved Staff CommentsNone.Item 2.PropertiesOur corporate headquarters are on our campus in Jack
326、sonville,Florida in owned facilities.The majority of our branch offices are leased from third parties.See Note M Commitments and Contingencies to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further information on our outstanding leases.Our subsidiari
327、es conduct their business operations primarily in leased office space in 44 states,Washington,DC,Canada and India.Item 3.Legal Proceedings For a description of our legal proceedings see discussion of Legal and Regulatory Contingencies in Note M Commitments and Contingencies to our Consolidated Finan
328、cial Statements included in Item 8 of Part II of this Annual Report,which is incorporated by reference into this Part I,Item 3.Table of Contents18PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock trades on the New
329、 York Stock Exchange under the trading symbol FNF.The following tables provide the high and low closing sales prices of our common stock and cash dividends declared per share of common stock for each quarter during 2017 and 2016.Stock PriceHigh Stock PriceLow Cash DividendsDeclaredYear ended Decembe
330、r 31,2017 First quarter$27.64$23.54$0.25Second quarter31.91 26.99 0.25Third quarter34.78 31.54 0.25Fourth quarter40.35 33.84 0.27Year ended December 31,2016 First quarter$23.19$19.97$0.21Second quarter25.76 21.63 0.21Third quarter26.40 24.92 0.21Fourth quarter25.65 22.01 0.25Information concerning s
331、ecurities authorized for issuance under our equity compensation plans will be included in Item 12 of Part III of this report.Table of Contents19PERFORMANCE GRAPHSet forth below is a graph comparing cumulative total shareholder return on our FNF common stock against the cumulative total return on the
332、 S&P 500 Index and against the cumulative total return of a peer group index consisting of certain companies in the primary industry in which we compete(SIC code 6361 Title Insurance)for the period ending December 31,2017.This peer group consists of the following companies:First American Financial C
333、orporation and Stewart Information Services Corp.The peer group comparison has been weighted based on their stock market capitalization.The graph assumes an initial investment of$100.00 on December 31,2012,with dividends reinvested over the periods indicated.12/31/201212/31/201312/31/201412/31/201512/31/201612/31/2017Fidelity National Financial,Inc.100.00141.40186.97192.43193.40317.26S&P 500100.00
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