SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS



	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Revenues
Investment income	20,000		20,000		15,000
Other income	784		1,252		922
	20,784		21,252		15,922
Expenses
Employee costs	1,388		832		156
Other operating expenses, including $276 each year to affiliates	4,447		6,641		7,617
Depreciation	5		69		162
Interest	3,123		2,726		1,726
	8,963		10,268		9,661

Income before taxes and income (losses) from subsidiaries	11,821		10,984		6,261
Income tax (benefit) expense	(776	)	2,928		—
Income (losses) from subsidiaries	36,062		47,422		(12,465	)
Net income (loss)	48,659		55,478		(6,204	)

Retained earnings at beginning of year	471,788		455,519		479,733
Cash dividends on Common Stock	(28,749	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Cumulative effect adjustment on adoption of new accounting pronouncement	—		631		—
Retained earnings at end of year	491,698		471,788		455,519

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS



	As of December 31,
	2017		2016
	($000 omitted)
Assets
Cash and cash equivalents	11,622		2,890
Receivables:
Notes - due from subsidiaries	26,316		40,879
Receivables from affiliates	930		848
Allowance for uncollectible amounts	(1	)	(4	)
	27,245		41,723
Property and equipment, at cost:
Furniture and equipment	2,733		2,733
Accumulated depreciation	(2,517	)	(2,512	)
	216		221
Title plant, at cost	48		48
Investments in subsidiaries, on an equity-method basis	731,975		688,837
Goodwill	8,470		8,470
Other assets	18,274		16,698
	797,850		758,887
Liabilities
Notes payable	98,875		92,875
Accounts payable and other liabilities	26,764		24,812
	125,639		117,687
Contingent liabilities and commitments	—		—
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072		23,783
Additional paid-in capital	159,954		157,176
Retained earnings ⁽¹⁾	491,698		471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373	)	(16,727	)
Unrealized investment gains	7,526		7,846
Treasury stock – 352,161 common shares, at cost	(2,666	)	(2,666	)
Total stockholders’ equity	672,211		641,200
	797,850		758,887

⁽¹⁾ Includes undistributed earnings of subsidiaries of $529,417 in 2017 and $522,104 in 2016.

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Reconciliation of net income (loss) to cash provided by operating activities:
Net income (loss)	48,659		55,478		(6,204	)
Add (deduct):
Depreciation	5		69		162
(Increase) decrease in receivables – net	(81	)	245		(596	)
(Increase) decrease in other assets – net	(1,576	)	359		(558	)
Increase (decrease) in payables and accrued liabilities – net	563		(496	)	(515	)
(Income) losses from subsidiaries	(36,062	)	(47,421	)	12,465
Other – net	1,705		(6,731	)	(4,593	)
Cash provided by operating activities	13,213		1,503		161
Investing activities:
Dividends from subsidiary	20,000		20,000		15,000
Purchase of property and equipment –net	—		(22	)	—
Collections on notes receivables	23,375		27,500		—
Increases in notes receivables	(16,000	)	—		(21,500	)
Contributions to a subsidiary	(7,184	)	—		—
Cash provided (used) by investing activities	20,191		47,478		(6,500	)
Financing activities:
Proceeds from notes payable	16,000		20,000		45,000
Payments on notes payable	(10,000	)	(25,125	)	(7,000	)
Dividends paid	(28,135	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Repurchases of Common Stock	(727	)	(1,053	)	(27,950	)
Purchase of remaining interest of consolidated subsidiary	(1,810	)	(991	)	(209	)
Other – net	—		86		130
Cash used by financing activities	(24,672	)	(46,923	)	(8,039	)
Increase (decrease) in cash and cash equivalents	8,732		2,058		(14,378	)
Cash and cash equivalents at beginning of year	2,890		832		15,210
Cash and cash equivalents at end of year	11,622		2,890		832
Supplemental information:
Income taxes paid	—		1		1
Interest paid	3,128		2,716		1,681

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTE TO FINANCIAL STATEMENT INFORMATION

The Parent Company operates as a holding company, transacting substantially all of its business through its subsidiaries. Its consolidated financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Investment income. During 2017, 2016 and 2015, Guaranty paid to the Parent Company dividends of $20.0 million, $20.0 million and $15.0 million, respectively.

Stockholders' equity. In 2016, the Parent Company's stockholders approved the Class B Exchange Agreement, in which all outstanding shares of Class B Common Stock were retired in exchange for shares of Common Stock plus $12.0 million in cash. Also at the beginning of 2016, the Parent Company reclassified $0.6 million of unrecognized excess tax benefits related to share-based awards from additional paid-in capital to retained earnings as a result of adopting a new accounting standard. Refer to Note 12 to the consolidated financial statements for details for these equity transactions.

Income taxes. The Parent Company consistently generates losses, exclusive of dividends or equity earnings from its subsidiaries, and is not expected to generate future income without its subsidiaries. On December 22, 2017, the United States (U.S.) enacted the Tax Cuts and Jobs Act (the 2017 Act), which revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21% effective on January 1, 2018. As a result of the 2017 Act, the Parent Company recorded an income tax benefit of $1.2 million related to the remeasurement of its deferred tax assets and liabilities at December 31, 2017.