The First American Corporation Announces 2007 Fourth Quarter Earnings Expectations

The First American Corporation Announces 2007 Fourth Quarter Earnings
Expectations

SANTA ANA, Calif., Jan. 15 /PRNewswire-FirstCall/ -- The First American
Corporation (NYSE: FAF), America's largest provider of business information,
today announced that it expects to report total revenues of approximately $1.9
billion and an after-tax loss for the fourth quarter of 2007, which is not
expected to exceed $50 million. The fourth quarter results will include losses
related to catastrophic losses from the California wildfires, write-downs of
certain private strategic investments and operational assets, litigation
reserves and severance payments. Excluding these items, as well as realized
gains from asset sales, the company expects to be marginally profitable for
the fourth quarter of 2007. In addition to the above-referenced items, the
company's operating results in the fourth quarter were negatively impacted by
higher provisions for title claims in the Title Insurance segment. The company
estimates that cash provided by operating activities in the fourth quarter of
2007 will exceed $100 million. The company plans to issue its 2007
fourth-quarter and year-end results on Feb. 28, 2008.
The company issued a separate release today announcing its plan to
spin-off into a separate public company its Financial Services businesses,
which primarily consist of its Title Insurance and Specialty Insurance
reporting segments. The transaction, which the company anticipates will be
tax-free to shareholders, is expected to close in the third quarter of 2008.
The company noted that although business conditions are expected to remain
difficult in 2008, it is confident that the plan to create two independent
companies, each focused on its unique strategies and financial objectives,
will enhance value for its shareholders.
The company does not typically comment on its earnings expectations and
does not undertake to do so in the future.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500(R) company
that traces its history to 1889. With revenues of approximately $8.5 billion
in 2006, it is America's largest provider of business information. First
American combines advanced analytics with its vast data resources to supply
businesses and consumers with valuable information products to support the
major economic events of people's lives, such as getting a job, renting an
apartment, buying a car or house, securing a mortgage and opening or buying a
business. The First American Family of Companies, many of which command
leading market share positions in their respective industries, operate within
five primary business segments, including: Title Insurance and Services,
Specialty Insurance, Mortgage Information, Property Information and First
Advantage. More information about the company and an archive of its press
releases can be found at http://www.firstam.com.
Forward-Looking Statements
Certain statements made in this press release, including the expected
amount of the loss for the quarter; the various components of that loss and
their respective amounts; marginal profitability for the quarter excluding
certain one-time items; estimated cash provided by operating activities in the
quarter; the timing of the company's finalized results; and the timing,
tax-free nature and anticipated effects of the spin-off, are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These and other forward-looking statements may contain the words "believe,"
"anticipate," "expect," "predict," "estimate," "project," "will be," "will
continue," "will likely result," and other similar words and phrases. Risks
and uncertainties exist that may cause results to differ materially from those
set forth in these forward-looking statements. Factors that could cause the
anticipated results to differ from those described in the forward-looking
statements include: interest rate fluctuations; continuing disruption in the
credit markets; the performance of the real estate markets; limitations on
access to public records and other data; general volatility in the capital
markets; changes in applicable government regulations; heightened scrutiny by
legislators and regulators of the title insurance business and certain other
regulated businesses; consolidation among significant customers and
competitors; changes in the ability to integrate acquired businesses; systems
interruptions and intrusions; the inability to realize the benefits of the
offshore strategy; product migration; the inability to consummate the spin-off
transaction as a result of, among other factors, the inability to obtain
necessary regulatory approvals or the failure to obtain the final approval of
the company's board of directors; the inability to recognize the benefits of
the spin-off transaction as a result of, among other factors, unexpected
corporate overhead costs, unfavorable reaction from customers, employees,
ratings agencies or other interested persons, the triggering of rights and
obligations by the spin-off, accommodations required to be made to obtain
consents or waivers or the inability to transfer assets into the entity being
spun-off; and other factors described in Part I, Item 1A of the company's
annual report on Form 10-K for the year ended Dec. 31, 2006, as updated in
Part II, Item 1A of the company's quarterly report on Form 10-Q for the period
ended June 30, 2007, and in Part II, Item 1A of the company's quarterly report
on Form 10-Q for the period ended September 30, 2007, in each case as filed
with the Securities and Exchange Commission. The forward-looking statements
speak only as of the date they are made. The company does not undertake to
update forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Media Contact: Investor Contact:
Jo Etta Bandy Mark Seaton
Corporate Communications Investor Relations
The First American Corporation The First American Corporation
(714) 250-3298 (714) 250-4264
jbandy@firstam.com mseaton@firstam.com

SOURCE The First American Corporation

media, Jo Etta Bandy, Corporate Communications, +1-714-250-3298,
jbandy@firstam.com, or investors, Mark Seaton, Investor Relations,
+1-714-250-4264, mseaton@firstam.com, both of The First American Corporation