This Management's Discussion and Analysis contains certain financial measures, in particular presentation of certain balances excluding the impact of acquisitions and other non-recurring items that are not presented in accordance with generally accepted accounting principles ("GAAP"). The Company is presenting these non-GAAP financial measures because they provide the Company's management and readers of the Quarterly Report on Form 10-Q with additional insight into the operational performance of the Company relative to earlier periods and relative to the Company's competitors. The Company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. Readers of this Quarterly Report on Form 10-Q should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are those policies used in the preparation of the Company's financial statements that require management to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosure of contingencies. A summary of these policies can be found in the Management's Discussion and Analysis section of the Company's Annual Report on Form 10-K for the year ended December 31, 2008, as amended.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 168, "The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162" also issued as Accounting Standards Update No. 2009-01, "Generally Accepted Accounting Principles" ("ASC Topic 105-10") which establishes the FASB Accounting Standards Codification ("the Codification" or "ASC") as the official single source of authoritative U.S. generally accepted accounting principles ("GAAP"). All guidance contained in the Codification carries an equal level of authority. All existing accounting standards are superseded. All other accounting guidance not included in the Codification will be considered non-authoritative. The Codification also includes all relevant SEC guidance organized using the same topical structure in separate sections within the Codification. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. The Codification is not intended to change GAAP, but it will change the way GAAP is organized and presented. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Except for the disclosure requirements, the adoption of this statement did not have an impact on the determination or reporting of the Company's consolidated financial statements. In order to ease the transition to the Codification, the Company is providing the Codification cross-reference alongside the references to the standards issued and adopted prior to the adoption of the Codification.

In February 2008, the FASB issued Staff Position 157-2, "Effective Date of FASB Statement No. 157" ("ASC Topic 820-10-15-1"). ASC Topic 820-10-15-1 delayed the effective date of Statement of Financial Accounting Standards No. 157 "Fair Value Measurements" ("ASC Topic 820-10") for non-financial assets and non-financial liabilities until January 1, 2009. The provisions of ASC Topic 820-10 for non-financial assets and non-financial liabilities were applied as of January 1, 2009, and had no material effect on the Company's consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("ASC Topic 825-10"). This statement permits companies to choose to measure many financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The Company adopted ASC Topic 825-10 effective January 1, 2008. The Company did not apply ASC Topic 825-10 to any assets or liabilities and, therefore, the adoption had no effect on its consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R), "Business Combinations" ("ASC Topic 805-10"). Effective January 1, 2009, the Company adopted the provisions of ASC Topic 805-10. This statement retains the fundamental requirements in Statement of Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141"), that the acquisition method of accounting, previously known as the purchase method, be used for all business combinations and for an acquirer to be identified for each business combination. ASC Topic 805-10 establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a

bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. ASC Topic 805-10 requires contingent consideration to be recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value to be recognized in earnings until settled. ASC Topic 805-10 also requires acquisition-related transaction and restructuring costs to be expensed rather than treated as part of the cost of the acquisition. The Company adopted ASC Topic 805-10 on January 1, 2009 and the adoption of ASC Topic 805-10 had no material impact on the Company's consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position FAS 141(R)-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" ("ASC Topic 805-20-25-19"). The FASB carried forward the requirements in SFAS 141 for acquired contingencies, which would require that such contingencies be recognized at fair value on the acquisition date if fair value can be reasonably estimated during the allocation period. Otherwise, companies would typically account for the acquired contingencies in accordance with Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies" ("ASC Topic 450-10"). As a result of the requirement to use the guidance in SFAS 141, the accounting for preacquisition contingencies may be an exception to the recognition and fair value measurement principles of ASC Topic 805-20-25-19. Additionally, the FASB changed the accounting for an acquiree's pre-existing contingent consideration arrangement that was assumed by the acquirer as part of the business combination. Such arrangements will now be accounted for as contingent consideration by the acquirer. ASC Topic 805-20-25-19 had the same effective date as ASC Topic 805-10, and was effective for all business combinations for which the acquisition date was on or after January 1, 2009. The Company adopted ASC Topic 805-20-25-19 on January 1, 2009 and the adoption of ASC Topic 805-20-25-19 had no impact on the Company's consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, "Noncontrolling Interest in Consolidated Financial Statements-an amendment of ARB No. 51" ("ASC Topic 810-10"). The Company adopted the provisions of ASC Topic 810-10 effective January 1, 2009. ASC Topic 810-10 states that accounting and reporting for minority interests will be recharacterized as noncontrolling interests and classified as a component of equity. ASC Topic 810-10 also establishes reporting requirements that provide disclosures that identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. ASC Topic 810-10 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests-all other requirements are to be applied prospectively. The Company filed Amendment No. 2 to the Company's Annual Report on Form 10-K on October 8, 2009 to apply the retroactive provisions of ASC Topic 810-10 to its consolidated financial statements. Except for the required presentation and disclosures, the adoption of ASC Topic 810-10 had no material impact on the Company's consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments" ("ASC Topic 320-10-65-1"). ASC Topic 320-10-65-1 establishes a new method of recognizing and reporting other-than-temporary impairments of debt securities. It also contains additional disclosure requirements related to debt and equity securities and changes existing impairment guidance under Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("ASC Topic 320-10"). For debt securities, the "ability and intent to hold" provision is eliminated, and impairment is considered to be other-than-temporary if an entity (i) intends to sell the security, (ii) more likely than not will be required to sell the security before recovering its cost, or (iii) does not expect to recover the security's entire amortized cost basis (even if the entity does not intend to sell). This new framework does not apply to equity securities (i.e., impaired equity securities will continue to be evaluated under previously existing guidance).The "probability" standard relating to the collectability of cash flows is eliminated, and impairment is now considered to be other-than-temporary if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security. ASC Topic 320-10-65-1 also provides that for debt securities which (i) an entity does not intend to sell and (ii) it is not more likely than not that the entity will be required to sell before the anticipated recovery of its remaining amortized cost basis, the impairment is separated into the amount related to estimated credit losses and the amount related to all other factors. The amount of the total impairment related to all other factors is recorded in other comprehensive loss and the amount related to estimated credit loss is recognized as a charge against current period earnings. ASC Topic 320-10-65-1 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted. The Company elected to adopt ASC Topic 320-10-65-1 in the first quarter of 2009. See the discussion in Note 4 regarding the impact of adoption.

In April 2009, the FASB issued FASB Staff Position FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("ASC Topic 820-10"). ASC Topic 820-10 indicates that if an entity determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. ASC Topic 820-10 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted. ASC Topic 820-10 must be applied prospectively. The Company elected to adopt ASC Topic 820-10 in the first quarter of 2009. The adoption of ASC Topic 820-10 had no material impact on the Company's consolidated financial statements.

In April 2009, the SEC issued Staff Accounting Bulletin No. 111 ("SAB 111") on Other-Than-Temporary Impairments. SAB 111 amends Topic 5.M. in the Staff Accounting Bulletin Series entitled "Other-Than-Temporary Impairment of Certain Investments in Debt and Equity Securities" ("Topic 5. M."). SAB 111 maintains the SEC staff's previous views related to equity securities and amends Topic
5.M. to exclude debt securities from its scope. The Company elected to adopt SAB 111 in the first quarter of 2009. SAB 111 did not have a material impact on the Company's consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments" ("ASC Topic 825-10-65-1"). This FSP relates to fair value disclosures in public entity financial statements for financial instruments that are within the scope of Statement of Financial Accounting Standards No. 107 (ASC Topic 825-10), "Disclosures about Fair Value of Financial Instruments". This guidance increases the frequency of those disclosures, requiring public entities to provide the disclosures on a quarterly basis, rather than annually. FSP 107-1 is effective for interim and annual periods ending after June 15, 2009. The Company adopted ASC Topic 825-10-65-1 in the second quarter of 2009. Except for the disclosure requirements, the adoption of ASC Topic 825-10-65-1 did not have an impact on the Company's consolidated financial statements.

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165, "Subsequent Events" ("ASC Topic 855-10"). ASC Topic 855-10 is modeled after the same principles as the subsequent event guidance in auditing literature with some terminology changes and additional disclosures. ASC Topic 855-10 is effective for interim and annual periods ending after June 15, 2009, and is required to be applied prospectively. The Company adopted ASC Topic 855-10 in the second quarter of 2009. Except for the disclosure requirements, the adoption of ASC Topic 855-10 had no impact on the Company's consolidated financial statements.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, "Accounting for Transfers of Financial Assets-an amendment of FASB Statement No. 140" ("SFAS 166"). SFAS 166 removes the concept of a qualifying special-purpose entity from SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," establishes a new "participating interest" definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarifies and amends the derecognition criteria for a transfer to be accounted for as a sale, and changes the amount that can be recognized as a gain or loss on a transfer accounted for as a sale when beneficial interests are received by the transferor. Enhanced disclosures are also required to provide information about transfers of financial assets and a transferor's continuing involvement with transferred financial assets. This statement must be applied as of the beginning of an entity's first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Management is currently evaluating the effect that adoption of this standard will have on the Company's consolidated financial position and results of operations when it becomes effective in 2010.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167, "Amendments to FASB Interpretation No. 46 (R)" ("SFAS 167"). SFAS 167 amends FASB Interpretation No. 46 (revised December 2003), "Consolidation of Variable Interest Entities ("ASC Topic 810-10") to require an enterprise to qualitatively assess the determination of the primary beneficiary of a VIE based on whether the entity (1) has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (2) has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Also, SFAS 167 requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a VIE. Enhanced disclosures are also required to provide information about an enterprise's involvement in a VIE. This statement shall be effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Management is currently evaluating the effect that adoption of this standard will have on the Company's consolidated financial position and results of operations when it becomes effective in 2010.

OVERVIEW

Corporate Update

On January 15, 2008, the Company announced its intention to separate its financial services companies from the information solutions companies via a spin-off transaction, resulting in two separate publicly traded entities. The Company continues to proceed with preparations for the anticipated separation, and to monitor market conditions, and currently expects the separation to occur during the first half of 2010. The transaction remains subject to customary conditions, including final approval by the Board of Directors, filing and effectiveness of a Form 10 Registration Statement with the SEC, receipt of a tax ruling from the Internal Revenue Service and the approval of applicable regulatory authorities.

On June 29, 2009, the Company announced its proposal to acquire the issued and outstanding common stock of its publicly traded subsidiary, First Advantage, in a stock-for-stock transaction in which the Company would issue 0.5375 of a common share for each issued and outstanding share of First Advantage. On October 9, 2009, the Company commenced an exchange offer (the "Offer") for all publicly held First Advantage Class A Shares at an exchange ratio of 0.58 of a Company common share for each share of First Advantage Class A Shares (the "Exchange Ratio"). As of October 7, 2009, the Exchange Ratio represented an offer price of $18.86 per Class A Share and a 47.89% premium to the closing price of the Class A Shares on the last trading day prior to the June 29, 2009 announcement.

In the event that the Offer and subsequent merger of a subsidiary of the Company into First Advantage are consummated in the fourth quarter, operating results for the fourth quarter will be negatively impacted due to related costs. The transaction will constitute a "Change in Control" under the First Advantage 2003 Incentive Compensation Plan ("the Plan"). Upon a Change in Control, the unvested awards of stock options, restricted stock units and restricted stock issued under the Plan will vest, the stock options will be assumed by the Company and converted at the Exchange Ratio to options to purchase common shares of the Company, and the unamortized costs of those awards will be expensed. At September 30, 2009, the unamortized compensation expense was $8.5 million and $0.9 million related to the unvested restricted stock and unvested options, respectively. In addition, Morgan Stanley is acting as First Advantage's financial advisor related to the Offer. Pursuant to the terms of Morgan Stanley's engagement, in the event that the Offer is accepted, First Advantage has agreed to pay Morgan Stanley a transaction fee which is currently estimated to be approximately $3.0 million.

Declines in real estate prices, as well as a continued tightening of mortgage credit for non-conforming loans and decreases in general economic conditions continue to impact the demand for many of the Company's products and services. These conditions have also had an impact on, and continue to impact, the performance and financial condition of some of the Company's customers in many of the segments in which the Company operates; should these parties continue to encounter significant issues, those issues may lead to negative impacts on the Company's revenue, claims, earnings and liquidity. Additionally, the Company sees further stress in the commercial real estate market. This may result in the instability or failure of developers and other participants in the commercial real estate business, which increases the probability of claims on commercial title insurance policies issued or reinsured by the Company.

Results of Operations

Summary of Third Quarter

The dollar amount of mortgage originations increased 51.5% in the third quarter of 2009, when compared with the same period of the prior year according to the Mortgage Bankers Association's October 13, 2009, Mortgage Finance Forecast (the "MBA Forecast"). This increase in mortgage originations reflected a relatively strong refinance market. According to the MBA Forecast, the dollar amount of refinance originations increased 146.2% in the third quarter of 2009 when compared with the same quarter of the prior year, while purchase originations remained flat. However, as a result of the continued soft commercial real estate market, depressed international real estate activity, and declining home values, offset in part by an increase in agent operating revenues, operating revenues for the Company's financial services group decreased 2.0% in the third quarter 2009 when compared with the same period of the prior year. Operating revenues for the information solutions group increased 2.8% in the third quarter 2009 when compared with the same period of the prior year. This increase reflected growth in default-related revenues, the relatively consistent revenues generated by origination-related products and by subscription-based businesses, offset in part by a decline in revenues at the risk mitigation segment which primarily reflected the downturn in domestic and international hiring, weakness in the credit markets, and overall economic slowdown. On a consolidated basis, operating revenues were relatively unchanged in the third quarter 2009 when compared with the same period of the prior year.

Total expenses for the Company, before income taxes, decreased 4.3% for the three months ended September 30, 2009, when compared with the same period of the prior year. For the financial services group, the decrease was 7.6%, with a partial offsetting increase of 2.3% at the information solutions group. The benefits from cost saving initiatives at the information solutions group were partially offset by increased costs of goods sold associated with the increased default-related and lead generation revenues. The Company-wide decrease in total expenses in the third quarter 2009 primarily reflected a decline in the title insurance loss provision, reductions in employee compensation expense, (primarily reflecting employee reductions) and a decline in other operating expenses due to overall cost-containment programs. These declines were offset in part by an increase in title insurance agent retention due in large part to the improvement in title insurance agent revenues.

Net income attributable to the Company for the three months ended September 30, 2009, was $55.4 million, or $0.59 per diluted share, compared with a net loss attributable to the Company of $8.3 million, or $0.09 per diluted share for the same period of the prior year.

FINANCIAL SERVICES GROUP

The Company expects that the uncertainty in the real estate and mortgage markets will continue to impact many of the financial services group's lines of business. However, certain governmental programs and a relatively low interest rate environment have, to some extent, provided an improved operating environment. The financial services group is maintaining its focus on controlling costs by centralizing agency and administrative functions, optimizing management structure and rationalizing its brand strategy. The financial services group plans to continue these efforts where appropriate. In addition, the financial services group will continue to scrutinize the profitability of its agency relationships, to increase its offshore leverage and to develop new sales opportunities. Beginning at the end of 2008, the title insurance and services segment also initiated an effort to optimize its claims handling process through, among other things, the centralization of claims handling, enhanced corporate control over the claims process and claims process standardization.

Title Insurance and Services



                                                             Three Months Ended September 30,                                    Nine Months Ended September 30,
(in thousands except percentages)                 2009             2008            $ Change        % Change          2009              2008             $ Change        % Change
Revenues
Direct operating revenues                       $ 515,523       $   546,498        $ (30,975 )         (5.7 )     $ 1,546,725       $ 1,751,761        $ (205,036 )        (11.7 )
Agent operating revenues                          450,829           436,938           13,891            3.2         1,100,196         1,369,033          (268,837 )        (19.6 )
Investment and other income                        25,172            39,030          (13,858 )        (35.5 )          85,975           121,840           (35,865 )        (29.4 )
Net realized investment gains (losses)              5,474           (44,609 )         50,083          112.3            (8,561 )         (83,401 )          74,840           89.7

                                                  996,998           977,857           19,141            2.0         2,724,335         3,159,233          (434,898 )        (13.8 )

Expenses
Salaries and other personnel costs                276,725           310,016          (33,291 )        (10.7 )         828,001         1,003,758          (175,757 )        (17.5 )
Premiums retained by agents                       363,408           347,379           16,029            4.6           881,571         1,088,492          (206,921 )        (19.0 )
Other operating expenses                          220,716           243,139          (22,423 )         (9.2 )         649,901           774,022          (124,121 )        (16.0 )
Provision for policy losses and other claims       49,577            72,604          (23,027 )        (31.7 )         158,815           206,476           (47,661 )        (23.1 )
Depreciation and amortization                      15,487            21,316           (5,829 )        (27.3 )          49,270            60,420           (11,150 )        (18.5 )
Premium taxes                                       9,134            11,295           (2,161 )        (19.1 )          23,407            33,409           (10,002 )        (29.9 )
Interest                                            3,428             5,824           (2,396 )        (41.1 )          12,493            20,175            (7,682 )        (38.1 )

                                                  938,475         1,011,573          (73,098 )         (7.2 )       2,603,458         3,186,752          (583,294 )        (18.3 )

Income (loss) before income taxes               $  58,523       $   (33,716 )      $  92,239          273.6       $   120,877       $   (27,519 )      $  148,396          539.2
. . .