TITLE INSURANCE AND SERVICES
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FINANCIAL RESULTS
New home sales and resale activity remained seasonally high during the first quarter of 2002, helping new title
order counts to reach a record first-quarter level. While refinance-related activity slowed a bit in the first half of
2002, further declines in interest rates helped total orders opened in the second quarter of 2002 to surpass those
of the same quarter in 2001. Title orders surged significantly in the year's third quarter as low interest rates prompted
refinancing activity, as well as existing and new home sales. By year's end,
the company showed an increase of 13 percent in title orders opened
over those opened in 2001.
Full-year operating revenues for 2002 increased 28 percent from 2001 levels to
a total of nearly $3.4 billion. The higher order volume, coupled with increased
operational and technology-driven efficiencies, helped the Title Insurance
and Services segment to realize income before income taxes and minority
interests of $271.7 million, an increase of 56 percent over 2001's total.
TECHNOLOGY IMPLEMENTATION
During 2002, the First American Title Insurance Company substantially
completed the implementation of our FAST Transaction System in all
First American Title offices, making it the first national company in the industry to have all of its people working
from a common platform. A great deal of effort and determination by many First American people made it
possible to complete this implementation during one of the strongest markets and, therefore, one of our
busiest environments.
Today, thousands of users in hundreds of offices utilize the FAST Transaction System, a fully integrated, browser-based
system designed to automate and centralize title and escrow settlement services. The system's full implementation
should help the Title Company to realize increased efficiencies and improved operating
margins well into the future.
Also in 2002, the Title Company expanded the coverage of FASTSearch™, an automated
title search engine integrated with the FAST Transaction System. FASTSearch, which
automates the title searching process, now covers more than 150 key counties. By the
end of 2002, more than a million title orders had been processed through this system.
This, along with FASTWeb, the Company's online ordering, status inquiry, and delivery
system, can now be accessed seamlessly through the FAST Transaction System from
anywhere in the nation.
Another operational advantage came when the Title Company's offshore searching
capabilities were expanded, lowering production costs as the number of orders processed by facilities abroad
rose to about 40,000 per month.
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