UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the Quarter Ended March 31, 2005

Commission File Number 1-9396

FIDELITY NATIONAL FINANCIAL, INC.

(904) 854-8100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES  þ          NO  o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES  þ          NO  o

     As of April 30, 2005, 172,762,061 shares of the Registrant’s Common Stock were outstanding.

FORM 10-Q
QUARTERLY REPORT
Quarter Ended March 31, 2005

INDEX

Part I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

See Notes to Condensed Consolidated Financial Statements

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)

See Notes to Condensed Consolidated Financial Statements

4

FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

(1)	Net of income tax (benefit) expense of $(10.9) million and $2.0 million for the three months ended March 31, 2005 and 2004, respectively.

(2)	Net of income tax (benefit) expense of $(1.0) million and $0.9 million for the three months ended March 31, 2005 and 2004, respectively.

(3)	Net of income tax expense of $0.4 million and $3.8 million for the three months ended March 31, 2005 and 2004, respectively.

See Notes to Condensed Consolidated Financial Statements.

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)

See Notes to Condensed Consolidated Financial Statements

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

See Notes to Condensed Consolidated Financial Statements.

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FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

See Notes to Condensed Consolidated Financial Statements

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Fidelity National Financial, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Note A — Basis of Financial Statements

     The unaudited financial information included in this report includes the accounts of Fidelity National Financial, Inc. and its subsidiaries (collectively, the “Company”) and has been prepared in accordance with generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

     Certain reclassifications have been made in the 2004 Condensed Consolidated Financial Statements to conform to classifications used in 2005.

Note B — Acquisitions

     The results of operations and financial position of the entities acquired during any year are included in the Consolidated Financial Statements from and after the date of acquisition. The Company employs an outside third party valuation firm to value the identifiable intangible and tangible assets and liabilities of each of its acquisitions. Based on this valuation any differences between the fair value of the identifiable assets and liabilities and the purchase price paid is recorded as goodwill.

     InterCept, Inc.

     On November 8, 2004, the Company acquired all of the outstanding stock of InterCept, Inc. (“InterCept”) for $18.90 per share. The total purchase price was approximately $419.4 million and was paid by $407.3 million of cash with the remaining purchase price relating to the issuance of Company options for vested InterCept options. InterCept provides both outsourced and in-house, fully integrated core banking solutions for community banks, including loan and deposit processing and general ledger and financial accounting operations. InterCept also operates significant item processing and check imaging operations, providing imaging for customer statements, clearing and settlement, reconciliation and automated exception processing in both outsourced and in-house relationships for customers.

     The assets acquired and liabilities assumed in the InterCept acquisition were as follows (dollars in thousands):

     Aurum Technology, Inc.

     On March 11, 2004, the Company acquired Aurum Technology, Inc. (Aurum) for $306.4 million, comprised of $185.0 million in cash and the issuance of 3,144,390 shares of the Company’s common stock valued using closing prices two days before and after the valuation date, which was $121.4 million. Aurum is a provider of outsourced and in-house information technology solutions for the community bank and credit union markets.

     The assets acquired and liabilities assumed in the Aurum acquisition were as follows (dollars in thousands):

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     Sanchez Computer Associates, Inc.

     On April 14, 2004, the Company acquired Sanchez Computer Associates, Inc. (Sanchez) for $183.7 million, comprised of $88.1 million in cash and the issuance of 2,267,290 shares of the Company’s common stock valued using closing prices two days before and after the valuation date, which was approximately $88.1 million with the remaining purchase price of $7.5 million relating to the issuance of the Company’s stock options for vested Sanchez stock options. Sanchez develops and markets scalable and integrated software and services that provide banking, customer integration, outsourcing and wealth management solutions to financial institutions in several countries.

     The assets acquired and liabilities assumed in the Sanchez acquisition were as follows (dollars in thousands):

     Kordoba

     On September 30, 2004, FNF acquired a 74.9% interest in KORDOBA Gesellschaft fur Bankensoftware mbH & Co. KG, Munich, or Kordoba, a provider of core processing software and outsourcing solutions to the German banking market, from Siemens Business Services GmbH & Co. OHG (Siemans). The acquisition price was $123.6 million in cash. The Company recorded the Kordoba acquisition based on its proportional share of the fair value of the assets acquired and liabilities assumed on the purchase date.

     The assets acquired and liabilities assumed in the Kordoba acquisition were as follows (dollars in thousands):

     American Pioneer Title Insurance Company

     On March 22, 2004, the Company acquired American Pioneer Title Insurance Company (“APTIC”) for $115.2 million in cash. APTIC is a 45-state licensed title insurance underwriter with significant agency operations and computerized title plant assets in the state of Florida. APTIC operates under the Company’s Ticor Title brand.

     The assets acquired and liabilities assumed in the APTIC acquisition were as follows (dollars in thousands):

     Selected unaudited pro forma combined results of operations for the three months ended March 31, 2004 of the acquired companies assuming the above acquisitions had occurred as of January 1, 2004, and using actual general and administrative expenses prior to the acquisition, are set forth below:

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Other Transactions:

     ClearPar

     On December 13, 2004, the Company acquired ClearParSM, LLC (“ClearPar”), a provider of a web-based commercial loan settlement system servicing the primary syndication and secondary loan trading markets. The acquisition price was $24.5 million in cash.

     Covansys Corporation

     On September 15, 2004, the Company acquired 11 million shares of common stock and warrants to purchase 4 million additional shares of Covansys Corporation (Covansys), a publicly traded U.S.-based provider of application management and offshore outsourcing services with India based operations for $121.0 million in cash. The Company owns approximately 29% of Covansys and accounts for the investment in common stock using the equity method of accounting and, until March 25, 2005, accounted for the warrants under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”. Under SFAS No. 133, the investment in warrants are considered derivative instruments and were recorded at a fair value of approximately $23.5 million on the date of acquisition. During the first quarter of 2005, the Company has recorded a loss of $4.4 million on the decrease in fair value of the warrants through March 25, 2005 which is reflected in the Consolidated Statement of Earnings in realized gains and losses. On March 25, 2005, the terms of the warrants were amended such that the accounting for the investment in the warrants is now governed by the provisions of Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, and changes in the fair value of the warrants are recorded in other comprehensive earnings.

     The Company also entered into a master service provider agreement with Covansys which requires the Company to purchase a minimum of $150 million in services over a five year period expiring June 30, 2009 or be subject to certain penalties if certain spending thresholds are not met. The Company is subject to penalties aggregating $8.0 million in the event that certain annual thresholds are not met and a final penalty equal to 6.67% of the unmet commitment.

     Geotrac, Inc.

     On July 2, 2004, the Company acquired 100% of Geotrac, Inc. (“Geotrac”), a flood zone monitoring services provider for $40 million in cash.

     Bankware

     On April 7, 2004, the Company acquired Bankware, a provider of check imaging solutions for financial institutions for $47.7 million in cash.

     Hansen Quality Loan Services, LLC

     On February 27, 2004, the Company acquired an additional 44% interest in Hansen Quality Loan Services, LLC (“Hansen”) that it did not already own for $33.7 million, consisting of $25.2 million in cash and $8.5 million of the Company’s common stock. The stock portion of the purchase price resulted in the issuance of 220,396 shares of the Company’s common stock. Hansen provides collateral risk assessment and valuation services for real estate mortgage financing. On March 26, 2004, we acquired the remaining 1% interest in Hansen for $.3 million in cash. In the first quarter 2005, the Company issued an additional 36,838 shares to the prior management of Hansen valued at $1.6 million in satisfaction of an earn-out provision in the purchase agreement.

Note C — Recapitalization of Fidelity National Information Services, Inc. (“FIS”) and Minority Interest Sale Resulting in a Gain on issuance of Subsidiary Stock

     The recapitalization of FIS was accomplished through $2.8 billion in borrowings under new senior credit facilities consisting of an $800 million Term Loan A facility, a $2.0 billion Term Loan B facility (collectively, the “Term Loan Facilities”) and a $400 million revolving credit facility (“Revolver”). FIS fully drew upon the entire $2.8 billion in Term Loan Facilities to consummate the recapitalization while the Revolver remained undrawn at the closing of the recapitalization. The current interest rate on both the Term Loan Facilities and the Revolver is LIBOR +1.75%. Bank of

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America, JP Morgan Chase, Wachovia Bank, Deutsche Bank and Bear Stearns led a consortium of lenders providing the new senior credit facilities.

     The minority equity interest sale was accomplished through FIS selling an approximately 25 percent minority equity interest in the common stock of FIS to an investment group led by Thomas H. Lee Partners (“THL”) and Texas Pacific Group (“TPG”). FIS issued a total of 50 million shares of the common stock of FIS to the investment group for a total purchase price of $500 million. A new Board of Directors has been created at FIS, with William P. Foley, II, current Chairman and Chief Executive Officer of FNF, serving as Chairman and Chief Executive Officer of FIS. FNF has appointed four additional members to the FIS Board of Directors, while each of THL and TPG have appointed two new directors. The minority equity interest sale resulted in a non-operating gain of $318.2 million. This gain was calculated under the provisions of Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin Topic 5H (“SAB Topic 5H”) and relates to the issuance of securities of a non-wholly owned subsidiary. The gain represents the difference between the Company’s book value investment in FIS immediately prior to the transaction and its book value investment in FIS immediately following the transaction. No deferred income taxes were recorded in connection with this transaction as the tax basis of the investment was greater than the book basis on the date of the sale.

     The following steps were undertaken to consummate the FIS recapitalization plan and the minority equity interest sale in FIS. On March 8, 2005, FIS declared a dividend to FNF of $2.7 billion and issued a $2.7 billion note to FNF as payment. On March 9, 2005, FIS borrowed $2.8 billion under its new senior credit facilities. FIS then paid FNF $2.7 billion, plus interest, to repay the $2.7 billion note issued on March 8, 2005. FNF used $400 million of these funds to repay all outstanding principal and interest on its bank debt. The remainder was used to fund a $10 per share dividend to FNF shareholders, with the balance available for general corporate purposes at FNF, which may include acquisitions. The minority equity interest sale in FIS was then closed through the payment of $500 million from the investment group led by THL and TPG to FIS. FIS then repaid approximately $410 million outstanding under its current credit facility. Finally, FIS paid all expenses related to the transactions. These expenses totaled $80.4 million, consisting of $33.2 million in bank fees that were capitalized as debt issuance costs and $47.2 million in fees relating to the minority interest sale that were netted against the proceeds, including placement fees payable to the investors. All remaining proceeds will be utilized for other general corporate purposes at FIS.

Note D — Earnings Per Share

     The Company presents “basic” earnings per share, representing net earnings divided by the weighted average shares outstanding (excluding all common stock equivalents), and “diluted” earnings per share, representing the dilutive effect of all common stock equivalents. The following table illustrates the computation of basic and diluted earnings per share:

     Options to purchase 4,660,085 shares and 9,242 shares of the Company’s common stock for the three months ended March 31, 2005 and 2004, respectively, were not included in the computation of diluted earnings per share because they were antidilutive.

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Note E – Investments

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2005 were as follows:

     A substantial portion of the Company’s unrealized losses relate to U.S. government and state and political subdivisions holdings. These unrealized losses were primarily caused by interest rate increases. Since the decline in fair value of these investments is attributable to changes in interest rates and not credit quality, and the Company has the intent and ability to hold these securities, the Company does not consider these investments other-than-temporarily impaired.

Note F- Stock-Based Compensation Plans

     The Company accounts for stock-based compensation using the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), for stock-based employee compensation. Under the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period. The Company has elected to use the prospective method of transition, as permitted by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based

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Compensation — Transition and Disclosure” (“SFAS No. 148”). Under this method, stock-based employee compensation cost is recognized from the beginning of 2003 as if the fair value method of accounting had been used to account for all employee awards granted, modified, or settled in years beginning after December 31, 2002. In December 2004, the FASB issued Statement No. 123R “Share Based Payment”. The Company will be required to adopt the provisions of this statement in the first quarter of 2006 and does not believe that it will have a material effect on earnings since all options granted prior to January 1, 2003 will be fully vested as of that date.

     The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to all outstanding and unvested awards in each period:

Note G — Notes Payable

     Notes payable consist of the following:

     On March 9, 2005, Fidelity National Information Solutions, Inc. and Fidelity National Tax Service, Inc., collectively the (“borrowers”), both direct subsidiaries of FIS and indirect subsidiaries of Fidelity National Financial, Inc., entered into a Credit Agreement, dated as of March 9, 2005, with Bank of America, as (“Administrative Agent”) and other financial institutions (the “Credit Agreement”). Fidelity National Financial, Inc. is not a party nor a guarantor to this agreement.

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     The Credit Agreement replaces a $500 million Revolving Credit Agreement, dated as of November 8, 2004, among FIS, as borrower, and Wachovia Bank, National Association, as Administrative Agent and Swing Line Lender, Bank of America, as Syndication Agent and the other financial institutions party thereto (the “Wachovia Credit Agreement”), which was repaid and terminated on March 9, 2005, prior to its scheduled expiration date of November 8, 2007. On the date of its termination, approximately $410.2 million was outstanding under the Wachovia Credit Agreement and no early termination penalties were incurred.

     The Credit Agreement provides for a $800 million six-year term facility (“Term A Loans”), a $2.0 billion eight-year term facility (“Term B Loans”) and a $400 million revolving credit facility maturing on the sixth anniversary of the closing date. The term facilities were fully drawn on the closing date while the revolving credit facility was undrawn on the closing date. FIS has provided an unconditional guarantee of the full and punctual payment of the Borrowers’ obligations under the Credit Agreement and related loan documents.

     Fidelity National Information Solutions, Inc. has granted the Administrative Agent a first priority (subject to certain exceptions) security interest in substantially all of its personal property, including shares of stock and other ownership interests.

     Amounts under the revolving credit facility may be borrowed, repaid and reborrowed by the Borrowers from time to time until the maturity of the revolving credit facility. The term facilities are subject to quarterly amortization of principal in equal installments of 0.25% of the principal amount with the remaining balance payable at maturity. In addition to the scheduled amortization, and with certain exceptions, the term loans are subject to mandatory prepayment from excess cash flow, issuance of additional equity and debt and certain sales of assets. Voluntary prepayments of both the term loans and revolving loans and commitment reductions of the revolving credit facility under the Credit Agreement are permitted at any time without fee upon proper notice and subject to a minimum dollar requirement. Revolving credit borrowings and Term A Loans bear interest at a floating rate, which will be, at the Borrowers’ option, either the British Bankers Association LIBOR or a base rate plus, in both cases, an applicable margin, which is subject to adjustment based on the performance of the Borrowers. The Term B Loans bear interest at either the British Bankers Association LIBOR plus 1.75% per annum or, at the Borrowers’ option, a base rate plus 0.75% per annum.

     Principal maturities of notes payable at March 31, 2005, are as follows (dollars in thousands):

Note H — Segment Information

     During 2004, the Company restructured its business segments to more accurately reflect a change in the Company’s current operating structure. All previously reported segment information has been restated to be consistent with the current presentation.

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Summarized financial information concerning the Company’s reportable segments is shown in the following table.

For the three months ended March 31, 2005:

For the three months ended March 31, 2004:

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     Title Insurance

     This segment, consisting of title insurance underwriters and wholly-owned title insurance agencies, provides core title insurance and escrow services, including document preparation, collection and trust activities.

     Financial Institution Software and Services

     The Financial Institution Software and Services segment focuses on two primary markets, financial institution processing and mortgage loan processing. The primary applications are software applications that function as the underlying infrastructure of a financial institution’s processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts, and core mortgage processing software, which lenders/servicers use to process and service mortgage loans. This segment also provides a number of complementary applications and services that interact directly with the core processing applications, including applications that facilitate interactions between the segment’s financial institution customers and their clients.

     Lender Outsourcing Solutions

     The Lender Outsourcing Solutions segment offers customized outsourced business process and information solutions to national lenders and loan servicers. This business provides loan facilitation services, which allows customers to outsource their title and closing requirements in accordance with pre-selected criteria, regardless of the geographic location of the borrower or property. Depending on customer requirements, the Company performs these services both in the traditional manner involving many manual steps, and through more automated processes, which significantly reduce the time required to complete the task. The Company also provides default management services, which allow customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan through the default and foreclosure process. The Company utilizes its own resources and networks established with independent contractors to provide outsourcing solutions.

     Information Services

     In the Information Services segment, the Company operates a real estate-related information services business. The Company’s real estate-related information services are utilized by mortgage lenders, investors and real estate professionals to complete residential real estate transactions throughout the U.S. The Company offers a comprehensive suite of applications and services spanning the entire home purchase and ownership life cycle, from purchase through closing, refinancing and resale.

     Specialty Insurance

     This segment, consisting of various non-title insurance subsidiaries, issues flood, home warranty and homeowners insurance policies.

     Corporate and Other

     The corporate segment consists of the operations of the parent holding company, smaller entities that do not fit in other segment classifications including the Company’s leasing operations, as well as the issuance and repayment of corporate debt obligations.

Note I — Dividends, Stock Repurchase Program and Share and Per Share Restatement

     On January 26, 2005, the Company’s Board of Directors declared a cash dividend of $0.25 per share, payable on March 24, 2005, to stockholders of record as of March 10, 2005. On March 9, 2005, the Company’s Board of Directors declared a cash dividend of $10.00 per share payable on March 28, 2005 to stockholders of record as of March 21, 2005. On April 26, 2005, the Company’s Board of Directors declared a cash dividend of $0.25 per share, payable on June 21, 2005, to stockholders of record as of June 7, 2005.

     On April 24, 2002, the Company’s Board of Directors approved a three-year stock repurchase program, whereby the Company plans to devote a portion of its annual cash flow from operations to the systematic repurchase of shares of its common stock. Purchases may be made by the Company from time to time in the open market, in block purchases or in privately negotiated transactions. There were no share repurchases during the first three months of 2005.

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     On April 25, 2005, the Company’s Board of Directors approved another three-year stock repurchase program similar to the 2002 plan which authorizes the repurchase of up to ten million shares.

Note J — Pension and Postretirement Benefits

     The following details the Company’s periodic (income) expense for pension and postretirement benefits:

     There have been no material changes to the Company’s projected benefit payments under these plans since December 31, 2004 as disclosed in the Company’s Form 10K filed on March 16, 2005.

Note K — Legal Proceedings

     In the ordinary course of business, the Company is involved in various pending and threatened litigation matters related to its operations, some of which include claims for punitive or exemplary damages. The Company believes that no actions, other than those listed below, depart from customary litigation incidental to its business. Further, the Company believes the resolution of all pending and threatened litigation will not have a material effect on its results of operations, financial position or liquidity.

     The Company is named in one class action lawsuit alleging irregularities and violations of law in connection with title and escrow practices in California. The Company believes that this lawsuit will be dismissed or settled now that the other California class actions concerning similar practices have been finally settled.

     Several class actions are pending alleging improper premiums were charged for title insurance. Four class action cases were filed in New York and have been consolidated for further proceedings. The cases allege that the named defendant companies failed to provide notice of premium discounts to consumers refinancing their mortgages, and failed to give discounts in refinancing transactions in violation of the filed rates. The actions seek refunds of the premiums charged and punitive damages. These actions were settled in the fall of 2004, and the court has granted preliminary approval of the settlement on January 24, 2005. A suit in Minnesota making these allegations was also settled. Similar allegations also have been made in class actions filed in Ohio, Pennsylvania and Florida. Recently, the court refused to certify a class in one of the Ohio actions and the plaintiffs in that case have appealed.

     Two class actions, one in California and one in Michigan allege that the Company violated the Real Estate Settlement Procedures Act (“RESPA”) and state law by giving favorable discounts or rates to builders and developers. These actions seek refunds of the premiums charged and additional damages. The Company intends to vigorously defend these actions.

     Several class actions are pending alleging that the Company imposed improper charges in closing real estate transactions. A class action pending in Tennessee alleges the Company’s agents have charged for satisfactions that were not recorded. Similar suits have been filed in Arkansas and New York. Two other class actions pending in Indiana allege that the Company overcharged recording fees. The Company intends to vigorously defend the pending actions.

     A class action in Arkansas alleges that the issuance of title commitments, policies and actions taken in aid of clearing title by title companies is the unauthorized practice of law. This case was dismissed by the trial court for lack of jurisdiction reasoning the dispute could only be brought before the Arkansas Committee on the Unauthorized Practice of Law. The Arkansas Supreme Court recently reversed the holding of the trial court asserting that the trial court had concurrent jurisdiction, and remanded the matter back to the trial court. The Company will continue to vigorously defend this action. Two class actions were recently filed in Georgia alleging that the Company was complicit with lenders in denying borrowers their right to representation of counsel at the closing of their consumer loans, and engaged in the unauthorized practice of law. One of those cases was settled for nominal consideration, and the Company intends to vigorously defend the other.

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     A class action is pending in California alleging that the Company violated the Telephone Consumer Protection Act by sending unsolicited facsimile advertising. Plaintiffs seek statutory damages. A class was certified in April 2004. At mediation, the parties reached a settlement in principle subject to the approval of final documents.

     A shareholder derivative action was recently filed in Florida alleging that the Company’s directors and certain executive officers breached their fiduciary and other duties to the Company by permitting the Company to pay so called contingent commissions to obtain business, thereby exposing the Company to fines and penalties. The Company has retained counsel and obtained an extension to respond.

     The Company and its subsidiaries FIS and FI are defendants in a civil lawsuit brought by an organization that formerly acted as a sales agent for Alltel Information Services, the predecessor to FI, in China. The suit, which is pending in state court in Monterey County, CA, seeks to recover damages for an alleged breach of the agency contract. The Company intends to defend this case vigorously. The plaintiff in the case has made allegations that the Company violated the Foreign Corrupt Practices Act in connection with its dealings involving a bank customer in China. The Company is cooperating with the Securities and Exchange Commission and the U.S. Department of Justice, which made inquiries regarding these allegations. The Company and its counsel are in the process of investigating these allegations. Based on the results and extent of the investigations completed to date, the Company does not believe that the ultimate disposition of these allegations or the lawsuit will have a material adverse impact on the Company’s financial position, results of operations or cash flows.

     Several state departments of insurance and attorney generals are investigating so called “captive reinsurance” programs whereby some of the Company’s title insurance underwriters reinsured policies through reinsurance companies owned or affiliated with brokers, builders or bankers. Some investigating agencies claim these programs unlawfully compensated customers for the referral of title insurance business. Although the Company believed and continues to believe the programs were lawful, the programs have been discontinued. The Company is cooperating with the investigating authorities, and no actions have been filed by the authorities against the Company or its underwriters.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions or strategies regarding the future. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results could vary materially from those forward-looking statements contained herein due to many factors, including, but not limited to: general economic and business conditions, including interest rate fluctuations and general volatility in the capital markets; changes in the performance of the real estate markets; the impact of competitive products and pricing; success of operating initiatives; adverse publicity; the ability to identify businesses to be acquired; availability of qualified personnel; employee benefits costs and changes in, or the failure to comply with, government regulations and other risks detailed in our filings with the Securities and Exchange Commission.

     The following discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Overview

     We are the largest title insurance company in the United States. Our title insurance underwriters — Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title — together issued approximately 31.4% of all title insurance policy premiums issued nationally during 2003, including the 2003 results of American Pioneer Title Insurance Company, which we acquired in March 2004. We are also a leading provider of technology solutions, processing services, and information services to the financial services and real estate industries. Over 2,400 financial institutions use our services, including 45 of the 50 largest banks in the U.S. Our applications process over 50% of all U.S. residential mortgage loans by dollar volume with balances exceeding $3.6 trillion, and over 235 million deposit accounts and non-mortgage consumer loans and leases are processed on our core bank processing platform. We also provide customized business process outsourcing related to aspects of the origination and management of mortgage loans to national lenders and loan servicers. Our information services, including our property data and real estate-related services, are used by mortgage lenders, mortgage investors and real estate professionals to complete residential real estate transactions throughout the U.S. We provide information services that span the entire home purchase and ownership life cycle, from contact through closing, refinancing and resale.

     We have six reporting segments:

•   Title Insurance. The title insurance segment consists of our title insurance underwriters and our wholly-owned title insurance agencies. The title segment provides core title insurance and escrow and other title related services including collection and trust activities, trustee’s sales guarantees, recordings and reconveyances.

•   Specialty Insurance. The specialty insurance segment, consisting of our various non-title insurance subsidiaries, issues flood, home warranty and homeowners insurance policies.

•   Financial Institution Software and Services. The financial institution software and services segment consists primarily of the operations of Fidelity Information Services, Inc. (“FI”), which was acquired on April 1, 2003 and subsequent acquisitions of WebTone, Inc. (“Webtone”), InterCept, Inc. (“InterCept”), KORDOBA Gesellschaft fur Bankensoftware mbH & Co. KG, Munich (“Kordoba”), Sanchez Computer Associates, Inc. (“Sanchez”) and Aurum Technology, Inc. (“Aurum”). This segment focuses on two primary markets, financial institution processing and mortgage loan processing.

•   Lender Outsourcing Solutions. The lender outsourcing solutions segment includes our loan facilitation services, which consist of centralized, customized title agency and closing services, which we offer to first mortgage, refinance, home equity and sub-prime lenders, and our default management services, which include foreclosure posting and publishing services, loan portfolio services, field services and property management. These services allow our customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan though the default and foreclosure process.

•   Information Services. The information services segment offers real estate related information services. Included in the information services we provide are property appraisal and valuation services, property records

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information, real estate tax services, borrower credit and flood zone information and certification and multiple listing software and services.

•   Corporate and Other. The corporate and other segment consists of the operations of the parent holding company, certain other unallocated corporate overhead expenses, the operations of our wholly-owned equipment-leasing subsidiary and other small operations.

     Our title insurance and specialty insurance segments make up our insurance underwriting businesses, while our financial institution software and services, lender outsourcing solutions and information services segments make up the technology solutions, processing and information-based services businesses of our subsidiary Fidelity National Information Services, Inc. (“FIS”).

Factors Affecting Comparability

     Our Condensed Consolidated Statements of Earnings for the three months ended March 31, 2005 include the results of operations of InterCept, Kordoba, Sanchez, Aurum and American Pioneer Title Insurance Company, Inc. (“APTIC”), which were acquired on various dates during 2004, as discussed in Note B of Notes to Condensed Consolidated Financial Statements. The acquisitions may affect the comparability of our 2005 and 2004 results of operations, particularly with respect to our financial institution software and services segment in which the operating results of all these acquisitions, with the exception of APTIC, are reported.

Results of Operations

Consolidated Results of Operations

     Net Earnings. The following table presents certain financial data for the years indicated:

     Revenue. The following table presents the components of our revenue:

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Revenues

     Total consolidated revenues for the first quarter of 2005 increased $434.8 million to $2,271.6 million primarily from the inclusion of a net $318.2 million non-operating gain relating to the issuance of subsidiary stock in the sale of a minority interest in FIS (see Note C to our consolidated financial statements included in this report). Excluding the net gain, total revenue increased $116.6 million or 6.3% as compared to the prior year quarter. This increase in consolidated revenue in the first quarter of 2005 was primarily due to the increases of $137.4 million in the financial institution software and services segment, $26.8 million in the specialty insurance segment and $12.8 million in the information services segment. These increases were offset by an aggregate decrease of $62.0 million in title and lender outsourcing segment operating revenues. The large increase in the operating revenues of the financial institution software and services segment was due to the inclusion of the results of numerous 2004 acquisitions in this segment in the 2005 quarter.

     Consolidated title insurance premiums for the three-month periods were as follows:

     Title insurance premiums decreased 7.7% to $988.6 million in the first quarter of 2005 as compared with the first quarter of 2004. An increase of $12.9 million or 2.7% in direct premiums was offset by a $95.5 million or 15.8% decrease in premiums from agency operations. The increased level of direct title premiums is a direct result of an increase in the average fee per file offset by a decline in closed order levels as compared with the prior year. The drop experienced in closed orders reflects a slowing refinance market as evidenced by the Mortgage Bankers Association’s (MBA) statistics showing that approximately 46% of new loan originations in the first quarter of 2005 were refinance transactions as compared with approximately 57% in the first quarter of 2004. The increase in fee per file is the result of the decreased levels of refinance-driven activity, which typically have lower fees, in the first quarter of 2005 as compared with the prior year quarter, as well as the appreciation of home prices over the past year. The decrease in agency revenues relates to the fact that the first quarter of 2004 benefited from the continued refinance volumes of 2003, which were at an all-time high, while the 2005 first quarter realized revenue from a declining refinance environment.

     Trends in escrow and other title related fees are primarily related to title insurance activity generated by our direct operations. Escrow and other title related fees during the three-month periods ended March 31, 2005 and 2004, fluctuated in a pattern generally consistent with the fluctuation in direct title insurance premiums and order counts. Escrow and other title related fees were $242.2 million and $218.6 million for the first quarter of 2005 and 2004, respectively.

     Interest and investment income levels are primarily a function of securities markets, interest rates and the amount of cash available for investment. Interest and investment income in the first quarter of 2005 was $26.4 million, compared with $14.5 million in the first quarter of 2004, an increase of $11.9 million, or 82.1%. The increase in interest and investment income in the first quarter of 2005 is due primarily to an increase in short-term investments and the fixed income asset base during the current year quarter and the increasing interest rate environment.

     Net realized gains for the first quarter was $3.9 million compared with net realized gains of $12.5 million for the corresponding period of the prior year.

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     Expenses. The following table presents the components of our expenses:

     Our operating expenses consist primarily of personnel costs, other operating expenses and agent commissions, which are incurred as orders are received and processed. Title insurance premiums, escrow and other title related fees are generally recognized as income at the time the underlying transaction closes. As a result, revenue lags approximately 45-60 days behind expenses and therefore gross margins may fluctuate. The changes in the market environment, mix of business between direct and agency operations and the contributions from our various business units have impacted margins and net earnings. We have implemented programs and have taken necessary actions to maintain expense levels consistent with revenue streams. However, a short time lag does exist in reducing variable costs and certain fixed costs are incurred regardless of revenue levels.

     Personnel costs include base salaries, commissions, benefits and bonuses paid to employees, and are one of our most significant operating expenses. Personnel costs totaled $747.1 million and $636.6 million for the three months ended March 31, 2005 and 2004, respectively. Personnel costs, as a percentage of total revenue (excluding the $318.2 million gain on issuance of subsidiary stock), were 38.2% in the first quarter of 2005, and 34.7% for the first quarter of 2004. The increase of $110.5 million in personnel costs primarily relates to a significant increase of $77.1 million in the financial institution software and services segment caused primarily by acquisitions and an increase in the title segment of $40.6 million or 10.8% which compares to an increase in revenues from direct operations of 8.3%. The increase in the percentage of revenue on a consolidated basis is due to the fact that personnel costs are a higher percentage of revenues for our financial institution software and services segment because the nature of those businesses requires many programmers and other personnel with an information technology background.

     Other operating expenses consist primarily of facilities expenses, title plant maintenance, premium taxes (which insurance underwriters are required to pay on title premiums in lieu of franchise and other state taxes), postage and courier services, computer services (including personnel costs associated with information technology support), professional services, advertising expenses, general insurance and trade and notes receivable allowances. Other operating expenses totaled $401.4 million and $345.5 million for the three months ended March 31, 2005 and 2004, respectively. The increase of $55.9 million or 16.2% primarily relates to increases in the financial institution software and services and title segments consistent with the increases in personnel costs.

     Agent commissions represent the portion of premiums retained by agents pursuant to the terms of their respective agency contracts. Agent commissions and the resulting percentage of agent premiums we retain vary according to regional differences in real estate closing practices and state regulations.

     The following table illustrates the relationship of agent premiums and agent commissions:

     Net margin from agency title insurance premiums increased as a percentage of total agency premiums due to the Company writing a higher percentage of policies in states where we pay lower commission rates.

     Depreciation and amortization was $97.3 million in the first three months of 2005 as compared to $70.6 million in the first three months of 2004. The increase in depreciation and amortization of $26.7 million is primarily due to increased amortization of intangible assets and software acquired during 2004.

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     The provision for claim losses includes an estimate of anticipated title and title related claims, escrow losses and homeowners claims relating to our specialty insurance segment. The estimate of anticipated title and title related claims is accrued as a percentage of title premium revenue based on our historical loss experience and other relevant factors. We monitor our claims loss experience on a continual basis and adjust the provision for claim losses accordingly. The claim loss provision for title insurance was $64.3 million in the first quarter of 2005 as compared to $55.3 million in the first quarter of 2004. Our claim loss provision as a percentage of total title premiums was 6.5% and 5.3% in the first quarter of 2005 and 2004, respectively. The increase is attributable to higher than expected payment levels, especially for individually significant claims, and a return to a more normalized environment with the volume of resale transactions exceeding the refinance transactions. The claim loss provision for homeowners claims was $15.4 million and $3.6 million in the first quarter of 2005 and 2004, respectively with the increase resulting from the increase in volume of business.

     Interest expense was $24.5 million and $7.9 million in the first quarter of 2005 and 2004, respectively. The increase of $16.6 million relates to an increase in average borrowings over the entire first quarter as compared to the prior year including the $2.8 billion borrowed on March 9, 2005 as part of the FIS recapitalization transaction.

     Income tax expense as a percentage of earnings before income taxes excluding the gain on the issuance of subsidiary stock, for which no taxes were provided, was 37.9% for the first quarter of 2005 and 38.0% for the first quarter of 2004. No income taxes were provided for the gain on the issuance of subsidiary stock as the Company’s tax basis in its investment in FIS exceeded the book basis on the date of the sale. Income tax expense as a percentage of earnings before income taxes is attributable to our estimate of ultimate income tax liability, and changes in the characteristics of net earnings year to year.

     Minority interest for the first quarter of 2005 was $5.4 million as compared with $0.3 million for the corresponding prior year period. The increase in minority interest expense is attributable to earnings generated following the sale of a 25% interest in FIS and also to the minority interest relating to our Kordoba investment which we acquired in the fourth quarter of 2004.

     Net earnings increased $294.3 million in the first quarter of 2005 as compared to the prior year, but excluding the gain of $318.2 million from the issuance of subsidiary stock, they decreased $24.0 million.

Segment Results of Operations

Title Segment

Revenue

     Revenue for the title insurance segment includes direct and agency title premiums, including those earned from the lender outsourcing solutions segment, as well as escrow and other title related fees, interest and investment income and realized gains and losses. The primary reason for the $50.9 million decrease in total title segment revenue in the first quarter of 2005 as compared with the prior year period is a decrease in agency premiums offset by an increase in both title premiums and escrow and other title related fees from our direct operations. For a discussion of title segment premiums and escrow and other title related fees, see the Consolidated Results of Operations revenues discussion above.

Expenses

     Personnel costs were $417.9 million and $377.3 million in the first quarters of 2005 and 2004, respectively and generally trend with revenues from our direct operations. We have taken significant measures to maintain appropriate personnel levels and costs relative to the volume and mix of business while maintaining customer service standards and quality

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controls. We will continue to monitor prevailing market conditions and will adjust personnel costs in accordance with expected activity.

     Other operating expenses were $206.9 million and $178.7 million in the first quarters of 2005 and 2004, respectively. The increase in the first quarter of 2005 as compared with 2004 relates to the increase in revenue from direct operations.

     As noted in the consolidated results of operations, the large decrease in agent commissions for the 2005 period as compared to the prior year is the result of a large decrease in agency premiums that were earned in 2005 as compared with 2004.

     As noted in the consolidated results of operations, the provision for claim losses includes an estimate of anticipated title and title related claims and escrow losses. The estimate of anticipated title and title related claims is accrued as a percentage of title premium revenue based on our historical loss experience and other relevant factors. We monitor our claims loss experience on a continual basis and adjust the provision for claim losses accordingly.

Specialty Insurance Segment

Revenues

     Revenues from specialty insurance include revenues from the issuance of flood, home warranty and homeowners insurance policies and were $76.9 million and $49.4 million for the first quarters of 2005 and 2004, respectively. Specialty insurance revenue increased in 2005 as compared with 2004 as a result of organic growth in our homeowners insurance and flood renewal insurance businesses.

Expenses

     Personnel costs were $8.4 million and $6.5 million in the first quarters of 2005 and 2004, respectively. As a percentage of revenues, personnel costs were 10.9% and 13.2% in the first quarters of 2005 and 2004, respectively. The decrease as a percentage of revenues in the 2005 period is primarily the result of organic growth of the business lines, which has not required a proportionate increase in personnel.

     Other operating expenses in the specialty insurance segment were $38.6 million and $31.4 million in the first quarters of 2005 and 2004, respectively. As a percentage of revenues, other operating expenses were 50.1% and 63.5% in first quarters of 2005 and 2004, respectively. The decrease as a percentage of revenues in the 2005 period is primarily the result of organic growth of the business lines, which has not required a proportionate increase in these costs.

     The provision for claim loss was $15.4 million and $3.6 million in the first quarters of 2005 and 2004, respectively. The increase was primarily the result of increased activity in the homeowners insurance business.

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Financial Institution Software and Services Segment

Revenues

     Revenues from financial institution software and services were $395.3 million and $253.9 million in the first quarters of 2005 and 2004, respectively. The $141.4 million increase in revenues in 2005 compared with the 2004 period relates primarily to recording revenues from the 2004 acquisitions of Aurum, Sanchez, Kordoba and InterCept, along with a few smaller acquisitions. The 2004 acquisitions of Aurum, Sanchez, Kordoba and InterCept and other smaller acquisitions contributed $136.7 million of the increase in the 2005 period as compared with the prior year quarter. Included in the 2005 and 2004 first quarters are $15.9 million and $10.6 million, respectively, of intersegment revenues that this segment earns relating to IT software and support services that it provides to the remainder of the Company.

Expenses

     Personnel costs were $225.8 million and $148.7 million in the first quarters of 2005 and 2004, respectively. The increase in the 2005 quarter as compared to the prior year quarter is consistent with the increase in revenue relating to the 2004 acquisitions. As a percentage of revenues, personnel costs were 57.1% and 58.6% in the first quarters of 2005 and 2004, respectively.

     Other operating expenses were $59.9 million and $30.1 million in the first quarters of 2005 and 2004, respectively. The increase of $29.8 million for the 2005 period as compared with prior year period was primarily the result of the above mentioned acquisitions.

     Depreciation and amortization costs were $58.9 million and $36.5 million in the first quarters of 2005 and 2004, respectively. The increase of $22.4 million relates primarily to the amortization of intangible assets and computer software acquired in the 2004 acquisitions.

     The interest expense of $4.1 million in the first quarter of 2005 related primarily to the $410 million line of credit that was used to fund the acquisition of InterCept in November of 2004. This line was paid off on March 9, 2005 as part of the recapitalization transaction (See Note C).

Lender Outsourcing Solutions Segment

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Revenues

     Revenues from lender outsourcing solutions relate primarily to revenues from both our loan facilitation services and default management services. Revenues from lender outsourcing solutions were $90.0 million and $114.4 million in the first quarters of 2005 and 2004, respectively. The decrease in revenues of $24.4 million, or 21.3%, is largely attributable to a decrease of $32.6 million in revenue from loan facilitation services compared with the prior year quarter. This decrease is primarily the result of lower volumes from our automated process for providing title agency services, due to increased mortgage interest rates which in turn reduced refinancing transactions in the 2005 first quarter as compared with 2004. This decrease was partially offset by an increase of $8.2 million in default management services revenue.

Expenses

     Personnel costs were $33.6 million and $39.8 million in the first quarters of 2005 and 2004, respectively. As a percentage of revenues, personnel costs were 37.3% and 34.8% in the 2005 and 2004 periods. The increase in 2005 as a percentage of revenues for the quarter is primarily the result of the reduction in revenues from the automated title agency process in 2005 as compared with 2004 as labor costs relating to these revenues are not as closely related to revenue volumes in this line of business.

     Other operating expenses in the lender outsourcing solutions segment consist primarily of professional fees, data processing costs, costs to purchase real estate data and other expenses. Other operating expenses were $42.7 million and $43.3 million in the first quarters of 2005 and 2004, respectively.

Information Services Segment

Revenues

     Revenues from information services relate primarily to revenues from our property data and real estate related services. Revenues from information services in the first quarters of 2005 and 2004 were $165.7 million and $152.3 million, respectively, an increase of 8.7%. The increase was partially attributable to increased revenues in our tax monitoring and 1031 transaction services businesses.

Expenses

     Personnel costs were $44.1 million and $42.5 million for the first quarters of 2005 and 2004, respectively. As a percentage of revenues, personnel costs were 26.6% and 27.9% in the 2005 and 2004 periods, respectively.

     Other operating expenses in the information services segment consist primarily of data processing costs, costs to purchase real estate data and other expenses. Other operating expenses were $68.2 million and $70.5 million for the first quarters of 2005 and 2004, respectively. As a percentage of revenues, other operating expenses were 41.1% and 46.3% in the first quarters of 2005 and 2004, respectively.

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Corporate and Other Segment

     The corporate and other segment is made up of smaller entities that do not fit in our other segment classifications, our leasing operations, and certain corporate expenses. Excluding the gain on issuance of subsidiary stock of $318.2 million, revenues from this segment were $15.9 million and $13.6 million for the first quarters of 2005 and 2004, respectively. Operating expenses were $49.1 million and $41.7 million for the first quarters of 2005 and 2004, respectively. The increase in operating expense primarily relates to the increased interest expense related to the increased borrowings at the corporate level.

Liquidity and Capital Resources

     Cash Requirements. Our cash requirements include debt service, operating expenses, taxes, capital expenditures, systems development, treasury stock repurchases, business acquisitions and dividends on our common stock. We believe that all anticipated cash requirements for current operations will be met from internally generated funds, through cash dividends from subsidiaries, cash generated by investment securities and borrowings through public debt offerings and existing credit facilities. Our short-term and long-term liquidity requirements are monitored regularly to match cash inflows with cash requirements. We forecast the daily needs of all of our subsidiaries and periodically review their short-term and long-term projected sources and uses of funds, as well as the asset, liability, investment and cash flow assumptions underlying these projections.

     We have $500.0 million of capacity under a shelf registration statement that may be used, subject to market conditions, to issue debt or other securities at our discretion. We presently intend to use the proceeds from the sale of any securities under the shelf registration statement primarily to finance strategic opportunities. While we seek to give ourselves flexibility with respect to meeting such needs, there can be no assurance that market conditions would permit us to sell such securities on acceptable terms at any given time, or at all.

     Our two significant sources of internally generated funds are dividends and other payments from our subsidiaries. As a holding company, we receive cash from our subsidiaries in the form of dividends and as reimbursement for operating and other administrative expenses we incur. The reimbursements are executed within the guidelines of management agreements among us and our subsidiaries. Our insurance subsidiaries are restricted by state regulation in their ability to pay dividends and make distributions. Each state of domicile regulates the extent to which our title underwriters can pay dividends or make other distributions to us. As of December 31, 2004, $1,731.3 million of our net assets were restricted from dividend payments without prior approval from the Departments of Insurance. During 2005, our first tier title subsidiaries can pay or make distributions to us of approximately $209.8 million without prior approval. Our underwritten title companies, financial institution software and services companies, lender outsourcing businesses and information services companies collect revenue and pay operating expenses. However, they are not regulated to the same extent as our insurance subsidiaries. Positive cash flow from these subsidiaries is invested primarily in cash and cash equivalents. Also, the new FIS credit facility (discussed below) limits FIS’s ability to pay us dividends. The agreements limit cumulative distributions greater than $50 million, except for certain defined distributions and the proceeds of future potential equity and debt offerings. The threshold of $50 million may increase based on changes in FIS’s leverage ratio or achievement of certain cash flow targets.

     Financing. On March 9, 2005, we completed a recapitalization plan of FIS (See Note C.) FIS entered into $3.2 billion in senior credit facilities consisting of a $800.0 million Term Loan A facility, a $2.0 billion Term Loan B facility (collectively, The “Term Loan Facilities”) and a $400.0 million revolving credit facility (“Revolver”) with a consortium of lenders led by Bank of America. FIS fully drew upon the entire $2.8 billion in Term Loan Facilities to consummate the recapitalization. Revolving credit borrowings and Term A Loans bear interest at a floating rate, which will be, at the Borrowers’ option, either the British Bankers Association LIBOR or base rate plus, in both cases, an applicable margin, which is subject to adjustment based on the senior secured leverage ratio of the Borrowers. The Term B Loans bear interest at either the British Bankers Association LIBOR plus 1.75% per annum or, at the Borrowers’ option, a base rate plus 0.75% per annum. The Borrowers may choose one month, two month, three month, six month, and to the extent available, nine month or one year LIBOR, which then applies for a period of that duration. Interest is due at the end of each interest period provided. For LIBOR loans that exceed three months, the interest is due three months after the beginning of such interest period. The Term Loan A matures in March, 2011, the Term Loan B in March, 2013, and the Revolver in March, 2011. The Term Loan Facilities are subject to quarterly amortization of principal in equal installments of .25% of the original principal amount with the remaining balance payable at maturity. In addition to the scheduled amortization, and with certain exceptions, the Term Loan

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Facilities are subject to mandatory prepayment from excess cash flow, issuance of additional equity and debt and sales of certain assets. Voluntary prepayments of both the Term Loan Facilities and revolving loans and commitment reductions of the revolving credit facility are permitted at any time without fee upon proper notice and subject to minimum dollar requirements.

     The new credit facilities contain affirmative, negative, and financial covenants customary for financings of this type, including, among other things, limits on the creation of liens, limits on the incurrence of indebtedness, restrictions on investments and dispositions, limitations on dividends and other restricted payments and capital expenditures, a minimum interest coverage ratio, and a maximum secured leverage ratio.

     On November 8, 2004, FIS entered into a new credit agreement providing for a $500.0 million, 5-year revolving credit facility due November 8, 2009. The facility provided an option to increase the size of the credit facility an additional $100.0 million. This credit agreement bore interest at a variable rate based on leverage and was unsecured. The interest rate under the new credit agreement during the time it was outstanding was LIBOR plus 0.50%. In addition, FIS was required to pay a 0.15% commitment fee on the entire facility. On November 8, 2004, FIS drew down approximately $410 million to fund the acquisition of InterCept. On March 9, 2005, FIS repaid this facility with a portion of the net proceeds from our sale of a minority interest in FIS to a group of investors and terminated the agreement.

     On November 5, 2003 we entered into a new credit agreement providing for a $700.0 million, 5-year revolving credit facility due November 4, 2008. The credit agreement bears interest at a variable rate based on the debt ratings assigned to us by certain independent agencies, and is unsecured. The current interest rate under this credit agreement is LIBOR plus 0.93%. In addition, we pay a 0.23% facility fee on the entire facility. As of March 31, 2005, the entire $700.0 million is available to us. On March 9, 2005, we used a portion of the proceeds received from the FIS note to pay this line down completely although we did not terminate this facility. Our credit agreement imposes certain affirmative and negative covenants on us relating to current debt ratings, certain financial ratios related to liquidity, net worth, capitalization, investments, acquisitions and restricted payments, and certain dividend restrictions. As of March 31, 2005, we were in compliance with all of our debt covenants.

     Following the recapitalization, FIS is highly leveraged. As of March 31, 2005, it is paying interest on the term loan facilities at a rate of one month LIBOR plus 1.75%, or 4.51%. At that rate, the annual interest on its $2,800.0 million of debt would be $126.3 million. A one percent increase in the LIBOR rate would increase its annual debt service on the Term Loan Facilities by $28 million. The credit rating assigned to the Term Loan Facilities and Revolver by Standard & Poor’s is currently BB.

     Seasonality. Historically, real estate transactions have produced seasonal revenue levels for title insurers. The first calendar quarter is typically the weakest quarter in terms of revenue due to the generally low volume of home sales during January and February. The fourth calendar quarter is typically the strongest in terms of revenue due to commercial entities desiring to complete transactions by year-end. Significant changes in interest rates may alter these traditional seasonal patterns due to the effect the cost of financing has on the volume of real estate transactions.

     Contractual Obligations. Other than the borrowings an debt repayments related to the recapitalization of FIS, which obligations are described above, there have been no other material changes to our contractual obligations as presented in our Form 10K filed on March 16, 2005. See Note G to our Consolidated Financial Statements included in this report for a table showing our principal repayment obligations.

     Capital Stock Transactions. On April 24, 2002, our Board of Directors approved a three-year stock repurchase program. Purchases are made by us from time to time in the open market, in block purchases or in privately negotiated transactions. From January 1, 2004, through December 31, 2004, we repurchased a total of 430,500 shares of common stock for $16.5 million, or an average price of $38.33. Additionally, on December 13, 2004, we entered into an agreement to repurchase 2,530,346 shares of Company common stock from Willis Stein & Partners (“Willis Stein”) and J.P. Morgan Chase, as escrow agent for the former stockholder of Aurum. We acquired Aurum in March 2004. The purchase price per share of $44.35 was a discount to the closing price of the Company’s common stock on December 13, 2004. Subsequent to March 31, 2005, on April 6, 2005, we acquired 2,250,000 shares at a purchase price of $31.50 per share of Company’s common stock from

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ALLTEL. On April 25, 2005, our Board of Directors approved another three-year stock repurchase program similar to the 2002 plan. This plan authorizes us to repurchase up to ten million shares.