Fidelity National Financial, Inc. (FNF) Q4 2015 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Fidelity National Financial 2015 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. And I would now like to turn the conference over to your host, Dan Murphy. Please go ahead, sir.

Thank you. Good morning, everyone, and thanks for joining us for our fourth quarter 2015 earnings conference call. Joining me today are our Chairman, Bill Foley; CEO, Randy Quirk; EVP, Brent Bickett; and CFO, Tony Park. We'll begin with a brief strategic overview from Bill. Randy will review the title business, and Tony will finish with a review of the financial highlights. We'll then open it up for your questions and finish with some concluding remarks from Bill Foley. Please note that we are only focused on FNF on this call. We will have a separate FNFV call at noon Eastern Time today. 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 facts, 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 1:00 P.M. Eastern Time today through next Thursday, February 18. That replay number is 800-475-6701 and the access code is 383828. Let me now turn the call over to our Chairman, Bill Foley.

Thanks, Dan. This quarter was a strong finish to another successful year for FNF. We generated a 13.8% pre-tax title margin this quarter and a 14.3% pre-tax title margin for all of 2015. Given the combined conditions in the commercial purchase and refinance markets, we are very pleased with that performance, but we'll continue to strive to produce even better margins. If we continue to see a strong commercial market, further growth in the purchase market and some level of stability from the refinance market, we believe we can generate a pre-tax title margin above 15% in 2016. Black Knight Financial Services continues to perform extremely well, generating 8% organic revenue growth in the fourth quarter and 9% revenue growth for the full year of 2015. Adjusted EBITDA was $106 million for the quarter and more than $409 million for all of 2015. The adjusted EBITDA margin was nearly 45% for the fourth quarter and 44% for the full year 2015. FNF's Black Knight ownership stake is currently worth approximately $2.3 billion or $8 per FNF share. Black Knight's business fundamentals remain strong and we firmly believe that it's high single-digit organic revenue growth rate, mid-40%s EBITDA margins and predictability of earnings will allow Black Knight to continue to generate value for both its shareholders and FNF shareholders. During the fourth quarter, we consistently repurchased 50,000 shares of FNF stock a day other than during the blackout period around our third quarter earnings release in October. For the quarter, we repurchased a total of 2.4 million shares at a total cost of approximately $85 million. We began our stock repurchase program on June 1, after the completion of the Black Knight IPO. For the seven months of 2015, we repurchased a total of 5.9 million shares of FNF common stock for approximately $214 million. I'll now turn the call over to Randy Quirk to discuss the title insurance business.

Thank you, Bill. As Bill mentioned, this fourth quarter was a solid finish to 2015 for our title business, as we again led the title industry with a 13.8% pre-tax title margin. The commercial market remains very strong with record fourth quarter and full year 2015 revenue. The purchase market showed continued growth, as our open and closed purchase orders grew by approximately 8% for the fourth quarter and full year 2015. Refinance activity declined somewhat during the fourth quarter, although with the recent market volatility and decline in rates, refinance volumes have the potential to be more stable than most would have expected as we head into 2016. We also had somewhat higher personnel costs in the fourth quarter due to the TRID implementation efforts. As we go through the fourth quarter, we're able to enact a more significant seasonal staffing reduction, as the real estate mortgage systems became more comfortable with the new TRID-driven disclosure and closing procedures. For the fourth quarter, we were able to reduce head count by 350 positions with 180 or more than 50% of those reductions coming in the month of December, as all parties continued to become more comfortable with the new closing process. We expect the personnel expense impact from TRID to continue to decline in the first quarter and have a smaller impact on our first quarter operations and financial results. For the fourth quarter, total open orders averaged approximately 7,000 orders per day, with October the strongest at 7,600 orders; November at 7,400 orders; and December at a seasonally lower 6,000 orders. FNTG purchase orders opened and closed in the fourth quarter both increased by approximately 9%. The mix towards purchase transactions was approximately 55% for open orders and 52% for closed orders during the quarter. For the month of January, total open orders per day bounced back to average approximately 7,300 orders per day, and FNTG purchase-related open orders increased by 3% on a per-day basis versus 2015. We had another very strong quarter in our commercial business generating $303 million of total commercial revenue, an 11% increase over the fourth quarter of 2014. As we only began tracking total local commercial orders and fee per file in January of 2015, we are not able to compare those total metrics to the prior year. However, national commercial revenue of $183 million increased by approximately 10%, as the fee per file grew by 4% and closed orders increased by 6%. For full year 2015, total commercial revenue was more than $1 billion, a 20% increase over full year 2014. As you can tell from those growth numbers, fourth quarter total commercial revenue growth was 11%. It was lower than the full year 20% growth figure. We are comfortable with slower growth in the commercial market as we can generate significant profits from any commercial market that is close to what we have today. The total fee per file of $2,272 increased by 7% versus the fourth quarter of 2014, as the mix shifted to slightly more purchase closings in the fourth quarter versus the prior year period and the strong commercial fee per file provided a benefit as well. Let me now turn the call over to Tony Park to review the financial highlights.

Thank you, Randy. We generated more than $1.9 billion in total revenue in the fourth quarter with title generating more than $1.6 billion in total revenue, Black Knight contributing $238 million in total revenue, and our corporate and other segment generating $55 million, which is predominantly the Pacific Union brokerage revenue that had been reclassified from the title segment to the corporate segment for all of 2015. Adjusted net earnings were $155 million or $0.55 per diluted share. The title segment generated more than $1.6 billion in total revenue for the fourth quarter, a 12% increase over the fourth quarter of 2014. Direct title premiums increased 9% while agency premiums increased by 20%. Personnel costs increased by 10%, modestly more than we normally see from a 9% increase in direct premiums. As Randy mentioned, personnel costs were somewhat negatively impacted by additional staffing in dealing with the TRID implementation, but we expect to see this - we expect this to be a short-lived impact on personnel expenses. Other operating expenses increased by only 4.5%. ServiceLink produced revenue of $198 million, adjusted EBITDA of $25 million, an adjusted EBITDA margin of 13%, adjusted pre-tax earnings of $21 million and an adjusted pre-tax margin of 11%. Excluding ServiceLink, our traditional title business generated a pre-tax margin of 14.2% in the fourth quarter and 14.5% for the full year 2015. Black Knight generated fourth quarter revenue of $238 million, organic revenue growth of 8%, adjusted EBITDA of $106 million and an adjusted EBITDA margin of 44.9%. FNF Group debt outstanding was $2.6 billion with nearly $1.7 billion of that debt at Black Knight. Our debt-to-total capital on a consolidated basis was approximately 29% at December 31. On an FNF-only basis, the debt-to-cap ratio was below 18%, but 25% when the guarantee on the $390 million of Black Knight debt is included. Total title claims paid were $84 million during the fourth quarter, an increase of approximately $8 million or 11% from the fourth quarter 2014. For the full year 2015, total claims paid were $285 million, a decline of $17 million or 6% from 2014. Finally, our FNF Group investment portfolio totaled approximately $4.8 billion at December 31. From a regulated standpoint, we have approximately $1.7 billion in statutory reserves, $1.5 billion in regulated cash and investments, and approximately $700 million in secured trust deposits for a total of approximately $3.9 billion in regulated cash and investments. From an unregulated perspective, we have approximately $480 million of unregulated cash at FNF Group as of December 31. There's also approximately $280 million in consolidated cash and investments at Black Knight and ServiceLink, and approximately $100 million in cash at subsidiaries, both of which are restricted by minimum working capital, other regulatory requirements or to let those businesses run themselves autonomously. Let me now turn the call back to our operator to allow for any questions. [Operator Instructions]

Our first question today comes from the line of Jeremy Campbell with Barclays. Please go ahead.

Yeah. Thanks, guys. So, if commercial remains strong and we do get a mini refi wave from the recent downward movement of rates, how strong do you think the purchase market has to be to hit that 15% plus title margin goal for 2016?

If commercial does remain strong like we're absolutely expecting and we do get this refi lift, if we just meet the expectations of the MBA which I believe is about a 6% increase in transactions over 2015, we'll be there. We're very well positioned to accept the additional purchase revenue with our network and particularly over in the West with California's coming back real strong. We're really about two years into this gradual return and that works very well for us. So we're confident. We just need a little bit of larger market and we need the purchase to stay in play.

Got it. And then between the structural changes you guys have made to the expense base over the past year, and the fact that you now own a higher proportion of ServiceLink which does well in refi markets, how should we think about margins in 1Q 2016 versus the 10% margin you guys achieved in the first quarter last year?

I mean, really I think Randy and I can answer this together, but ServiceLink should certainly be at a margin level equal to the title group as a whole. And so it's not quite achieving that margin level. And we've got a number of initiatives underway to improve the revenue line at ServiceLink, and as that revenue line increases, the margins will improve because the base business case is already in place. The people are there. The systems are in place. We don't need to change - don't need to add a lot of systems or new software. So it doesn't take much for ServiceLink to move on up to the title group margin level, and that really would be our minimum expectation for ServiceLink.

Yeah, and I would just add that obviously this is our centralized lender platform. So, with the rates being down where they are, we're going to get some good lift on these refinances coming out. In addition to that, the default side, even though that market has contracted somewhat, we continue to have opportunity - actually continue to have wins in terms of expanding our client base on the default side. So I totally agree with Bill that those margins should come up to where we're operating the title operations.

Great. And then just one more. With the share price having been pressured pretty heavily thus far in the first quarter, is there an opportunity for you guys to accelerate the buyback above your fourth quarter pace?

We're going to keep - we're going to remain in touch with where the share price is and take a look at that relative to our cash flow and cash availability. The first quarter is kind of our toughest cash quarter. We pay bonuses - accrued bonuses from the previous year that have been expensed. And the title business is under pressure in the first quarter. So we're going to defer an increase in the rate of repurchase of shares until we get through the first quarter and we really see how things end up. Now, we're already almost halfway through the first quarter. So it's only another 45 days or 60 days, and we'll have a pretty good feeling for it. So I'm sure in the next call, we'll be able to give you an update.

Great. Thanks a lot, guys.

Thank you.

And we do have a question from the line of Bose George with KBW. Please go ahead.

Hey, guys. Good morning. Just a follow-up on that 15% margin question. When you say if we continue to see a strong commercial market, are you talking about kind of roughly flat year-over-year? Is that a good way to think about that?

Yeah. I think that that could be a good way to look at it. I mean, we've had a real nice run in the commercial market for the last four years, five years, six years. We had record revenue in 2015 on a quarter-by-quarter basis and also annually. If it stays where it's at, we could certainly meet our market share goals.

Okay. Great. Thanks. And then, actually switching to TRID, could you quantify the margin impact of TRID this quarter? And was it just on the expense side or did you also see some revenues being deferred into the first quarter from closings being pushed out?

Sure. It's been a little bit difficult to quantify, as much as we would like to, in the fourth quarter because that's when we really took the full impact of TRID. It started in October, ran through the first quarter. We spent a good part of the year getting our employees prepped for that. They're on schedule now. Our folks know how to close the transaction. They know about the process. They're comfortable with the documents. So, as we move through the first quarter here, it'll start to settle down. In our closing side, it looks like we have maybe a 10% to 15% load in productivity in our closing offices. And in terms of the number of people that we have on board today, it might be carrying an extra 200 folks or 300 folks. But we're going to work that through the system as we get into the fourth quarter, but it's still a moving target, but we're up to speed to it. We're spending just a little more time on the phone with our customers, our realtors, our mortgage brokers, our lenders, getting everybody through this learning curve. So I'd like to be able to quantify it, but precisely, Tony may have some real numbers, but I feel that we're going to move through in the first quarter.

Yeah, Bose, probably our best estimate is roughly 50 basis points to 60 basis points. And again, it's hard to tell. Orders coming in and we adjust staffing, as you know, every week. And so we took out some people in the quarter, but then we had some more orders come in. So it's a moving target, but best guess is probably 50 basis points to 60 basis points and that's both in the salaries line item where we have more people and also in temp services and overtime where we incurred more cost this year than we did in the fourth quarter of last year.

One of the biggest problems with TRID was that we were prepared, Black Knight was prepared, and our customers weren't prepared. So we had to train our customers. And so they took nice advantage of our preparation, so our real estate professional customers were not prepared.

Okay. Great. That's helpful color. Thanks. And actually just one more. It looks like you guys took a tax benefit in the corporate segment. I was just curious what drove that?

Yeah. So we were running year-to-date through nine months at roughly 37% on a total group tax rate. Congress extended an R&D credit in the fourth quarter, which actually they've done every year for many years. And so we and, I think, most other companies don't take that until they know that they have it. So we did benefit on a year-to-date basis by a full percentage point to roughly a 36% FNF Group tax rate for the full year. And again, that credit relates to a couple of things, domestic production which is really title data production and also software development. So 36% for the full year and it's probably a pretty good run rate for you to forecast for 2016.

Okay. Great. Thank you.

And we do have a question from the line of John Campbell with Stephens, Inc. Please go ahead.

Hey, guys. Good morning. Congrats on a good quarter.

Thank you.

Thanks.

Just on the agency growth, I mean that was really good in the quarter. I think that was about 20% year-over-year. Is that just share taking, I know you guys have a desire to grow out that agency channel or is that just good geographic mix? Randy, anything you can provide on this?

Yeah, it's a little bit of each. Again I think I had mentioned on the last call, you don't really get a good look at agency share except for maybe once a year and that shows up in March or April. But we've been very aggressive in selecting proper agents to come on board with us. We signed about 300 agents here in 2015. We've done a lot of recruiting of revenue-attached folks in the industry. I think we've added 45 good salespeople, 50 good salespeople in the organization. We're very focused on organic growth, which is getting more remittance out of existing relationships. So we've really focused on - we focused on 15 of the top states and we're seeing share growth in some real good states like Florida where Florida is coming back, Michigan; Pennsylvania has been strong for us. So it's really a collective focus or collective effort. And again, that market share target or goal is a one-year, two-year or three-year play, but directionally we're pretty comfortable with what's been taking place.

All right. Thanks for that. And then, Tony, on the escrow and other, it looks like that revenue decelerated a pretty good bit this quarter despite that good title premium growth. But what's below the surface there that we might be missing there or are we lapping some of the acquired revenue you guys did?

Well, the pieces other than escrow which is clearly tied to title premiums and that trended roughly 10% increase just like title premiums did. There are some other big buckets in there and a couple that I'm thinking about. Valuations is a pretty big part of that, maybe $40 million, $45 million or so. Field services also. Those are two of ServiceLink's businesses and those fell off seasonally in the fourth quarter. So those were the primary drivers of why that line item is kind of flat with the prior year.

That's helpful. And then last one from me. The 5.5% or so reserve range. Is that a good run rate for 2016?

Yeah. It really is. We're continuing to see good progress, good development on the reserve front. We haven't really seen leakage in the older years. So we're well through 2006 and 2007 which were our worst years. We were 80%, 85% through those years, feeling pretty good about those. And the more recent years, last five years or six years now continue to run at roughly 5% on an average basis. So 5.5% is good now. We like where we sit in terms of reserve position on our balance sheet. You'll see in our 10-K disclosure that we're now sitting above our actuaries' best estimate or central estimate, if you will, for three quarters running now, so it's all positive. I think 5.5% is a real good number for 2016.

Excellent. Thanks, guys.

And we do have a question from the line of Kevin Kaczmarek with Zelman & Associates. Please go ahead.

Hey, guys. Can you give us some color on any premium rate changes that you're thinking about? I know some of your peers moved some rates around in some Western states, I guess, in the latter half of 2015. Can you just talk about what you're thinking about rates heading into the next year, especially in the top 10 states?

That's a good point. And we really haven't had a rate increase for several years. We kind of went back about four years or five years ago and raised rates in a number of different areas. And that's something we're going to be addressing over the next six months or so just to analyze state by state, see where we are, see where our competitors are, see if there's room to move rates a bit. We're profitable, we're doing well, our margins are good. And so raising rates is always a tricky subject to deal with the various states. There is more work being done now with TRID, so we have a justification. So we are going to be on that. It'll probably take us until July 1 to really have a good feel for it before we start implementing some rate increases.

Okay. And I guess on the commercial space, more in terms of claims and kind of the book of business that you've been writing over the past, say, five years or six years, can you give us some sense of your exposure to energy and any potential claims there? And I don't know if you have any historical context from earlier time periods, but should we be expecting a bump up in some claims from the energy space given what's going on with the commodities prices?

No. Of course, we insure at a point in time when the transaction closes. The one thing the industry has done over the last eight years is really improve its position relative to various types of losses. So we rarely insure mechanic's liens which is broken priority. Creditors’ rights have been eliminated from the insurance process. So we knock on wood, but we really don't anticipate any kind of adverse development from the energy sector. Other than what might normally happen in a particular claim situation, we might have missed an easement or we might have made an error in terms of our underwriting process, but that would apply to any type of transaction, not just energy.

Okay. All right. That's all I had. Thanks a lot.

And we do have a question from the line of Chris Gamaitoni with Autonomous. Please go ahead.

Good morning. Thanks for taking my call. On TRID, I was wondering since there appears to have been a delay in the fourth quarter, is it reasonable to think that there may be a higher close rate in the first quarter than seasonally would be expected?

No, there was - the only delay - I mean the closing cycle may be extended out a week or week and a half. And as people get more familiar with the process that will probably come back and seek a proper level. So there was maybe some deferral from the fourth quarter into the first quarter - or from December into January, but not really significant or at least not something we've been able to track. We didn't lose any transactions. It's just taken because - it's fairly laborious, so it's just taking a little longer to get these deals closed, but it'll snap back to where it was here, really as we finish out the quarter.

Sure. And can you - I think in the prior quarters, you had talked about a plan to expand your retail market share. I was wondering if you give us an update on how that's going, what you're doing, kind of what you see for 2016.

Well, over the course of 2015, we have made several acquisitions of title agents around the country. We made a nice acquisition in Texas, Michigan, over in Arizona, Southern California. I think we made seven or eight acquisitions in 2015. We've got one underway here in the first quarter. So we're going to continue looking to expand our footprint through these acquisitions. We'd like to pick up a big one. These are for the most part mid-range, but we're continuing to expand the footprint where we have space, and Texas is a great example of geographically where we could do some more work.

Perfect. And just finally, could you give us the rationale for moving Pacific Union into corporate? And is there any way to kind of give us the historicals [indiscernible] so we have a clean comp?

So the historicals are easy because there wasn't anything in 2014. So it's entirely in 2015 and it's in each of the quarters, and so you'll see as we report each quarter that we'll have the appropriate comps. We just felt like it made more sense. It's a different business, different line of business. It's separate and apart from our title business. It's separately managed and overseen than our title business. So it made some sense, different margin profile than our title business. So for a lot of reasons, it made sense. And we have three of them now, and so it was big enough to be impactful. And so, that's why we moved that over into the corporate segment.

Right. Perfect. Thank you.

And we do have a question from the line of Jason Deleeuw with Piper Jaffray. Please go ahead.

Thank you. Question on 15% title margin. It sounds like strong commercial, I mean it's kind of flattish revenue from the commercial and then stable refi and then expecting some growth on purchase. So it sounds like if you're going to get above the 15% title margin for the year, you would need some revenue growth. But I'm wondering how much of the margin goals kind of just in your hands in terms of additional cost cuts that you can do. I know there's going to be a little bit of benefit as you kind of normalize for TRID, but is there additional stuff you're looking at on the cost side? So, essentially, like if we had flat title revenue, could there still be some margin expansion?

Absolutely. That's always a big part of our play as expense management. So we need more revenue. And 2016, there is a great potential for us, but we're always looking at ways to become more efficient. We do more actuarial work with our title operations. We got good technology that allows us to produce the title product. We consolidate backroom functions. So we always continue to look at that. Two approaches for us, one is metrics managed through our metrics which is our head count. The other is to find ways to identify efficiencies within the title operations. So, yeah, we're not just dependent on revenue growth. We also are looking at expense reduction.

And probably one of the biggest controllable expenses was my salary and bonus, which is now - I've now become Chairman, so I just get a Chairman's fee. And it's going to be pretty - that's a big change, Tony, for 2016.

Yes.

All right. Thanks for all that color. And then on the commercial front, just obviously a little bit hotter topic. And I'm just wondering if you could just kind of level set for us what the commercial activity you're seeing. And how much visibility do you have in the commercial volume pipeline? Is it like a month or is it longer than that? What is your visibility to commercial activity?

As you probably know, commercial transactions can close in 60 days or in two years. So it's hard to determine when particularly these large transactions going to close, but we have a lot of visibility in the pipeline. We've got our 18 national commercial service centers that are very focused not only on the new transactions coming in, but our expectations of the pipeline and when these deals going to close. So it's very, very - they're very bullish on 2016. We're off to a pretty good start here in January with - we're up $10 million January over the prior January. We got some good closings. Fee per file is up a little bit. So we really worked the operations so that we are on top of the pipeline, and that's really the transparency that we have.

Got it. And then how much of the commercial activity now is purchase versus refi? Has there been any major change in those trends?

No, not really any major change. It's actually pretty close to our residential area where you're running kind of the round numbers of 60/40 purchase.

Great. Thank you very much.

And we do have a question from the line of Ryan Byrnes with Janney. Please go ahead.

Great. Thanks. Good morning, everybody.

Good morning.

I had a question on paid losses. They ticked up a little bit in the quarter, came in for the year around $284 million, a little bit higher than, I think, what we were discussing last year. Just want to get your thoughts there and, again I think obviously this impacts free cash flow going forward.

Yeah. We did have a couple - three actually - claims that were a little larger than we're typically seeing, but those large claims often are in litigation and they go on for sometimes years. And so they can be a little bit lumpy in terms of when they show up. But we had three claims that made up about $15 million in total paid out of that $84 million. So, yes, that was a little higher than we expected, and the $285 million was probably a little higher than we expected. But it's been pretty level. And we didn't lose any development as a result of those claims because they were already reserved. So, from that standpoint, we feel fine. I think probably, if we were estimating for 2016, the expectation - my expectation is we're probably coming off maybe as much as 10% off that $285 million number in 2016.

Great. Thanks for that. And then, again, maybe your outlook on M&A now that the markets have melted down pretty significantly so far this year. Maybe kind of larger M&A-type transactions. Maybe just want to get your thoughts as to how it looks right now?

Yeah, this is Brent. I'll answer that. Clearly having the market go down and having the ability to have some cash and borrowing capacity to look at those has improved dramatically. We've been focused on, as Randy mentioned, just rounding out our title footprint. Those are usually characterized by small deals, very hard to move our overall needle. But collectively over time, it will add up. There are certain larger transactions in our space that we've been looking at. One was we thought we'd get done. Unfortunately, it moved away from us. But clearly, it's a better market now to be buying things and it certainly was in mid-2015, so we're excited about the possibilities and hopefully we could announce something, as Bill say, in the next quarter.

Great. Thanks, guys. [Operator Instructions]

And we do have a question from the line of Mark Hughes with SunTrust. Please go ahead.

Thank you. Good morning. Sorry, if I missed this, but could you give an indication of how the residential order trends looked in January and February?

Sure. In January, we opened up 7,300 orders per day. In the last week of January, we opened up 7,800 orders per day. And in the first week of February, we opened up 8,500 orders per day. So, with the refinances with the low rates, that's come up. And our purchase market is up about 4% January-over-January.

Great. Thank you.

And we do have a follow-up question from the line of Chris Gamaitoni with Autonomous. Please go ahead.

Thanks for taking my follow-up. I just want to clarify on the M&A discussion. Is your interest only limited to title or would it also be other complementary businesses that you pursued in the past?

Well, it would be within our core business, so the real estate and mortgage industries. And keep in mind, we also oversee M&A for Black Knight. While it's not really part of their strategy looking back, certainly going forward, we're looking at opportunities for them as well. So it's all in and around the real estate and mortgage industries, and we're going to stick to those industries.

But we'd probably expand beyond title insurance agency purchases. We've got a lot of different ideas about how to supplement ServiceLink's business, our loan care business. And so that's kind of been Brent's emphasis over the last year or so. We just haven't - every transaction we've been working on for some reason has either been deferred or, as Brent said, moved away from us because someone paid a price that we thought was not a reasonable price.

Perfect. Thank you so much for the clarification. [Operator Instructions]

At this time, it does appear there are no further questions from the phone lines. Please continue.

Great. Thank you. Both our title business and Black Knight generated strong financial performance in the fourth quarter and for the full year 2015. We look forward to maximizing profitability from both businesses in 2016 and beyond. Thanks for joining us this morning.

And ladies and gentlemen, that does conclude the conference for today. Thank you for your participation and for using the AT&T Executive Teleconference Service. You may now disconnect.