Ladies and gentlemen, thank you for standing by, and welcome to the Fidelity National Financial 2011 Fourth Quarter Earnings Conference. [Operator Instructions] As a reminder, today's conference call is being recorded. And at this time, I'd like to turn the call over to our first speaker, Dan Murphy. Please go ahead, sir.

Thanks. Good morning, everyone, and thanks for joining us for our fourth quarter 2011 earnings conference call. Joining me today are Bill Foley, our Chairman; George Scanlon, our CEO; Randy Quirk, President; and Tony Park, our CFO. We'll begin with a brief strategic overview from Bill Foley. George Scanlon will provide an update on the Title business and our operating companies, and Tony Park will finish with a review of the financial highlights. We'll then take 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 February 16. The replay number is (800) 475-6701 with an access code of 231930. Let me now turn the call over to our Chairman, Bill Foley.

Thanks, Dan. 2011 was another successful year for our company despite a continued challenging environment for our Title business. We were able to improve our title pretax margin, excluding realized gains and losses by 320 basis points versus 2010. Our Commercial business was particularly strong producing a 25% revenue growth over 2010. We were also successful in closing the sale of our Flood Insurance business in November. The total sale price was approximately $210 million, generating a $95 million after-tax gain or $0.43 per diluted share in the fourth quarter results. We also signed a definitive agreement to sell an 85% interest in our Personal Lines business in late December for approximately $119 million, which resulted in $9 million net loss or $0.04 per diluted share. We expect to close this transaction in the first half of 2012. These 2 divestitures will produce total sale proceeds of approximately $329 million, including $254 million in cash and $75 million in an 18-month note receivable, allowing us to redeploy the capital into other uses that we expect to generate higher future returns and greater value for our shareholders. On Monday, we announced the signing of a definitive agreement to acquire all of the outstanding common stock of O'Charley's that we do not currently own for $9.85 per share. We expect to commence a tender offer on or about February 24 and complete that process on about April 2, assuming the majority of the outstanding shares including our 9.5% ownership position are tendered. We have been seeking an investment in a larger scalable strategic restaurant operating company to complement our successful investment in American Blue Ribbon Holdings. With more than 340 restaurants and over $800 million in revenue, O'Charley's is an attractive company with 3 proven restaurant concepts in O'Charley's, the Ninety Nine and Stoney River Steakhouse. There is a real opportunity to continue to improve the operating performance at O'Charley's and to build on their current momentum. We look forward to having the ABRH and O'Charley's teams working toward that end. ABRH operates more than 220 company-owned restaurants, nearly 140 franchise restaurants and generates approximately $455 million in annual revenue. We also look forward to the successful completion of the tender offer and to welcoming all of O'Charley's concepts employees to the FNF restaurant family. Finally, yesterday, we announced that our Board approved an increased quarterly dividend of $0.14 per share, an increase of 17% from the previous quarterly dividend -- cash dividend of $0.12 per share. I'll now turn this call over to our CEO, George Scanlon.

Thank you, Bill, and good morning, everyone. We are very pleased to report strong fourth quarter results with continued strength in the Commercial business, a strong pretax title margin and a significant gain from the sale of our Flood Insurance business. The title pretax margin, excluding realized gains and losses, was 11.7% versus 11.2% in the fourth quarter of 2010. Total revenue was $1.3 billion and net earnings were $173 million or $0.78 per diluted share. In the full year 2011, total revenue was $4.8 billion and net earnings were $370 million or $1.66 per diluted share. As Bill mentioned, a significant contributor to our performance was the Commercial business. Our commercial operations produced nearly $104 million in revenue for the fourth quarter, the strongest commercial revenue quarter in the history of our company. Commercial revenue accounted for more than 27% of total direct title premiums in the fourth quarter, compared with 24% in the fourth quarter of 2010. We opened approximately 17,400 commercial orders in our National Commercial divisions and closed 12,500 commercial orders with a fee per file of $8,300. We expect the Commercial business to remain strong as we enter 2012. Open order accounts are relatively stable during the quarter. Overall, open orders averaged more than 8,700 per day for the fourth quarter with October averaging 9,100, November, 8,900 and December 8,200. The first 2 weeks of December averaged approximately 8,600 open orders per day and then the normal seasonal holiday slowdown began in the second half of the month of December. Not surprisingly the mix of fourth quarter business was weighted to agreed financial orders as 63% of both open and closed orders were refinanced related. Additionally, open orders for the month of January increased significantly from the fourth quarter, averaging more than 10,200 orders per…

Thank you, George. FNF generated $1.3 billion in revenue in the fourth quarter, compared to $1.5 billion in the prior-year fourth quarter, as the decline in agency premiums and total orders closed were not entirely offset by stronger commercial revenue and an increase in the fee per file. However, net earnings were $173 million, compared to net earnings of $131 million in the prior year primarily due to the gain on the sale of Flood business. Because the Flood sale closed and the Personal Line sale is deemed probable and can be estimated, they are both shown as discontinued operations in the fourth quarter. Therefore, the Flood sale after-tax gain of $95 million or $0.43 per share and the $9 million net loss or $0.04 loss per share from the pending Personal Line sale were both recorded in discontinued operations as after-tax items. For the full-year 2011, total revenue was $4.8 billion and net earnings were $370 million or $1.66 per diluted share, compared to $5.4 billion in revenue and $1.61 per diluted share for 2010. The Title segment generated $1.2 billion in operating revenue for the fourth quarter, a 14% decline from the fourth quarter of 2010. Direct title premiums decreased by 10%, driven by a 13% decline in closed orders, partially offset by an 8% increase in the fee per file. Agency premiums declined by 24% over the prior year, a portion of which is consistent with the decline in direct revenue. Also, our agent count declined by 8% versus the fourth quarter 2010 as we ended 2011 with approximately 5,100 agents. Additionally, agent revenue from LPS declined by $26 million versus the prior-year quarter and our New York agency revenue fell by $9 million due to our move to an 80-20 split. Overall, our agent commission split…

[Operator Instructions] Our first question today comes from the line of Mark DeVries with Barclays Capital.

Can you tell us about how the 20% month-over-month increase in open orders compares to the normal seasonal change you expect to see in January?

Sure, this is Randy Quirk. The normal January is actually quite slow. January and February are typically tough months for us on the order counts. So the increase of 20% is a strong indicator of what we believe we'll see in the first quarter. The record low interest rates certainly play well for us. The anticipation of the Harp 2.0, that really begins for us in April, has really pushed our order count up. So this is contrary to what we typically see and should position us real well into the back end of the first quarter and into the second quarter for our closings.

And do you have a sense for what the refi percentages for the open orders so far this year?

The refi right now is running about 65%.

Okay, got it. And as you guys pointed out, you're not yet seeing any of the benefits from Harp 2.0 showing up in the numbers. Do you have any visibility on what that could mean kind of incrementally to the volumes you're seeing?

Well, we really don't right now because it will depend on interest rates. But it is getting a lot of attention and we expect -- we hear the banks -- our major banks tell us that they're stacking up to handle the Harp volume so we can't predict it but we expect it'll have some impact.

Okay. And so I'm just about to clarify on the refi mix of 53% -- was that 53% for the entire fourth quarter?

Yes.

Okay, got it. And then one last question. Does the O'Charley's acquisition give you the scale now you think you need for your restaurant platform? Or should we expect that there might be additional acquisitions around that?

What we're looking at is probably about a year integration of O'Charley's into the ABRH platform. And in conjunction with that, a repositioning of our relative ownership position vis-à-vis our partner with in ABRH, the Newport group, so that Fidelity FNF will be in a position to consolidate the results of the Restaurant business. There are going to be other acquisition opportunities and as we acquire these companies as we've seen with Village Inn, Bakers Square and Max & Erma's, we get significant synergies every time we buy a business. And O'Charley's, we expect to, again, have significant synergies between the Denver and Nashville offices. And once those synergies are obtained, we intend to do it again and to keep on growing this Restaurant business and keep on developing the synergies. We have a very strong management team at ABRH. They're getting excellent results. Our ABRH financial statements over the last 3 years have improved to the point where we have no debts and we have about $25 million of cash on hand and we're cash generating. So we intend to do the same thing with O'Charley's and hopefully, we'll find another opportunity 9 months or 1 year out from the O'Charley's acquisition.

Our next question comes from Douglas Mewhirter with RBC Capital Markets.

I have one of my questions answered. I have another one. George or Randy, could you give me idea of your view on the commercial real estate market now or actually we're in the commercial part of the market? I mean, I noticed the growth had flattened this quarter although it flattened at a very high level. Have you detected any change? Or you just think that this is sort of a natural order of things now that we've sort of bounced off a pretty low bottom?

Well, if you talk to our commercial sales folks, they'll tell you that the backlogs remain strong and that pipelines are good coming into 2012. And so I think as we look to this year, we don't see any loss of momentum. Last year, we had good year-over-year and sequential growth every quarter. This year, I'm not sure we’ll get that same amount of growth but there's still a lot of refinancing activity that has to come through. We're well positioned with the banks and the reach in other investor groups to get our share of the market, which is probably 40% to 45%. So we're optimistic as we come into 2012 and don't really see a slowdown. And I think, as we said on previous calls, it was fairly broad-based in 2011 and we hope that continues this year.

If I could just follow up on that. More of a numbers question. What do you think or I guess, to avoid you having to make projections, what has been the historical, I guess, value per closed order for your commercial book?

Well, I'll tell you, our average fee per file on the commercial transaction is about $8,500 and that's held for the last -- for 2011.

Yes. You might point out, though, that about 2.5 years ago, it was down in the high 4,000s. It's really improved.

Okay. I just don't know if there is any possibility we'd get closer to 9 or 10. I'm not familiar with how the real estate cycle.

Well, I would say, certainly, as over time as property values increase, the associated premiums will increase and that will happen over time. But I think as you're looking ahead to 2012, using that $8,500 number is probably in the current market the right way to think about it.

We'll go to the line of Brett Huff with Stephens.

One question on sort of the longer-term view. When you look at it, the title margins were very nice and when you look out of the title margins in a normalized market and I guess I'm thinking normalized market with a similar split of commercial to you -- to right now, which is 25% or 30%, maybe a 1.5 trillion kind of housing turnover and probably a lower amount of refi than normal just given that, I think, the refi activity is really high now and maybe will taper a little bit in 1 year or 2. What is your sort of thought on where the title pretax margin can go? And are those the right assumptions to give us that number?

I would say that it's 1.5 trillion-sized market with an emphasis on the resale component, it sounds pretty good to us right now. We model out different scenarios, Brett, and mid- to high-teens margins are what we think we could get with that kind of mix. I think what we've shown this year, because as you may recall coming into this year, the originations were projected to be below 1 trillion. We did 11%, 12% margins all year in a 1.2 trillion market with a weighting toward refinancing. So as it shifts more to resale, we get $2 for every $1 of refinancing transaction so the revenue will grow and our margins should expand a little bit. So we don't know when that's going to happen. Obviously, refi is still strong and we're going to enjoy it while we can. We're watching the resale market, which has been stable, hopefully see it uptick in that as the economy improves. And then as we look to '13 and beyond, that's where we should see the incremental improvement.

And then one housekeeping question. The Personal Lines went into disco ops And that happened versus our model a little early because, Tony, like you said, it hits the accounting definition of probable ad estimable. But how much of that -- can you -- have you talked about how much revenue that move from the top line to the below the line after tax number?

So the Personalized business had revenue of about $150 million annualized and it was fairly even quarter to quarter. So that's what we removed. The issue with that business was the volatility in the bottom line. So we're going to keep a 15% stake in there. It will grow with the new owner and we have a chance for upside and to frankly recover the modest loss that we realized in the transaction as it's structured now.

Great. And then last question on Chuck's. So the -- I understand that there is -- we just have to work through some items in order to figure out how we're going to put the 2, American Blue Ribbon and Chuck's, together. In terms of the management, your success with ABRH, so far, has been obviously good. Will those same folks be the ones managing Chuck's going forward?

Yes. The CEO at ABRH, Hazem Ouf, is kind of our designated hitter in the restaurant business. He has a wide range of experience from family to casual to fine dining. Chuck's fits right into that wheelhouse -- right into his wheelhouse. And -- so he will be the leader of Chuck's. And there'll be, obviously, a large presence in Nashville. However, to the extent we can get purchasing synergies, we can get synergies with regard to HR, finance, accounting systems, that's really what we're going to try and develop these synergies of $20 million to $22 million as kind of a low-end number. So that would result in a restaurant company with an EBITDA going forward, once the synergies are obtained, of around $85 million to $90 million. And that's a pretty good base to operate off of. We're not going to put serious financing on the Chuck's acquisition. ABRH has no debt. Chuck's has a sale leaseback but no other debt. So there will be a small debt component but basically, it's going to be equity going into the business. It's going to be shared between ourselves and Newport group. But it's going to be structured in such a way that Fidelity becomes a -- rather ABRH becomes a consolidated entity within our overall group.

Just one final question on that. So it seems that there's about $35 million of EBITDA this year roughly and then with a $20 million to $22 million in synergies that gets you higher. But how do we get to the $85 million to $90 million? Is that just including -- assuming better comps and et cetera?

No, that's for Chuck's. Chuck's is doing about $30 million or $31 million right now. So that's what they're getting plus the $22 million, plus the $35 million. So that's kind of where I come up with the $85 million to $90 million.

And that includes the ABRH in the mix.

Oh, okay. I'm sorry. The $85 million to $90 million includes ABRH. Okay, that's what I needed.

Our next question is from the line of Travis Hogan [ph] with River Ridge Capital [ph].

You mentioned that there was a one-time item that impacted the EBITDA from Remy. Can you tell us when that occurred in the quarter and how material that was?

It was a -- I think it was only about a $5 million intangible impairment. We booked Remy's results one month in arrears. I don't recall which month that hit. I know it hit our fourth quarter. But again, it was pretty negligible at $5 million or $6 million write-off pretax.

Next, we go to the line of Geoffrey Dunn with Dowling & Partners. Geoffrey Dunn - Dowling & Partners Securities, LLC: Randy, I had a bigger picture question about kind of emerging from a downturn and how the downturn might have affected the competitive dynamic of the industry. Is there any sense that yourself and FAF might be better positioned on a competitive standpoint relative to going into the downturn, through your efficiency gains, on things like claim processing, et cetera and scale? And just what you're able to deliver in the downturn to your customers relative to some of the smaller players? Is there a shift in preference out there for your brand or FAF's, given what you're able to deliver?

Well, I tell you, I think relative to scale, our footprint obviously is significant on our direct side around the country and our multiple brand strategy has served us well. So we're able to penetrate a large metropolitan markets with more than one -- with one company, one brand, one group of sales efforts. And on the agency side, with our 5,000-plus agents, we've got significant coverage throughout the stage. We improved the profitability on the agency side. So I think those play well to our competitive situation coming out of the downturn into a, hopefully at some point, a more normal traditional market. I think that footprint will serve us very, very well.

Randy, also, we need to remember that we have a very strong direct operations based in the western part of United States and then in the upper Midwest, in New York, to some extent and also in Florida, to some extent, and Texas and so on. And the result of it -- that's a very extensive network to put together. So a smaller company -- a regional company, who wants to compete with us on the direct operations side, has got to make a very large investment in systems, in facilities, in people and then they've got to try and get the business. And so we have that business base right now that's been impaired by the lack of resell transactions. But when the resell transactions come back, we have the footprint, as Randy mentioned, to really respond to our customers' needs. And to a slightly lesser extent, First American has the same sort of footprint. So we really believe we have a competitive advantage, if and when this economy ever gets going their job. Geoffrey Dunn - Dowling & Partners Securities, LLC: Okay. And Bill, just to be clear on -- you threw some numbers out there on Chuck's. You don't see any reason you couldn't improve their 4% to 5% margin to the 10% to 11% we see at American Blue Ribbon?

There's going to be an incentive package put together for Hazem Ouf's management team and the continuing management team from Chuck's to equalize that EBITDA margin. We definitely anticipate that.

And at this time, speakers, there are no further questions in queue.

We're pleased with our financial results this quarter, particularly in our Title Insurance business, where we produced an 11.7% pretax margin, excluding realized gains and losses. Open orders for the month of January have increased nearly 20% sequentially versus the fourth quarter of 2011 and at their highest monthly level since November 2010. Overall, we're confident that our Title business is well positioned to produce strong industry-leading returns in 2012. Thanks for joining this morning.

With that, ladies and gentlemen, that does conclude our conference for today. We do thank you for your participation and for using AT&T Executive TeleConference. You may now disconnect.