Alltel Sells Financial Services Division for $1 Billion

Alltel Corp. of Little Rock announced Wednesday it has agreed to sell the financial services division of its information services subsidiary to Fidelity National Financial Inc. of Irvine, Calif., for $1.05 billion.

The sum is payable as $775 million cash and $275 million in Fidelity National common stock. Alltel said that the telecom division of its information services subsidiary will not be part of the transaction.

Fidelity National is acquiring Alltel's mortgage servicing operations, retail banking operations, commercial lending and wholesale banking business, and community/regional bank division.

The sale will affect about 5,500 employees, about 1,200 of whom are in Arkansas at Alltel's retail banking operations. The rest are part of the financial services division, including the mortgage servicing operations in Jacksonville, Fla. No job losses are expected.

If the transaction closes on or before March 31, the sale will dilute Alltel's 2003 earnings by about 22 cents per share. First-quarter 2003 results will show the financial services division of the information services business as a discontinued operation.

"The decision to sell the financial services division of Alltel Information Services improves Alltel's financial flexibility and allows our company to focus on expanding the communications business," said Scott Ford, Alltel president and CEO.

"We also believe Fidelity National will provide opportunities for both our information services customers and employees, and we look forward to our continued relationship with Fidelity National as one of their sizable shareholders."

In a conference call on Wednesday, Fidelity said Ford would be elected to its board of directors once the transaction was complete.

Fidelity, based in Irvine, Calif., is the nation's largest provider of title insurance and real estate-related products and services.

Alltel's services include wireless wireline, long-distance, Internet and paging to more than 12 million customers in 26 states.

A Strong 4Q

Also Wednesday, Alltel reported strong fourth-quarter and 2002 results.

For the fourth quarter, Alltel reported total revenues of $2.1 billion, a 13 percent increase from the same time last year. It also reported net income of $262.4 million, a 12 percent increase from the same time last year.

For the fourth quarter, fully diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were 82 cents, an 11 percent increase from a year ago. Fully diluted earnings per share from current businesses were 84 cents, a 12 percent increase from a year ago.

For the year, fully diluted earnings per share under GAAP were $2.96, while fully diluted earnings per share from current businesses were $3.24, a 14 percent increase from 2001.

"This was another solid year for Alltel as our company continued to produce strong financial results while growing our communications business in what was a very challenging year for the industry," Ford said.

For the quarter, wireless revenues were $1.1 billion, a 15 percent increase from the same time last year. Wireline revenues jumped 22 percent from the same time last year to $607.8 million.