Edgar Filing: Fidelity National Title Group, Inc.

prem14c

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14C

(RULE 14C-101)

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934

Check the Appropriate box:


þ Preliminary information statement.		o Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2)).
o Definitive information statement.

Fidelity National Title Group, Inc.

(Name of Registrant as Specified in its Charter)

Payment of Filing Fee (Check the Appropriate box):


o	No fee required.

þ	Fee computed on table below per Exchange Act Rules 14c-5(g) and 0 -11.


	(1)	Title of each class of securities to which transaction applies:

Class A common stock


	(2)	Aggregate number of securities to which transaction applies:

45,744,681


	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

$23.50


	(4)	Proposed maximum aggregate value of transaction:

$1,075,000,000


	(5)	Total fee paid:

$115,025


o	Fee paid previously with preliminary materials.

o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.


	(1)	Amount previously paid:

N/A


	(2)	Form, Schedule or Registration Statement No.:

N/A


	(3)	Filing Party:

N/A


	(4)	Date Filed:

N/A

FIDELITY NATIONAL TITLE GROUP, INC.

601 Riverside Avenue

Jacksonville, FL 32204

We Are Not Asking You for a Proxy and

You are Requested Not To Send Us a Proxy

To the Stockholders of Fidelity National Title Group, Inc.:

On June 25, 2006, Fidelity National Title Group, Inc., which we refer to as FNT, entered into a securities exchange and distribution agreement with Fidelity National Financial, Inc., which we refer to as FNF, under which FNF agreed to transfer its interests in certain companies and certain other assets to FNT in exchange for the assumption by FNT of certain liabilities of FNF and shares of FNT Class A Common Stock, par value $0.0001 per share, which we refer to as FNT Class A common stock. In connection with the transactions under the securities exchange and distribution agreement, which we refer to as the proposed transactions, FNF will receive that number of shares of FNT Class A common stock equal to (i) 34,042,553 plus (ii) the amount of cash included in the transfer of assets (not to exceed $275,000,000 for purposes of this calculation) divided by $23.50. FNF will also convert all of the FNT Class B Common Stock, par value $0.0001 per share, which we refer to as FNT Class B common stock, it holds into FNT Class A common stock. Immediately thereafter, the shares acquired by FNF from FNT, together with the converted shares, will be distributed to holders of FNF common stock and, as a result, such FNF stockholders will receive shares of our common stock representing approximately 86% of our common stock outstanding on a fully-diluted basis.

We believe that our stockholders will benefit in several ways from the proposed transactions, including the distribution by FNF of all shares of FNT common stock held by it. First, the distribution will increase our public float, which in the long term we anticipate may enhance the trading price of our common stock. Second, the proposed transactions may enhance our ability to issue our common stock to raise equity capital and fund acquisitions and for management incentives. Our ability to do so is currently limited because, for several tax-related reasons, FNF is unwilling to own less than 80% of our common stock. These factors and others are described further in this information statement.

In connection with the proposed transactions, our certificate of incorporation will be amended to, among other things, (a) increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000, (b) eliminate the FNT Class B common stock and all provisions relating thereto, (c) remove all references to and any requirements resulting from FNF’s ownership of FNT common stock and (d) change our name to “Fidelity National Financial, Inc.” Following the proposed transactions, our common stock will be listed and traded on the New York Stock Exchange, under the symbol “FNF.” Further, we will amend the FNT 2005 Omnibus Incentive Plan to increase the number of shares available for grants thereunder by 15,500,000.

Our board of directors, after its independent evaluation and acting upon the unanimous recommendation of a special committee of our independent directors, approved the proposed transactions as contemplated under the securities exchange and distribution agreement. A copy of the securities exchange and distribution agreement is attached to this information statement as Annex A.

Under Delaware law, the approval of the holders of a majority of the outstanding shares of our common stock is required to approve the amendment to our certificate of incorporation. In addition, under the rules of the New York Stock Exchange, listed companies such as FNT are required to obtain stockholder approval prior to issuing securities in connection with the acquisition of assets of another company if the number of shares to be issued in the transaction exceeds 20% of the shares outstanding prior to the transaction.

On , 2006, we will hold our annual meeting of stockholders, at which holders of record of our common stock will consider and vote on (1) the issuance of additional shares of FNT Class A common stock, (2) the adoption of an

amendment to the FNT 2005 Omnibus Incentive Plan, which will increase the number of shares available for grants under the current plan, (3) the charter amendments, (4) the election of certain directors of FNT and (5) the ratification of the appointment of KPMG LLP as FNT’s independent registered public accounting firm. Neither FNT nor FNF is soliciting proxies from FNT stockholders. You may, if you wish, attend the meeting and vote personally on all matters presented at the annual meeting. We recommend that FNT stockholders vote “FOR” the proposed transactions and the other annual meeting items.

FNF owns approximately 82% of our outstanding common stock as the result of its ownership of 100% of our outstanding FNT Class B common stock. Because of the greater voting rights of the FNT Class B common stock, the shares FNF holds represent 97.9% of the outstanding voting rights of our common stock. FNF will be present at the annual meeting and intends to vote “FOR” the proposed transactions and the other annual meeting items. You are invited to attend the FNT annual meeting, at which you will have the opportunity to vote, but your approval of the matters presented at the FNT annual meeting is not required.

Sincerely,

Raymond R. Quirk

Chief Executive Officer

This notice and the accompanying information statement are dated , 2006 and are first being mailed to our stockholders on or about , 2006. You should not assume that the information contained in this document is accurate as of any date other than that date, and the mailing of this document to you does not create any implication to the contrary.

FIDELITY NATIONAL TITLE GROUP, INC.

601 Riverside Avenue

Jacksonville, FL 32204

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON , 2006

We Are Not Asking You for a Proxy and
You are Requested Not To Send Us a Proxy

To the Stockholders of Fidelity National Title Group, Inc.:

The 2006 annual meeting of stockholders of Fidelity National Title Group, Inc., which we refer to as FNT, will be held on , 2006, at a.m., local time, in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida 32204. At the meeting, stockholders will vote on each of the following proposals:


	1.	The issuance of additional shares of FNT Class A common stock pursuant to the securities exchange and distribution agreement, which we refer to on the securities exchange and distribution agreement, dated as of June 25, 2006, between FNT and Fidelity National Financial, Inc., which we refer to as FNF, which provides for, among other things, the transfer of FNT common stock to FNF and the assumption by FNT of certain liabilities of FNF in exchange for FNF’s interests in certain companies owned or controlled by it and certain other assets of FNF.

	2.	The adoption of an amendment to the FNT 2005 Omnibus Incentive Plan, which will increase the number of shares available for grants under the current plan by an additional 15,500,000.

	3.	The adoption of the amended and restated certificate of incorporation of FNT, which will, among other things, (a) increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000, (b) eliminate the FNT Class B common stock and all provisions relating thereto, (c) remove all references to and any requirements resulting from FNF’s ownership of FNT common stock and (d) change our name to “Fidelity National Financial, Inc.”

	4.	The election of four Class I directors to serve until the 2009 annual meeting of stockholders.

	5.	The ratification of the appointment of KPMG LLP as FNT’s independent registered public accounting firm for the fiscal year ending December 31, 2006.

	6.	Any other matters as may properly be brought before the annual meeting.

On June 25, 2006, FNT’s board of directors unanimously adopted and approved the securities exchange and distribution agreement and the transactions contemplated thereby and determined that the transactions contemplated by the agreement are advisable and in the best interests of FNT and its stockholders. FNT’s board of directors recommends that FNT stockholders vote “FOR” Proposal 1 relating to the issuance of additional shares of FNT Class A common stock pursuant to the securities exchange and distribution agreement and “FOR” the other annual meeting proposals described above.

FNT’s board of directors has fixed the close of business on , 2006, as the record date for determining those stockholders entitled to vote at the FNT annual meeting. Accordingly, only stockholders of record at the close of business on that date are entitled to notice of, and to vote at, the FNT annual meeting. A complete list of our stockholders will be available for inspection at the FNT annual meeting.

Please review the information statement accompanying this notice for more complete information regarding the proposed transactions and the annual meeting.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the proposed transactions, passed upon the merits or fairness of the proposed transactions or determined if this information statement is accurate or complete. Any representation to the contrary is a criminal offense.

By Order of the Board of Directors

Todd C. Johnson

Secretary

This information statement is dated , 2006 and is first being mailed to our stockholders on or about , 2006.

Table of Contents


	Page

QUESTIONS AND ANSWERS ABOUT THE PROPOSED TRANSACTIONS		v
SUMMARY		1
Information about Fidelity National Title Group, Inc.		1
Information about Fidelity National Financial, Inc.		1
Information about the Transferred Business		2
The Proposed Transactions		3
Opinion of the FNT Special Committee’s Financial Advisor		4
Interests of Directors and Executive Officers in the Proposed Transactions		4
Record Date; Outstanding Shares; Shares Entitled to Vote		4
Expected Completion of the Proposed Transactions		5
Ownership of FNT After the Proposed Transactions		5
No Dissenters’ Rights		5
Conditions to Completion of the Proposed Transactions		5
Termination of the Securities Exchange and Distribution Agreement		6
Material United States Federal Income Tax Considerations		6
Accounting Treatment		6
Directors and Officers of FNT Following the Spin-off		6
Changes in Intercompany Agreements and Related Party Agreements		6
Cross-Indemnity Agreement and Tax Disaffiliation Agreement		7
Risk Factors		7
Regulatory Matters		7
Treatment of FNF Equity Awards in Connection with the Spin-off		7
Indemnification and Insurance		8
MARKET PRICE AND DIVIDEND INFORMATION		9
Our Historical Market Price		9
FNT Dividend Information		9
FINANCIAL SUMMARY		11
Summary Historical Financial Data of FNT		11
Summary Historical Financial Data of FNF		14
Summary Unaudited Pro Forma Condensed Combined Financial Information		18
UNAUDITED COMPARATIVE PER SHARE DATA		19
RISK FACTORS		20
Risks Related to the Proposed Transactions		20
Risks Related to the Operations of FNT after the Proposed Transactions		21
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		24
THE FNT ANNUAL MEETING		25
General		25
Date, Time and Place of the FNT Annual Meeting		25
Purposes of the FNT Meeting		25
Record Date; Outstanding Shares; Shares Entitled to Vote		25
NYSE Stockholder Approval Requirements		25
Quorum and Voting Rights		26
Stock Ownership of Directors and Executive Officers		27


	Page

Voting at the Annual Meeting		27
THE PROPOSED TRANSACTIONS		28
Structure of the Proposed Transactions		28
Background of the Proposed Transactions		29
FNT’s Reasons for the Proposed Transactions; Recommendation by FNT’s Board of Directors		33
Opinion of the FNT Special Committee’s Financial Advisor		33
Interests of Directors and Executive Officers in the Proposed Transactions		45
Accounting Treatment		46
No Dissenters’ Rights		46
Regulatory Approvals Required for the Proposed Transactions		46
Material United States Federal Income Tax Considerations		47
THE SECURITIES EXCHANGE AND DISTRIBUTION AGREEMENT AND RELATED DOCUMENTS		48
Structure of the Proposed Transactions		48
Consideration for the Proposed Transactions		48
Treatment of FNF Equity Awards		48
Employee Benefits		49
Amendment and Restatement of Certificate of Incorporation		49
Representations and Warranties		49
Interim Operating Limitations		52
Additional Covenants and Agreements		55
Additional Agreements		55
Changes in Related Party Agreements after the Proposed Transactions		57
Directors and Officers		58
Principal Conditions to Completion of the Proposed Transactions		58
Termination of the Securities Exchange and Distribution Agreement		59
Indemnification and Insurance		60
Fees and Expenses		60
Amendments; Waivers		60
Governing Law		61
SELECTED HISTORICAL FINANCIAL DATA OF FNT		62
FNT’S MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		65
Overview		65
Related Party Transactions		65
Business Trends and Conditions		68
Critical Accounting Policies		69
Comparison of Years Ended December 31, 2005, 2004 and 2003		73
Comparison of Three Months Ended March 31, 2006 and 2005		77
Selected Quarterly Financial Data		80
Liquidity and Capital Resources		80
Minimum Pension Liability Adjustment		82
Off-Balance Sheet Arrangements		83
Recent Accounting Pronouncements		83
Market Risks		83


	Page

INFORMATION ABOUT THE TRANSFERRED BUSINESS		85
Business Overview		85
Specialty Insurance		85
Insurance Claims Management		85
Real Estate Holdings		86
Other Assets		86
Assumed Liabilities		86
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF FNF		87
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION		90
Unaudited Pro Forma Combined Financial Statements		91
Notes to Unaudited Pro Forma Combined Financial Statements		96
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH FNF AND FIS		98
Overview		98
Arrangements with FNF		98
Arrangements with FIS		106
Changes in Related Party Agreements after the Proposed Transactions		116
APPROVAL OF AMENDMENT AND RESTATEMENT OF FNT’S CERTIFICATE OF INCORPORATION		120
Description of Amendments		120
Reasons for the Proposed Amendment and Restatement		121
No Additional Action Required for Issuance; No Preemptive Rights		121
APPROVAL OF AMENDMENT TO THE FNT 2005 OMNIBUS INCENTIVE PLAN		122
Purpose of the Amendment and Description of the Proposal		122
Description of the Omnibus Incentive Plan		123
Option Grant Information		127
Federal Income Tax Consequences		127
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF FNT		130
Security Ownership of Certain Beneficial Owners		130
Security Ownership of Management		131
ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS		132
Certain Information about our Directors		132
Certain Information about our Executive Officers		138
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS		140
Director Compensation		140
Executive Compensation		140
FIS Option Grants		142
Retirement Benefits		143
Employment Agreement		144
Compensation Committee Interlocks and Insider Participation		144
Board Compensation Committee Report on Executive Compensation		144
Performance Graph		149
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS		150
DESCRIPTION OF FNT CAPITAL STOCK		151
Authorized and Outstanding Capital Stock		151

iii


	Page

Common Stock		151
Preferred Stock		152
Anti-Takeover Considerations		152
Corporate Opportunity Considerations		153
Limitations on Director Liability		154
Transfer Agent and Registrar		155
EXPERTS		156
WHERE YOU CAN FIND MORE INFORMATION		157
INDEX TO FINANCIAL STATEMENTS OF FNT		F-1

ANNEXES


ANNEX A	SECURITIES EXCHANGE AND DISTRIBUTION AGREEMENT	A-1
ANNEX B	OPINION OF BANC OF AMERICA SECURITIES LLC	B-1
ANNEX C	FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION	C-1
ANNEX D	FNT 2005 OMNIBUS INCENTIVE PLAN, AS AMENDED	D-1

QUESTIONS AND ANSWERS ABOUT THE PROPOSED TRANSACTIONS

Following are questions and related answers that briefly address some of the questions you may have regarding the securities exchange and distribution agreement and the proposed transactions as contemplated therein. These questions and answers may not contain all of the information relevant to you, do not purport to summarize all material information discussed in this information statement, and are subject to, and are qualified in their entirety by, the more detailed information contained in or attached to this information statement. Therefore, please read carefully this information statement, including the attached annexes, in its entirety.


Q:		What are the proposed transactions?

A:		In general terms, the transactions contemplated under the securities exchange and distribution agreement, which we refer to as the proposed transactions, involve the transfer by Fidelity National Financial, Inc., which we refer to as FNF, to us of substantially all of FNF’s assets, other than its ownership interest in FNT and Fidelity National Information Services, Inc., which we refer to as FIS. These assets include FNF’s interests in various subsidiaries, up to $275 million in cash and any other property or rights that FNF owns immediately prior to the closing under the securities exchange and distribution agreement. In consideration of the contribution of these assets by FNF, FNT will, with certain limited exceptions, assume all of FNF’s liabilities and issue shares of FNT Class A common stock to FNF. We refer to this contribution of assets by FNF to FNT in exchange for the assumption of liabilities and issuance to FNF of shares of FNT Class A common stock as the asset contribution.

		Immediately following the asset contribution, FNF will convert all of its shares of FNT Class B common stock into shares of FNT Class A common stock and then distribute all of the shares of FNT Class A common stock that it owns, including the converted shares and the shares received from FNT pursuant to the securities exchange and distribution agreement, to holders of FNF common stock as a dividend, which we refer to as the spin-off. As a result, FNF stockholders will receive shares of our common stock representing, on a fully-diluted basis, approximately 86% of our outstanding common stock. After the completion of the spin-off, FNF will have no assets other than its approximately 50.3% ownership position in FIS and its rights under certain agreements entered into pursuant to the securities exchange and distribution agreement.

		Additionally, our certificate of incorporation will be amended to, among other things:

		• increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000;

		• eliminate the FNT Class B common stock and all provisions relating thereto;

		• remove all references to and any requirements resulting from FNF’s ownership of FNT common stock; and

		• change our name to “Fidelity National Financial, Inc.”

		We refer to the amendments to our certificate of incorporation as the charter amendments.

		Further, we will amend the FNT 2005 Omnibus Incentive Plan, which we refer to as the omnibus incentive plan, to increase the number of shares available for grants thereunder by 15,500,000.

		Following the completion of the proposed transactions, our common stock will be listed and traded on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “FNF.”

Q:		Why is FNT proposing the proposed transactions?

A:		We believe that our stockholders will benefit in several ways from the proposed transactions, including the distribution by FNF of all shares of FNT common stock held by it. First, the distribution will increase our public float, which in the long term we anticipate will enhance the trading price of our common stock. Second, the proposed transactions may enhance our ability to issue our common stock to raise equity capital and fund acquisitions and for management incentives. Our ability to do so is currently limited because, for several tax-related reasons, FNF is unwilling to own less than 80% of our common stock. These factors and others are described further in this information statement.

Q:		How will the proposed transactions affect my FNT common stock?

A:		Your rights as an FNT stockholder will not be affected by the proposed transactions, and you will not receive any additional shares by virtue of the FNT common stock you own at the time the proposed transactions are


		completed. However, your current percentage ownership of our company will be reduced as a result of the issuance of additional shares of FNT Class A common stock in connection with the proposed transactions and our company will be subject to the changes described in this information statement.

Q:		What other transactions are contemplated in connection with the securities exchange and distribution agreement?

A:		The proposed transactions are part of a larger organizational restructuring of FNF. At the same time that FNF and FNT entered into the securities exchange and distribution agreement, FNF and FIS entered into an agreement and plan of merger, which we refer to as the merger agreement. The merger agreement provides that immediately following the spin-off under the securities exchange and distribution agreement, FNF will merge with and into FIS, which we refer to as the merger. Upon the completion of the merger, FNF’s separate corporate existence will cease and FIS will be the surviving corporation. In order to complete the proposed transactions, all of the conditions to the consummation of the merger of FNF and FIS (other than the completion of the spin-off) must be satisfied or waived. In addition, in order for the merger to be completed, the proposed transactions, including the spin-off, must be completed.

Q:		Why is FNT proposing to amend its certificate of incorporation to increase the authorized number of shares of FNT Class A common stock?

A:		FNT’s certificate of incorporation currently provides that the total number of shares of all classes of stock FNT is authorized to issue is 650,000,000, consisting of 300,000,000 shares of FNT Class A common stock, 300,000,000 shares of FNT Class B common stock and 50,000,000 shares of preferred stock. In connection with the proposed transactions, the FNT Class B common stock will be eliminated, and the 300,000,000 authorized shares of FNT Class B common stock will become authorized shares of FNT Class A common stock. As a result, we are amending our certificate of incorporation to provide for an increase to the number of authorized shares of FNT Class A common stock from 300,000,000 to 600,000,000.

Q:		Why is FNT proposing to amend the omnibus incentive plan?

A:		In connection with the proposed transactions, FNF will no longer remain in existence and its outstanding options are being divided between FNT and FIS. Additionally, following the proposed transactions, there will be certain equity award grants for which FNT does not have sufficient shares authorized under its current omnibus incentive plan. The amendment to the omnibus incentive plan, which we refer to as the option plan amendment, will increase the number of shares available for grants thereunder by 15,500,000.

Q:		What are the other material conditions to complete the proposed transactions?

A:		The proposed transactions are subject to conditions that include the following:

		• The NYSE must approve the listing of the shares of our common stock to be issued pursuant to the securities exchange and distribution agreement.

		• FNT stockholders must approve the issuance of our shares of FNT Class A common stock to FNF and the option plan amendment.

		• All of the conditions to the consummation of the merger of FNF with and into FIS pursuant to the merger agreement must be satisfied, other than the occurrence of the spin-off.

		• FNF must terminate or assign to FNT its obligations under certain intercompany agreements with FNT and FIS, and FNT must amend certain related party agreements, as well as enter into additional agreements with FIS.

		• The receipt of a private letter ruling from the internal revenue service and an opinion of FNF’s special tax advisor, Deloitte Tax LLP, together to the effect that the spin-off will be tax free for both FNF and its stockholders.

		The proposed transactions also are subject to other customary closing conditions.

Q:		When do you expect the proposed transactions to be completed?

A:		If the stockholders of FNT give their approval in connection with the proposed transactions, we expect to complete the proposed transactions as soon as practicable after the satisfaction of the other conditions thereto,


		including the satisfaction of the conditions to the consummation of the merger (other than the occurrence of the spin-off), termination and/or amendment of certain FNT and FNF agreements, the amendment of and entering into of certain related party agreements between FNT and FIS, and receipt of governmental and regulatory consents. There may be a substantial period of time between the approval by stockholders of FNT of the proposals at the FNT annual meeting and the effectiveness of the proposed transactions. We currently anticipate that the proposed transactions will be completed in the fourth quarter of 2006.

Q:		What are the material United States federal income tax considerations of the proposed transactions?

A:		FNF expects to receive a ruling from the internal revenue service and an opinion of its special tax advisor, Deloitte Tax LLP, satisfactory to us, together to the effect that the proposed transactions (including the spin-off) will be tax free transactions under the Internal Revenue Code of 1986, as amended, which we refer to as the internal revenue code. Our stockholders (other than FNF) are not parties to the proposed transactions (including the spin-off); therefore, there will be no tax consequences to them as a result of the proposed transactions.

Q:		Why did our board of directors constitute a special committee of independent FNT directors?

A:		A special committee of our board of directors, composed solely of independent directors, was constituted because of the potential for conflicts of interest resulting from the fact that FNF recommended the proposed transactions and owns a majority of our common stock.

Q:		Did the special committee make a determination as to the fairness of the proposed transactions?

A:		Yes. The special committee of our board of directors has determined that the proposed transactions are fair to, and in the best interests of, our company and its stockholders and unanimously recommended approval of the terms and conditions of the securities exchange and distribution agreement. Our board of directors, after its independent evaluation and acting upon the unanimous recommendation of the special committee, has adopted and approved the proposed transactions and the securities exchange and distribution agreement.

Q:		Why am I not required to vote on the proposed transactions and related matters?

A:		Each of the issuance of shares to FNF as part of the proposed transactions, the charter amendments and the option plan amendment may be approved with the affirmative vote or consent of the holders of a majority of our outstanding common stock. FNF owns approximately 82% of our outstanding common stock as the result of its ownership of 100% of the outstanding FNT Class B common stock. Because of the greater voting rights of the FNT Class B common stock, the shares FNF holds represent 97.9% of the outstanding voting rights of our common stock. FNF will be present at the annual meeting and intends to vote “FOR” the proposed transactions, including the charter amendments and the option plan amendment. Accordingly, your approval of these matters is neither required nor requested.

Q:		Do I have dissenters’ or appraisal rights with respect to the proposed transaction?

A:		No. FNT stockholders will not have dissenters’ or appraisal rights under Delaware law as a result of the proposed transactions.

Q:		Why did FNT send me this information statement?

A:		Under applicable securities regulations, we are required to provide you with information regarding the proposed transactions and related matters as well as the completion of the proposed transactions, even though your vote or consent is neither required nor requested to complete the proposed transactions.

Q:		Who can help answer my questions?

A:		If you have any questions about the proposed transactions or if you need additional copies of this information statement, you should contact:

Morrow & Co.

470 West Avenue

Stamford, CT 06902

(203) 658-9400

(800) 662-5200

vii

SUMMARY

This summary highlights selected information contained elsewhere in this information statement and the attached annexes. This summary does not purport to contain a complete statement of all material information relating to the securities exchange and distribution agreement, the transactions contemplated therein and the other matters being considered at our annual meeting, and is subject to, and qualified in its entirety by, the more detailed information contained in or attached to this information statement. Where appropriate, items in this summary contain a cross reference directing you to a more complete description included elsewhere in this information statement. You should carefully read this information statement in its entirety, as well as all annexes attached to this information statement. As your approval of the matters described in this information statement is neither required nor requested, we are not asking you for a proxy and you are requested not to send us a proxy.

Information about Fidelity National Title Group, Inc.

Fidelity National Title Group, Inc., which we refer to as FNT, is one of the largest title insurance companies in the United States. Our title insurance underwriters — Fidelity National Title Insurance Company, which we refer to as Fidelity National Title, Chicago Title Insurance Company, which we refer to as Chicago Title, Ticor Title Insurance Company, which we refer to as Ticor Title, Security Union Title Insurance Company, which we refer to as Security Union Title and Alamo Title Insurance Company, which we refer to as Alamo Title — together issued approximately 29.0% of all title insurance policies issued nationally during 2005, as measured by premiums. Our title business consists of providing title insurance and escrow and other title-related products and services arising from the real estate closing process. Our operations are conducted on a direct basis through our own employees who act as title and escrow agents and through independent agents. In addition to our independent agents, our customers are lenders, mortgage brokers, attorneys, real estate agents, home builders and commercial real estate developers. We do not focus our marketing efforts on the homeowner.

We are a Delaware corporation formed on May 24, 2005. We are a majority owned subsidiary of Fidelity National Financial, Inc., which we refer to as FNF. FNF owns 143,176,041 shares, or approximately 82%, of our outstanding common stock, representing 97.9% of the voting rights of our common stock. Our principal executive offices are located at 601 Riverside Avenue, Jacksonville, Florida 32204. Our telephone number is (904) 854-8100.

The predecessors to FNT have primarily been title insurance companies, some of which have been in operation since the late 1800s. Many of these title insurance companies have been acquired in the last two decades. In 1984, our parent company, FNF, acquired a controlling interest in Fidelity National Title Insurance Company. During the 1990s, FNF acquired Alamo Title, Nations Title Inc., Western Title Company of Washington and First Title Corp. In 2000, FNF completed the acquisition of Chicago Title Corp., creating the largest title insurance organization in the world. In 2004, FNF acquired American Pioneer Title Insurance Company, which now operates under our Ticor Title brand. Chicago Title previously acquired Security Union Title in 1987 and Ticor Title in 1991. Our businesses have historically been operated as wholly-owned subsidiaries of FNF until October 2005, when FNF distributed to its stockholders a minority interest in FNT.

Additional information concerning our company is included in the reports that we periodically file with the U.S. Securities and Exchange Commission, which we refer to as the SEC, copies of which may be obtained as described in “Where You Can Find More Information” beginning on page 157.

Information about Fidelity National Financial, Inc.

FNF is a holding company that, through its operating subsidiaries, provides outsourced products and services to a variety of industries. During 2005, FNF completed certain strategic initiatives, including contributing its title operations to FNT (and in turn we became a majority-owned, publicly traded company); selling a minority interest in its subsidiary FIS; and agreeing to merge FIS into a separate publicly traded company, Certegy Inc., which we refer to as Certegy. Certegy is now known as FIS. Through FNT, FNF is one of the largest title insurance companies in the United States, with approximately 29.0% national market share. Through FIS, FNF provides industry leading data processing, payment and risk management services to financial institutions and retailers. Through other wholly-owned subsidiaries, FNF is a leading provider of specialty insurance products, including flood insurance, homeowners insurance and home warranty insurance.

Since February 1, 2006 when FNF closed its acquisition of an approximate 40% interest in Sedgwick CMS Holdings, Inc., which we refer to as Sedgwick CMS, FNF is now a provider of outsourced insurance claims management services to large corporate and public sector entities.

FNF has four reporting segments:


	•	Fidelity National Title Group, Inc. This segment consists of our operations.

	•	Fidelity National Information Services, Inc. This segment consists of the operations of FNF’s majority owned subsidiary, FIS. FIS provides transaction processing services, consisting principally of technology solutions for banks and other financial institutions, credit and debit card services and check risk management and related services for retailers and others. FIS also provides lender processing services, consisting principally of technology solutions for mortgage lenders, selected mortgage origination services such as title agency and closing services, default management and mortgage information services. FIS’ credit and debit card services and check risk management services were added through FIS’ merger with Certegy. This merger closed in February 2006.

	•	Specialty Insurance. The specialty insurance segment, consisting of FNF’s various non-title insurance subsidiaries, issues flood, home warranty, homeowners, automobile and certain niche personal lines insurance policies.

	•	Corporate and Other. The corporate and other segment consists of the operations and investments of the parent holding company, certain smaller businesses and certain other unallocated corporate overhead expenses.

Information about the Transferred Business (beginning on page 85)

Under the securities exchange and distribution agreement, FNF has agreed to transfer to us its interests in the following assets, which we refer to as the contributed assets, and we have agreed to assume certain liabilities of FNF, which we refer to as the assumed liabilities. We refer to the contributed assets and the assumed liabilities collectively as the transferred business:

Contributed Assets

Specialty Insurance Business. Through its insurance subsidiaries, including Fidelity National Insurance Company, FNF offers various property and casualty insurance policies and other contracts which include:


	•	Home warranty. The specialty insurance operations issue one-year, renewable contracts that protect new and existing homeowners against defects in household systems and appliances.

	•	Flood insurance. The specialty insurance operations issue new and renewal flood insurance policies in conjunction with the U.S. National Flood Insurance Program. We are the largest domestic provider of the Write-Your-Own program sponsored by the U.S. National Flood Insurance Program.

	•	Personal lines insurance. The specialty insurance operations offer and underwrite homeowners insurance in 48 states. Automobile insurance is currently underwritten in 23 states and is anticipated to expand to the balance of the U.S. in 2006. In addition, these operations also underwrite personal umbrella, inland marine (boat and recreational watercraft), and other niche personal lines products in selected markets.

Insurance Claims Management. On February 1, 2006, FNF completed the acquisition of an approximate 40% interest in Sedgwick CMS. Sedgwick CMS is a leading provider of outsourced insurance claims management services to large corporate and public sector entities. Since FNF’s acquisition of its interests in Sedgwick CMS, Sedgwick CMS has acquired VPA, Inc., a privately-held claims services organization, based in Calabasas, California, specializing in absence and disability benefit management programs for large employers. Additionally, Sedgwick CMS has signed a definitive agreement to acquire CompManagement, Inc. and its affiliated companies through a merger of a subsidiary of Sedgwick CMS with CompManagement, Inc.’s parent company, Security Capital Corporation, for a cash purchase price of approximately $191.5 million. Sedgwick CMS offers three core

claims management product lines, which include worker’s compensation, liability and disability and operates in over 100 locations with more than 4,000 employees.

Real Estate Holdings. Through its subsidiary, Cascade Timberlands LLC, which we refer to as Cascade, FNF owns an interest in approximately 293,000 acres of productive timberlands located on the eastern side of the Cascade mountain range extending from Bend, Oregon toward the California border. FNF began to purchase equity interests in Cascade in March 2006. FNF has acquired approximately 71% of Cascade for an aggregate price of approximately $94 million.

Other Contributed Assets. Pursuant to the securities exchange and distribution agreement, FNF has agreed to transfer to us its interest in a small technology leasing business and certain other real estate holdings in Montana. Additionally, FNF has agreed to transfer to us all cash held by FNF as of the date of completion of the proposed transactions (up to $275 million), and substantially all other properties, assets and rights of any nature, kind and description, tangible and intangible (including goodwill), whether real, personal or mixed, held by FNF immediately prior thereto. The contributed assets will not, however, include the shares of the capital stock of FNT or FIS held by FNF.

Assumed Liabilities

Pursuant to the securities exchange and distribution agreement, we have agreed to assume all of FNF’s liabilities, except (i) any liabilities of FNF to the extent FIS or any subsidiary of FIS has, as of or prior to the closing under the securities exchange and distribution agreement, which we refer to as the closing, agreed in writing to be responsible for such liabilities, (ii) any liabilities of FNF to the extent arising out of or related to the ownership or operation of the assets or properties, or the operations or conduct of the business, of FIS or any subsidiary of FIS, in each case to the extent FIS or any subsidiary of FIS has, as of or prior to the closing, agreed to be responsible for such liabilities, (iii) any guaranties or other similar contractual liabilities of FNF in respect of a primary liability of FIS or any subsidiary of FIS and (iv) certain limited tax liabilities. We refer collectively to these liabilities to be assumed by FNT as the assumed liabilities.

The Proposed Transactions (beginning on page 28)

Pursuant to the securities exchange and distribution agreement, FNF has agreed to transfer to us the contributed assets in exchange for our assumption of the assumed liabilities and our issuance of that number of shares of FNT Class A common stock equal to (i) 34,042,553 plus (ii) the amount of cash included in the transfer of assets (not to exceed $275,000,000 for purposes of this calculation) divided by $23.50.

Immediately after the completion of FNF’s contribution of assets to FNT, the assumption by FNT of the assumed liabilities and the transfer of shares of FNT Class A common stock by FNT to FNF, which we refer to collectively as the asset contribution, FNF will convert all of the FNT Class B common stock it holds into FNT Class A common stock. Immediately after the asset contribution and the conversion of the FNT Class B common stock into FNT Class A common stock, FNF will distribute all of the FNT Class A common stock held by it, including the converted shares and the shares received from FNT, to the holders of FNF common stock. FNF will distribute to each holder of FNF common stock, as of the record date of the distribution, as a dividend shares of FNT common stock equal to that holder’s pro rata portion of all of the shares of FNT Class A common stock held by FNF immediately prior to the payment date. Fractional shares that would otherwise be received by FNF stockholders will be aggregated and sold and the net cash proceeds of the sale will be distributed in lieu of fractional shares. We refer to the distribution to the stockholders of FNF of all FNT common stock held by FNF as the spin-off.

Immediately after the completion of the spin-off and the merger described below, we will amend our certificate of incorporation, which amendment we refer to as the charter amendments, to (i) increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000, (ii) eliminate the FNT Class B common stock and all provisions relating thereto, (iii) remove all references to and any requirements resulting from FNF’s ownership of FNT common stock and (iv) change our name to “Fidelity National Financial, Inc.” Following completion of the proposed transactions, the symbol for our common stock on the NYSE will become “FNF.” Further, we will amend the omnibus incentive plan to increase the number of shares available for grants thereunder by 15,500,000.

The proposed transactions are part of a larger organizational restructuring of FNF. At the same time that FNF and FNT entered into the securities exchange and distribution agreement, FNF and FIS entered into an agreement and plan of merger, which we refer to as the merger agreement. The merger agreement provides that immediately following the spin-off under the securities exchange and distribution agreement, FNF will merge with and into FIS, which we refer to as the merger. Upon the completion of the merger, FNF’s separate corporate existence will cease and FIS will continue as the surviving corporation. In order to complete the proposed transactions, all of the conditions to the consummation of the merger of FNF and FIS (other than the completion of the spin-off) must be satisfied or waived. In addition, in order for the merger to be completed, the proposed transactions, including the spin-off, must be completed. After the completion of the proposed transactions, and immediately prior to the merger, FNF will have no assets other than its approximately 50.3% ownership position in FIS and its rights under certain agreements entered into pursuant to the securities exchange and distribution agreement.

Opinion of the FNT Special Committee’s Financial Advisor (beginning on page 33)

In connection with the asset contribution, Banc of America Securities LLC, which we refer to as Banc of America Securities, delivered to a special committee of our board of directors composed solely of independent directors, which we refer to as the FNT special committee, a written opinion, dated June 25, 2006, as to the fairness, from a financial point of view and as of the date of the opinion, to FNT of the aggregate number of shares of FNT Class A common stock to be issued by FNT pursuant to the securities exchange and distribution agreement, which we refer to as the aggregate stock consideration. The full text of the written opinion, dated June 25, 2006, of Banc of America Securities, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this information statement and is incorporated by reference in its entirety into this information statement. FNT stockholders are encouraged to read the opinion carefully in its entirety. Banc of America Securities provided its opinion to the FNT special committee to assist the FNT special committee in its evaluation of the aggregate stock consideration from a financial point of view. Banc of America Securities’ opinion does not address any other aspect of the proposed transactions or any related transactions and does not constitute a recommendation as to how any stockholder should vote or act in connection with the proposed transactions.

Interests of Directors and Executive Officers in the Proposed Transactions (beginning on page 45)

You should be aware that certain of our directors and officers have interests in the proposed transactions that differ from, or are in addition to, the interests of FNT stockholders. In particular, William P. Foley, II, the chairman of our board of directors, is also the chairman of the board of directors and chief executive officer of FNF, the controlling stockholder of FNT. Following the proposed transactions, Mr. Foley will become our Chief Executive Officer and the Executive Chairman of FIS. In connection with the proposed transactions, FNT will enter into a new employment agreement with Mr. Foley and he will receive a grant of 475,000 shares of our restricted stock. Additionally, Mr. Foley currently holds 5,408,216 options to purchase FNF common stock, although 3,856,684 of such options will be exercised or cashed-out prior to the spin-off pursuant to the terms of the option letter agreement among FNF, William P. Foley, II, Alan L. Stinson and Brent B. Bickett. See “The Securities Exchange and Distribution Agreement — Additional Agreements” beginning on page 55. With respect to the FNF stock options held by Mr. Foley at the time of the spin-off, 50% of such options will be replaced with FNT options and the remaining 50% of such options will be assumed by FIS pursuant to the terms of the merger agreement.

Certain of our other directors and executive officers hold options to acquire FNF common stock, some of which will be similarly replaced with options to acquire FNT common stock. In particular, Mr. Foley owns, in the aggregate, 5,721,266 shares and 110,000 restricted shares of FNF common stock and will receive shares of our common stock, subject to the same terms, conditions and restrictions, in respect thereof in connection with the spin-off.

Record Date; Outstanding Shares; Shares Entitled to Vote (beginning on page 25)

We have fixed the close of business on , as the record date for determining the FNT stockholders entitled to receive notice of or to vote at our annual meeting. Only holders of record of shares of FNT common stock at the

close of business on that date will be entitled to vote at our annual meeting. At the close of business on the record date there were shares of our common stock outstanding.

Expected Completion of the Proposed Transactions

We expect that the proposed transactions will be approved at our annual meeting. If all conditions to the consummation of the merger are satisfied, we expect to complete the proposed transactions as soon as practicable after the satisfaction of the other conditions to the proposed transactions, including the receipt of third party consents and regulatory approvals. There may be a substantial period of time between the approval of the proposed transactions at our annual meeting and the effectiveness of the proposed transactions. We currently anticipate that the proposed transactions will be completed in the fourth quarter of 2006.

Ownership of FNT After the Proposed Transactions

As part of the consideration for the transfer by FNF to us of certain assets, we expect to issue approximately 45,744,681 shares of FNT Class A common stock, based on receiving a cash amount of $275 million from FNF in connection with the proposed transactions. Further, based on the number of shares of FNT Class B common stock held by FNF on the record date and to be converted to FNT Class A common stock in connection with the spin-off, we expect to issue approximately 143,176,041 additional shares of FNT Class A common stock to FNF. Upon completion of the proposed transactions, including the distribution by FNF to its stockholders of all shares of FNT common stock held by FNF, we expect that the stockholders of FNF will own approximately 86% of the then outstanding shares of FNT common stock.

No Dissenters’ Rights

FNT’s stockholders are not entitled to demand appraisal of, or to receive payment for, their shares of FNT common stock under the Delaware General Corporation Law in connection with the proposed transactions.

Conditions to Completion of the Proposed Transactions (beginning on page 58)

A number of conditions must be satisfied or waived on or prior to the closing under the securities exchange and distribution agreement (which we refer to as the closing) before the proposed transactions may be completed. These include, among others:


	•	the absence of any inaccuracy in either party’s representations and warranties that would be reasonably likely to have a material adverse effect;

	•	the receipt of governmental and regulatory consents and approvals, including all necessary approvals for the transfer of FNF’s interest in its regulated insurance company subsidiaries to FNT and for the spin-off of the FNT insurance operations;

	•	the receipt of FNT stockholder approval (which we refer to collectively as the FNT stockholder approval) of (i) the issuance of shares of FNT common stock in connection with the asset contribution, (ii) the adoption of the amendment to the omnibus incentive plan and (iii) the adoption of the charter amendments;

	•	the receipt of a private letter ruling from the internal revenue service and an opinion of FNF’s special tax advisor Deloitte Tax LLP together to the effect that the spin-off will be tax free to FNF and its stockholders;

	•	the receipt of consents required from third parties, including under credit agreements of FNF, FNT and FIS and any other material agreements;

	•	the effectiveness of the registration statement on Form S-1 (of which this information statement forms a part), which we refer to as the Form S-1, in respect of the distribution to FNF stockholders of shares of FNT common stock by FNF in connection with the spin-off, and the absence of any stop order or related SEC proceedings in connection therewith;

	•	the amendment of specified related party agreements, the termination and/or amendment of specified intercompany agreements, and the entering into of specified additional agreements between FNT and FIS;


	•	the total liabilities of FNF to be assumed by FNT that would be reflected on an unconsolidated balance sheet of FNF prepared in accordance with generally accepted accounting principles in the United States, which we refer to as GAAP, not exceeding $100,000,000 at the time of the closing; and

	•	the satisfaction or waiver of all of the conditions to the consummation of the merger of FNF with and into FIS (other than the occurrence of the spin-off).

Termination of the Securities Exchange and Distribution Agreement (beginning on page 59)

The securities exchange and distribution agreement may be terminated at any time prior to the closing, whether before or after receipt of the FNT stockholder approval:


	•	by the mutual written consent of FNT and FNF;

	•	by either FNT or FNF if the FNT stockholder approval has not been obtained;

	•	by either FNT or FNF if the closing has not been consummated on or before December 31, 2006;

	•	by either FNT or FNF if the merger agreement has been terminated;

	•	by either FNT or FNF if any governmental entity prohibits the transactions contemplated under the securities exchange and distribution agreement; or

	•	by FNF in its sole discretion (in which case FNF will be required to reimburse FNT for its reasonable costs and expenses in connection with the securities exchange and distribution agreement).

Material United States Federal Income Tax Considerations

FNF expects to receive a ruling from the internal revenue service and an opinion of its special tax advisor, Deloitte Tax LLP, satisfactory to us, together to the effect that the proposed transactions (including the spin-off) will be tax free transactions under the internal revenue code. Our stockholders (other than FNF) are not parties to the proposed transactions; therefore, there will be no tax consequences to them as a result of the proposed transactions.

Accounting Treatment

Acquisitions among entities under common control such as the asset contribution are not considered business combinations and are to be accounted for at historical cost in accordance with EITF 90-5, Exchanges of Ownership Interests between Enterprises under Common Control. Furthermore, the substance of the proposed transactions and the merger is effectively a reverse spin-off of FIS by FNF in accordance with EITF 02-11, Accounting for Reverse Spinoffs. Accordingly, the historical financial statements of FNF will become those of FNT; however, the criteria to account for FIS as discontinued operations as prescribed by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets will not be met. This is primarily due to the continuing involvement of FNT with and significant influence that FNT will have over FIS subsequent to the merger through common board members, common senior management and continuing business relationships. It is expected that FIS will continue to be included in FNF’s consolidated financial statements through the date of the completion of the proposed transactions and the merger.

Directors and Officers of FNT Following the Spin-off

Under the securities exchange and distribution agreement, we have agreed that our board of directors, after the completion of the proposed transactions, will consist of our existing directors except that William G. Bone and William A. Imparato will resign and Douglas K. Ammerman, Thomas M. Hagerty, Daniel D. Lane and Cary H. Thompson will be appointed to join our board of directors.

Changes in Intercompany Agreements and Related Party Agreements

At or prior to the closing, FNT and FNF will, and will cause their relevant subsidiaries to, terminate certain specified intercompany agreements and enter into prescribed amendments to certain specified related party agreements and, in the case of FNT, enter into certain specified additional agreements with FIS. Generally

speaking, the intercompany and related party agreements to which FNF is a party will either be terminated or assigned to FNT. Certain of the intercompany and related party agreements between FIS and/or its subsidiaries, on the one hand, and FNT and/or subsidiaries, on the other, will require amendment to reflect the merger as well as other changes necessary to take into account changes in the relationship between the parties after the merger.

Cross-Indemnity Agreement and Tax Disaffiliation Agreement

At or prior to the closing, (i) FNT and FIS will enter into the cross-indemnity agreement, which is described below under the caption “The Securities Exchange and Distribution Agreement and Related Documents—Additional Agreements” beginning on page 55 and (ii) FNF, FNT and FIS will enter into the tax disaffiliation agreement, which is described below under the caption “The Securities Exchange and Distribution Agreement and Related Documents—Additional Agreements” beginning on page 55.

Risk Factors

In evaluating the proposed transactions or the securities exchange and distribution agreement, you should carefully read this information statement and especially consider the factors discussed in the section entitled “Risk Factors” beginning on page 20.

Regulatory Matters

The insurance subsidiaries of FNF and FNT are subject to regulation under applicable state laws. Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance commissioner of the state where the insurer is domiciled. Generally, state statutes presume control to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more (5% in Florida) of the voting securities of a domestic insurer. The state insurance commissioner reviewing an application to acquire control will consider such factors as the financial strength of the applicant, the integrity and management of the applicant’s board of directors and executive officers and the acquiror’s plans for the future operations of the domestic insurer. In connection with the proposed transactions, FNF and FNT are in the process of seeking exemptions from the requirements of the various state insurance laws from this approval process on the basis that the proposed transactions do not result in any new person acquiring control of the FNF or FNT insurance subsidiaries as such term is defined under the applicable state insurance laws. In the alternative, FNF and FNT will request approval for the proposed transactions from state insurance commissioners where necessary.

Additionally, on July 3, 2006, the California Insurance Commissioner issued a notice of proposed action and notice of public hearing relating to certain proposed regulations governing rate-making for title insurance. A hearing on the proposed regulations is scheduled for August 30, 2006. If implemented, the proposed regulations would result in significant reductions in title insurance rates, which are likely to have a significant negative impact on FNT’s revenues in California. Further, the proposed regulations would give the California Insurance Commissioner the ability to set maximum allowable title insurance rates on a going-forward basis. It is possible that such maximum rates would be lower than the rates that FNT would otherwise set.

Treatment of FNF Equity Awards in Connection with the Spin-off (beginning on page 48)

Stock Options

FNF stock options held by persons who, after the spin-off, will be employed by or provide services to FNT or an FNT affiliate will be replaced with FNT stock options granted under the omnibus incentive plan, with the same terms and conditions as the FNF options, but with equitable adjustments made to the exercise prices and the number of shares underlying the options to reflect the difference in value of FNF and FNT common stock.

In addition, William P. Foley, II, Alan L. Stinson and Brent B. Bickett entered into an agreement with FNF on June 25, 2006, pursuant to which FNF has the right to cash out a certain number of the FNF stock options held by Messrs. Foley, Stinson and Bickett for their fair market value or require these individuals to exercise such options. To the extent FNF exercises its right under this agreement, it is required to do so immediately prior to the effective time of the spin-off or as near thereto as practicable. FNF’s right to cash out these FNF stock options or require such

options to be exercised is subject to the right of Messrs. Foley, Stinson and Bickett to exercise such stock options if doing so would not adversely affect the tax treatment of the proposed transactions. With respect to the FNF stock options held by Messrs. Foley, Stinson and Bickett that are not subject to the agreement entered into with FNF, 50% of such options will be replaced with FNT options, as described above, and the remaining 50% of such options will be assumed by FIS and converted into FIS stock options pursuant to the terms of the merger agreement.

Restricted Stock

All holders of FNF restricted stock will receive FNT shares in connection with the spin-off in the same proportion as other FNF stockholders, with such shares subject to the same transfer restrictions and forfeiture conditions as the FNF restricted stock based upon continued service with FNT and its affiliates or FIS and its affiliates, as the case may be. In addition, FNF restricted stock granted to and held by persons who, after the spin-off, will be employed by or provide services to FNT or an FNT affiliate will be converted pursuant to the terms of the securities exchange and distribution agreement, with the same terms and conditions as the FNF restricted stock based upon continued service with FNT and its affiliates.

Indemnification and Insurance (beginning on page 60)

Under the securities exchange and distribution agreement, we have agreed to indemnify each person who, prior to the closing, was an officer or director of FNF to the same extent that such officer or director was indemnified by FNF under FNF’s charter and by-laws. We will also purchase and maintain for at least six years after date of closing a directors’ and officers’ insurance policy insuring directors, officers and employees of FNF and its subsidiaries (but not directors, officers or employees of FIS and its subsidiaries acting in their capacity as such) and providing coverage at least as favorable to the insured persons as FNF’s current director’s and officer’s insurance.

MARKET PRICE AND DIVIDEND INFORMATION

Our Historical Market Price

Our common stock is listed and traded on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “FNT.” FNF’s common stock is listed and traded on the NYSE under the symbol “FNF.” Following the completion of the proposed transactions and the merger of FNF with and into FIS pursuant to the merger agreement, our common stock will be listed and traded on the NYSE under the symbol “FNF.” The table below sets forth, for the periods indicated, the high and low split-adjusted sales prices per share of FNF and our common stock as reported on the NYSE:


	Our Common Stock				FNF Common Stock
	High		Low		High		Low

Year Ended December 31, 2005
Quarter ended March 31		N/A		N/A	$	47.00	$	30.35	(a)
Quarter ended June 30		N/A		N/A		36.98		30.05
Quarter ended September 30		N/A		N/A		44.71		35.56
Quarter ended December 31	$	24.35	$	20.30		45.56		35.50	(b)
Year Ended December 31, 2006
Quarter ended March 31	$	25.73	$	21.72	$	39.86	$	35.15

_ _


(a)		During the first quarter of 2005, FNF declared and paid a $10.00 special dividend.

(b)		During the fourth quarter of 2005, FNF distributed to its stockholders 17.5% of the outstanding shares of our common stock which resulted in a reduction in FNF’s stock price of $4.06 on the ex-dividend date.

On , the latest practicable date before the mailing of this information statement, the last sale price of our common stock as reported on the NYSE was $ per share. On , the last trading day prior to the public announcement of the proposed transactions, the last sale price of our common stock as reported on the NYSE was $ per share.

FNT Dividend Information

The following table presents information on dividends declared each quarter on our common stock and FNF common stock, respectively, for the periods indicated.


Year Ended December 31, 2005	Our Dividends		FNF Dividends

Quarter ended March 31		N/A	$	10.25	(a)
Quarter ended June 30		N/A		0.25
Quarter ended September 30		N/A		0.25
Quarter ended December 31	$	0.25		0.25
Year Ended December 31, 2006
Quarter ended March 31	$	0.29	$	0.25

_ _


(a)		During the first quarter of 2005, FNF declared and paid a $10.00 special dividend.

Until the completion of the proposed transactions, the securities exchange and distribution agreement does not permit any declaration, setting aside or payment of any dividend or other distribution by FNT or FNF in respect of its capital stock, except for FNT’s and FNF’s ordinary quarterly cash dividends consistent with past practice.

Our current dividend policy anticipates the payment of quarterly dividends in the future. The declaration and payment of dividends will be at the discretion of our board of directors and will be dependent upon our future earnings, financial condition and capital requirements. Our ability to declare and pay dividends is also subject to our compliance with the financial covenants contained in a credit agreement entered into on October 17, 2005, which we refer to as our credit agreement. See “FNT’s Management Discussion and Analysis of Financial Conditions and

Results of Operations — Recent Accounting Pronouncements” beginning on page 83. On February 8, 2006, our board of directors declared an increase in our quarterly cash dividend to $0.29 per share, a 16% increase over the previous cash dividend of $0.25 per share.

Since we are a holding company, our ability to pay dividends will depend largely on the ability of our subsidiaries to pay dividends to us, and the ability of our title insurance subsidiaries to do so is subject to, among other factors, their compliance with applicable insurance regulations. As of December 31, 2005, $1.9 billion of our net assets are restricted from dividend payments without prior approval from the Departments of Insurance in the states where our title insurance subsidiaries are domiciled. As of March 31, 2006, our first tier title insurance subsidiaries can pay dividends or make distributions to us of approximately $239 million without prior regulatory approval during the remainder of 2006. In addition, our ability to declare dividends is subject to restrictions under our credit agreement. We do not believe the restrictions contained in our credit agreement will, in the foreseeable future, adversely affect our ability to pay cash dividends at the current dividend rate.

FINANCIAL SUMMARY

Summary Historical Financial Data of FNT

The following table shows selected historical consolidated and combined financial data for FNT. The data of FNT as of December 31, 2005, 2004 and 2003 and for each of the years in the four-year period ended December 31, 2005, are derived from FNT’s audited consolidated and combined financial statements and related notes. The data as of December 31, 2002 and 2001 and March 30, 2006 and 2005 and for the year ended December 31, 2001 and the three-month periods ended March 31, 2006 and 2005 are derived from FNT’s unaudited annual and interim consolidated and combined financial statements. In the opinion of FNT’s management, the unaudited annual and interim consolidated and combined financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the interim consolidated and combined financial statements. Results for the interim periods are not necessarily indicative of the results to be expected for the full year.

Detailed historical financial information is included in the audited consolidated and combined balance sheets as of December 31, 2005 and 2004, and the related consolidated and combined statements of earnings, comprehensive earnings, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2005 as well as the unaudited interim consolidated balance sheet as of March 31, 2006 and the related unaudited interim consolidated and combined statements of earnings and cash flows for the three month periods ended March 31, 2006 and 2005, each of which is included in this information statement. You should read the following selected financial data together with FNT’s historical consolidated and combined financial statements, including the related notes, and the other information included in this information statement. See “Selected Historical Financial Data of FNT” beginning on page 62.


	Three Months Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)		2004(1)		2003(1)		2002		2001(2)(3)
	(In thousands, except per share data)

Statement of Earnings Data:
Direct title insurance premiums	$	447,769	$	456,205	$	2,184,993	$	2,003,447	$	2,105,317	$	1,557,769	$	1,252,656
Agency title insurance premiums		628,420		532,513		2,763,973		2,714,770		2,595,433		1,989,958		1,441,416

Total title premiums		1,076,189		988,718		4,948,966		4,718,217		4,700,750		3,547,727		2,694,072
Escrow and other title related fees		254,059		243,137		1,162,344		1,039,835		1,058,729		790,787		656,739

Total title and escrow		1,330,248		1,231,855		6,111,310		5,758,052		5,759,479		4,338,514		3,350,811
Interest and investment income		38,012		20,854		118,084		64,885		56,708		72,305		88,232
Realized gains and losses, net		14,506		3,436		44,684		22,948		101,839		584		946
Other income		10,498		9,075		41,783		43,528		52,689		55,927		50,476

		1,393,264		1,265,220		6,315,861		5,889,413		5,970,715		4,467,330		3,490,465

Personnel costs		452,435		424,660		1,897,904		1,680,805		1,692,895		1,260,070		1,036,236
Other operating expenses		210,893		209,735		935,263		849,554		817,597		633,193		558,263
Agent commissions		488,368		409,901		2,140,912		2,117,122		2,035,810		1,567,112		1,131,892
Depreciation and amortization		26,237		24,866		102,105		95,718		79,077		53,042		100,225
Provision for claim losses		80,721		64,226		354,710		259,402		248,834		175,963		134,527
Interest expense		11,326		303		16,663		3,885		4,582		8,586		15,695

		1,269,980		1,133,691		5,447,557		5,006,486		4,878,795		3,697,966		2,976,838

Earnings before income taxes and minority interest		123,284		131,529		868,304		882,927		1,091,920		769,364		513,627
Income tax expense		43,766		48,863		327,351		323,598		407,736		276,970		205,965

Earnings before minority interest		79,518		82,666		540,953		559,329		684,184		492,394		307,662
Minority interest		416		347		1,972		1,165		859		624		—
Cumulative effect of accounting change		—		—		—		—		—		—		5,709

Net earnings	$	79,102	$	82,319	$	538,981	$	558,164	$	683,325	$	491,770	$	301,953


	Three Months Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)			2004(1)		2003(1)	2002	2001(2)(3)
	(In thousands, except per share data)

Per share amounts:
Basic earnings per share	$	0.46			$	3.11

Weighted average shares outstanding, basic basis		173,473				173,463	(4)

Diluted earnings per share	$	0.46			$	3.11

Weighted average shares outstanding, diluted basis		173,654				173,575	(4)

Unaudited pro forma net earnings per share — basic and diluted(5)			$	0.48				$	3.22

Unaudited pro forma weighted average shares outstanding — basic and diluted(5)				172,951					172,951

Dividends declared per share	$	0.29			$	0.25


(1)		Effective January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, using the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”, and as a result recorded stock compensation expense of $3.0 million for the three months ended March 31, 2005 and $12.5 million, $5.4 million and $4.9 million for the years ended December 31, 2005, 2004 and 2003, respectively. Effective January 1, 2006, we adopted SFAS No. 123 (Revised), “Share-Based Payment,” and recorded stock compensation expense of $3.2 million in the first three months of 2006.

(2)		Effective January 1, 2002, we adopted SFAS No. 142 “Goodwill and Other Intangible Assets” and as a result, have ceased to amortize goodwill. Goodwill amortization in 2001 was $33.2 million.

(3)		During 2001, we recorded a $5.7 million, after-tax charge, reflected as a cumulative effect of a change in accounting principle, as a result of adopting Emerging Issues Task Force No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets.”

(4)		Because there were no outstanding shares prior to FNF’s distribution of our common stock (representing 17.5% of our outstanding shares) as a dividend to its stockholders, that was completed on October 17, 2005, basic and diluted weighted average shares outstanding for 2005 have been calculated using activity from October 18, 2005 to December 31, 2005 as if shares outstanding and common stock equivalents at October 18, 2005 had been outstanding for the entire year.

(5)		Unaudited pro forma net earnings per share is calculated using the number of outstanding shares of FNF on a date prior to the distribution of FNT shares to FNF stockholders.


	March 31,		December 31,
	2006		2005		2004		2003		2002		2001
	(In thousands)

Balance sheet data (at end of period):
Investments(1)	$	3,234,928	$	3,300,738	$	2,819,489	$	2,510,182	$	2,337,472	$	1,705,267
Cash and cash equivalents(2)		550,447		462,157		268,414		395,857		433,379		491,709
Total assets		5,897,476		5,900,533		5,074,091		4,782,664		4,494,716		3,848,300
Notes payable		599,094		603,262		22,390		54,259		107,874		176,116
Reserve for claim losses		1,090,095		1,063,857		980,746		932,439		887,973		881,053
Minority interests		5,006		4,338		3,951		2,488		1,098		239
Equity		2,505,728		2,480,037		2,676,756		2,469,186		2,234,484		1,741,387


(1)		Investments as of March 31, 2006 and December 31, 2005, 2004, 2003, 2002 and 2001 include securities pledged to secure trust deposits of $601.8 million, $656.0 million, $546.0 million, $448.1 million, $474.9 million and $319.1 million, respectively. Investments as of March 31, 2006, and December 31, 2005, include securities pledged relating to FNT’s securities lending program of $188.2 million and $120.2 million, respectively.

(2)		Cash and cash equivalents as of March 31, 2006, and December 31, 2005, 2004, 2003, 2002 and 2001 include cash pledged to secure trust deposits of $241.8 million, $234.7 million, $195.2 million, $231.1 million, $295.1 million and $367.9 million, respectively. Cash and cash equivalents as of March 31, 2006, and December 31, 2005, include cash pledged relating to FNT’s securities lending program of $195.5 million and $124.3 million, respectively.


	Three Months
	Ended March 31,		Year Ended December 31,
	2006		2005		2004		2003		2002		2001
	(In whole numbers)

Other non-financial data (unaudited):
Direct operations orders opened(1)		683,800		3,052,805		3,142,945		3,771,393		2,953,797		2,496,597
Direct operations orders closed(1)		436,300		2,169,656		2,249,792		2,916,201		2,141,680		1,685,147
Fee per closed file(1)	$	1,532	$	1,487	$	1,324	$	1,081	$	1,099	$	1,120


(1)		These measures are used by management to judge productivity and are a measure of transaction volume for our direct title businesses. An order is opened when we receive a customer order and is closed when the related real estate transaction closes, which typically takes 45-60 days from the opening of an order.

Summary Historical Financial Data of FNF

The following table shows selected historical consolidated financial data for FNF. The data as of and for each of the five years ended December 31, 2005 was derived from FNF’s audited consolidated financial statements. The data as of March 30, 2006 and for the three-month periods ended March 31, 2006 and 2005 was derived from FNF’s unaudited interim consolidated financial statements. In the opinion of FNF’s management, the unaudited interim consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the interim consolidated financial statements. Results for the interim periods are not necessarily indicative of the results to be expected for the full year.

Detailed historical financial information is included in the audited consolidated balance sheets as of December 31, 2005 and 2004, and the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2005 included in FNF’s Annual Report on Form 10-K for the year ended December 31, 2005, as well as the unaudited interim consolidated balance sheet as of March 31, 2006 and the related unaudited interim consolidated statements of earnings, comprehensive earnings and cash flows for the three month periods ended March 31, 2006 and 2005 included in FNF’s Quarterly Report on Form 10-Q for the three months ended March 31, 2006. You should read the following selected financial data together with FNF’s historical consolidated financial statements, including the related notes, and the other information incorporated by reference in this information statement. See “Where You Can Find More Information” beginning on page 157.

The information set forth below represents the consolidated results of operations and financial condition of FNF, including FNT and FIS. Subsequent to the completion of the proposed transactions, the historical financial statements of FNF will become the historical financial statements of FNT. For more information on the accounting treatment of the proposed transactions, see “The Proposed Transactions—Accounting Treatment” beginning on page 46. As a result it may be difficult to analyze the results of operations and financial condition of the transferred business based on this information. For information about the transferred business, see “Unaudited Pro Forma Combined Financial Information” beginning on page 90.


	Three Months
	Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)(3)		2004(1)(4)		2003(1)(5)		2002		2001(2)(6)(7)
	(In thousands, except per share data)

Statement of Earnings Data:
Revenue	$	2,355,771	$	2,271,638	$	9,668,938	$	8,296,002	$	7,715,215	$	5,082,640	$	3,874,107

Expenses:
Personnel costs		877,931		747,077		3,224,678		2,786,297		2,465,026		1,476,430		1,187,177
Other operating expenses		494,616		393,817		1,716,711		1,599,124		1,448,133		945,829		711,151
Agent commissions		469,707		391,466		2,060,467		2,028,926		1,823,241		1,521,573		1,098,328
Depreciation and amortization		124,631		97,327		406,259		338,434		227,937		74,163		118,282
Provision for claim losses		114,492		87,164		480,556		311,916		287,136		179,292		134,724
Goodwill amortization		—		—		—		—		—		—		54,155
Interest expense		54,645		24,507		172,327		47,214		43,103		34,053		46,569

		2,136,022		1,741,358		8,060,998		7,111,911		6,294,576		4,231,340		3,350,386


	Three Months
	Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)(3)		2004(1)(4)		2003(1)(5)		2002		2001(2)(6)(7)
	(In thousands, except per share data)

Earnings before income taxes, minority interest and cumulative effect of a change in accounting principle		219,749		530,280		1,607,940		1,184,091		1,420,639		851,300		523,721
Income tax expense		81,747		80,335		573,391		438,114		539,843		306,468		209,488

Earnings before minority interest and cumulative effect of a change in accounting principle		138,002		449,945		1,034,549		745,977		880,796		544,832		314,233
Minority interest		31,631		5,448		70,443		5,015		18,976		13,115		3,048

Earnings before cumulative effect of a change in accounting principle		106,371		444,497		964,106		740,962		861,820		531,717		311,185
Cumulative effect of a change in accounting principle, net of income taxes		—		—		—		—		—		—		(5,709	)

Net earnings	$	106,371	$	444,497	$	964,106	$	740,962	$	861,820	$	531,717	$	305,476

Per Share Data:
Basic earnings per share before cumulative effect of a change in accounting principle	$	0.61	$	2.57	$	5.58	$	4.33	$	5.81	$	4.05	$	2.41
Cumulative effect of a change in accounting principle, net of income taxes, basic basis		—		—		—		—		—		—		(.05	)

Basic net earnings per share	$	0.61	$	2.57	$	5.58	$	4.33	$	5.81	$	4.05	$	2.36

Weighted average shares outstanding, basic basis		173,845		173,124		172,839		171,014		148,275		131,135		129,316

Diluted earnings per share before cumulative effect of a change in accounting principle	$	0.59	$	2.51	$	5.43	$	4.21	$	5.63	$	3.91	$	2.34
Cumulative effect of a change in accounting principle, net of income taxes, diluted basis		—		—		—		—		—		—		(.05	)

Diluted net earnings per share	$	0.59	$	2.51	$	5.43	$	4.21	$	5.63	$	3.91	$	2.29

Weighted average shares outstanding, diluted basis		179,251		177,327		177,597		176,000		153,171		135,871		133,189

Dividends declared per share	$	0.25	$	10.25	$	11.00	$	0.79	$	0.54	$	0.32	$	0.26


(1)		Effective January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, using the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”, and as a result recorded stock compensation expense of $7.2 million for the three months ended March 31, 2005, and $34.1 million, $21.8 million and $6.2 million for the years ended December 31, 2005, 2004 and 2003, respectively. Effective January 1, 2006, we adopted SFAS No. 123 (Revised), “Share-Based Payment,” and recorded stock compensation expense of $34.3 million in the first three months of 2006.

(2)		Effective January 1, 2002, we adopted SFAS No. 142 “Goodwill and Other Intangible Assets” and as a result, have ceased to amortize goodwill. Goodwill amortization in 2001 was $54.2 million.

(3)		FNF’s financial results for the year ended December 31, 2005 includes in revenue and net earnings a $318.2 million gain on sale relating to the issuance of subsidiary stock, approximately $100.0 million in


		additional income tax expense relating to the distribution to its stockholders of a 17.5% interest of FNT and additional minority interest expense related to the minority interest issued in FNT and FIS.

(4)		FNF’s financial results for the year ended December 31, 2004 include the results of various entities acquired on various dates during 2004.

(5)		FNF’s financial results for the year ended December 31, 2003 include the results of its acquisition of ALLTEL Information Services, Inc. for the period from April 1, 2003, the acquisition date, through December 31, 2003, and include the results of operations of various other entities acquired on various dates during 2003.

(6)		FNF’s financial results for the year ended December 31, 2001 include the results of the former operations of Vista Information Solutions, Inc. for the period from August 1, 2001, the acquisition date, through December 31, 2001. In the fourth quarter of 2001, FNF recorded certain charges totaling $10.0 million, after applicable taxes, relating to the discontinuation of small-ticket lease origination at FNF Capital and the wholesale international long distance business at Micro General Corporation.

(7)		During 2001, FNF recorded a $5.7 million, after-tax charge, reflected as a cumulative effect of a change in accounting principle, as a result of adopting Emerging Issues Task Force No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets.”


	March 31,		December 31,
	2006		2005		2004		2003		2002		2001
	(In thousands, except per share data)

Balance Sheet Data:
Investments(1)	$	4,238,176	$	4,564,189	$	3,346,276	$	2,689,817	$	2,565,815	$	1,823,512
Cash and cash equivalents(2)		707,239		513,394		331,222		459,655		482,600		542,620
Total assets		14,090,857		11,104,617		9,270,535		7,263,175		5,245,951		4,415,998
Notes payable		3,578,094		3,217,019		1,370,556		659,186		493,458		565,690
Reserve for claim losses		1,144,981		1,113,506		1,000,474		945,237		890,148		881,089
Minority interests and preferred stock of subsidiary		1,883,609		636,304		18,874		14,835		131,797		47,166
Stockholders’ equity		4,230,645		3,279,775		4,700,091		3,873,359		2,253,936		1,638,870
Book value per share(3)	$	24.21	$	18.84	$	27.24	$	23.50	$	17.13	$	12.65


(1)		Investments as of March 31, 2006 and December 31, 2005, 2004, 2003, 2002 and 2001 include securities pledged to secure trust deposits of $601.8 million, $656.0 million, $546.0 million, $448.1 million, $474.9 million and $319.1 million, respectively. Investments as of March 31, 2006, and December 31, 2005 include securities pledged relating to FNF’s securities lending program of $218.3 million and $138.7 million, respectively.

(2)		Cash and cash equivalents as of March 31, 2006, and December 31, 2005, 2004, 2003, 2002 and 2001 include cash pledged to secure trust deposits of $241.8 million, $234.7 million, $195.2 million, $231.1 million, $295.1 million and $367.9 million, respectively. Cash and cash equivalents as of March 31, 2006 and December 31, 2005 include cash pledged relating to FNF’s securities lending program of $226.6 million and $143.4 million, respectively.

(3)		Book value per share is calculated as stockholders’ equity at March 31, 2006 and December 31 of each year presented divided by actual shares outstanding at the end of each period presented.


	Three Months Ended
	March 31,			Year Ended December 31,
	2006			2005			2004			2003			2002			2001
	(In whole numbers)

Other Data:
Orders opened by direct title operations(1)		831,400			3,615,400			3,680,200			4,820,700			3,228,300			2,635,200
Orders closed by direct title operations(1)		526,700			2,487,000			2,636,300			3,694,000			2,290,300			1,770,600
Provision for claim losses to title insurance premiums		7.5	%		7.2	%		5.5	%		5.4	%		5.0	%		5.0	%
Title related revenue(2):
Percentage direct operations		54.4	%		56.0	%		54.8	%		59.7	%		55.3	%		59.0	%
Percentage agency operations		45.6	%		44.0	%		45.2	%		40.3	%		44.7	%		41.0	%


(1)		These measures are used by management to judge productivity and are a measure of transaction volume for our direct title businesses. An order is opened when we receive a customer order and is closed when the related real estate transaction closes, which typically takes 45-60 days from the opening of an order.

(2)		Includes title insurance premiums and escrow and other title related fees.

Summary Unaudited Pro Forma Condensed Combined Financial Information

The following summary unaudited pro forma condensed combined financial information gives effect to the transfer by FNF to us of substantially all of its assets and liabilities (other than its ownership interest in FIS), as if the transfer had been completed as of March 31, 2006 for balance sheet purposes and as of January 1, 2005 with respect to the statement of earnings data and is derived from the unaudited pro forma combined financial statements included elsewhere in this information statement. The pro forma financial information should be read in conjunction with the unaudited pro forma condensed consolidated financial statements and related notes and the separate financial statements and related notes of FNT and FNF, which also are included in or incorporated by reference into this information statement. See “Unaudited Pro Forma Combined Financial Information” beginning on page 90.

Because the substance of the combined proposed transactions among FNF, FNT, and FIS pursuant to the securities exchange and distribution agreement and the merger agreement is effectively a reverse spin-off of FIS by FNF, and because FNT and FIS are entities under common control, the historical financial statements of FNF will become the historical financial statements of FNT subsequent to the proposed transactions. For more information on the accounting treatment of the proposed transactions, see “The Proposed Transactions — Accounting Treatment” beginning on page 46.

The selected unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of FNT would have been had the proposed transactions occurred on the dates assumed and does not reflect any benefits or synergies that may result from the proposed transactions, nor is it indicative of future operating results or financial position. Accounting policies used in the preparation of the pro forma condensed combined financial statements are in accordance with those used in FNF’s and our consolidated financial statements.


	Pro Forma		Pro Forma
	Three Months Ended		Year Ended
	March 31, 2006		December 31, 2005
	(In thousands, except		(In thousands, except
	per share data)		per share data)

Consolidated statement of earnings data:
Revenue	$	1,509,840	$	7,088,406
Earnings before income taxes and minority interest		154,207		1,282,730
Net earnings		96,419		827,709
Basic earnings per common share	$	0.44	$	3.78
Diluted earnings per common share		0.43		3.72
Basic shares outstanding		219,218		219,208
Diluted shares outstanding		222,750		222,508


	Pro Forma as of
	March 31,
	2006
	(In thousands)

Consolidated balance sheet data:
Investments	$	3,994,119
Cash and cash equivalents		586,656
Total assets		6,874,792
Long-term debt		649,956
Total stockholders’ equity		3,185,189

UNAUDITED COMPARATIVE PER SHARE DATA

The following table presents certain unaudited historical per share information of FNT and combined pro forma per share information after giving effect to the proposed transactions, which will be accounted for at historical cost. Subsequent to the proposed transactions, the historical financial statements of FNF will become the historical financial statements of FNT. For more information on the accounting treatment of the proposed transactions, see “The Proposed Transactions — Accounting Treatment” beginning on page 46. The unaudited pro forma information is presented on this basis for informational purposes only and is not intended to be indicative of the results of future operations or the results that would have occurred had the business combination been consummated at the beginning of the periods presented. The information set forth below has been derived from and should be read in conjunction with the financial statements and related notes of FNT and FNF included elsewhere in or incorporated by reference into this information statement and the unaudited pro forma condensed combined financial statements included elsewhere in this information statement.


	Three Months Ended March 31, 2006
	Historical		Historical		FNT		FNF
	FNT		FNF		Pro Forma(1)		Pro Forma

Earnings per common share:
Basic	$	0.46	$	0.61		N/A	$	0.44
Diluted		0.46		0.59		N/A		0.43
Dividends		0.29		0.25		N/A		0.29	(2)
Book value per common share		14.38		24.21		N/A		N/A


	Year Ended December 31, 2005
	Historical		Historical		FNT		FNF
	FNT		FNF		Pro Forma		Pro Forma

Earnings per common share:
Basic	$	3.11	$	5.58		N/A	$	3.78
Diluted		3.11		5.43		N/A		3.72
Dividends		0.25		11.00		N/A		1.16	(2)
Book value per common share		14.23		18.84		N/A		N/A


(1)		Because the substance of the proposed transactions and the merger is effectively a reverse spin-off of FIS by FNF, and because FNT and FIS are entities under common control, the historical financial statements of FNF will become the historical financial statements of FNT subsequent to the proposed transactions. For more information on the accounting treatment of the proposed transactions, see “The Proposed Transactions — Accounting Treatment” beginning on page 46.

(2)		Subsequent to the proposed transactions, FNT intends to continue to make dividend payments of $0.29 per quarter, or $1.16 per year.

RISK FACTORS

An investment in FNT after the proposed transactions will be subject to risks different from those to which an investment in FNT on a stand-alone basis would be subject. Moreover, by reason of the proposed transactions, and the resulting change in the business of FNT as compared to FNT’s business as currently conducted, the nature of the investment by each FNT stockholder will change. In addition to the other information contained in or incorporated by reference into this information statement, you should carefully review the risks described below together with all of the other information included in this information statement.

The issuance of shares of our common stock to FNF in connection with the proposed transactions will dilute the percentage ownership interests of current FNT stockholders.

If the proposed transactions are completed, we expect that we will issue to FNF approximately 45,744,681 shares of our common stock, based on receiving a cash amount of $275 million from FNF in the proposed transactions. This issuance of our common stock to FNF stockholders in excess of what they currently own will cause a reduction in the relative percentage interest of current FNT stockholders in FNT’s earnings, voting rights, liquidation book values and market capitalization. In addition, as a result of the increased issuance of our common stock, our future earnings per share will be lower than they otherwise would have been had such additional share issuance not occurred.

If the proposed transactions are not completed, we will have nonetheless incurred substantial costs and our results of operations and the market price of our common stock may be adversely affected.

We have incurred and expect to continue to incur substantial costs in connection with the proposed transactions. In addition, we have diverted significant management resources in an effort to complete the proposed transactions and are subject to restrictions contained in the securities exchange and distribution agreement on the conduct of our business. If the proposed transactions are not completed, we will receive little or no benefit from these costs.

Additionally, if the proposed transactions are not completed, we may experience negative reactions from the financial markets and our customers, suppliers and employees. Each of these factors may adversely affect the trading price of our common stock.

The pro forma financial statements may not be an indication of our financial condition or results of operations following the proposed transactions.

The pro forma financial statements contained in this information statement are presented for illustrative purposes only and may not be an indication of our financial condition or results of operations following the proposed transactions. The pro forma financial statements have been derived from the financial statements of FNT and FNF and certain adjustments and assumptions have been made regarding FNT after giving effect to the proposed transactions. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Furthermore, as described below, the historical financial statements of FNF are not representative of the transferred business on a stand-alone basis. As a result, the actual financial condition and results of operations of FNT following the proposed transactions may not be consistent with, or evident from, these pro forma financial statements.

The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect FNT’s financial condition or results of operations following the proposed transactions. Any potential decline in FNT’s financial condition or results of operations could cause the stock price of FNT to decline.

The completion of the proposed transactions is subject to the satisfaction or waiver of conditions.

The completion of the proposed transactions is subject to the satisfaction or waiver of a number of conditions set forth in the securities exchange and distribution agreement. If these conditions are not satisfied or waived, the proposed transactions will not be completed. Also, even if all of these conditions are satisfied or waived, the

proposed transactions may not be completed, as FNF has the right to terminate the securities exchange and distribution agreement prior to the closing thereunder in its sole discretion and both FNF and FNT have the right to terminate the securities exchange and distribution agreement prior to the closing thereunder under certain other circumstances specified therein and described in greater detail in “The Securities Exchange and Distribution Agreement — Termination of the Securities Exchange and Distribution Agreement” beginning on page 59.

If the spin-off does not constitute a tax free spin-off under Section 355 of the internal revenue code or the merger does not constitute a tax free reorganization under Section 368(a) of the code, then we may have to indemnify FIS or FNF for payment of taxes and tax-related losses.

Under the tax disaffiliation agreement, which we are required to enter into with FNF and FIS as a condition to the closing under the securities exchange and distribution agreement, we are required to indemnify FNF and FIS for taxes and tax-related losses (including stockholder suits) if the spin-off were determined to be taxable either to FNF or the FNF stockholders or both, unless such adverse determination were the result of a breach by FIS of its agreement not to take any action within its control that would cause the spin-off to be taxable or the result of an acquisition of FIS stock within the control of FIS or an FIS subsidiary. FNF estimates the amount of our indemnification obligation for the amount of tax on FNF’s transfer of our stock in the spin-off to be in the range of $150 million and possibly greater depending on, among other things, the value of our stock at the time of the spin-off. In addition, we are required under the tax disaffiliation agreement to indemnify FNF and FIS for taxes and tax-related losses (including stockholder suits) in the event the merger was determined to be taxable. FNF estimates the amount of our indemnification obligation for the amount of tax on FNF’s transfer of its FIS stock in the merger to be in the range of $1 billion and possibly greater depending on, among other things, the value of FIS’s stock at the time of the merger. See “The Securities Exchange and Distribution Agreement — Additional Agreements” beginning on page 55.

FNT may be affected by significant restrictions following the merger with respect to certain actions that could jeopardize the tax free status of the spin-off or the merger.

Even if the spin-off otherwise qualifies as a spin-off under Section 355 of the internal revenue code, the distribution of our common stock to the FNF stockholders in connection with the spin-off may not qualify as tax free to FNF (or its successor upon the consummation of the merger, FIS) under Section 355(e) of the internal revenue code if 50% or more of our stock is acquired as part of a plan or series of related transactions that includes the spin-off.

In order to help preserve the tax free treatment of the spin-off, the tax disaffiliation agreement restricts us from taking certain actions without first obtaining the consent of certain officers of FIS or obtaining an opinion from a nationally recognized law firm or accounting firm that such transaction will not cause the spin-off to be taxable under Section 355(e). In general, such actions would include, for a period of two years after the spin-off, engaging in any transaction involving (i) the acquisition of our stock or (ii) the issuance of shares of our stock.

FNT may not be able to integrate the transferred business successfully.

The success of the proposed transactions will depend in large part upon our ability to integrate the organizations, operations, systems and personnel of the companies transferred to us by FNF. The integration of such companies is a challenging, time-consuming and costly process. It is possible that the integration process could result in the loss of key employees, the disruption of our ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our or such companies’ ability to maintain relationships with suppliers, customers and employees or to achieve the anticipated benefits of the proposed transactions. In addition, successful integration of such companies will require the dedication of significant management resources, which will temporarily detract attention from the day-to-day business of such companies or FNT. If our management is not able to integrate the organizations, operations, systems and personnel of such companies in a timely and efficient manner, the anticipated benefits of the proposed transactions may not be realized fully or at all or may take longer to realize than expected.

Like our subsidiaries, certain companies included in the transferred business engage in insurance-related businesses and must comply with additional regulations. These regulations may impede, or impose burdensome conditions on, our rate increases or other actions that we might seek to increase the revenues of our subsidiaries.

The specialty insurance businesses included in the transferred business are subject to extensive regulation by state insurance authorities in each state in which they operate. These agencies have broad administrative and supervisory power relating to the following, among other matters:


	•	licensing requirements;

	•	trade and marketing practices;

	•	accounting and financing practices;

	•	capital and surplus requirements;

	•	the amount of dividends and other payments made by insurance subsidiaries;

	•	investment practices;

	•	rate schedules;

	•	deposits of securities for the benefit of policyholders;

	•	establishing reserves; and

	•	regulation of reinsurance.

Most states also regulate insurance holding companies like us with respect to acquisitions, changes of control and the terms of transactions with our affiliates. State regulations may impede or impose burdensome conditions on the insurance companies’ ability to increase or maintain rate levels or on other actions that we may want to take to enhance operating results, and could affect our ability to pay dividends on our common stock. In addition, we may incur significant costs in the course of complying with regulatory requirements. We cannot assure you that future legislative or regulatory changes will not adversely affect our business operations.

If the rating agencies further downgrade our company our results of operations and competitive position in the industry may suffer.

Ratings have always been an important factor in establishing the competitive position of insurance companies. Our insurance companies are rated by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., Moody’s Corporation, Fitch Ratings, Inc, A.M. Best Company, Inc. and Demotech, Inc. Ratings reflect the opinion of a rating agency with regard to an insurance company’s or insurance holding company’s financial strength, operating performance, and ability to meet its obligations to policyholders and are not evaluations directed to investors. In connection with the public announcement of the proposed transactions on April 27, 2006, Standard & Poor’s and A.M. Best revised their outlook to positive from stable and Moody’s and Fitch affirmed financial strength ratings of A3 and A−, respectively. Our ratings are subject to continued periodic review by those rating entities and the continued retention of those ratings cannot be assured. If our ratings are reduced from their current levels by those rating entities, our results of operations could be adversely affected.

We could have conflicts with FIS, and the fact that our chief executive officer and certain other officers will also serve as officers of FIS could create conflicts of interests.

Conflicts may arise between FIS and us as a result of our ongoing agreements and the nature of our respective businesses. We will seek to manage any potential conflicts through our agreements with FIS and entities affiliated with FIS and through oversight by independent members of our board of directors. However, there can be no assurances that such measures will be effective or that we will be able to resolve all potential conflicts with FIS and such affiliated entities, and even if we do, the resolution may be less favorable to us than if we were dealing with a different third party.

Some of the individuals who will be our executive officers after the proposed transactions own substantial amounts of FIS stock and options because of their relationships with FNF and FIS prior to the proposed transactions. Such ownership could create or appear to create potential conflicts of interest when officers are faced with decisions that could have different implications for our company and FIS.

William P. Foley, II will be our Chief Executive Officer and chairman of our board of directors and an executive officer and chairman of the board of directors of FIS following the proposed transactions. In addition, Alan L. Stinson will be our Chief Operating Officer and the Executive Vice President of Finance of FIS and Brent B. Bickett will be an executive officer of FNT and the Executive Vice President, Strategic Planning of FIS. As a result, they will have obligations to us as well as FIS and may have conflicts of interest with respect to matters potentially or actually involving or affecting us.

Matters that could give rise to conflicts include, among other things:


	•	our past and ongoing relationships with FIS, including tax matters, employee benefits, indemnification, and other matters; and

	•	the quality and pricing of services that we have agreed to provide to FIS entities or that those entities have agreed to provide to us.

Provisions of our certificate of incorporation may prevent us from receiving the benefit of certain corporate opportunities.

Because FIS may engage in the same activities in which we engage, there is a risk that we may be in direct competition with FIS over business activities and corporate opportunities. To address these potential conflicts, we have adopted a corporate opportunity policy that has been incorporated into our certificate of incorporation. Among other things, this policy limits the situations in which one of our directors or officers, if also a director or officer of FIS, may offer corporate opportunities to us of which such individual becomes aware. These provisions may limit the corporate opportunities of which we are made aware or which are offered to us.

We may not realize the anticipated benefits from the acquisition of the transferred business.

The transferred business is subject to risks and liabilities that are different from those of our current operations. Further, it is anticipated that the specialty insurance business may continue to expand into lines of business outside of our traditional area of operations and into new states with which we have limited experience.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the information contained in, or incorporated by reference into, this information statement, including in the sections entitled “The Proposed Transactions” and “FNT’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that involve risk and uncertainties. These statements relate to, among other things, consummation of the proposed transactions, future financial and operating results of FNT and the transferred business and benefits of the proposed transactions. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms and other comparable terminology. Actual results could differ materially from those anticipated in these statements as a result of a number of factors, including those set forth in the sections of this information statement listed above, in the section entitled “Risk Factors” or elsewhere in this information statement or in FNT’s and FNF’s other filings with the SEC, including FNF’s annual report on Form 10-K for the year ended December 31, 2005 filed with the SEC and incorporated by reference into this information statement. FNT is not under any obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. You should carefully consider the possibility that actual results may differ materially from forward-looking statements in this information statement.

THE FNT ANNUAL MEETING

General

This information statement is being furnished to FNT stockholders in connection with FNT’s annual meeting. This information statement is intended to provide you with the information you need to know to be able to consider the matters presented at the annual meeting. We are not soliciting proxies from FNT stockholders in connection with the annual meeting on account of the fact that a quorum will be present by virtue of FNF’s approximately 82% interest in our outstanding shares (representing 97.9% of the outstanding voting rights of our common stock) and that FNF intends to vote FOR the proposed transactions and the other annual meeting items. Accordingly, you are invited to attend the annual meeting, at which you will have the opportunity to vote, but your approval of the matters presented at the annual meeting is not required.

Date, Time and Place of the FNT Annual Meeting

The FNT annual meeting will be held on , 2006, at a.m., local time, in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida 32204.

Purposes of the FNT Meeting

At the FNT annual meeting, FNT stockholders will vote upon the following proposals:


	•	To approve the issuance of additional shares of FNT Class A common stock pursuant to the securities exchange and distribution agreement, dated as of June 25, 2006, between FNT and FNF, which provides for, among other things, the transfer of FNT common stock to FNF and the assumption by FNT of certain liabilities of FNF in exchange for FNF’s interests in certain companies owned or controlled by it and certain other assets of FNF.

	•	To adopt an amendment to the FNT 2005 Omnibus Incentive Plan, which we refer to as the omnibus incentive plan, that will increase the number of shares available for grants under the current plan by an additional 15,500,000.

	•	To adopt the amended and restated certificate of incorporation of FNT, which will, among other things, (a) increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000, (b) eliminate the FNT Class B common stock and all provisions relating thereto, (c) remove all references to and any requirements resulting from FNF’s ownership of FNT common stock and (d) change our name to “Fidelity National Financial, Inc.”

	•	To elect four Class I directors to serve until the 2009 annual meeting of stockholders.

	•	To ratify the appointment of KPMG LLP as FNT’s independent registered public accounting firm for its fiscal year ending December 31, 2006.

	•	To transact such other business as may properly be brought before the annual meeting.

Record Date; Outstanding Shares; Shares Entitled to Vote

The record date for our annual meeting was , 2006. This means that you must have been a stockholder of record of FNT common stock at the close of business on the record date in order to vote at the annual meeting. You are entitled to one vote for each share of FNT Class A common stock you own on the record date. On the record date, FNT had shares of FNT common stock outstanding.

NYSE Stockholder Approval Requirements

NYSE rules require that a listed company obtain the consent of its stockholders prior to completing any transaction that would result in the issuance of more than 20% of the company’s outstanding common stock. If the proposed transactions are completed, FNT will issue shares of common stock representing, in the aggregate, in excess of 20% of its currently outstanding shares of common stock. NYSE rules also require that a listed company

obtain stockholder approval of equity compensation plans like the proposed amendment to the omnibus incentive plan.

Quorum and Voting Rights

Proxies are not being solicited from the stockholders of FNT with respect to our annual meeting. FNF’s ownership of a majority of the outstanding shares of common stock of FNT establishes the presence of a quorum at the meeting. Approval of each of Proposal 1, relating to the issuance of shares of FNT Class A common stock pursuant to the securities exchange and distribution agreement, Proposal 2, relating to the amendment to the omnibus incentive plan, and Proposal 3, relating to the amendment and restatement of the certificate of incorporation of FNT, requires an affirmative vote of a majority of the votes cast at the FNT annual meeting. Approval of Proposal 4, relating to the election of directors, requires the affirmative vote of a plurality of the votes cast at the FNT annual meeting. Approval of Proposal 5, relating to ratification of the appointment of FNT’s independent auditors, and any other proposal that may be properly presented at the FNT annual meeting, requires an affirmative vote of a majority of the votes cast at the FNT annual meeting. FNF intends to vote its FNT shares in connection with each of the proposals which alone will suffice for the requisite minimum number of shares necessary with respect to each of the proposals. Accordingly, you are invited to attend our annual meeting, at which you will have the opportunity to vote, but your approval of the matters presented at the annual meeting is neither required nor requested.


ITEM 1 —	*THE ISSUANCE OF SHARES OF FNT COMMON STOCK PURSUANT TO THE SECURITIES EXCHANGE AND DISTRIBUTION AGREEMENT*

As discussed elsewhere in this information statement, FNT stockholders are being asked to vote for a proposal to approve the issuance of shares of FNT Class A common stock pursuant to the securities exchange and distribution agreement. You should carefully read this information statement in its entirety for more detailed information concerning the securities exchange and distribution agreement and the issuance of FNT common stock. You are also urged to read the securities exchange and distribution agreement, a copy of which is attached to this information statement as Annex A.

The FNT board of directors recommends that FNT stockholders vote FOR the issuance of FNT Class A common stock pursuant to the securities exchange and distribution agreement.

ITEM 2 — ADOPTION OF AN AMENDMENT TO THE FNT 2005 OMNIBUS INCENTIVE PLAN

As discussed elsewhere in this information statement, FNT stockholders are being asked to vote for the adoption of the amendment to the omnibus incentive plan to increase the total number of shares available for grants thereunder by an additional 15,500,000 shares. See “Approval of Amendment to the FNT 2005 Omnibus Incentive Plan” beginning on page 122.

The FNT board of directors recommends that FNT stockholders vote FOR the adoption of the amendment to the omnibus incentive plan.


ITEM 3 —	ADOPTION OF AN AMENDMENT AND RESTATEMENT OF FNT’S CERTIFICATE OF INCORPORATION

As discussed elsewhere in this information statement, FNT stockholders are being asked to vote for the adoption of the amended and restated certificate of incorporation of FNT, which will, among other things, (a) increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000, (b) eliminate the FNT Class B common stock and all provisions relating thereto, (c) remove all references to and any requirements resulting from FNF’s ownership of FNT common stock and (d) change our name to “Fidelity National Financial, Inc.”

The FNT board of directors recommends that FNT stockholders vote FOR the adoption of the amendment and restatement of FNT’s certificate of incorporation.

ITEM 4 — APPROVE ELECTION OF DIRECTORS

As discussed elsewhere in this information statement, FNT stockholders are being asked to vote for the election of four Class I nominees for director. You should carefully read this information statement in its entirety for more detailed information concerning the election of directors.

The FNT board of directors recommends that FNT stockholders vote FOR the election of all four nominees.


ITEM 5 —	*APPROVE RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS*

As discussed elsewhere in this information statement, FNT stockholders are being asked to ratify the appointment of KPMG LLP as FNT’s independent registered public accountants for fiscal year 2006. You should carefully read this information statement in its entirety for more detailed information concerning the ratification of KPMG LLP.

The FNT board of directors recommends that FNT stockholders vote FOR the ratification of the appointment of KPMG LLP as FNT’s independent registered public accountants for FNT’s fiscal year ending December 31, 2006.

Stock Ownership of Directors and Executive Officers

As of the record date for our annual meeting, FNT’s directors and executive officers and their affiliates had the right to vote approximately shares of the then outstanding FNT common stock at our annual meeting, which represented less than [ ] percent of the FNT common stock outstanding and entitled to vote at the meeting. No FNT director or executive officer or their affiliates beneficially owned any shares of FNT preferred stock.

Voting at the Annual Meeting

As proxies are not being solicited, all voting will be done in person at our annual meeting. Ballots will be available to all stockholders in attendance at the meeting provided that, with respect to stockholders whose FNT shares are held in “street name,” those stockholders must present appropriate proof of beneficial ownership of their FNT shares upon entrance to the meeting in order to be able to vote their shares at the meeting.

Shares held in “street name”

Generally, a broker, bank or other nominee may only vote the common stock that it holds in “street name” for you in accordance with your instructions. Therefore, if you are the beneficial owner of shares held in “street name” by a broker, and wish to vote on the proposals to be presented at our annual meeting, please give instructions to your broker on how to vote your shares. If you plan to attend our annual meeting and wish to vote in person, but your shares are held in “street name”, you must obtain a legal proxy authorizing you to vote the shares in person, which you must bring with you to the meeting.

Other voting matters

This information statement is available on the SEC’s Internet site at www.sec.gov or on our Internet site at www.fntg.com.

THE PROPOSED TRANSACTIONS

Structure of the Proposed Transactions

Transfer of assets and assumption of liabilities

The securities exchange and distribution agreement provides for the contribution of substantially all of FNF’s assets to FNT (other than FNF’s ownership interest in FIS and FNT). These assets include FNF’s interests in Fidelity Sedgwick Holdings, Inc., Fidelity National Insurance Company, Fidelity National Insurance Services, Inc., Fidelity National Timber Resources Inc., FNF Capital Leasing, Inc., FNF Holding, LLC, FNF International Holdings, Inc., National Alliance Marketing Group, Inc., Rocky Mountain Aviation, Inc. and Cascade Timberlands LLC. The assets to be transferred also include cash and any other property or rights that FNF owns immediately prior to the closing under the securities exchange and distribution agreement, which we refer to as the closing. In exchange for the transfer by FNF to FNT of these assets, which we refer to as the contributed assets, FNT will issue to FNF that number of shares of FNT Class A common stock equal to (i) 34,042,553 plus (ii) the amount of cash included in the contributed assets (not to exceed $275,000,000 for purposes of this calculation) divided by $23.50. FNT will also assume all of FNF’s liabilities, except for any:


	•	liabilities of FNF to the extent FIS or any subsidiary of FIS has, as of or prior to the closing, agreed in writing to be responsible therefor;

	•	liabilities of FNF to the extent arising out of or related to the ownership or operation of the assets or properties, or the operations or conduct of the business, of FIS or any subsidiary of FIS, in each case to the extent FIS or any subsidiary of FIS has, as of or prior to the closing, agreed to be responsible therefor;

	•	guaranties or other similar contractual liabilities of FNF in respect of a primary liability of FIS or any subsidiary of FIS; and

	•	certain limited tax liabilities (which are addressed in the tax disaffiliation agreement among FNT, FNF and FIS to be entered into at the closing). See “The Securities Exchange and Distribution Agreement and Related Documents — Additional Agreements” beginning on page 55.

The liabilities of FNF to be assumed by FNT are referred to as the assumed liabilities. FNT will assume and agree to pay, honor and discharge when due all of the assumed liabilities pursuant to an assumption agreement to be executed and delivered by FNT at the closing. The contribution of assets by FNF to FNT in exchange for the assumption by FNT of the assumed liabilities and the issuance to FNF of shares of FNT Class A common stock is referred to as the asset contribution. We refer to the contributed assets and the assumed liabilities collectively as the transferred business.

Spin-off

Immediately after the FNT annual meeting, the FNF board of directors will approve and formally declare the spin-off dividend. Following the asset contribution, FNF will convert all shares of FNT Class B common stock held by it into shares of FNT Class A common stock. Immediately thereafter, and immediately prior to the consummation of the merger, the transfer agent appointed by FNF will distribute all of the shares of FNT Class A common stock that FNF owns (including the converted shares and the shares received from FNT in connection with the asset contribution) to the holders of FNF common stock. The number of shares to which each holder is entitled will be determined by applying the formula contained in the spin-off declaration. Fractional shares that would otherwise be received by FNF stockholders will be aggregated and sold and the net cash proceeds of the sale will be distributed in lieu of fractional shares. We refer to the distribution to the stockholders of FNF of all the shares of FNT common stock held by FNF as the spin-off.

Stock Plan Amendment

We will amend the omnibus incentive plan to increase the total number of shares available for grants thereunder by an additional 15,500,000 shares.

Charter Amendments

Immediately after the completion of the spin-off and the merger of FNF with and into FIS described below, we will amend our certificate of incorporation to:


	•	increase the authorized number of shares of FNT Class A common stock from 300,000,000 to 600,000,000;

	•	eliminate the FNT Class B common stock and all provisions relating thereto;

	•	remove all references to and any requirements resulting from FNF’s ownership of FNT common stock; and

	•	change our name to “Fidelity National Financial, Inc.”

We refer to these amendments as the charter amendments.

In this information statement we refer to the asset contribution, the spin-off, the amendment to the omnibus incentive plan and the charter amendments collectively as the proposed transactions. Following the completion of the proposed transactions and the merger described below, our common stock will be listed and traded on the New York Stock Exchange under the symbol “FNF.”

Merger of FNF and FIS

The proposed transactions are part of a larger organizational restructuring of FNF. At the same time that FNF and FNT entered into the securities exchange and distribution agreement, FNF entered into an agreement and plan of merger, which we refer to as the merger agreement, with its majority-owned subsidiary FIS. The merger agreement provides for the merger of FNF with and into FIS, which we refer to as the merger, immediately following the spin-off. In order to complete the proposed transactions under the securities exchange and distribution agreement, all of the conditions to the consummation of the merger of FNF and FIS (other than the completion of the spin-off) must be satisfied or waived. In addition, in order for the merger to be completed, the proposed transactions under the securities exchange and distribution agreement, including the spin-off, must be completed. After the completion of the proposed transactions, and immediately prior to the merger, FNF will have no assets other than its approximately 50.3% ownership position in FIS and its rights under certain agreements entered into pursuant to the securities exchange and distribution agreement. Upon the consummation of the merger, FNF’s separate corporate existence will cease and FIS will continue as the surviving corporation.

Background of the Proposed Transactions

FNF formed old FIS and contributed assets to it in early 2005 in connection with the sale of a 25% interest in old FIS to a group of private equity investors led by Thomas H. Lee Partners and Texas Pacific Group. The principal businesses contributed were FNF’s bank core processing and mortgage processing business, its lender services businesses and its real estate information businesses. In February 2006, old FIS merged into a subsidiary of Certegy in a transaction in which FNF and the private equity investors received an aggregate of 67.4% of the common stock of Certegy. Certegy was subsequently renamed Fidelity National Information Services, Inc. We refer to the merger of Certegy into FIS as the Certegy merger. Prior to the Certegy merger, FNF had distributed a minority interest in FNT, the holding company for FNF’s title insurance operations, to the stockholders of FNF in a taxable distribution. This distribution resulted in FNT becoming publicly traded on the NYSE.

Following the Certegy merger and the establishment of public markets for FNT common stock and FIS common stock, FNF management perceived that the public market price for FNF common stock was not adequately reflecting the fair value of its parts, including FNF’s majority stakes in both FNT and old FIS. FNF believed that one possible factor contributing to this discount, among others, was FNF’s requirement that, for so long as FNF retained significant ownership positions in FNT and FIS, FNF maintain a majority ownership position in each company in order to consolidate their financial results within FNF for accounting purposes, which limited the ability of each of FNT and FIS to use its common stock as currency for acquisitions.

By early April, 2006, FNF and senior management had concluded that the public markets had discounted the value of FNF in relation to the sum of its parts. FNF and senior management began discussing the potential

inefficiencies in FNF’s holding company structure and how the market valuation of FNF’s assets might be maximized in a corporate restructuring.

The FNF board of directors recognized a number of factors in its decision to investigate the possibility of a restructuring transaction, including that:


	•	FNF’s majority ownership of FIS and FNT may limit the public float, the number of eligible stockholders, the trading liquidity and, therefore, limit the market value of FIS and FNT common stock; and

	•	FNF’s need to maintain its majority ownership positions in FIS and FNT may limit the ability of each of FIS and FNT to use its common stock as currency for acquisitions and, therefore, may constrain FIS and FNT from pursuing attractive acquisition opportunities.

Senior management also recognized the possibility that eliminating the FNF holding company structure and making FIS and FNT independent companies would simplify the profile of the FNF family of companies, eliminate the discount surrounding FNF common stock, provide more valuable currencies for future acquisitions for both FIS and FNT and more fully realize the underlying value of FIS and all of the assets of FNF.

Accordingly, senior management of FNF, in consultation with Bear Stearns & Co. Inc., began studying potential transactions that might mitigate or eliminate the perceived structural inefficiencies described above. FNF believed that any such transaction would have to meet at least two constraints: (i) that it not cause a taxable transaction for the company or its stockholders and (ii) that it not trigger purchase accounting rules that would require FNT or FIS (or a successor company in any transaction) to recognize significant goodwill in connection with any sale or transfer of assets.

At the regular quarterly meeting of the FNT board of directors on April 19, 2006, senior management of FNF proposed to the FNT directors a plan for a three-step transaction that would result in FIS and FNT becoming independent entities held entirely by public stockholders. In the first step, FNF would transfer its specialty insurance businesses, its interest in Sedgwick CMS, and certain other assets to FNT in exchange for stock of FNT. In the second step, FNF would spin out its entire ownership of FNT to FNF stockholders in a tax free distribution, effectively leaving FNF with its ownership in FIS as its only asset. In the third step, FIS would merge with FNF and issue stock of FIS to stockholders of FNF in a tax free transaction, thus making FIS independent of FNF ownership. The FNT board of directors approved pursuing these transactions, subject to further analysis of the value of such transactions to FNT and its stockholders and evaluation and negotiation of the transactions by the special committee of the FNT board of directors established at the same meeting. In authorizing the pursuit of this plan, the FNT board of directors considered, among other things, the need for FNT to pursue its own independent business and acquisition strategies and the projected impact of the transactions on FNT common stock valuations.

At their regular quarterly meetings on April 26, 2006, each of the FNF and FIS boards of directors approved pursuing these transactions, subject to further analysis of the value of such transactions to each company and their respective stockholders/shareholders and evaluation and negotiation of the transactions by the special committees of each board established at the same meetings. At its April 26, 2006 meeting, the FNF board of directors did not set or propose any definitive financial terms for either the asset contribution to FNT or the merger. As part of the announcement of the proposed plan, FNF did indicate that it expected to propose a total consideration range of $1.0 billion to $1.25 billion for the assets to be sold to FNT.

Formation of FNT Special Committee; Initial FNF Proposal

The FNT board of directors authorized the creation of a special committee of disinterested directors, consisting of Philip G. Heasley, chairman, Willie D. Davis and General William Lyon, that would, among other things, negotiate the terms and conditions of any proposed sale of assets of FNF to FNT in connection with a potential spin-off of FNT common stock to the holders of FNF common stock, and provide a recommendation to the FNT board of directors as to whether such transactions with FNF should be pursued by FNT. The FNT special committee retained Foley & Lardner LLP to serve as its legal counsel and Banc of America Securities LLC, which we refer to as Banc of America Securities, as its financial advisor in connection with the acquisition by FNT of such assets.

On May 19, 2006, the special committee of disinterested directors of FNF, which we refer to as the FNF special committee, provided a term sheet to the FNT special committee in which FNF proposed total consideration to FNF of $1.250 billion, plus the assumption of nearly all of FNF’s liabilities, in exchange for the businesses and assets to be transferred by FNF to FNT, with the number of FNT shares issued to FNF to be determined based on the average closing price of FNT Class A common stock on the NYSE during the 10 trading days before the execution of the definitive securities exchange and distribution agreement for the transaction. The FNF term sheet would have resulted in the issuance to FNF of approximately 61,819,980 shares of FNT Class A common stock, based on the average closing price of FNT Class A common stock of $20.22 per share during the 10 trading days ending on the date the definitive agreement was signed.

Deliberations and Negotiations by the FNT Special Committee

During May and June 2006, the FNT special committee held seven meetings with its advisors to consider the proposed transaction and its potential effect on FNT. At the first four meetings held to consider FNF’s proposal and develop a counter-proposal, the FNT special committee reviewed Banc of America Securities’ progress in analyzing the component businesses and assets of FNF to be transferred to FNT in connection with the asset contribution and the potential financial impact of such transfer on FNT. The FNT special committee instructed its advisors to obtain additional information from the management of each of FNT and FNF, including more information regarding the transferred business, projections regarding FNT’s own business, anticipated transaction costs and the FNF stock options to be assumed by FNT as part of the proposed transactions. The FNT special committee also received updates from its advisors about their due diligence regarding the assumed liabilities, including the possibility of contingent liabilities of FNF unrelated to the transferred business. These contingent liabilities include liabilities for taxes in the unanticipated event that the distribution by FNF of shares of FNT common stock and the merger were taxable events. In addition, during this period, at the FNT special committee’s direction, Foley & Lardner LLP negotiated the terms of the legal documents for the proposed transaction, drafts of which had been prepared by LeBoeuf, Lamb, Greene & MacRae LLP, legal counsel to FNF, including representations, warranties and covenants in the securities exchange and distribution agreement and the terms of a cross-indemnity agreement between FNT and FIS.

At its fifth meeting held on June 20, 2006, after reviewing updated information from its advisors, the FNT special committee authorized Banc of America Securities to make a counter-offer to FNF reflecting total consideration of $1.025 billion for the transferred business, with the number of FNT shares issued to FNF to be determined based on $24 per share. In addition, the FNT special committee proposed, among other things, that (1) the number of options to be assumed by FNT in connection with the proposed transactions be reduced through the pre-transaction exercise by FNF senior management of specified options, and (2) the cash to be included in the transferred business be limited to $275 million.

On June 21, 2006, after further consultation with its financial and legal advisors, the FNF special committee made a counter-proposal to FNT of total consideration of $1.150 billion for the transferred business (including $275 million of cash), with the number of FNT shares issued to FNF to be determined based on $22 per share and reduced to the extent that the cash transferred to FNF was less than $275 million. Under this counter-proposal, FNF also would repay in cash at closing inter-company notes to FNT of $24 million.

The FNT special committee met with its advisors later that day to consider the counter-proposal and authorized a final counter-proposal to FNF of total consideration of $1.075 million (to be reduced dollar for dollar to the extent the transferred cash was less than $275 million), with the number of FNT shares issued to FNF to be determined based on $23.50 per share. Assuming FNF transfers cash of $275 million to FNT at closing, FNT will issue 45,744,681 shares of FNT Class A common stock to FNF in connection with the proposed transactions. FNF’s special committee accepted this final counter-proposal, subject to the completion of definitive documentation, on June 23, 2006.

Later on June 23, 2006, FNT’s special committee met with its advisors and discussed the results of the negotiations with the FNF special committee regarding the consideration payable by FNT in exchange for the transferred business, the status of the negotiations with respect to the securities exchange and distribution agreement and related matters. Also at this meeting, Banc of America Securities informed the FNT special committee that,

assuming no material changes in the terms of the proposed transactions or in the information it considered in connection with its financial analysis, it believed it would be in a position to render to the FNT special committee, at the time of execution of the securities exchange and distribution agreement, an opinion to the effect that, as of the date of its opinion and based on and subject to the matters described in its opinion, the aggregate stock consideration to be issued by FNT pursuant to the securities exchange and distribution agreement was fair, from a financial point of view, to FNT. The FNT special committee voted unanimously in favor of recommending FNT’s final counter-proposal to the full board of directors of FNT. On June 25, 2006, the FNT board of directors met to consider the proposed transactions and the FNT special committee’s recommendation, and approved the securities exchange and distribution agreement and the proposed transactions. Following the meeting of the FNT board of directors and its approval of the securities exchange and distribution agreement and the proposed transactions and the approval by the board of directors of each of FNF and FIS, FNF and FNT executed and delivered the securities exchange and distribution agreement, FNF and FIS executed and delivered the merger agreement, FNF and Messrs. Foley, Stinson and Bickett executed and delivered the letter agreement regarding executive options, and Banc of America Securities delivered its opinion to the FNT special committee.

Factors Considered by the FNT Special Committee

The FNT special committee believed that the securities exchange and distribution agreement and the proposed transactions are in the best interests of FNT and its stockholders. Accordingly, the FNT special committee voted to recommend that the FNT board of directors approve the securities exchange and distribution agreement and the proposed transactions.

In evaluating the proposed transactions, the FNT special committee reviewed and discussed the securities exchange and distribution agreement and the transactions contemplated thereby with FNT’s management team and the FNT special committee’s legal and financial advisors and considered a number of factors, including the following:


	•	the elimination, through the FNF distribution of FNT shares, of the overhang caused by the large block of FNT stock held by FNF and the resulting increase in the public float of FNT;

	•	acquisition of a complementary special insurance business and a 40% ownership position in an attractive claims processing business;

	•	greater operational and financial flexibility as the result of eliminating the requirements for being an 80% consolidated subsidiary of FNF, including the ability to use FNT stock for acquisitions after the transaction;

	•	the potential use of the cash acquired from FNF for acquisition opportunities that might arise in the future and management’s favorable track record in making acquisitions; and

	•	the projected increase to book value per share.

The FNT special committee also considered the following material negative factors:


	•	the dilution to FNT’s projected earnings per share and return on equity in 2007 and 2008; and

	•	FNT’s assumption of FNF liabilities, which could include unknown contingent liabilities.

The FNT special committee gave primary weight to the anticipated unlocking of value that it expected to accompany the elimination of the overhang from FNF’s approximately 82% ownership of FNT and the increase in the public float of FNT’s stock. The FNT special committee believed that the dilution to FNT’s earnings per share and return on equity in 2007 and 2008 would be mitigated in subsequent years if the assets acquired from FNF achieved their long-range earnings potential. The FNT special committee also believed that the risk of assumed contingent liabilities was relatively remote. In particular, the risk of tax liabilities with respect to the restructuring would be mitigated by the IRS private letter ruling and the opinion of FNF’s special tax advisor that are conditions to closing. The FNT special committee therefore determined that the benefits of the proposed transactions, including FNF’s distribution of FNT shares, outweighed the detriments and voted unanimously in favor of recommending the transaction to FNT’s full board of directors.

FNT’s Reasons for the Proposed Transactions; Recommendation by FNT’s Board of Directors

As discussed above, we believe that the holding company structure, with FNF having ownership stakes in public and private operating subsidiaries, including FNT, has discounted the value of FNF in relation to the sum of its parts. The majority ownership stake that FNF currently has in FNT limits the public float of FNT, which may be significantly reducing the number of eligible holders of our common stock and limiting the trading liquidity, and thus the valuation, of FNT common stock. Additionally, for several tax-related reasons, FNF has been unwilling to own less than 80% of FNT’s common stock, which has limited FNT’s ability to issue its common stock to raise equity capital and fund acquisitions and for management incentives. We believe that the stockholders of FNT will benefit in several ways from the proposed transactions, including the spin-off. The proposed transactions, in conjunction with the merger of FNF into FIS, will eliminate FNF and the holding company structure, and we will be an independent company without the control of a single majority stockholder. This will increase FNT’s public float, which in the long term we anticipate will enhance the trading volume and value of FNT’s common stock. As a result, we expect to be better able to issue our common stock (i) to raise equity capital, (ii) as currency to take advantage of acquisition opportunities and (iii) for employee compensation to incentivize, attract and retain key employees. Additionally, we expect the proposed transactions to afford us the synergy benefits of ownership of complementary businesses, including FNF’s specialty insurance business and an approximately 40% ownership position in Sedgwick CMS, FNF’s insurance claims processing business. Further, the cash component of the contributed assets is expected to provide us with additional operating flexibility.

Our board of directors, after its independent evaluation and acting upon the unanimous recommendation of the special committee, approved the securities exchange and distribution agreement and the proposed transactions.

Opinion of the FNT Special Committee’s Financial Advisor

FNT has retained Banc of America Securities to act as the FNT special committee’s financial advisor in connection with the asset contribution. Banc of America Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with transactions and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. FNT selected Banc of America Securities to act as the FNT special committee’s financial advisor in connection with the asset contribution on the basis of Banc of America Securities’ experience in similar transactions, its reputation in the insurance industry and investment community, and its familiarity with FNT, FNF and their respective businesses.

On June 25, 2006, the date on which the securities exchange and distribution agreement was executed, Banc of America Securities delivered to the FNT special committee a written opinion, dated June 25, 2006, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the aggregate stock consideration was fair, from a financial point of view, to FNT.

The full text of Banc of America Securities’ written opinion to the FNT special committee, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this information statement and is incorporated by reference in its entirety into this information statement. FNT stockholders are encouraged to read the opinion carefully in its entirety. The following summary of Banc of America Securities’ opinion is qualified in its entirety by reference to the full text of the opinion. Banc of America Securities provided its opinion to the FNT special committee to assist the FNT special committee in its evaluation of the aggregate stock consideration from a financial point of view. Banc of America Securities’ opinion does not address any other aspect of the proposed transactions and does not constitute a recommendation as to how any stockholder should vote or act in connection with the proposed transactions.

For purposes of its opinion, Banc of America Securities:


	•	reviewed publicly available financial statements and other business and financial information relating to FNT and the contributed assets;

	•	reviewed internal financial statements and other financial and operating data concerning FNT and the contributed assets;


	•	reviewed financial forecasts relating to (i) FNF’s insurance subsidiaries, consisting of Fidelity National Insurance Company, FIS and National Alliance Marketing Group, Inc. (which we collectively refer to in this section as the specialty insurance companies), (ii) FNF Capital Leasing, Inc. (which we refer to in this section as FNF leasing), and (iii) Sedgwick CMS (which, together with the specialty insurance companies and FNF leasing, we collectively refer to in this section as the FNF businesses), which forecasts were prepared by FNF’s management and the managements of the FNF businesses;

	•	reviewed financial forecasts and estimates prepared by FNF’s management relating to FNT and certain of the contributed assets other than the FNF businesses (which we collectively refer to in this section as the other FNF assets), including estimates as to the anticipated investment strategy for the cash portion of the other FNF assets and the potential rates of return for such investments;

	•	discussed the past and current operations, financial condition and prospects of FNT with FNT’s senior executives, discussed the past and current operations, financial condition and prospects of the FNF businesses with senior executives of FNT, FNF and the FNF businesses, and discussed business and financial matters pertaining to the other FNF assets with FNT’s and FNF’s senior executives;

	•	reviewed the potential pro forma financial impact of the transaction on FNT’s future financial performance, including the potential effects on FNT’s estimated earnings and book value per share and return on equity;

	•	reviewed the reported prices and trading activity for FNT Class A common stock;

	•	compared the financial performance of FNT and the FNF businesses, respectively, with that of publicly traded companies Banc of America Securities deemed relevant;

	•	compared financial terms of the transaction to financial terms, to the extent publicly available, of other transactions Banc of America Securities deemed relevant with respect to the FNF businesses and Cascade;

	•	participated in discussions and negotiations among the FNT special committee and FNF’s representatives and their respective advisors;

	•	reviewed the securities exchange and distribution agreement and certain related documents;

	•	with respect to certain real property assets comprising the other FNF assets, reviewed and discussed with FNT’s and FNF’s senior executives appraisals prepared by a third party consultant to FNF and/or the purchase prices paid by FNF for such properties;

	•	reviewed public announcements made by FNT and FNF, and held discussions with the FNT special committee and the managements of FNT and FNF, regarding the asset contribution and certain related transactions, including the spin-off and the merger, which we refer to in this section collectively as the related transactions; and

	•	performed other analyses and considered other factors as Banc of America Securities deemed appropriate.

Banc of America Securities assumed and relied on, without independent verification, the accuracy and completeness of the financial and other information reviewed by it for the purposes of its opinion. Banc of America Securities assumed, at FNT’s direction, that the financial forecasts and estimates prepared by FNT’s management it reviewed relating to FNT and certain of the other FNF assets were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of FNT’s management as to FNT’s future financial performance and the other matters covered by such forecasts and estimates. Banc of America Securities assumed, upon FNF’s advice and at FNT’s direction, that the financial forecasts it reviewed relating to the FNF businesses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the managements of FNF and the FNF businesses as to the future financial performance of the FNF businesses. Banc of America Securities did not make any independent valuation or appraisal of the contributed assets or FNT’s assets or liabilities and Banc of America Securities was not furnished with any such valuations or appraisals (other than appraisals relating to real property assets comprising a portion of the other FNF assets, which Banc of America Securities reviewed and relied on, without independent verification, for purposes of its opinion). Banc of America Securities assumed, with FNT’s consent, that, other than those liabilities relating to the contributed assets to be assumed by FNT as specified in the securities exchange and distribution agreement, FNT would not incur any liability or other obligations in connection with the asset contribution or the related

transactions that would impact its analyses in any material respect. Banc of America Securities also assumed, with FNT’s consent, that the asset contribution and the related transactions would be consummated as provided in or contemplated by the securities exchange and distribution agreement and related documents, with full satisfaction of all covenants and conditions contained in the securities exchange and distribution agreement and related documents and without any waivers, and in compliance with all applicable laws and contractual and other requirements. Banc of America Securities further assumed, with FNT’s consent, that all regulatory, governmental and third party consents, approvals, agreements, waivers and rulings necessary for the consummation of the asset contribution would be obtained without any adverse effect on FNT, the contributed assets or the asset contribution.

Banc of America Securities expressed no view or opinion as to any terms or aspects of the asset contribution, other than the aggregate stock consideration to the extent expressly specified in its opinion, including, without limitation, the related transactions, the form or structure of the asset contribution or any tax or accounting aspects. In addition, Banc of America Securities expressed no opinion as to the relative merits of the asset contribution in comparison to other transactions available to FNT or in which FNT might engage or as to whether any transaction might be more favorable to FNT as an alternative to the asset contribution, nor did Banc of America Securities express any opinion as to the underlying business decision of the FNT special committee to proceed with or effect the asset contribution. Banc of America Securities expressed no opinion as to what the value of FNT Class A common stock actually will be when issued or the prices at which FNT Class A common stock may trade at any time. Except as described above, the FNT special committee imposed no other limitations on the investigations made or procedures followed by Banc of America Securities in rendering its opinion.

Banc of America Securities’ opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to Banc of America Securities as of, the date of its opinion. Accordingly, although subsequent developments may affect its opinion, Banc of America Securities did not assume any obligation to update, revise or reaffirm its opinion.

The following represents a brief summary of the material financial analyses presented by Banc of America Securities to the FNT special committee in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Banc of America Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Banc of America Securities. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Banc of America Securities.

Sum-of-the-Parts Analysis of the Contributed Assets

Banc of America Securities performed a “Sum-of-the-Parts-Analysis” of the contributed assets by performing separate financial analyses of, or utilizing certain financial information or data relating to, the contributed assets. These contributed assets include, among other things, the flood insurance business and home warranty and personal lines insurance businesses of the specialty insurance companies, a 40% interest in Sedgwick CMS, a 70.1% interest in Cascade, FNF leasing, FNF’s real estate holdings in Montana and a cash amount of up to $275 million. The Sum-of-the-Parts-Analysis indicated the following approximate implied aggregate reference range for the contributed assets, as compared to the approximate implied value of the aggregate stock consideration, assuming the transfer of $275 million in cash to FNT in the asset contribution, of 45,744,681 shares of FNT Class A common stock based on the closing price of FNT common stock on June 23, 2006:


Implied Sum-of-the-Parts	Implied Value of
Reference Range for Contributed Assets	Aggregate Stock Consideration

$1,050,000,000 - $1,249,000,000	$	940,000,000

As more fully described below, the Sum-of-the-Parts Analysis performed by Banc of America Securities was based on, in the case of each of the FNF businesses, a “Selected Companies Analysis,” “Selected Transactions Analysis” and “Discounted Cash Flow Analysis” and, in the case of Cascade, a “Selected Transactions Analysis,” the appraised value of real estate held by Cascade and the purchase prices previously paid by FNF for such real

estate. In the case of FNF’s real estate holdings in Montana, Banc of America Securities utilized an estimated value based on the purchase price previously paid by FNF for such real estate. The financial analyses of Sedgwick CMS and Cascade reflected FNF’s equity ownership in those entities of 40% and 70.1%, respectively.

Specialty Insurance Companies’ Businesses

In evaluating the businesses of the specialty insurance companies to be transferred to FNT as part of the asset contribution, Banc of America Securities performed separate financial analyses of the flood insurance business and home warranty and personal lines insurance businesses of the specialty insurance companies.

Flood Insurance Business

Selected Companies Analysis. Banc of America Securities reviewed financial and stock market information for the following four selected publicly held claims administrators and other insurance services providers and four selected domestic insurance brokers:


Claims Administrators
and Other Insurance Providers		Domestic Insurance Brokers

• Fiserv, Inc.		• Brown & Brown, Inc.
• Arthur J. Gallagher & Co.		• Hilb Rogal & Hobbs Company
• Crawford & Company		• Arthur J. Gallagher & Co.
• CorVel Corporation		• USI Holdings Corporation

Banc of America Securities reviewed, among other things, enterprise values of the selected companies, calculated as fully-diluted market value, plus net debt and minority interests, less cash and cash equivalents, as a multiple of calendar years 2006 and 2007 estimated earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA. Banc of America Securities also reviewed market values of the selected companies as a multiple of calendar years 2006 and 2007 estimated net income. Banc of America Securities then applied a range of selected EBITDA and net income multiples derived from the selected companies to corresponding data of the flood insurance business, as adjusted, in the case of calendar year 2006 estimated EBITDA and net income, to exclude extraordinary amounts as a result of the calendar year 2005 hurricane season. Multiples were based on closing stock prices on June 23, 2006. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates. Estimated financial data of the flood insurance business were based on internal estimates of the specialty insurance companies’ management.

Selected Transactions Analysis. Banc of America Securities reviewed, to the extent publicly available, financial information relating to the following 30 selected acquisition transactions in the insurance brokerage and 13 selected acquisition transactions in the flood insurance industry:

Insurance Brokerage Transactions


Announcement Date	Acquiror	Target

• 3/1/06	• Hub International Limited	• Citizens Clair Insurance Group, Brewer & Lord of Norwell, LLC and The Feitelberg Company LLC
• 9/22/05	• Hicks, Muse Tate & Furst Incorporated, Banc of America Capital Investors and Emerald Group	• The Swett & Crawford Group, Inc.
• 9/7/05	• J.C. Flowers & Co. LLC	• Crump Group, Inc.
• 3/5/05	• Wachovia Corporation	• Palmer & Clay, Inc.
• 2/15/05	• American Wholesale Insurance Group, Inc.	• Stewart Smith Group Inc.
• 2/11/05	• Brown & Brown, Inc.	• Hull & Company, Inc.
• 4/23/04	• Brown & Brown, Inc.	• Proctor Financial Insurance Corp.
• 4/01/04	• U.S.I. Holdings Corporation	• Bertholon Rowland, Inc.
• 3/14/04	• Hub International Limited	• Talbot Financial Corporation
• 3/12/04	• Marsh & McLennan Companies, Inc.	• Heath Lambert Limited (Australia and New Zealand operations)
• 1/5/04	• Capital Risk LLC	• HCC Employee Benefits, Inc.
• 11/11/03	• BB&T Insurance Services, Inc.	• McGriff, Seibels & Williams Inc.
• 11/10/03	• The BISYS Group, Inc.	• USA Insurance Group, Inc.


Announcement Date	Acquiror	Target

• 3/14/03	• The BISYS Group, Inc.	• Tri-City Brokerage, Inc.
• 12/31/02	• Hub International Limited	• Fifth Third Insurance Services, Inc.
• 10/23/02	• Brown & Brown, Inc.	• Cal-Surance Associates, Inc.
• 9/26/02	• Clark/Bardes, Inc.	• Long Miller & Associates, LLC
• 5/13/02	• Hilb, Rogal and Hamilton Company	• Hobbs Group, LLC
• 12/19/01	• Greater Bay Bancorp	• Alburger Basso de Grosz Insurance Services, Inc.
• 7/25/01	• Brown & Brown, Inc.	• Raleigh, Schwarz & Powell, Inc.
• 4/16/01	• Benfield Greig Group plc	• E.W. Blanch Holdings, Inc.
• 3/08/01	• Wells Fargo & Company	• ACO Brokerage Holdings Corporation
• 1/20/01	• Hub International Limited	• Kaye Group Inc.
• 1/3/01	• Brown & Brown, Inc.	• Riedman Corporation
• 6/7/00	• M Financial Group	• Management Compensation Group, Northwest, LLC
• 8/25/98	• Marsh & McLennan Companies, Inc.	• Sedgwick Group plc
• 7/21/98	• Kohlberg Kravis Roberts & Co.	• Willis Corroon Group plc
• 8/4/97	• Knightsbridge Capital LLC	• Acordia, Inc.
• 3/12/97	• Marsh & McLennan Companies, Inc.	• Johnson & Higgins, Inc.
• 12/11/96	• Aon Corporation	• Alexander & Alexander Services Inc.

Flood Insurance Transactions


Announcement Date	Acquiror	Target

• 7/1/04	• CTG Real Estate Information Services Inc.	• Determination Processing Services Inc.
• 11/4/03	• The Seibels Bruce Group, Inc.	• The Seibels Bruce Group, Inc.
• 9/4/03	• The First American Financial Corporation (now known as The First American Corporation)	• Transamerica Flood Hazard Certification, Inc.
• 9/2/03	• LandAmerica Financial Group, Inc.	• LERETA Corp.
• 4/9/03	• Fiserv, Inc.	• Insurance Management Solutions Group, Inc.
• 10/15/02	• FNF	• Bankers Insurance Group, Inc.
• 11/30/01	• Fiserv, Inc.	• National Con-Serv, Inc.
• 10/3/00	• Fiserv, Inc.	• National Flood Services, Inc.
• 11/24/99	• The First American Financial Corporation (now known as The First American Corporation)	• Crystal River Title Co.
• 5/26/98	• LERETA Corp.	• AccuFlood Inc.
• 10/20/97	• Guaranty National Corporation	• Unisun Insurance Company
• 2/14/97	• Investor Group	• National Flood Services, Inc.
• 6/24/96	• Investor Group	• The First American Financial Corporation (now known as The First American Corporation)

Banc of America Securities reviewed, among other things, transaction values of the selected transactions, calculated as the equity value implied for the target company based on the consideration payable in the selected transaction, plus net debt and minority interests, less cash and cash equivalents, as a multiple of latest 12 months EBITDA. Banc of America Securities also reviewed purchase prices paid in the selected transactions as a multiple of latest 12 months net income. Banc of America Securities then applied a range of selected EBITDA and net income multiples derived from the selected transactions to the calendar year 2006 estimated EBITDA and net income, in each case as adjusted to exclude extraordinary amounts as a result of the calendar year 2005 hurricane season, of the flood insurance business. Multiples for the selected transactions were based on publicly available financial information at the time of announcement of the relevant transaction. Estimated financial data of the flood insurance business were based on internal estimates of the specialty insurance companies’ management.

Discounted Cash Flow Analysis. Banc of America Securities performed a discounted cash flow analysis of the flood insurance business in order to calculate the estimated present value of the standalone cash flows that the flood insurance business could generate during the fourth quarter of fiscal year 2006 through fiscal year 2011 based on internal estimates of the specialty insurance companies’ management. Banc of America Securities calculated a range of estimated terminal values by applying a range of terminal value multiples of 8.0x to 9.0x to the fiscal year

2011 estimated net income of the flood insurance business. The present value of the cash flows and terminal values were then calculated using discount rates ranging from 13.0% to 14.0%.

Home Warranty and Personal Lines Insurance Businesses

Selected Companies Analysis. Banc of America Securities reviewed financial and stock market information for the following nine selected publicly held personal lines insurance companies:

Personal Lines Insurance Companies

• The Allstate Corporation

• Safeco Corporation

• Mercury General Corporation

• The Hanover Insurance Group, Inc.

• Ohio Casualty Corporation

• State Auto Financial Corporation

• Alfa Corporation

• Safety Insurance Group, Inc.

• The Midland Company

Banc of America Securities reviewed, among other things, market values of the selected companies as multiples of calendar years 2006 and 2007 estimated net income and book value, excluding accumulated other comprehensive income, as of March 31, 2006. Banc of America Securities then applied a range of selected net income and book value multiples derived from the selected companies to corresponding data of the home warranty and personal lines insurance businesses. Multiples were based on closing stock prices on June 23, 2006. Financial data of the selected companies were based on publicly available research analysts’ estimates and public filings. Financial data of the home warranty and personal lines insurance businesses were based on internal estimates and data of the specialty insurance companies’ management.

Selected Transactions Analysis. Banc of America Securities reviewed financial information, to the extent publicly available, relating to the following 15 selected acquisition transactions in the personal lines insurance industry:


Announcement Date	Acquiror	Target

• 11/14/05	• General Motors Acceptance Corporation	• MEEMIC Insurance Company
• 7/29/05	• Sentry Insurance a Mutual Company	• Viking Insurance Holdings, Inc.
• 12/15/03	• Liberte Investors Inc. (now known as First Acceptance Corporation)	• USAuto Holdings, Inc.
• 11/17/03	• The St. Paul Companies, Inc. (now known as The St. Paul Travelers Companies, Inc.)	• Travelers Property Casualty Corp.
• 5/22/03	• Liberty Mutual Group Inc.	• Prudential’s Property & Casualty Insurance Company
• 5/22/03	• The Palisades Group, LLC	• The Prudential Property and Casualty New Jersey Holdings, Inc.
• 3/27/03	• Nationwide Mutual Insurance Company	• THI Holdings, Inc.
• 11/1/00	• American National Insurance Company	• Farm Family Holdings, Inc.
• 10/25/00	• State Auto Financial Corporation	• Meridian Insurance Group, Inc.
• 9/25/00	• White Mountains Insurance Group, Ltd.	• CGU Corporation
• 6/22/00	• Medical Assurance, Inc.	• Professionals Group, Inc.
• 3/21/00	• Citigroup Inc.	• Travelers Property Casualty Corp.
• 10/19/99	• Farmers Insurance Exchange	• Foremost Corporation of America
• 7/12/99	• Metropolitan Property & Casualty Company	• The St. Paul Companies, Inc.
• 6/9/99	• The Allstate Corporation	• CNA Financial Corporation (Personal Insurance Business)

Banc of America Securities reviewed, among other things, purchase prices in the selected transactions as multiples of latest 12 months and estimated next 12 months net income and book value as of the most recent completed accounting period prior to public announcement of the relevant transaction. Banc of America Securities then applied a range of selected net income and book value multiples derived from the selected transactions to the

calendar year 2005 and estimated calendar year 2006 net income and book value, excluding accumulated other comprehensive income, as of March 31, 2006 of the home warranty and personal lines insurance businesses. Multiples for the selected transactions were based on publicly available financial information at the time of announcement of the relevant transaction. Financial data of the specialty insurance companies’ home warranty and personal lines insurance businesses were based on internal estimates and data of the specialty insurance companies’ management.

Discounted Cash Flow Analysis. Banc of America Securities performed a discounted cash flow analysis of the home warranty and personal lines insurance businesses in order to calculate the estimated present value of the standalone cash flows that the home warranty and personal lines insurance businesses could generate during the fourth quarter of fiscal year 2006 through fiscal year 2011 based on internal estimates of the specialty insurance companies’ management. Banc of America Securities calculated a range of estimated terminal values by applying a range of terminal value multiples of 9.5x to 11.5x to the fiscal year 2011 estimated net income of the home warranty and personal lines insurance businesses. The present value of the cash flows and terminal values were then calculated using discount rates ranging from 12.5% to 13.5%.

Sedgwick CMS


Claims Administrators and
Other Insurance Services Providers		Call Center Outsourcers

• Fiserv, Inc.		• Convergys Corp.
• Arthur J. Gallagher & Co.		• TeleTech Holdings
• Crawford & Company		• StarTek, Inc.
• CorVel Corporation		• ICT Group Inc.

Banc of America Securities reviewed, among other things, enterprise values of the selected companies as a multiple of calendar years 2006 and 2007 estimated EBITDA. Banc of America Securities then applied a range of selected EBITDA multiples derived from the selected companies to corresponding data of Sedgwick CMS. Multiples were based on closing stock prices on June 23, 2006. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates. Estimated financial data of Sedgwick CMS were based on internal estimates of Sedgwick CMS’ management.

Selected Transactions Analysis. Banc of America Securities reviewed, to the extent publicly available, financial information relating to the following 14 selected acquisition transactions in the insurance services industry and 10 selected acquisition transactions in the business processes outsourcing and human resources services industry:

Insurance Services Transactions


Announcement Date	Acquiror	Target

• 2/27/06	• Aetna, Inc.	• Broadspire Services, Inc. (Disability Business)
• 12/27/05	• Fidelity National Financial, Inc.	• Sedgwick Claims Management Services Inc.
• 3/31/05	• Monitor Clipper Partners Inc.	• Medical Services Company
• 10/4/04	• Scandent Group, Inc.	• Cambridge Integrated Services Group, Inc.
• 3/9/04	• Broadspire Services, Inc.	• Cunningham Lindsey Claims Management, Inc. (US TPA Business)
• 3/2/04	• U.S. Risk Insurance Group, Inc.	• Ward North America Holding, Inc.
• 10/3/03	• CompManagement, Inc.	• Octagon Risk Services, Inc.
• 7/22/03	• Platinum Equity, LLC	• Kemper Corporation / National Loss Control Services Corporation
• 4/2/03	• Cunningham Lindsey US Inc.	• RSKCo Services, Inc.
• 4/15/03	• Fiserv, Inc.	• Wausau Benefits, Inc.
• 4/9/03	• Fiserv, Inc.	• Insurance Management Solutions Group, Inc.
• 12/31/02	• Cobalt Corporation	• Claim Management Services, Inc.
• 11/12/02	• CGI Group Inc.	• Underwriters Adjustment Bureau Ltd.
• 9/21/99	• Brera Capital Partners LLC	• The GAB Robins Group of Companies

Business Processes Outsourcing and HR Services Transactions


Announcement Date	Acquiror	Target

• 7/21/05	• Perot Systems Corporation	• Technical Management Inc. and its subsidiaries, including Transaction Applications Group, Inc.
• 3/31/05	• Affiliated Computer Services, Inc.	• Mellon Human Resources & Investor Solutions Inc.
• 1/18/05	• Watson Wyatt & Company Holdings	• Watson Wyatt LLP
• 1/18/05	• Electronic Data Systems Corporation	• Towers Perrin’s Human Resources Business Process Outsourcing
• 11/8/04	• General Atlantic/Oak Hill Capital Partners, L.P.	• Gecis Global Holdings Inc.
• 6/15/04	• Hewitt Associates, Inc.	• Exult, Inc.
• 2/4/03	• New Mountain Capital LLC	• Choice Point Inc. (CP Commercial Services)
• 5/29/01	• Capita Group plc	• Mclaren Dick & Company Limited
• 11/2/00	• Capital Group plc	• Eastgate Group Limited
• 2/6/00	• BCE Emergis Inc.	• United Payors & United Providers, Inc.

Banc of America Securities reviewed, among other things, transaction values of the selected transactions as a multiple of latest 12 months EBITDA. Banc of America Securities then applied a range of selected EBITDA multiples derived from the selected transactions to corresponding data of Sedgwick CMS. Multiples for the selected transactions were based on publicly available financial information at the time of announcement of the relevant transaction. Financial data for Sedgwick CMS were based on internal estimates of Sedgwick CMS’ management.

Discounted Cash Flow Analysis. Banc of America Securities performed a discounted cash flow analysis of Sedgwick CMS to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that Sedgwick CMS could generate during the fourth quarter of fiscal year 2006 through fiscal year 2011 based on internal estimates of Sedgwick CMS’ management. Banc of America Securities calculated a range of estimated terminal values by applying a range of terminal value multiples of 7.0x to 9.0x to the fiscal year 2011 estimated EBITDA of Sedgwick CMS. The present value of the cash flows and terminal values were then calculated using discount rates ranging from 11.0% to 13.0%.

Cascade

Selected Transactions Analysis. Banc of America Securities reviewed financial information relating to the following 15 selected acquisition transactions in the timber industry:


Announcement Date	Acquiror	Target

• 2006	• Fidelity National Financial, Inc.	• Cascade
• 2004	• Longview Fibre Company	• Plum Creek Timber Company, Inc.
• 2004	• Jeld-Wen, Inc.	• US Timberlands Company, LP
• 2004	• Cascades Timberlands LLC	• Crown Pacific Partners, LP
• 2003	• Ponderosa Land & Cattle Company	• Weyerhaeuser Company
• 2003	• US Forest Service	• Pioneer Forest Inc.
• 2003	• Private Investor	• Plum Creek Timber Company, Inc.
• 2002	• Patriot Investments, LLC	• Crown Pacific Partners, LP
• 2002	• Undisclosed	• Pioneer Forest Inc.
• 2002	• Undisclosed	• Pioneer Forest Inc.
• 2002	• Undisclosed	• Pioneer Forest Inc.
• 2002	• Undisclosed	• US Timberlands Company, LP
• 1996	• Crown Pacific Partners, LP	• Cavenham Forest Industries Inc./Willamette Industries, Inc.
• 1996	• US Timberlands Company, LP	• Weyerhaeuser Company
• 1996	• Various	• Valcor, Inc./Medite Corporation
• 1996	• Pioneer Forest Inc.	• Louisiana-Pacific Corporation

Banc of America Securities reviewed, among other things, the purchase price per acre paid in the selected transactions. Banc of America Securities then applied a range of selected purchase prices per acre paid derived from the selected transactions to the total timberland acreage of Cascade.

Other. In analyzing Cascade, Banc of America Securities also reviewed estimated values of Cascade based on the appraised value of the real estate properties held by Cascade and the purchase prices previously paid by FNF for such properties.

FNF Leasing

Selected Companies Analysis. Banc of America Securities reviewed financial and stock market information for the following four selected publicly held technology leasing companies:

Technology Leasing Companies

• CIT Group Inc.

• CapitalSource Inc.

• GATX Corporation

• Financial Federal Corporation

Banc of America Securities reviewed, among other things, market values of the selected companies as a multiple of calendar years 2006 and 2007 estimated net income. Banc of America Securities then applied a range of selected net income multiples derived from the selected companies to corresponding data of FNF leasing. Multiples were based on closing stock prices on June 23, 2006. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates. Estimated financial data of FNF leasing were based on internal estimates of FNF leasing’s management.

Selected Transactions Analysis. Banc of America Securities reviewed, to the extent publicly available, financial information relating to the following 31 selected acquisition transactions in the consumer finance industry with transaction values of less than $1 billion:


Announcement Date	Acquiror	Target

• 5/16/06	• Cerberus Capital Management L.P.	• Pitney Bowes Credit Corporation
• 2/16/06	• TD Bank Financial Group	• VFC Inc.
• 12/14/05	• JPMorgan Chase & Co.	• Collegiate Funding Services, Inc.
• 7/19/05	• CIT Group Inc.	• Healthcare Business Credit Corporation
• 12/16/04	• National City Corporation	• Charter One Vendor Finance, LLC
• 10/26/04	• General Electric Company	• Bay4 Capital, LLC
• 10/22/04	• KeyCorp	• American Express Business Finance Corporation
• 4/15/04	• CIT Group Inc.	• GATX Corporation (Technology Services Business)
• 2/24/04	• MBNA Corporation	• Sky Financial Solutions, Inc.
• 11/23/02	• E*TRADE Group, Inc.	• Ganis Credit Corporation
• 4/3/02	• General Electric Company	• Comdisco Inc. (Healthcare Lending Assets)
• 2/8/02	• Compaq Financial Services	• El Camino Arrendamento Mercantil SA (Brazilian Assets)
• 1/23/02	• General Electric Company	• Comdisco Inc. — Electronics, Lab. & Science Equipment Leasing
• 12/21/01	• General Electric Company	• Xerox Credit Corporation
• 7/30/01	• Berkshire Hathaway Inc.	• XTRA Corporation
• 7/23/01	• General Electric Company	• SAFECO Credit Company, Inc.
• 2/14/01	• American Express Company	• SierraCities.com Inc.
• 2/13/01	• GATX Corporation	• El Camino Resources, Ltd.
• 1/15/01	• General Electric Company	• Rollins Truck Leasing Corp.
• 12/15/00	• Wells Fargo Financial Leasing, Inc.	• Conseco, Inc.
• 5/23/00	• ABN Amro Bank, N.V.	• Fidelity Leasing, Inc.
• 3/2/00	• U.S. Bancorp	• Oliver-Allen Corporation
• 12/8/99	• The FINOVA Group Inc.	• Fremont Financial Corporation
• 9/23/99	• Textron Financial Corporation	• Litchfield Financial Corporation
• 9/1/99	• MLC Holdings Inc.	• CLG Inc.
• 4/19/99	• Heller Financial, Inc.	• Healthcare Financial Partners, Inc.
• 3/8/99	• Rabobank	• Tokai Financial Services, Inc.
• 11/23/98	• Fleet Financial Group, Inc.	• Sanwa Business Credit Corporation
• 4/7/97	• KeyCorp	• Leasetec Corporation
• 2/14/97	• TCF Financial Corporation	• Winthrop Resources Corporation
• 1/10/96	• General Electric Company	• BellSouth Financial Services Corporation

Banc of America Securities reviewed, among other things, purchase prices in the selected transactions as a multiple of latest 12 months and estimated next 12 months net income. Banc of America Securities then applied a range of selected net income multiples derived from the selected transactions to corresponding data of FNF leasing. Multiples for the selected transactions were based on publicly available financial information at the time of announcement of the relevant transaction. Financial data of FNF leasing were based on internal estimates and data of FNF leasing’s management.

Discounted Cash Flow Analysis. Banc of America Securities performed a discounted cash flow analysis of FNF leasing to calculate the estimated present value of the standalone cash flows that FNF leasing could generate during the fourth quarter of fiscal year 2006 through fiscal year 2011 based on internal estimates of FNF leasing’s management. Banc of America Securities calculated a range of estimated terminal values by applying a range of terminal value multiples of 12.0x to 14.0x to the fiscal year 2011 estimated net income of FNF leasing. The present value of the cash flows and terminal values were then calculated using discount rates ranging from 14.5% to 15.5%.

FNT Analyses

Selected Companies Analysis. Banc of America Securities reviewed publicly available financial and stock market information for the following three selected title insurance companies:

Title Insurance Companies

• The First American Corporation

• LandAmerica Financial Group, Inc.

• Stewart Information Services Corporation

Banc of America Securities reviewed, among other things, closing stock prices of the selected companies as multiples of calendar years 2006 and 2007 estimated earnings per share, commonly referred to as EPS, and book value, excluding accumulated other comprehensive income, per share as of March 31, 2006. Banc of America Securities then applied a range of selected EPS and book value per share multiples derived from the selected companies to corresponding data of FNT. Banc of America Securities also reviewed the relationship of book value per share multiples relative to calendar year 2006 estimated return on equity, or ROE, for the selected companies. Banc of America Securities then applied book value per share multiples based on this relationship to the book value, excluding accumulated other comprehensive income, per share of FNT as of March 31, 2006. Multiples were based on closing stock prices on June 23, 2006. Book values of the selected companies and FNT were based on public filings. Other financial data of the selected companies were based on publicly available research analysts’ estimates. Other financial data of FNT were based both on publicly available research analysts’ forecasts, referred to below as “street forecasts,” and internal forecasts prepared by FNT’s management, referred to below as “management forecasts.” This analysis indicated the following selected per share equity reference ranges for FNT, as compared to the closing price of FNT common stock on June 23, 2006:


Selected Per Share Equity
Reference Ranges for FNT			Closing Price of FNT
Street Forecasts	Management Forecasts		Common Stock on June 23, 2006

$23.00 - $26.00	$	20.00 - $23.00		$20.55

Discounted Cash Flow Analysis. Banc of America Securities performed a discounted cash flow analysis of FNT to calculate the estimated present value of the standalone cash flows that FNT could generate during the fourth quarter of fiscal year 2006 through fiscal year 2011 based on internal estimates of the FNT’s management. Banc of America Securities calculated a range of estimated terminal values by applying a range of terminal value multiples of 9.0x to 10.0x to FNT’s fiscal year 2011 estimated net income. The present value of the cash flows and terminal values were then calculated using discount rates ranging from 10.0% to 11.0%. This analysis indicated the following implied per share equity reference range for FNT, as compared to the closing price of FNT common stock on June 23, 2006:


	Closing Price of FNT
Per Share Equity Reference Range for FNT	Common Stock on June 23, 2006

$20.00 - $22.58	$	20.55

Pro Forma Accretion/Dilution Analysis

Banc of America Securities analyzed the potential pro forma financial effect of the asset contribution on FNT’s estimated EPS, book value per share and ROE for calendar years 2007 and 2008 after applying varying pre-tax investment yields of 10%, 15% and 20% to the cash amount to be transferred in the asset contribution. Estimated financial data for FNT were based both on internal estimates of FNT’s management and publicly available research analysts’ estimates. Estimated financial data of the contributed assets were based on internal estimates of the managements of FNT and the FNF businesses. Based on the aggregate stock consideration of 45,744,681 shares of FNT Class A common stock (assuming the transfer of $275 million in cash to FNT in the asset contribution), this analysis indicated that the asset contribution could be dilutive to FNT’s estimated EPS and ROE, and accretive to FNT’s estimated book value per share, in calendar years 2007 and 2008 under each of the various pre-tax investment yields analyzed with respect to the cash amount to be transferred in the asset contribution. The actual results achieved by the combined company may vary from projected results and the variations may be material.

Miscellaneous

As noted above, the discussion set forth above is merely a summary of the material financial analyses performed by Banc of America Securities and is not a comprehensive description of all analyses undertaken by Banc of America Securities in connection with its opinion. No company, transaction or business used in its analyses is identical to the contributed assets, FNT or the asset contribution. Accordingly, an evaluation of the results of these analyses is not entirely mathematical. Rather, these analyses involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the contributed assets, FNT or the asset contribution were compared. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Banc of America Securities believes that its analyses and the summary above must be considered as a whole. Banc of America Securities further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Banc of America Securities’ analyses and opinion. Banc of America Securities did not assign any specific weight to any of the analyses described above. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis.

In performing its analyses, Banc of America Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of FNT and FNF. The estimates of the future performance of FNT provided by FNT’s management and of the FNF businesses provided by the managements of FNF and the FNF businesses in or underlying Banc of America Securities’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by Banc of America Securities’ analyses. These analyses were prepared solely as part of Banc of America Securities’ analysis of the financial fairness of the aggregate stock consideration to be issued by FNT pursuant to the securities exchange and distribution agreement and were provided to the FNT special committee in connection with the delivery of Banc of America Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company or business might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be Banc of America Securities’ view of the actual value of FNT or the contributed assets.

The type and amount of consideration payable in the transaction were determined through negotiations between the FNT special committee and FNF, rather than by any financial advisor, and were approved by the FNT special committee. The decision to enter into the securities exchange and distribution agreement was solely that of the FNT special committee and FNT’s board of directors. As described above, Banc of America Securities’ opinion and analyses were only one of many factors considered by the FNT special committee in its evaluation of the asset contribution and should not be viewed as determinative of the views of the FNT special committee or FNT’s board of directors or management with respect to the transaction or the consideration payable in the asset contribution.

FNT has agreed to pay Banc of America Securities for its services in connection with the asset contribution an aggregate fee of $2.9 million, a portion of which was payable upon rendering Banc of America Securities’ opinion and a significant portion of which is contingent upon the completion of the transaction. FNT also has agreed to indemnify Banc of America Securities, any controlling person of Banc of America Securities and each of their respective directors, officers, employees, agents, affiliates and representatives against specified liabilities, including liabilities under the federal securities laws.

Banc of America Securities or its affiliates in the past have provided, currently are providing and in the future may provide financial advisory and financing services to FNT, for which services Banc of America Securities and its affiliates have received and expect to receive compensation, including, among other things, acting as administrative agent, book manager, lead arranger and lender under certain revolving credit facilities of FNT. Banc of America Securities or its affiliates in the past have provided, currently are providing and in the future may provide financial advisory and financing services to FNF and certain of its affiliates, for which services Banc of America

Securities and its affiliates have received and expect to receive compensation, including, among other things, (i) having acted as financial advisor to FNF in connection with the spin-off of FNT to FNF’s stockholders in 2005 and to Sedgwick CMS in connection with the sale of Sedgwick CMS to FNF in January 2006, referred to in this paragraph as the Sedgwick acquisition, (ii) having provided financing to an affiliate of FNF in connection with the Sedgwick acquisition and providing financing to Sedgwick CMS in connection with certain acquisition transactions, (iii) having acted as lead arranger and co-manager for FIS in connection with certain public offerings and (iv) acting as administrative agent, book manager, joint or co-lead arranger and lender under certain revolving credit facilities of FNF and certain of its affiliates. In addition, one of Banc of America Securities’ affiliates currently has an investment in FIS. In the ordinary course of its businesses, Banc of America Securities or its affiliates may actively trade or hold the securities or loans of FNT, FNF and certain of their respective affiliates for Banc of America Securities’ accounts or for the accounts of customers and, accordingly, Banc of America Securities or its affiliates may at any time hold long or short positions in such securities or loans.

Interests of Directors and Executive Officers in the Proposed Transactions

In considering the recommendation of our board of directors with respect to the proposed transactions, you should be aware that certain of our directors and officers have interests in the proposed transactions that differ from, or are in addition to, the interests of FNT stockholders. In particular, William P. Foley, II, the chairman of our board of directors, is also the chairman of the board of directors and chief executive officer of FNF, the controlling stockholder of FNT. Following the proposed transactions, Mr. Foley will become our Chief Executive Officer and the Executive Chairman of FIS. Also in connection with the proposed transactions, FNT will enter into a new employment agreement with Mr. Foley, the proposed terms of which are described below, and he will also receive a grant of 475,000 shares of our restricted common stock. Additionally, Mr. Foley currently holds 5,408,216 options to purchase FNF common stock, although 3,856,684 of such options will be exercised or cashed out prior to the spin-off pursuant to the terms of the option letter agreement among FNF, William P. Foley, II, Alan L. Stinson and Brent B. Bickett. See “The Securities Exchange and Distribution Agreement and Related Documents — Additional Agreements” beginning on page 55. With respect to the FNF stock options held by Mr. Foley at the time of the spin-off, 50% of such options will be replaced with FNT options and the remaining 50% of such options will be assumed by FIS pursuant to the terms of the merger agreement.

Our compensation committee has approved the terms of an employment agreement with William P. Foley, II, which agreement will become effective immediately following the spin-off. Pursuant to the agreement, Mr. Foley will serve as our Chief Executive Officer. Mr. Foley will receive an annual base salary of $500,000, with an annual cash bonus opportunity equal to 300% of his annual base salary. In the event of a termination of Mr. Foley’s employment by FNT for any reason other than cause or disability, or in the event of a termination by Mr. Foley for good reason or for any reason during the 6-month period immediately following a change in control, he will receive (i) any accrued obligations, (ii) a prorated annual bonus, (iii) a lump-sum payment equal to 300% of the sum of his (x) annual base salary and (y) the highest annual bonus paid to him within the 3 years preceding his termination, (iv) immediate vesting and/or payment of all FNT equity awards, and (v) continued receipt of life and health insurance benefits for a period of 3 years, reduced by comparable benefits he may receive from another employer. The agreement expressly provides that no event or transaction which is entered into, is contemplated by, or occurs as a result of the securities exchange and distribution agreement or the merger agreement between FNF and FIS will constitute a change in control under the agreement.

It is intended that FNT will also enter in employment agreements with certain other FNT executive officers who, along with Mr. Foley, will serve as executive officers of both FNT and FIS. Specifically, FNT will enter into an employment agreement immediately following the spin-off with Alan L. Stinson and with Brent B. Bickett, both of whom will serve as dual executive officers. With respect to Messrs. Bickett and Stinson, the compensation committee has approved the following compensation arrangements: (i) Mr. Bickett: an annual base salary of

$300,000, with an annual cash bonus opportunity equal to 150% of his annual base salary; and (ii) Mr. Stinson: an annual base salary of $300,000, with an annual cash bonus opportunity equal to 150% of his annual base salary. In addition, Messrs. Bickett and Stinson will each receive a grant of 130,000 shares of FNT restricted stock, with 3 year graded vesting (1/3 each year), immediately following the spin-off.

The FNT special committee was aware of these interests and considered them, among other matters, in determining that the proposed transactions are fair to, and in the best interests of, our company and its stockholders, and in unanimously recommending that our board of directors approve the terms and conditions of the securities exchange and distribution agreement.

Accounting Treatment

Acquisitions among entities under common control such as the asset contribution are not considered business combinations and are to be accounted for at historical cost in accordance with EITF 90-5, Exchanges of Ownership Interests between Enterprises under Common Control. Furthermore, the substance of the proposed transactions and the merger is effectively a reverse spin-off of FIS by FNF in accordance with EITF 02-11, Accounting for Reverse Spinoffs. Accordingly, the historical financial statements of FNF will become those of FNT; however, the criteria to account for FIS as discontinued operations as prescribed by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets will not be met. This is primarily due to the continuing involvement of FNT with and significant influence that FNT will have over FIS subsequent to the merger through common board members, common senior management and continuing business relationships. It is expected that FIS will continue to be included in FNF’s consolidated financial statements through the date of the completion of the proposed transactions and the merger.

No Dissenters’ Rights

FNT stockholders are not entitled to demand appraisal of, or to receive payment for, their shares of FNT common stock under the Delaware General Corporation Law in connection with the proposed transactions.

Regulatory Approvals Required for the Proposed Transactions

The following requests, applications and notices have been or are in the process of being filed with the various state insurance departments that regulate the insurance subsidiaries of FNF and FNT, seeking the necessary approvals, orders and consents from such state insurance departments prior to the closing:


	•	California. With respect to Fidelity National Insurance Company, which we refer to as FNIC, and Fidelity National Home Warranty Company, which we refer to as FNHWC, subsidiaries of FNF that will become subsidiaries of FNT, and with respect to Fidelity National Title Insurance Company, which we refer to as FNTIC, Security Union Title Insurance Company, which we refer to as SUTIC, and Ticor Title Insurance Company, which we refer to as Ticor, subsidiaries of FNT, FNF and FNT have requested an exemption from the provisions of Section 1215.2 of the California Insurance Code, which we refer to as the CIC, pursuant to subdivision (f) thereof, on the basis that the proposed transactions, including the insertion of a new holding company, FNT, Inc., and the elimination of FNF as a stockholder, are not included (individually or together) within the purposes of CIC Section 1215.2 since they do not result in any new person acquiring control of FNIC, FNHWC, FNTIC, SUTIC or Ticor, as “control” is defined in CIC Section 1215(b). In addition, with respect to Fidelity National Title Company and Fidelity National Title Company of California, California underwritten title companies that will become subsidiaries of FNT, Inc., FNT, Inc. has requested the commissioner’s consent to the transfer of FNT, Inc.’s shares pursuant to CIC Section 12389.3.

	•	New York. With respect to Fidelity National Property and Casualty Insurance Company, which we refer to as FNPAC, a subsidiary of FNF, and Nations Title Insurance of New York, Inc., which we refer to as Nations Title, a subsidiary of FNT, FNF and FNT have requested an exemption from the provisions of Sections 1501 through 1506 of the New York Insurance Law, which we refer to as the NYIL, pursuant to Section 1502(b) thereof, on the basis that the proposed transactions are not included within the purposes of Sections 1501 through 1506 since they do not result in any new person acquiring control of FNPAC or Nations Title, as “control” is defined pursuant to Section 1501 of the NYIL.


	•	Texas. With respect to Fidelity National Indemnity Insurance Company, which we refer to as FNIIC, a subsidiary of FNF, and Alamo Title Insurance, which we refer to as Alamo Title, a subsidiary of FNT, FNF and FNT have requested an exemption from the provisions of Sections 823.151 through 823.165 of the Texas Insurance Code, which we refer to as the Texas Code, and the request for the issuance of an order by the Texas Insurance Department granting such exemption, on the basis that the proposed transactions are not included within the purposes of the Texas Code since they do not result in any new person acquiring control of FNIIC or Alamo Title as “control” is defined pursuant to Section 823.151 of the Texas Code.

	•	Florida. With respect to Ticor Title Insurance Company of Florida, which we refer to as Ticor Title, a subsidiary of FNT, a Statement Regarding the Acquisition of Control of a Domestic Insurer pursuant to Section 628.461 of the Florida Statutes was filed seeking the prior approval of the Commissioner of the Office of Insurance Regulation of the State of Florida for the acquisition of control of Ticor Title by FNT.

	•	Illinois. With respect to Chicago Title and Trust Company and Chicago Title Land Trust Company, a notification has been submitted to the Illinois Department of Financial and Professional Regulation regarding the proposed transactions, stating that such transactions are not contemplated within 205 ILCS 620/3-2(g) and are thus exempt from the requirements of Section 205 relating to the change in control of an Illinois trust company.

	•	Missouri. With respect to Chicago Title Insurance Company , which we refer to as CTIC, a request was made and an exemption has been granted from the provisions of Missouri Revised Statutes Sections 382.040, 382.050 and 382.060 pursuant to Mo. Rev. Stat. Section 382.070 on the basis that the proposed transactions are not included within the purposes of Mo. Rev. Stat. Sections 382.010 through 382.300 since such transactions do not result in any new person acquiring control of CTIC as “control” is defined in Mo. Rev. Stat. Section 382.101.

	•	Oregon. With respect to Chicago Title Insurance Company of Oregon, which we refer to as CTIC-OR, a request has been made for an order pursuant to Oregon Revised Statutes Section 732.521(2) granting an exemption from the provisions of ORS Sections 732.521 and 732.523 on the basis that the proposed transactions are not included within the purposes of ORS Section 732.521 since such transactions do not result in any new person acquiring control of CTIC-OR as contemplated thereby.

	•	Puerto Rico. With respect to Chicago Title Insurance Company of Puerto Rico, which we refer to as CTIC-PR, a request has been made for an exemption from the provisions of the Puerto Rico Insurance Code, which we refer to as the Puerto Rico Code, on the basis that the proposed transactions are not included within the purposes of the Puerto Rico Code since such transactions do not result in any new person acquiring control of CTIC-PR as contemplated thereby.

	•	Vermont. With respect to FNF Title Reinsurance Company, a request has been made for the approval by the Vermont Department of Banking Insurance and Securities of the proposed transactions pursuant to DOI Reg. 81-2, Section 14.

Material United States Federal Income Tax Considerations

FNF expects to receive a ruling from the internal revenue service and an opinion of its special tax advisor, Deloitte Tax LLP, satisfactory to us, together to the effect that the proposed transactions (including the spin-off) will be tax free transactions under the internal revenue code. Our stockholders (other than FNF) are not parties to the proposed transaction; therefore, there will be no tax consequences to them as a result of the proposed transactions.

THE SECURITIES EXCHANGE AND DISTRIBUTION AGREEMENT

AND RELATED DOCUMENTS

This section of the information statement describes selected portions of the securities exchange and distribution agreement and related agreements and documents. While we believe that the description covers the material terms of the securities exchange and distribution agreement, this summary may not contain all of the information that is important to you. You should refer to the full text of the securities exchange and distribution agreement for details of the terms and conditions thereof and the proposed transactions. The securities exchange and distribution agreement is attached to this document as Annex A and is incorporated by reference into this information statement. We urge you to read the securities exchange and distribution agreement carefully in its entirety.

The securities exchange and distribution agreement and related documents have been included with this information statement to provide you with information regarding their terms. They are not intended to provide any factual, business, or operational information about FNT or FNF. Such information can be found elsewhere in this information statement and in the other public filings FNT and FNF make with the SEC, which are available without charge at www.sec.gov.

The securities exchange and distribution agreement contains representations and warranties FNT and FNF made to each other. These representations and warranties were made as of specific dates and are subject to qualifications and limitations agreed to by FNT and FNF in connection with negotiating the terms of the securities exchange and distribution agreement. Moreover, these representations and warranties are subject to contractual standards of materiality that may be different from those generally applicable to disclosures to shareholders and in some cases may have been made solely for the purpose of allocating risk between FNT and FNF and to provide contractual rights and remedies to the parties rather than to establish matters as facts. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of affairs.

Structure of the Proposed Transactions

FNF will transfer to us the transferred business in exchange for our issuance to FNF of shares of FNT Class A common stock and our assumption of the assumed liabilities. Following completion of the asset contribution, FNF will convert all of the FNT Class B common stock it holds into FNT Class A common stock and immediately thereafter effect the spin-off of all of the shares of FNT Class A common stock held by FNF, including the converted shares and the shares of FNT Class A common stock issued by FNT to FNF, to the holders of FNF common stock. Immediately following the spin-off, FNF will be merged with and into FIS pursuant to the merger agreement and we will file the charter amendments. See “The Proposed Transactions — Structure of the Proposed Transactions” beginning on page 28.

Consideration for the Proposed Transactions

In connection with the proposed transactions, we will issue to FNF that number of shares of FNT Class A common stock equal to (i) 34,042,553 plus (ii) the amount of cash included in the contributed assets (not to exceed $275,000,000 for purposes of this calculation) divided by $23.50. We will also assume all of the assumed liabilities.

Treatment of FNF Equity Awards

Options

At the time of the spin-off, all outstanding options to purchase shares of FNF common stock, which we refer to as FNF options, held by employees or directors of FNF who will become employees or directors of FNT after the spin-off will be replaced with options to purchase shares of FNT Class A common stock, which we refer to as the replacement option, granted under the omnibus incentive plan. Each replacement option will be exercisable for a number of shares of FNT Class A common stock calculated by multiplying the number of shares of FNF common stock subject to such FNF option as of the effective time of the spin-off by the option exchange number, rounding down to the nearest whole number. The “option exchange number” will equal the closing price of a share of FNF common stock on the business day immediately preceding the date that the spin-off is consummated divided by the

closing price of share of FNT Class A common stock on the date that the spin-off is consummated (or, if the spin-off is consummated after the close of trading on the NYSE on such date, on the next business day following such date), rounded to the nearest ten thousandth. The exercise price for each share of FNT Class A common stock under a replacement option will be calculated by dividing the exercise price for one share of FNF common stock under the related FNF option as of the effective time of the spin-off by the option exchange number, rounding up to the nearest whole cent. No vesting schedule for any replacement option will be modified as a result of the proposed transactions. Notwithstanding the foregoing, 50% of all FNF options held as of the effective time of the spin-off by any employee or director of FNF who will become dual employees or directors of FNT and FIS after the spin-off (other than the FNF options that are subject to the agreement among FNF, William P. Foley, II, Alan L. Stinson and Brent B. Bickett, which we refer to as the option letter agreement) will be replaced with replacement options, and the remaining 50% of the FNF options (other than the FNF options that are subject to the option letter agreement) held by such employees or directors will be assumed by FIS and converted into FIS stock options pursuant to the merger agreement. Upon the closing, William P. Foley, II, Alan L. Stinson, Brent B. Bickett and Michael L. Gravelle will become dual employees of FNT and FIS. Additionally, upon the closing, Cary H. Thompson, Daniel D. (Ron) Lane and Thomas M. Hagerty will become dual directors of FNT and FIS.

Restricted Stock

Each holder as of the record date, as determined by the board of directors, of a share of FNF common stock which when issued was subject to forfeiture under an FNF stock plan and which remains subject to forfeiture as of the effective time of the spin-off, which we refer to as an FNF restricted share, will receive the spin-off dividend; provided, however, that such spin-off dividend will be subject to the same terms, conditions and restrictions applicable to its corresponding FNF restricted share based upon continued service with FNT and its affiliates or FIS and its affiliates, as the case may be.

The FNF restricted shares held by employees or directors who, after the spin-off, will serve as FNT employees or directors will be converted pursuant to the terms of the securities exchange and distribution agreement, with the same terms, conditions and restrictions applicable to the corresponding FNF restricted shares based upon continued service with FNT and its affiliates.

Employee Benefits

In connection with the spin-off, FNT has agreed to (i) provide coverage under its health and welfare plans to employees of FNF and its subsidiaries who become employees of FNT or an FNT subsidiary following the spin-off, (ii) waive any preexisting conditions or waiting periods under such plans, and (iii) cause such plans to honor expenses incurred by the employees and their beneficiaries for purposes of satisfying deductibles and maximum out-of-pocket expenses. FNT will also cause any benefit plan in which employees of FNF and its subsidiaries are eligible to participate after the spin-off to take into account for purposes of eligibility, vesting, and benefit accrual, service with FNF and its subsidiaries as if such service were with FNT. Prior to the spin-off, FNF will transfer all of its employee benefit plans, including the FNF 401(k), the FNF employee stock purchase plan, and its various health and welfare plans, including all related insurance policies and service agreements, to FNT, and FNT will assume sponsorship of such plans.

Amendment and Restatement of Certificate of Incorporation

The securities exchange and distribution agreement provides for the amendment of our certificate of incorporation immediately after the completion of the spin-off and the merger. See “Approved of Amendment and Restatement of FNT’s Certificate of Incorporation” beginning on page 120.

Representations and Warranties

The securities exchange and distribution agreement contains representations and warranties made by FNT and FNF to each other regarding their respective businesses. None of the representations and warranties of the parties will survive the closing, and there is no indemnity for any breach of the representations and warranties.

Representations and Warranties by FNF

FNF has made representations and warranties to FNT as to itself and as to the entities, which we refer to as the subject companies, the equity securities of which are to be transferred to FNT as part of the asset contribution, including representations and warranties as to:


	•	corporate organization and other similar matters;

	•	capital structure of the subject companies;

	•	authorization, execution, delivery, performance and enforceability of the securities exchange and distribution agreement and related matters;

	•	conduct of business in the ordinary course since December 31, 2005, with no material adverse changes;

	•	employee benefit plans of FNF and the subject companies and related matters;

	•	filing of tax returns, payment of taxes and other tax matters;

	•	documents filed with the SEC, the accuracy and sufficiency of information contained in those documents, the conformity of financial statements with applicable accounting principles and the absence of undisclosed financial liabilities;

	•	accuracy of information supplied by FNF for inclusion in securities filings;

	•	compliance with applicable laws and reporting requirements and possession of all permits, licenses and regulatory or other approvals required to conduct business;

	•	absence of material pending or threatened litigation;

	•	title to assets; and

	•	environmental matters.

Representations and Warranties by FNT

FNT has made representations and warranties to FNF as to itself and its subsidiaries, including representations and warranties as to:


	•	corporate organization and other similar matters;

	•	capital structure;

	•	authorization, execution, delivery, performance and enforceability of the securities exchange and distribution agreement and related matters;

	•	conduct of business in the ordinary course since December 31, 2005, with no material adverse changes;

	•	employee benefit plans of FNT and related matters;

	•	filing of tax returns, payment of taxes and other tax matters;

	•	documents filed with the SEC, the accuracy and sufficiency of information contained in those documents, the conformity of financial statements with applicable accounting principles and the absence of undisclosed financial liabilities;

	•	absence of undisclosed liabilities;

	•	accuracy of information supplied by FNT for inclusion in securities filings;

	•	compliance with applicable laws and reporting requirements and possession of all permits, licenses and regulatory or other approvals required to conduct business; and

	•	absence of material pending or threatened litigation.

Materiality

Significant portions of the representations and warranties, as well as of certain covenants and agreements, of the parties in the securities exchange and distribution agreement are qualified as to “materiality” or “material adverse effect.” For purposes of the securities exchange and distribution agreement, “material adverse effect” means:


	•	with respect to FNF, (x) any event, circumstance or change that, individually or in the aggregate, is or would reasonably be likely to be materially adverse to the assets, liabilities, business, condition (financial or otherwise) or results of operations of the transferred business (which collectively means the contributed assets and the assumed liabilities) taken as a whole, other than any such event, circumstance or change to the extent resulting from (A) changes in general economic conditions affecting the United States occurring after the date of the securities exchange and distribution agreement, (B) general changes or developments in the industries in which the transferred business is operated occurring after the date of the securities exchange and distribution agreement, (C) changes in laws or regulations occurring after the date of the securities exchange and distribution agreement or (D) the announcement of the securities exchange and distribution agreement and the transactions contemplated thereby, unless, in the case of the foregoing clause (A) or (B), such changes referred to therein have a materially disproportionate effect on the transferred business, taken as a whole, relative to other participants in the industries in which the transferred business is operated, or (y) any material adverse effect on the ability of FNF to perform its obligations under the securities exchange and distribution agreement or to consummate the transactions contemplated thereby on a timely basis;

	•	with respect to any subject company, any event, circumstance or change that, individually or in the aggregate, is or would reasonably be likely to be materially adverse to the assets, liabilities, business, condition (financial or otherwise) or results of operations of such subject company (or, in the case of a subsidiary of a subject company, the subject company of which such entity is a subsidiary) and its subsidiaries taken as a whole, other than any such event, circumstance or change to the extent resulting from (A) changes in general economic conditions affecting the United States occurring after the date of the securities exchange and distribution agreement, (B) general changes or developments in the industries in which such subject company and its subsidiaries operate occurring after the date of the securities exchange and distribution agreement, (C) changes in laws or regulations occurring after the date of the securities exchange and distribution agreement or (D) the announcement of the securities exchange and distribution agreement and the transactions contemplated thereby, unless, in the case of the foregoing clause (A) or (B), such changes referred to therein have a materially disproportionate effect on such subject company and its subsidiaries, taken as a whole, relative to other participants in the industries in which such subject company and such subsidiaries operate; and

	•	with respect to FNT, (x) any event, circumstance or change that, individually or in the aggregate, is or would reasonably be likely to be materially adverse to the assets, liabilities, business, condition (financial or otherwise) or results of operations of FNT and its subsidiaries taken as a whole, other than any such event, circumstance or change to the extent resulting from (A) changes in general economic conditions affecting the United States occurring after the date of the securities exchange and distribution agreement, (B) general changes or developments in the industry in which FNT and its subsidiaries operate occurring after the date of the securities exchange and distribution agreement, (C) changes in laws or regulations occurring after the date of the securities exchange and distribution agreement or (D) the announcement of the securities exchange and distribution agreement and the transactions contemplated thereby, unless, in the case of the foregoing clause (A) or (B), such changes referred to therein have a materially disproportionate effect on FNT and its subsidiaries taken as a whole relative to other participants in the industry in which FNT and its subsidiaries operate, or (y) any material adverse effect on the ability of FNT to perform its obligations under the securities exchange and distribution agreement or to consummate the transactions contemplated thereby on a timely basis.

Interim Operating Limitations

FNF (with respect to itself and the subject companies and their subsidiaries) and FNT (with respect to itself and its subsidiaries) have agreed to be subject to certain limitations on how they conduct their respective businesses between the date of the securities exchange and distribution agreement and the date of the closing thereunder. During this period, FNT has agreed to cause its business and that of its subsidiaries, and FNF has agreed to cause its business and that of the subject companies and their subsidiaries, to be carried on only in the ordinary and usual course of business consistent with past practice and, if applicable and to the extent consistent therewith, use all reasonable efforts to preserve intact the current business organization, keep available the services of current officers and employees and preserve relationships with any governmental entities, customers, suppliers, distributors, creditors, lessors, agents, insureds, reinsureds and others having business dealings with the relevant business to the end that its goodwill and ongoing businesses will be unimpaired at the closing. Further limitations on the conduct of business by the subject companies and their subsidiaries, by FNF, and by FNT and its subsidiaries between the date of the securities exchange and distribution agreement and the closing are described below.

Conduct of Business by the Subject Companies

FNF will not permit any subject company or subsidiary thereof to, without the prior consent of FNT, which is not to be unreasonably withheld or delayed:


	•	(i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any outstanding capital stock or other equity securities, (ii) split, combine or reclassify any of its outstanding capital stock or other equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or other equity securities or (iii) acquire any shares of outstanding capital stock or other equity securities or any rights, warrants or options to acquire any such shares or other equity securities;

	•	issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other equity securities, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares or other equity securities, voting securities or convertible securities other than upon the exercise of options or warrants issued by it and outstanding on the date of the securities exchange and distribution agreement;

	•	acquire any business or any corporation, partnership, joint venture, association or other business organization or division thereof or substantially all of the assets of any of the foregoing, or any assets that are material, individually or in the aggregate, to any subject company or its subsidiaries taken as a whole;

	•	sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of any of its properties or assets that are material to any subject company and its subsidiaries taken as a whole;

	•	amend or propose any change to its certificate or articles of incorporation or formation, by-laws and other organizational documents;

	•	(x) incur any indebtedness for borrowed money or guarantee or otherwise become responsible for any such indebtedness, other than indebtedness in an amount less than $5,000,000 individually or $15,000,000 in the aggregate or (y) make any material loans, advances or capital contributions to, or investments in, any other individual or entity, other than to such subject company or to any direct or indirect wholly-owned subsidiary of such subject company and routine, immaterial advances to employees and other than purchases of investment assets in the ordinary course of business consistent with past practice;

	•	except in accordance with the budget of any such subject company as of the date of the securities exchange and distribution agreement, make or agree to make any new capital expenditure or expenditures which, individually, involves payments of in excess of $5,000,000 or, in the aggregate, involve payments of in excess of $15,000,000;

	•	make any tax election or settle or compromise any income tax liability that, individually or in the aggregate, would reasonably be expected to have a material adverse effect;


	•	pay, discharge, settle or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the financial statements of the subject companies as at and for the year ended December 31, 2005 or incurred since December 31, 2005 in the ordinary course of business consistent with past practice, or in amounts not in excess of $5,000,000 in each case;

	•	settle or compromise any action, suit or other litigation or claim arising out of the transactions contemplated by the securities exchange and distribution agreement;

	•	make any change in accounting, underwriting or actuarial methods, principles or practices used by such subject companies materially affecting its assets, liabilities or business, including any change with respect to establishment of reserves for unearned premiums, losses and loss adjustment expenses, except insofar as may be required by law or by a change in applicable accounting principles;

	•	cancel, modify or waive any material debts or claims held by it or waive any material rights under any material contract to which such subject company or its subsidiary is a party; or

	•	authorize any of, or commit or agree to take any of, the foregoing actions.

Conduct of Business by FNF

FNF will not, without the prior consent of FNT, which is not to be unreasonably withheld or delayed:


	•	declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its outstanding capital stock or other equity securities, other than ordinary quarterly cash dividends consistent with past practice, or except as required by the terms of any agreement, arrangement or plan in effect as of the date hereof, purchase, redeem or otherwise acquire any shares of outstanding capital stock or other equity securities or any rights, warrants or options to acquire any such shares or other equity securities;

	•	acquire any business or any corporation, partnership, joint venture, association or other business organization or division thereof or substantially all of the assets of any of the foregoing, or any assets the acquisition of which would result in a material change in the cash and other specified assets to be transferred to FNT in connection with the proposed transactions;

	•	make any tax election or settle or compromise any income tax liability that, individually or in the aggregate, would reasonably be expected to have a material adverse effect;

	•	pay, discharge, settle or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the balance sheet as of December 31, 2005 or incurred since December 31, 2005 in the ordinary course of business consistent with past practice, or in amounts not in excess of $10,000,000 in each case;

	•	settle or compromise any action, suit or other litigation or claim arising out of the transactions contemplated by the securities exchange and distribution agreement;

	•	acquire any equity securities issued by FIS;

	•	acquire any equity securities issued by FNT;

	•	loan or contribute funds to, or acquire any shares of capital stock of, National Title Insurance of New York, Inc.;

	•	other than in the ordinary course of business consistent with past practice, cancel, modify or waive any material debts or claims held by it or waive any material rights under any material contract to which FNF is a party; or

	•	authorize any of, or commit or agree to take any of, the foregoing actions.

Conduct of Business by FNT

FNT will not, and will not permit any of its subsidiaries to, without the prior consent of FNF, which is not to be unreasonably withheld or delayed:


	•	declare, set aside or pay any dividends on, or make any other distributions in respect of, any outstanding capital stock or other equity securities of FNT or an FNT subsidiary, other than ordinary quarterly cash dividends consistent with past practice, split, combine or reclassify any of its outstanding capital stock or other equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or other equity securities, or purchase, redeem or otherwise acquire any shares of outstanding capital stock or other equity securities or any rights, warrants or options to acquire any such shares or other equity securities;

	•	issue, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, other than upon the exercise of options outstanding under the FNT stock plan on the date of the securities exchange and distribution agreement;

	•	acquire any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or substantially all of the assets of any of the foregoing, or any assets that are material, individually or in the aggregate, to FNT or any FNT subsidiary, except purchases of investment assets in the ordinary course of business consistent with past practice, except, in each case, for such transactions among FNT and any FNT subsidiary or between FNT subsidiaries;

	•	sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of any of its properties or assets that are material to FNT or any FNT subsidiary, except in the ordinary course of business consistent with past practice;

	•	amend or propose any change to its certificate or articles of incorporation or formation, by-laws and other organizational documents;

	•	(x) incur any indebtedness for borrowed money or guarantee or otherwise become responsible for any such indebtedness of another individual or entity, other than indebtedness in an amount less than $25,000,000 individually or $50,000,000 in the aggregate, other than in the ordinary course of business consistent with past practice and other than indebtedness owing to or guarantees owing to FNT or any direct or indirect wholly-owned subsidiary of FNT (it being understood that FNT’s guarantee of the performance of an FNT subsidiary to a third party customer or vendor will not constitute an incurrence of indebtedness under this subsection) or (y) make any material loans, advances or capital contributions to, or investments in, any other individual or entity, other than to FNT or to any direct or indirect wholly-owned subsidiary of FNT and routine, immaterial advances to employees and other than purchases of investment assets in the ordinary course of business consistent with past practice;

	•	except in accordance with FNT’s or an FNT subsidiary’s budget as of the date hereof, make or agree to make any new capital expenditure or expenditures which, individually, involves payments of in excess of $10,000,000 or, in the aggregate, involve payments of in excess of $25,000,000 or has not, prior to the date hereof, been budgeted by FNT or such FNT subsidiary and approved by its board of directors;

	•	make any tax election or settle or compromise any income tax liability that, individually or in the aggregate, would reasonably be expected to have a material adverse effect;

	•	pay, discharge, settle or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the audited consolidated and combined financial statements (or the notes thereto) of FNT as at and for the year ended December 31, 2005 or incurred since December 31, 2005 in the ordinary course of business consistent with past practice, or in amounts not in excess of $10,000,000 in each case;

	•	settle or compromise any action, suit or other litigation or claim arising out of the proposed transactions;


	•	make any change in accounting, underwriting or actuarial methods, principles or practices used by FNT or any of its subsidiaries materially affecting its assets, liabilities or business, including any change with respect to establishment of reserves for unearned premiums, losses and loss adjustment expenses, except insofar as may be required by law or by a change in applicable accounting principles;

	•	other than in the ordinary course of business consistent with past practice, cancel, modify or waive any material debts or claims held by it or waive any material rights under any material contract to which FNT or any FNT subsidiary is a party; or

	•	authorize any of, or commit or agree to take any of, the foregoing actions.

Additional Covenants and Agreements

Certain Pre-Closing Contributions by FNT

Prior to the closing, FNT will contribute all of the shares of capital stock of its subsidiaries held by FNT to a newly-formed, wholly-owned subsidiary of FNT.

Conversion of FNT Class B Common Stock

Immediately following the asset contribution, FNF will convert all of the FNT Class B common stock it holds into FNT Class A common stock. Immediately after the asset contribution and the conversion of the FNT Class B common stock into FNT Class A common stock, FNF will distribute all of the FNT Class A common stock held by it, including the converted shares and the shares received from FNT, to the holders of FNF common stock. Each holder of FNF common stock, as of the record date of the distribution, will receive a dividend equal to that holder’s pro rata portion of all of the shares of FNT Class A common stock held by FNF immediately prior to the payment date. Fractional shares that would otherwise be received by FNF stockholders will be aggregated and sold and the net cash proceeds of the sale will be distributed in lieu of fractional shares.

New York Stock Exchange Listing

FNT will use reasonable best efforts to cause the shares of FNT Class A common stock that will be issued to FNF and the shares of FNT Class A common stock that will be reserved for issuance upon conversion of the replacement options to be authorized for listing on the NYSE subject to official notice of issuance, prior to the date of closing.

Additional Agreements

Tax Disaffiliation Agreement

As a condition to the closings under the securities exchange and distribution agreement and the merger agreement, FIS, FNF and FNT are required to enter into a tax disaffiliation agreement. FNT and its subsidiaries currently are members of the FNF consolidated federal income tax return. In addition, certain of FNT subsidiaries are included with FIS group companies in state combined income tax returns. From and after the time of the spin-off, FNT’s companies will no longer be included in the FNF consolidated federal income tax return or in any state combined return with any FIS company. The tax disaffiliation agreement allocates responsibility between FIS and FNT for filing returns and paying taxes for periods prior to the spin-off, subject to the indemnification provisions set forth in the agreement. The tax disaffiliation agreement also includes indemnifications for any adjustments to taxes for periods prior to the spin-off and for any taxes and for any associated adverse consequences that may be imposed on the parties as a result of the spin-off, as a result of actions taken by the parties or otherwise, and as a result of the merger.

Indemnification


	•	FNT will indemnify FNF (and its successor after the merger, FIS) with respect to the FNF federal consolidated income taxes for periods prior to the spin-off (other than taxes attributable to income of FIS or FIS subsidiaries), and with respect to any state income taxes payable by FIS but attributable to FNF, to

FNT, to a subsidiary of FNT or to one of the former direct FNF subsidiaries that are being contributed to FNT pursuant to the securities exchange and distribution agreement.


	•	FIS will indemnify FNT with respect to any state income taxes payable by FNT but attributable to a subsidiary of FIS.

	•	FNT will indemnify FIS for all taxes and any associated adverse consequences (including shareholder suits) if the merger of FNF into FIS is determined to be a taxable transaction.

	•	FNT will indemnify FIS for all taxes and any associated adverse consequences (including shareholder suits) if the spin-off is determined to be a taxable transaction, unless such adverse determination is the result of a breach by FIS of its covenant not to take certain actions within its control that would cause the spin-off to be taxable or the result of certain acquisitions of FIS stock within the control of FIS or an FIS affiliate.

Designation of Agent

FNF, prior to the merger, to the extent permissible under the tax law, will designate FNT or an affiliate of FNT as the agent of the FNF federal consolidated group, such that FNT (or such FNT affiliate) will represent that group before the internal revenue service for all federal income tax matters related to periods prior to the spin-off. There will be conforming agency designations at the state level to the extent permitted by law.

Filing of Returns and Payment of Taxes


	•	In general, FNT will file and pay the tax due on all FNF federal consolidated returns.

	•	FNT and FIS will share the responsibility for filing and paying tax on combined state returns that contain FNT group companies and FIS group companies; determination of which group will file the return and pay the tax will depend upon whether the common parent of the combined group is an FNT company or an FIS company.

	•	There are limitations on each group’s ability to amend returns if amendment would increase the tax liability of the other group.

	•	The payment of taxes will be subject to the indemnification obligations provided for in the tax disaffiliation agreement.

Restrictions on Stock Acquisitions

In order to help preserve the tax free nature of the spin-off, FNT and FIS have mutually agreed that neither company will engage in any direct or indirect acquisition, issuance, or other transaction involving that company’s stock unless the company first obtains an opinion from a nationally recognized law firm or accounting firm that the acquisition will not cause the spin-off to be taxable. This restriction is subject to various exceptions, including that the opinion restriction may be waived with the consent of certain officers of the other company.

Other Operational Provisions


	•	Prior tax sharing agreements will be terminated, except for tax sharing agreements relating to insurance companies. Such agreements will be amended to substitute FNT for FNF, except in the case of National Title Insurance of New York, Inc., which will be amended to substitute FIS for FNF.

	•	Dispute resolution provisions generally follow the provisions contained in the cross-indemnity agreement between us and FIS. See below “— Cross-Indemnity Agreement” beginning on page 57.

	•	Subject to some limitations and exceptions, the indemnifying party controls any contest or audit related to any indemnified tax.

Cross-Indemnity Agreement

It is a condition to closing under both the securities exchange and distribution agreement and the merger agreement that FNT and FIS shall have entered into a cross-indemnity agreement. Under the cross-indemnity agreement, each party, together with certain of its affiliates and representatives, which we refer to collectively as the indemnity party, will indemnify the other party and certain of the other party’s affiliates and representatives, which we refer to as the indemnified party, from and against any losses incurred (whether before, at or after the closing under both agreements) by the indemnified parties arising out of:


	•	the ownership or operation of the assets or properties, the operations or conduct of the business, and the employee retirement and benefit plans and financial statements of the indemnifying party;

	•	any breach by the indemnifying party of the cross-indemnity agreement, of its organizational documents, or of any law or contract to which it is a party;

	•	any untrue statement of, or omission to state, a material fact in any governmental filing of the indemnified party to the extent it was as a result of information about the indemnifying party;

	•	any untrue statement of, or omission to state, a material fact in any governmental filing of the indemnifying party, except to the extent it was as a result of information about the indemnified party;

	•	claims brought by third parties to the extent related to the transactions contemplated by the securities exchange and distribution agreement (to the extent we are the indemnifying party) or, among other things, the merger agreement (to the extent FIS is the indemnifying party), subject to certain exceptions; and

	•	the provision of services by or employment of representatives of the indemnifying party, and the termination of such services or employment.

The cross-indemnity agreement expressly provides that it is not intended to change the allocation of liability for any matter in any other existing or future agreement between FNT and its affiliates and FIS and its affiliates, to all of which agreements the cross-indemnity agreement is made subject.

Option Letter Agreement

In connection with the spin-off and the merger, William P. Foley, II, Alan L. Stinson and Brent B. Bickett entered into an agreement with FNF on June 25, 2006, pursuant to which FNF has the right to cash out a certain number of the FNF stock options held by Messrs. Foley, Stinson and Bickett for their fair market value as of the date FNF elects to exercise such right or cause these individuals to exercise such options. To the extent FNF exercises its right under this agreement, it is required to do so immediately prior to the effective time of the spin-off or as near thereto as practicable. FNF’s right to cash out these FNF stock options or cause such options to be exercised is subject to the right of Messrs. Foley, Stinson and Bickett to exercise such stock options if doing so would not adversely affect the tax treatment of the transactions contemplated by the securities exchange and distribution agreement.

At or prior to the closing, FNT and FNF will, and will cause their relevant subsidiaries to, terminate and/or amend certain specified intercompany agreements, enter into prescribed amendments to certain specified related party agreements and enter into certain specified additional agreements with FIS. Generally speaking, the intercompany and related party agreements to which FNF is a party will either be terminated or assigned to FNT. Certain of the intercompany and related party agreements between FIS and/or its subsidiaries, on the one hand, and FNT and/or subsidiaries, on the other, will require amendment to reflect the merger as well as other changes necessary to take into account changes in the relationship between the parties after the merger. See “Certain Relationships and Related Transactions with FNF and FIS — Changes in Related Party Agreements after the Proposed Transactions” beginning on page 116.

Directors and Officers

The disclosure schedules to the securities exchange and distribution agreement identify the individuals who will serve as members of the board of directors of FNT and individuals who will serve as officers of FNT after the closing, including William P. Foley, II, who will become the Chief Executive Officer of FNT, and Alan L. Stinson, who will become FNT’s Chief Operating Officer.

Principal Conditions to Completion of the Proposed Transactions

Mutual Conditions

The obligations of FNT and FNF to complete the proposed transactions are subject to the satisfaction or waiver on or prior to the closing date under the securities exchange and distribution agreement of the following conditions:


	•	the absence of any inaccuracy in either parties’ representations and warranties that would be reasonably likely to have a material adverse effect;

	•	the receipt of governmental and regulatory consents and approvals, including all necessary approvals for the transfer of FNF’s interest in its regulated insurance company subsidiaries to FNT and for the spin-off of the FNT insurance operations;

	•	the absence of any temporary restraining order, preliminary or permanent injunction or other order issued by, and no law issued, promulgated, enforced or entered into by, any governmental entity or competent jurisdiction or other legal restraint or prohibition preventing the consummation of the proposed transactions;

	•	the receipt of the FNT stockholder approval of (i) the issuance of shares of FNT common stock in connection with the asset contribution, (ii) the adoption of the amendment to the omnibus incentive plan and (iii) the adoption of the charter amendments;

	•	the registration statement on Form S-1, which we refer to as the Form S-1, to be filed with the SEC in respect of the distribution to FNF stockholders of shares of FNT common stock in connection with the spin-off (of which this information statement forms a part), shall have become effective and not subject to any stop order, and no proceedings for that purpose shall have been initiated or threatened by the SEC;

	•	the amendment of specified related party agreements, the termination and/or amendment of specified intercompany agreements, and the entering into of specified additional agreements between FNT and FIS; and

	•	the satisfaction or waiver of all of the conditions to the consummation of the merger agreement (other than the occurrence of the spin-off).

FNT Conditions

In addition, FNT’s obligations to complete the proposed transactions are subject to the satisfaction or waiver on or prior to the closing date under the securities exchange and distribution agreement of the following conditions:


	•	FNF shall have complied with or performed in all material respects of all of its covenants and agreements required by the securities exchange and distribution agreement to be complied with or performed by it at or prior to the date of closing;

	•	FNF shall have received all consents required from third parties, including any such consent required under the credit agreements of FNF, FNT and FIS and any other material agreements;

	•	FIS shall have executed and delivered the cross-indemnity agreement (which is described below under “— Additional Agreements” beginning on page 55) and FNF and FIS shall have executed and delivered the tax disaffiliation agreement (which is described below under “— Additional Agreements” beginning on page 55);

	•	FNF shall have received (i) an opinion of FNF’s special tax advisor, Deloitte Tax LLP, in substance and form reasonably satisfactory to FNT, dated as of the closing date, to the effect that, for U.S. federal income tax

purposes, the proposed transactions will qualify as a reorganization within the meaning of Section 368(a) of the internal revenue code and the spin-off will qualify as a tax free transaction under Section 355 and related provisions of the internal revenue code (including Section 361(c)(1)) for both FNF and its stockholders, and (ii) a private letter ruling from the internal revenue service;


	•	the board of directors of FNF shall have approved and formally declared the spin-off dividend; and

	•	the total liabilities of FNF to be assumed by FNT that would be reflected on an unconsolidated balance sheet of FNF prepared in accordance with GAAP shall not exceed $100,000,000 at closing.

FNF Conditions

In addition, FNF’s obligations to complete the proposed transactions are subject to the satisfaction or waiver on or prior to the closing date under the securities exchange and distribution agreement of the following conditions:


	•	FNT shall have complied with or performed in all material respects of all of its covenants and agreements required by the securities exchange and distribution agreement to be complied with or performed by it at or prior to the date of closing;

	•	FNT shall have received all consents required from third parties, including any such consent required under the credit agreements of FNF, FNT and FIS and any other material agreements;

	•	FNT shall have executed and delivered the cross-indemnity agreement (which is described below under “— Additional Agreements” beginning on page 55) and the tax disaffiliation agreement (which is described below under “— Additional Agreements” beginning on page 55);

	•	the total liabilities of FNF to be assumed by FNT that would be reflected on an unconsolidated balance sheet of FNF prepared in accordance with GAAP shall not exceed $100,000,000 at closing; and

	•	the shares of FNT Class A common stock to be issued to FNF in connection with the proposed transactions, or reserved for issuance upon conversion of the replacement options, shall have been authorized for listing on the NYSE upon official notice of issuance.

Termination of the Securities Exchange and Distribution Agreement

The securities exchange and distribution agreement may be terminated and abandoned at any time prior to the closing, whether before or after approval of matters presented in connection with the FNT annual meeting:


	•	by mutual written consent of FNT and FNF, as authorized by action of the respective special committees of independent members of the boards of directors of FNT and FNF;

	•	by either FNT or FNF:


	•	if, upon a vote at the FNT annual meeting or any adjournment or postponement thereof, the FNT stockholder approval is not obtained;

	•	if the closing has not been consummated on or before December 31, 2006; provided that the right to terminate the securities exchange and distribution agreement in such circumstances will not be available to any party that has breached in any material respect its obligations thereunder in any manner that has proximately contributed to the failure of the closing to be consummated by such date;

	•	if the merger agreement has been terminated; or

	•	if any governmental entity issues an order, decree or ruling or takes any other action prohibiting the proposed transactions and such order, decree, ruling or other action has become final and nonappealable; or


	•	by FNF in its sole discretion (in which case FNF will be required to reimburse FNT for its reasonable costs and expenses in connection with the securities exchange and distribution agreement).

Indemnification and Insurance


	•	From and after the closing, FNT will indemnify and hold harmless each person who was prior to the closing, (i) an officer or director of FNF or (ii) an officer or director of any other enterprise at the request of FNF (referred to as indemnified parties), except that such indemnification will be subject to any limitation imposed from time to time under applicable law. The indemnity will cover all acts or omissions occurring prior to the closing. Each indemnified party will be entitled to advancement of expenses, provided such indemnified party provides an undertaking to repay such advances if it is ultimately determined that such indemnified party is not entitled to indemnification. Any determination to be made as to whether any indemnified party has met any standard of conduct imposed by law will be made by legal counsel reasonably acceptable to such indemnified party and FNT, retained at FNT’s expense.

	•	FNT will also purchase and maintain for at least six years after the date of the closing, a directors’ and officers’ insurance and indemnification policy providing coverage for events occurring prior to the closing for directors, officers or employees of FNF or its subsidiaries (but not directors, officers or employees of FIS and its subsidiaries acting in their capacity as such), on terms and conditions, at least as favorable to the insured persons as FNF’s current director’s and officer’s insurance and indemnification policy.

	•	FNT will pay all costs and expenses that may be incurred by any indemnified parties in successfully enforcing the indemnity or other obligations of FNT.

In the event that FNT or any of its successors or assigns (i) consolidates or merges into any other business entity and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any other business entity, then, in each such case, proper provision will be made so that the successors and assigns of FNT assume the indemnification obligations of FNT described above.

Fees and Expenses

Except with respect to the payment of expenses in the case of termination of the securities exchange and distribution agreement by FNF in its sole discretion, prior to the closing each party agrees to pay its own fees and expenses incident to preparing for, entering into and carrying out the securities exchange and distribution agreement and the consummation of the proposed transactions. FNT will bear all SEC registration fees, any state filing fees, and all printing, mailing, solicitation and other expenses associated with this information statement, the Form S-1 and the vote of the FNT stockholders at our annual meeting. All transfer, documentary, sales, use, stamp, registration and other such taxes and fees (including penalties and interest) incurred in connection with the transactions contemplated by the securities exchange and distribution agreement will be paid by FNT when due, and FNT will indemnify FNF against liability for any such taxes.

Amendments; Waivers

The securities exchange and distribution agreement may not be amended except by an instrument in writing signed on behalf of each of FNF and FNT, as authorized by action of the respective special committees of independent members of the boards of directors of each of the parties.

At any time prior to the closing, each party may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in the securities exchange and distribution agreement or in any document delivered pursuant thereto or (c) subject to certain exceptions, waive compliance with any of the agreements of the other party contained in the securities exchange and distribution agreement. The conditions to each of the parties’ obligations to consummate the proposed transactions are for the sole benefit of such party and may be waived by such party in whole or in part. Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to assert any of its rights will not constitute a waiver of such rights.

Governing Law

The securities exchange and distribution agreement is governed by, and to be interpreted and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

SELECTED HISTORICAL FINANCIAL DATA OF FNT

Detailed historical financial information is included in the audited consolidated and combined balance sheets as of December 31, 2005 and 2004, and the related consolidated and combined statements of earnings, comprehensive earnings, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2005 as well as the unaudited interim consolidated balance sheet as of March 31, 2006 and the related unaudited interim consolidated statements of earnings and cash flows for the three month periods ended March 31, 2006 and 2005, each of which is included in this information statement. You should read the following selected financial data together with FNT’s historical consolidated and combined financial statements, including the related notes, and the other information included in this information statement. See “FNT’s Management Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 65.


	Three Months Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)		2004(1)		2003(1)		2002		2001(2)(3)
	(In thousands, except per share data)

Statement of Earnings Data:
Direct title insurance premiums	$	447,769	$	456,205	$	2,184,993	$	2,003,447	$	2,105,317	$	1,557,769	$	1,252,656
Agency title insurance premiums		628,420		532,513		2,763,973		2,714,770		2,595,433		1,989,958		1,441,416

Total title premiums		1,076,189		988,718		4,948,966		4,718,217		4,700,750		3,547,727		2,694,072
Escrow and other title related fees		254,059		243,137		1,162,344		1,039,835		1,058,729		790,787		656,739

Total title and escrow		1,330,248		1,231,855		6,111,310		5,758,052		5,759,479		4,338,514		3,350,811
Interest and investment income		38,012		20,854		118,084		64,885		56,708		72,305		88,232
Realized gains and losses, net		14,506		3,436		44,684		22,948		101,839		584		946
Other income		10,498		9,075		41,783		43,528		52,689		55,927		50,476

		1,393,264		1,265,220		6,315,861		5,889,413		5,970,715		4,467,330		3,490,465

Personnel costs		452,435		424,660		1,897,904		1,680,805		1,692,895		1,260,070		1,036,236
Other operating expenses		210,893		209,735		935,263		849,554		817,597		633,193		558,263
Agent commissions		488,368		409,901		2,140,912		2,117,122		2,035,810		1,567,112		1,131,892
Depreciation and amortization		26,237		24,866		102,105		95,718		79,077		53,042		100,225
Provision for claim losses		80,721		64,226		354,710		259,402		248,834		175,963		134,527
Interest expense		11,326		303		16,663		3,885		4,582		8,586		15,695

		1,269,980		1,133,691		5,447,557		5,006,486		4,878,795		3,697,966		2,976,838

Earnings before income taxes and minority interest		123,284		131,529		868,304		882,927		1,091,920		769,364		513,627
Income tax expense		43,766		48,863		327,351		323,598		407,736		276,970		205,965

Earnings before minority interest		79,518		82,666		540,953		559,329		684,184		492,394		307,662
Minority interest		416		347		1,972		1,165		859		624		—
Cumulative effect of accounting change		—		—		—		—		—		—		5,709

Net earnings	$	79,102	$	82,319	$	538,981	$	558,164	$	683,325	$	491,770	$	301,953


	Three Months Ended
	March 31,				Year Ended December 31,
	2006(1)		2005(1)		2005(1)			2004(1)		2003(1)	2002	2001(2)(3)
	(In thousands, except per share data)

Per share amounts:
Basic earnings per share	$	0.46			$	3.11

Weighted average shares outstanding, basic basis		173,473				173,463	(4)

Diluted earnings per share	$	0.46			$	3.11

Weighted average shares outstanding, diluted basis		173,654				173,575	(4)

Unaudited pro forma net earnings per share — basic and diluted(5)			$	0.48				$	3.22

Unaudited pro forma weighted average shares outstanding — basic and diluted(5)				172,951					172,951

Dividends declared per share	$	0.29			$	0.25


(1)		Effective January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, using the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”, and as a result recorded stock compensation expense of $3.0 million for the three months ended March 31, 2005 and $12.5 million, $5.4 million and $4.9 million for the years ended December 31, 2005, 2004 and 2003, respectively. Effective January 1, 2006, we adopted SFAS No. 123 (Revised), “Share-Based Payment,” and recorded stock compensation expense of $3.2 million in the first three months of 2006.

(2)		Effective January 1, 2002, we adopted SFAS No. 142 “Goodwill and Other Intangible Assets” and as a result, have ceased to amortize goodwill. Goodwill amortization in 2001 was $33.2 million.

(3)		During 2001, we recorded a $5.7 million, after-tax charge, reflected as a cumulative effect of a change in accounting principle, as a result of adopting Emerging Issues Task Force No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets.”

(4)		Because there were no outstanding shares prior to FNF’s distribution of our common stock (representing 17.5% of our outstanding shares) as a dividend to its stockholders, that was completed on October 17, 2005, basic and diluted weighted average shares outstanding for 2005 have been calculated using activity from October 18, 2005 to December 31, 2005 as if shares outstanding and common stock equivalents at October 18, 2005 had been outstanding for the entire year.

(5)		Unaudited pro forma net earnings per share is calculated using the number of outstanding shares of FNF on a date prior to such distribution of FNT Shares to FNF stockholders.


	March 31,		December 31,
	2006		2005		2004		2003		2002		2001
	(In thousands)

Balance sheet data (at end of period):
Investments(1)	$	3,234,928	$	3,300,738	$	2,819,489	$	2,510,182	$	2,337,472	$	1,705,267
Cash and cash equivalents(2)		550,447		462,157		268,414		395,857		433,379		491,709
Total assets		5,897,476		5,900,533		5,074,091		4,782,664		4,494,716		3,848,300
Notes payable		599,094		603,262		22,390		54,259		107,874		176,116
Reserve for claim losses		1,090,095		1,063,857		980,746		932,439		887,973		881,053
Minority interests		5,006		4,338		3,951		2,488		1,098		239
Equity		2,505,728		2,480,037		2,676,756		2,469,186		2,234,484		1,741,387


(1)		Investments as of March 31, 2006 and December 31, 2005, 2004, 2003, 2002 and 2001 include securities pledged to secure trust deposits of $601.8 million, $656.0 million, $546.0 million, $448.1 million, $474.9 million and $319.1 million, respectively. Investments as of March 31, 2006, and December 31, 2005, include securities pledged relating to FNT’s securities lending program of $188.2 million and $120.2 million, respectively.

(2)		Cash and cash equivalents as of March 31, 2006, and December 31, 2005, 2004, 2003, 2002 and 2001 include cash pledged to secure trust deposits of $241.8 million, $234.7 million, $195.2 million, $231.1 million, $295.1 million and $367.9 million, respectively. Cash and cash equivalents as of March 31, 2006, and December 31, 2005, include cash pledged relating to FNT’s securities lending program of $195.5 million and $124.3 million, respectively.


	Three Months
	Ended March 31,		Year Ended December 31,
	2006		2005		2004		2003		2002		2001
	(In whole numbers)

Other non-financial data (unaudited):
Direct operations orders opened(1)		683,800		3,052,805		3,142,945		3,771,393		2,953,797		2,496,597
Direct operations orders closed(1)		436,300		2,169,656		2,249,792		2,916,201		2,141,680		1,685,147
Fee per closed file(1)	$	1,532	$	1,487	$	1,324	$	1,081	$	1,099	$	1,120


(1)		These measures are used by management to judge productivity and are a measure of transaction volume for our direct title businesses. An order is opened when we receive a customer order and is closed when the related real estate transaction closes, which typically takes 45-60 days from the opening of an order.

FNT’S MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated and combined financial statements and the related notes thereto and selected financial data included in this information statement.

Overview

We are one of the largest title insurance companies in the United States. Our title insurance underwriters — Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title — together issue all of FNT’s title insurance policies in 49 states, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico. Our title business consists of providing title insurance and escrow and other title-related products and services arising from the real estate closing process. Our operations are conducted on a direct basis through our own employees who act as title and escrow agents and through independent agents. In addition to our independent agents, our customers are lenders, mortgage brokers, attorneys, real estate agents, home builders and commercial real estate developers. We do not focus our marketing efforts on the homeowner. We operate our business through a single segment, title and escrow, and do not generate significant revenue outside the United States.

Prior to October 17, 2005, we were a wholly-owned subsidiary of FNF. On that date, FNF distributed shares of FNT Class A common stock representing 17.5% of our outstanding shares to its stockholders as a dividend, which we refer to as the distribution. FNF currently holds shares of our Class B common stock representing approximately 82% of all shares and 97.9% of all voting rights of our outstanding common stock.

Our historical financial statements include assets, liabilities, revenues and expenses directly attributable to our operations as well as transactions between us and FNF and other affiliated entities and allocations of certain of our corporate expenses to FNF and FIS, allocated on a basis that management considers to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by those businesses. These expense allocations to FNF and FIS reflect an allocation to us of a portion of the compensation of certain senior officers and other personnel of FNF who are not our employees after the distribution but who have historically provided services to us. Our historical financial statements do not reflect the debt or interest expense we might have incurred if we had been a stand-alone entity. In addition, we incur other expenses, not reflected in our historical financial statements, as a result of being a separate publicly traded company. As a result, our historical financial statements do not necessarily reflect what our financial position or results of operations would have been if we had been operated as a stand-alone public entity during the periods covered, and may not be indicative of our future results of operations or financial position.

Related Party Transactions

Our historical financial statements reflect transactions with other businesses and operations of FNF including those being conducted by another FNF subsidiary, FIS.

A detail of related party items included in revenues and expenses is as follows:


	2005			2004			2003
	(In millions)

Agency title premiums earned	$	91.9		$	106.3		$	284.9
Rental income earned		5.0			8.4			7.3
Interest revenue		1.0			1.0			0.7

Total revenue	$	97.9		$	115.7		$	292.9

A detail of related party items included in operating expenses is as follows:
Agency title commissions	$	80.9		$	93.6		$	250.7
Data processing costs		56.9			56.6			12.4
Data processing costs allocated		—			—			(5.4	)
Corporate services allocated		(30.3	)		(84.5	)		(48.7	)
Title insurance information expense		28.1			28.6			28.2
Other real-estate related information		10.9			9.9			11.4
Software expense		7.7			5.8			2.6
Rental expense		3.8			2.8			0.5
License and cost sharing		11.9			12.8			17.9

Total expenses	$	169.9		$	125.6		$	269.6

Total pretax impact of related party activity	$	(72.0	)	$	(9.9	)	$	23.3

An FIS subsidiary acts as the title agent in the issuance of title insurance policies by a title insurance underwriter owned by us and in connection with certain trustee sales guarantees, a form of title insurance issued as part of the foreclosure process. As a result, our title insurance subsidiaries pay commissions on title insurance policies sold through FIS. For 2005, 2004, and 2003, these FIS operations generated $91.9 million, $106.3 million, and $284.9 million, respectively, of revenues for us, which we record as agency title premium. The amounts generated have declined significantly since 2003, in part due to a decline in the volume of refinancing transactions in the mortgage industry as a whole. We paid FIS commissions at the rate of 88% of premiums generated, equal to $80.9 million, $93.6 million, and $250.7 million for 2005, 2004, and 2003, respectively.

Through June 30, 2005, we have leased equipment to a subsidiary of FIS. Revenue relating to these leases was $5.0 million, $8.4 million, and $7.3 million in 2005, 2004, and 2003, respectively.

Beginning in September 2003, our expenses included amounts paid to a subsidiary of FIS for the provision by FIS to us of IT infrastructure support, data center management and related IT support services. For 2005, 2004, and 2003, expenses incurred related to such FIS services totaled $56.9 million, $56.6 million, and $12.4 million, respectively. Prior to September 2003, we performed these services ourselves and provided them to FIS. During 2003, we received payments from FIS of $5.4 million relating to these services that offset our other operating expenses. Subsequent to FNF’s acquisition of Alltel Information Services, Inc. in 2003, we performed these services ourselves. In addition, we incurred software expenses relating to an agreement with a subsidiary of FIS that approximated $7.7 million, $5.8 million, and $2.6 million in 2005, 2004, and 2003, respectively.

Included as a reduction of our expenses for all periods are payments from FNF and FIS relating to the provision by us of corporate services to FNF and to FIS and its subsidiaries. These corporate services include accounting, internal audit, treasury, payroll, human resources, tax, legal, purchasing, risk management, mergers and acquisitions, and general management. For the years ended December 31, 2005, 2004, and 2003, our expenses were reduced by $7.0 million, $9.4 million, and $9.2 million, respectively, related to the provision of these corporate services by us to FNF and its subsidiaries other than FIS and its subsidiaries. For the years ended December 31, 2005, 2004, and 2003, our expenses were reduced by $23.3 million, $75.1 million, and $39.5 million, respectively, related to the provision of corporate services by us to FIS and its subsidiaries.

The title plant assets of several of our title insurance subsidiaries are managed or maintained by a subsidiary of FIS. The underlying title plant information and software continues to be owned by each of our title insurance underwriters, but FIS manages and updates the information in return for either (i) a cash management fee or (ii) the right to sell that information to title insurers, including title insurance underwriters that we own and other third party customers. In most cases, FIS is responsible for keeping the title plant assets current and fully functioning, for which we pay a fee to FIS based on our use of, or access to, the title plant. For 2005, 2004, and 2003, our expenses to FIS under these arrangements were $29.9 million, $28.9 million, and $28.2 million, respectively. In addition, since November 2004, each applicable title insurance underwriter in turn receives a royalty on sales of access to its title plant assets. For the years ended December 31, 2005 and 2004, the revenues from these title plant royalties were $3.0 million and $0.3 million, respectively. We have entered into agreements with FIS that permit FIS and certain of its subsidiaries to access and use (but not to re-sell) the starters databases and back plant databases of our title insurance subsidiaries. Starters databases are our databases of previously issued title policies and back plant databases contain historical records relating to title that are not regularly updated. Each of our applicable title insurance subsidiaries receives a fee for any access to or use of its starters and back plant databases by FIS. We also do business with additional entities within FIS that provide real estate information to our operations, for which we recorded expenses of $10.9 million, $9.9 million, and $11.4 million in 2005, 2004, and 2003, respectively.

We also have certain license and cost sharing agreements with FIS. We recorded expense of $11.9 million, $12.8 million and $17.9 million relating to these agreements in 2005, 2004 and 2003, respectively.

Also, we capitalized software costs of $11.2 million paid to FIS relating to a development agreement.

Our financial statements reflect allocations for a lease of office space to us for our corporate headquarters and business operations in the amounts of $3.8 million, $2.8 million, and $0.5 million in 2005, 2004, and 2003, respectively.

We believe the amounts earned by us or charged to us under each of the foregoing arrangements are fair and reasonable. Although the commission rate paid on the title insurance premiums written by the FIS title agencies was set without negotiation, we believe the commissions earned are consistent with the average rate that would be available to a third party title agent given the amount and the geographic distribution of the business produced and the low risk of loss profile of the business placed. In connection with the title plant management and maintenance services provided by FIS, we believe that the fees charged to us by FIS are at approximately the same rates that FIS and other similar vendors charge unaffiliated title insurers. The IT infrastructure support and data center management services provided to us by FIS are priced within the range of prices that FIS offers to its unaffiliated third party customers for the same types of services. However, the amounts we earned or were charged under these arrangements were not negotiated at arm’s length, and may not represent the terms that we might have obtained from an unrelated third party.

Notes receivable from FNF, due from FNF and notes payable to FNF as of December 31, 2005 and December 31, 2004 were as follows:


	As of
	December 31,
	2005		2004
	(In millions)

Notes receivable from FNF	$	19.0	$	22.8
Due from FNF		32.7		63.7
Notes payable to FNF		497.8		—

We have notes receivable from FNF relating to agreements between our title underwriters and FNF. These notes amounted to $19.0 million and $22.8 million at December 31, 2005 and 2004, respectively. As of December 31, 2005, these notes bear interest at 5.1%. We earned interest revenue of $1.0 million, $1.0 million, and $0.7 million relating to these notes during 2005, 2004, and 2003, respectively.

We are included in FNF’s consolidated tax returns and thus any income tax liability or receivable is due to/from FNF. Due from FNF at December 31, 2005 and 2004, includes a receivable from FNF relating to overpayment of taxes of $11.5 million and $63.6 million, respectively.

On September 30, 2005, we issued two $250 million intercompany notes payable to FNF, which we refer to as the mirror notes, with terms that mirrored FNF’s existing $250 million 7.30% public debentures due in August 2011 and $250 million 5.25% public debentures due in March 2013. Following the issuance of the mirror notes, we filed a Registration Statement on Form S-4, pursuant to which we offered to accept the outstanding FNF notes in exchange for FNT notes we issued having substantially the same terms. On January 18, 2006, we completed these exchange offers and received $241,347,000 in aggregate principal amount of FNF’s 7.30% Notes due August 15, 2011, and the entire $250,000,000 in aggregate principal of FNF’s 5.25% Notes due March 15, 2013. The FNF notes received by us in the exchange were subsequently delivered to FNF in partial redemption of the 7.30% Mirror Note due August 15, 2011, and in full redemption of the 5.25% Mirror Note due March 15, 2013. In order to reflect the partial redemption of the 7.30% Mirror Note due August 15, 2011, the original note was replaced with an identical Mirror Note with a principal balance of $8,653,000, which reflects the unredeemed portion of the original Mirror Note. Interest on each mirror note has been accrued from the last date on which interest on the corresponding FNF notes was paid and at the same rate. We subsequently acquired approximately $2.1 million of the 7.30% FNF Notes remaining outstanding. In connection with the proposed transactions, FNF will redeem the remaining 7.30% FNF Notes, and we will repay the remaining balance of the related mirror note.

On October 24, 2005, we borrowed $150 million under our revolving credit facility and paid it to FNF in satisfaction of a $150 million intercompany note issued by one of our subsidiaries to FNF in August 2005. Later in the fourth quarter, we repaid $50 million of this amount.

Business Trends and Conditions

Title insurance revenue is closely related to the level of real estate activity and the average price of real estate sales. Real estate sales are directly affected by the availability of funds to finance purchases, predominantly mortgage interest rates. Other factors affecting real estate activity include, but are not limited to, demand for housing, employment levels, family income levels and general economic conditions. In addition to real estate sales, mortgage refinancing is an important source of title insurance revenue. We have found that residential real estate activity generally decreases in the following situations:


	•	when mortgage interest rates are high or increasing;

	•	when the mortgage funding supply is limited; and

	•	when the United States economy is weak.

Because commercial real estate transactions tend to be driven more by supply and demand for commercial space and occupancy rates in a particular area rather than by macroeconomic events, our commercial real estate title insurance business can generate revenues which are not dependent on the industry cycles discussed above.

Because these factors can change dramatically, revenue levels in the title insurance industry can also change dramatically. For example, beginning in the second half of 1999 and through 2000, steady interest rate increases caused by actions taken by the Federal Reserve Board resulted in a significant decline in refinancing transactions. As a result, the market shifted from a refinance-driven market in 1998 to a more traditional market driven by new home purchases and resales in 1999 and 2000. However, beginning in January 2001 and continuing through June of 2003, the Federal Reserve Board reduced interest rates by 550 basis points, bringing interest rates down to their lowest level in recent history, which again significantly increased the volume of refinance activity. In 2004 and 2005, mortgage rates increased as the Federal Reserve Board increased interest rates by 325 basis points since June 2004, resulting in decreases in refinance activity. Notwithstanding the increase in interest rates, home prices appreciated strongly in many markets in 2004, benefiting our revenues. In 2005, refinance activity has been lower than in 2004, but purchase loan originations have continued to increase and home prices have continued to appreciate. The decreased refinance activity is evidenced by the statistic of the Mortgage Bankers Association, which we refer to as the MBA, showing that approximately 46.5% of new loan originations in 2005 were refinance transactions as compared with approximately 52.8% in 2004. The ten-year treasury rate has increased from 3.0% in June 2003 to 4.5% at the end of 2005. According to the MBA, U.S. mortgage originations (including refinancings) were approximately $2.4 trillion, $2.8 trillion, and $3.8 trillion in 2005, 2004, and 2003, respectively. The MBA’s Mortgage Finance Forecast estimates a $2.38 trillion mortgage origination market for 2006, which would be an

18.3% decrease from 2005. The MBA further predicts that the 19.2% decrease will result from purchase transactions declining from $1.49 billion in 2005 to $1.43 billion in 2006, or 3.6%, and refinancing transactions dropping from $1.29 billion to $0.81 billion, or 37.1%. We expect that current interest rate levels and any future increase in interest rates will most likely result in lower levels of mortgage originations in 2006 than in 2005 or 2004.

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 third calendar quarter is typically the strongest in terms of revenue due to a higher volume of home sales in the summer months and the fourth quarter is also strong due to commercial customers 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.

Critical Accounting Policies

The accounting estimates described below are those we consider critical in preparing our Consolidated and Combined Financial Statements. Management is required to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures with respect to contingent assets and liabilities at the date of the Consolidated and Combined Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. See Note A of Notes to the Consolidated and Combined Financial Statements for a more detailed description of the significant accounting policies that have been followed in preparing our financial statements.

Reserve for Claim Losses. Title companies issue two types of policies since both the buyer and lender in real estate transactions want to know that their interest in the property is insured against certain title defects outlined in the policy. An owner’s policy insures the buyer against such defects for as long as he or she owns the property (as well as against warranty claims arising out of the sale of the property by such owner). A lender’s policy insures the priority of the lender’s security interest over the claims that other parties may have in the property. The maximum amount of liability under a title insurance policy is generally the face amount of the policy plus the cost of defending the insured’s title against an adverse claim. While most non-title forms of insurance, including property and casualty, provide for the assumption of risk of loss arising out of unforeseen future events, title insurance serves to protect the policyholder from risk of loss from events that predated the issuance of the policy.

Unlike many other forms of insurance, title insurance requires only a one-time premium for continuous coverage until another policy is warranted due to changes in property circumstances arising from refinance, resale, additional liens, or other events. Unless we issue the subsequent policy, we receive no notice that our exposure under our policy has ended and as a result we are unable to track the actual terminations of our exposures.

Our reserve for claim losses includes reserves for known claims, which we refer to as PLR, as well as for losses that have been incurred but not yet reported to us, which we refer to as IBNR, net of recoupments. We reserve for each known claim based on our review of the estimated amount of the claim and the costs required to settle the claim. Reserves for IBNR claims are estimates that are established at the time the premium revenue is recognized and are based upon historical experience and other factors, including industry trends, claim loss history, legal environment, geographic considerations, and the types of policies written. We also reserve for losses arising from escrow, closing and disbursement functions due to fraud or operational error.

The table below summarizes our reserves for known claims and incurred but not reported claims.


	As of December 31,				As of December 31,
	2005				2004
	(In thousands)

PLR	$	231,007	21.7	%	$	223,202	22.8	%