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Industry News

The First American Corporation Reports Record Results For the Fourth Quarter and Full Year 2003

February 11, 2004

Net Income for the Quarter Increases 14 Percent

SANTA ANA, Calif., /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF ), the nation's largest data provider, today announced all-time record results for the fourth quarter and year ended Dec. 31, 2003:

Three Months Ended
December 31
Twelve Months Ended
December 31

2003 2002 2003 2002

Total revenues

$1.61 billion $1.37 billion $6.21 billion $4.70 billion

Income before income taxes and minority interests

$174.7 million $152.3 million $838.7 million $449.9 million

Net income

$94.1 million $82.8 million $451.0 million $234.4 million

Net income per diluted share

$1.07 $1.01 $5.22 $2.92

Summary of Operations

"2003 was an exceptionally strong year," stated Parker S. Kennedy, president and chief executive officer of The First American Corporation. "In our real estate-related businesses, continued low interest rates generated record home sales and mortgage originations paving the way for First American's record results in the company's Financial Services and Information Technology groups. Our other businesses, such as subprime credit information, screening information, auto credit and other data products, respond to different cycles and generally will experience strong sales as the national economy improves."

Quarterly Financial Highlights
Financial Services Group:

  • Revenues for the fourth quarter 2003 were $1.21 billion, an increase of 14.1 percent when compared with $1.06 billion for the fourth quarter of 2002.
  • Pretax income was $109.3 million, a decrease of 1.4 percent when compared with $110.8 million in the prior year quarter.
  • Pretax margins declined to 9.0 percent compared with 10.4 percent for the fourth quarter 2002.

Information Technology Group:

  • Revenues for the fourth quarter 2003 were $394.7 million, an increase of 26.6 percent when compared with $311.8 million for the prior year quarter.
  • Pretax income was $90.8 million, an increase of 18 percent when compared with $77.0 million in the prior year quarter.
  • Pretax margins declined to 23 percent compared with 24.7 percent for the fourth quarter 2002.

2004 Outlook

Kennedy continued: "On the real estate side of our company, as our mix of business has shifted to residential resale and builder business and away from heavy refi activities, 2004 will follow a typical seasonal pattern not seen in the past 2 1/2 years. Our first quarter will be slow due to weather conditions, with improvements beginning in the spring and summer months. Looking ahead, we believe 2004 in total will be another strong year enhanced by our FAST technology solutions, off-shore production, data leverage and bundling of products and services, resulting in opportunities to increase market share and deliver solid bottom-line results.

"Our recent acquisition of Transamerica's tax and flood businesses positively impacted our fourth-quarter results. The integration is ahead of schedule. The combination of the Transamerica businesses with our existing tax service and flood certification divisions creates the dominant provider in each product line.

"As First American becomes more widely recognized as the leading provider of data and information to the real estate, business, automobile and consumer industries, we expect to fully maximize shareholder value."

Source: First American

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