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The First American Corporation Reports Results for the Second Quarter 2004

July 27, 2004

SANTA ANA, Calif., /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF) have announced results for the second quarter ended June 30, 2004:

  Three Months Ended
June 30
  Six Months Ended
June 30
  2004 2003   2004 2003
Total revenues $1.72 billion $1.54 billion   $3.20 billion $2.88 billion
           
Income before income taxes and minority interests $219.2 million $239.8 million   $330.3 million $403.2 million
           
Net income $116.5 million $127.5 million   $171.5 million $215.1 million
           
Net income per diluted share $1.27 $1.47   $1.90 $2.53

Summary of Operations

"The company posted strong second quarter results," stated Parker S. Kennedy, president of The First American Corporation. "Second quarter earnings benefited from a 26 percent increase in closed title orders, compared with first quarter closings. A quarter point hike in interest rates in the second quarter, which was the first interest rate increase since May of 2000, slowed refinancings, but residential and commercial property purchase transactions remained solid, which resulted in steady real estate activity for the quarter. Traditionally, First American's real estate-related businesses benefit from the seasonally stronger home purchase market in the second and third quarters."

Quarterly Financial Highlights

Financial Services Group:

  • Revenues for the second quarter 2004 were $1.31 billion, an
    increase of 12 percent when compared with $1.17 billion for the
    second quarter of 2003.
  • Pretax income was $152.1 million, an increase of 1 percent when
    compared with $151.3 million in the prior year quarter.
  • Pretax margins for the second quarter 2004 were 11.6 percent
    compared with 13.0 percent for the second quarter 2003.

Information Technology Group:

  • Revenues for the second quarter 2004 were $411.4 million, an
    increase of 10 percent when compared with $375.2 million for
    the second quarter of 2003.
  • Pretax income was $98.5 million, a 15 percent decrease when
    compared with $116.2 million in the prior year quarter.
  • Pretax margins for the second quarter 2004 were 23.9 percent
    compared with 31.0 percent for the second quarter 2003.



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