Ladies and gentlemen, thank you for standing by, and welcome to the FNF 2011 Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to your host, Mr. Dan Murphy. Please go ahead, sir.

Thanks. Good morning, everyone, and thanks for joining us for our third quarter 2011 earnings conference call. Joining me today are Bill Foley, our Chairman; George Scanlon, CEO; Randy Quirk, our President; and Tony Park, CFO. We will begin with a brief strategic overview from Bill Foley. George Scanlon will provide an update on the Title business and our other operating companies, and Tony Park will finish with a review of the financial highlights. We'll then open the call for your questions and finish with some concluding remarks from Bill Foley. This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our expectations, hopes, intentions or strategies regarding the future, are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties, which forward-looking statements are subject to, include but are not limited to the risks and other factors detailed in our press release dated yesterday and in the statement regarding forward-looking information, risk factors and other sections of the company's Form 10-K and other filings with the SEC. This conference call will be available for replay via webcast at our website at fnf.com. It will also be available through phone replay beginning at noon, Eastern Time today through next Thursday, October 27. The replay number is (800) 475-6701 and the access code is 219468. Let me now turn the call over to our Chairman, Bill Foley.

Thanks, Dan. We produced another strong quarter in our title insurance business despite continued difficult operating environment. Our industry-leading pretax margin was 11.6%, including $7.2 million in realized investment losses and 12.2% before the impact of those realized losses. We again saw the strength in our commercial title business, partially offset the sustained weakness in the residential resale markets, and we exceeded our targets in shared services cost reductions. Additionally, with the meaningful decline in mortgage rates beginning in August, we began to see a significant increase in our refinance open order volumes as August's total open orders per day increased nearly 30% over July, and September total open orders per day remained nearly equal with those elevated August levels. We expect to see the majority of the revenue and earnings benefit from these increased open order volumes in our fourth quarter operating results. In July, we announced the sale of our flood business for $210 million, which will generate an estimated $154 million pretax gain. That flood business has been the nation's largest flood insurance provider and a very profitable and consistent business for FNF for nearly 10 years. We feel this transaction is a great opportunity to realize the value we have created and redeploy the capital into other uses that can continue to create increased value for our shareholders. We are awaiting final regulatory approval and expect to close that sale in the next several weeks. In August, we entered into a $300 million, 7-year, 4.25% convertible senior note. This issuance allowed us to prepay our maturing senior notes and continued our strategy of enhancing our longer-term liquidity profile conservatively managing our balance sheet and liquidity position during uncertain times and maximizing holding company flexibility. Concurrent with the offering, we used $75 million of the proceeds to repurchase approximately 4.6 million shares of our common stock. We currently have 4.6 million shares remaining on our repurchase authorization. Finally, in September, we filed a 13D disclosing that we had purchased a total of 2.1 million shares or a 9.5% ownership position in O'Charley's Inc., the operator of more than 220 full-service restaurants under the O'Charley's, Ninety Nine and Stoney River concepts. Our total investment is approximately $13.8 million or $6.65 per share. I'll now turn the call over to our CEO, George Scanlon.

Thank you, Bill, and good morning, everyone. We are pleased to report another strong performance from our title insurance business, although a bit of analysis is necessary to better understand the company's performance this quarter. For the third quarter, we reported earnings per share of $0.33 compared with $0.36 last year, and our very strong title operating performance was overshadowed by 2 items. First, we realized about $40 million in gains in last year's quarter. It was an exceptionally strong quarter for gains as we disposed of half of our position in common shares of FIS when they did their leveraged recapitalization. Now we realized a gain of $23 million. This year, we realized a loss of $6 million, primarily associated with mark-to-market adjustments for certain investment securities. As a result, there was a net change year-over-year of $46 million in realized gains and losses, which roughly translates into almost $0.14 per share. As you have seen in the past, there can be volatility in the recognition of portfolio gains and losses, but it is important to separate this line from the operating margins generated by our title business. Secondly, our personal lines business, similar to others in the property and casualty industry, experienced losses this quarter associated principally with claims resulting from hurricane Irene, and that impacted earnings by an additional $0.04 per share. As we have previously indicated, this business carries high relative volatility and exposure to uncontrollable events, and we are looking to reduce this exposure over time. Now back to the strong performance of our title business this quarter. We achieved an 11.6% pretax margin, including realized losses, and a 12.2% pretax title margin, excluding the impact of those realized losses. Despite $132 million reduction in total title revenue, title pretax earnings declined by just about…

Thank you, George. FNF generated $1.2 billion in revenue in the third quarter, with pretax earnings of $97 million and cash flow from operations of $66 million. Cash flow continued to be somewhat negatively impacted because title claims paid in the third quarter exceeded the provision by $65 million, although that was a decline from claims paid exceeding the provision by $90 million in the second quarter. As George mentioned, we have eliminated our specialty insurance segment as a result of the pending sale of the flood business. Flood is now shown as a discontinued operation in our financial statements. Our corporate and other segment now consists primarily of the personal lines business, Cascade, our earnings from minority equity investments in Ceridian, Remy and American Blue Ribbon and corporate costs. All of our other operations fall under the FNTG title segment. The title segment generated nearly $1.2 billion in total revenue for the third quarter, essentially flat with the second quarter this year and a 10% decline from the third quarter of 2010. Direct title premiums grew by 5% versus both the second quarter of this year and the third quarter of 2010, while agency premiums declined by 12% sequentially and 22% versus the third quarter of 2010. There are many reasons for the decline in agency premiums. First, over the last several years, we have been aggressive in eliminating lower remitting and higher claim agents. Additionally, the commercial business, which has been strong, is more heavily weighted to direct operations. Also, with the move to an 80-20 split in New York, we saw a modest decline in agency premiums, but an increase in profitability. Finally, LPS continues to move agency business from FNF to its own underwriter. Overall, our agency split improved by 170 basis points versus the third…

[Operator Instructions] Our first question will come from Mark DeVries with Barclays Capital.

Are you seeing any lengthening in the closed cycle right now? With volume picking up, it would suggest that with open orders still pretty strong right now that you could see some spill over into 1Q?

No. This is Randy Quirk. We're not really seeing any lengthening in the closing cycle as of yet. With the uptick in the refinance orders and as quickly as that came up, we might see that the bank slowed down a bit on the processing, so it might take a longer to close some of these refinances. But other than that, we have a very typical closing cycle.

Okay. Do you have a sense for what the refi mix is for the orders that came in, in October?

It's about 65%, 35%, refi to resale.

Okay. It's the same as the last, the prior 2 months?

Yes.

Okay. Got it. And have you seen any impact from kind of the choppiness in the CMBS markets in the last couple of months on the outlook for commercial this quarter and into 2012?

No, I would say, at this point, we're expecting a good fourth quarter. Seasonally, deals tend to get done toward the end of the year. Uncertainty about tax policy can be a catalyst, but our backlog of projects remains very strong. It's always subject to financing and other risks like that, but our field is generally encouraged, I think, particularly because it's a fairly broad-based inventory. It's not concentrated in a particular inventory type or transaction or geography. And as we said, we're cautiously optimistic to next year. We're having a very good year in commercial. The enthusiasm over the economy has dimmed a bit, but the backlogs look pretty good for the fourth quarter.

Okay. And you have -- you generally have pretty good visibility at least on one quarter out in the business, right?

It's generally good, but the commercial transactions are more complicated. And they're the ones that are subject to potential delay because of all the parties involved. So we can't predict certainly what's going to close this quarter. But we have -- we know we've been working on it and how far advanced those projects are in the underwriting. And so we get a good sense of what to expect.

Then we'll move on to Nat Otis with KBW. Nathaniel Otis - Keefe, Bruyette, & Woods, Inc., Research Division: Just a couple of very quick questions. One, certainly homeowners volatility hurt this quarter. Anything, any thoughts on now that it's in corporate, how quickly you might be able to dispose of that business given its volatility.

I'll tell you, Nat, we're looking at different options right now, and we're in discussions with several parties about ways that they could participate with us in taking our position lower. In the absence of that, we're raising prices, pulling out of certain markets, trying to reduce the exposure the company has with the overall objective of getting our surplus back out of the business. We're just not generating a sufficient return on capital. A wind down process can be long-tailed, but, again, we're looking at other options, and we'll obviously keep you posted as those advance. Nathaniel Otis - Keefe, Bruyette, & Woods, Inc., Research Division: Alright, fair enough. That makes sense. Just 1 -- 2 quick things that I think you already covered. What was your current authorization on buyback?

We have 4.6 million shares remaining in the authorization. Nathaniel Otis - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, great. And then what was your per day open order rate in September.

September was around...

9,800.

Yes, 9,800. It upticked in the first week of October and then settled back down about 8,800 in the second week.

We will go next to Brett Huff with Stephens Inc.

A couple of quick follow-ups. On the agency percentage of revenue, that looked great, and you went through a few reasons. Can you just talk about sustainability, number 1, of each of those items? And then number 2, why is this quarter, with the benefit, seemed greater than in the past even though you've been calling for some time? Was it New York specifically? Or kind of what were the things that made it a little bit more, I guess, stand out today?

There are a couple of things that work together. First, we're generating less revenue from LPS, which is at a -- around a 12% margin to us, and they are continuing to write on their own internal underwriter of national and moving business away from our underwriters. And the second reason, you hit it, which is New York, it went -- in effect went from 88-12, 85-15 down to 80-20 in April. And there is a 120 to 150 day lag in terms of when that revenue actually comes through our income statement, because the agents write the policy. And then they hold the money for 30 days, 60 days, and then they remit the money. So those are kind of the 2 key elements that improved our margin on the agency side. But in addition to that, in almost -- in every state, we're trying -- if were possible, we're trying to raise rates, increase rates, and we're trying to modify splits in states where we find we just can't operate profitably.

I'm glad you mentioned, talking about raising rates. You all -- the industry kind went through a positive cycle that, I guess, in middle '09 to middle '10, if I remember right. Is your sense that -- how big of a help do you think a price increase could be? Is it more targeted? Is it more broad based? And just give us your thoughts on whether folks are receptive to that from a regulatory point of view.

We're going to have to pick our states, and we look at the states where we have not increased rates significantly over the past several years and move toward the increased rate filings in those states. And we have to make sure we remain competitive, but the largest states are -- the largest state is California, and we all believe that our rates are still too low in California. But it is a process to get a rate increase approved. So it's targeted, it's not broad based. It was broad-based in '09 and '10, and now it's targeted.

Okay. And then just a little bit detailed question. For the flood business, is the profitability of that business that we saw in this quarter a reasonable assumption if we annualized that? And will that give us a pretty good idea of its profitability and how it will change the outlook of EPS for 2012?

No, the third quarter is usually, seasonally the best quarter for that business. The EBITDA has been running in the 30 to 35 range, and I think that's a reasonable number to use as you model next year.

[Operator Instructions] We have no one else queuing up.

Terrific. We've produced another strong quarter in our title insurance business despite the continued difficult operating environment. With the increased open orders in August, September and the first half of October, we look forward to a strong finish to 2011. Thanks for joining us this morning.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive TeleConference. You may now disconnect.