-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CmcimeFAbpzYnKm4DepTSqxbJCOV7sNuX3waNhXeU9x4IJteTTEapc93XGwQPWna lwn0E2pUWVHnnjvGbau97A== 0000950129-96-000380.txt : 19960320 0000950129-96-000380.hdr.sgml : 19960320 ACCESSION NUMBER: 0000950129-96-000380 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960318 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART INFORMATION SERVICES CORP CENTRAL INDEX KEY: 0000094344 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 741677330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-06151 FILM NUMBER: 96535962 BUSINESS ADDRESS: STREET 1: 2200 W LOOP S STREET 2: STEWART TITLE BLDG CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7138711100 10-K405 1 STEWART INFORMATION SERVICES CORPORATION -12/31/95 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from __________ to __________ Commission file number 1-12688 STEWART INFORMATION SERVICES CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 74-1677330 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1980 POST OAK BLVD., HOUSTON, TEXAS 77056 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 625-8100 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $1 PAR VALUE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of March 1, 1996, 6,139,758 shares of Common Stock, $1 par value, and 525,006 shares of Class B Common Stock, $1 par value, were outstanding. The aggregate market value as of such date of the Common Stock (based upon the closing sales price of the Common Stock as reported by the NYSE on March 8, 1996) of Stewart Information Services Corporation held by nonaffiliates of the Registrant was approximately $125,865,039. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Stewart Information Services Corporation Annual Report to Stockholders for the year ended December 31, 1995 are incorporated by reference in Parts I and II of this document. Portions of the definitive proxy statement (the "Proxy Statement"), relating to the annual meeting of the Registrant's stockholders to be held April 26, 1996, are incorporated by reference in Parts III and IV of this document. ================================================================================ 2 FORM 10-K ANNUAL REPORT YEAR ENDED DECEMBER 31, 1995 TABLE OF CONTENTS PART I
ITEM NO. PAGE --- ---- 1. Business ....................................................................... 1 2. Properties ..................................................................... 3 3. Legal Proceedings .............................................................. 4 4. Submission of Matters to a Vote of Security Holders ............................ 4 PART II 5. Market for Registrant's Common Equity and Related Stockholder Matters .......... 5 6. Selected Financial Data ........................................................ 6 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................................................... 6 8. Financial Statements and Supplementary Data .................................... 6 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................................................................... 6 PART III 10. Directors and Executive Officers of the Registrant ............................. 7 11. Executive Compensation ......................................................... 7 12. Security Ownership of Certain Beneficial Owners and Management ................. 7 13. Certain Relationships and Related Transactions ................................. 7 PART IV 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K .............. 8 Signatures ..................................................................... 10
i 3 P A R T I ITEM 1. BUSINESS Stewart's primary business is title insurance. Stewart issues policies through 3,549 issuing locations on homes and other real property located in all 50 states, the District of Columbia, Canada, Mexico, Belize (reinsurance), the Bahamas, Guam, England and the Commonwealth of the Northern Marianas. Stewart sells computer-related services and information, as well as mapping products and geographic information systems to government and private entities, both domestic and foreign. Examination and closing. The purpose of a title examination is to ascertain the ownership of the property being transferred, what debts are owed on it and what the title policy coverage will be. This involves searching for and examining documents such as deeds, mortgages, wills, divorce decrees, court judgments, liens, paving assessments and tax records. At the closing or "settlement", the seller executes a deed to the new owner. The buyer signs new mortgage documents. Closing funds are then disbursed to the seller, the prior mortgage company, real estate brokers, the title company and others. The documents are then recorded in the public records. A title policy is generally issued to both the lender and new owner. Title policies. Lenders in the USA generally require title insurance as a condition to making a loan on real estate, including securitized lending. This is to assure lenders of the priority of their lien position. The purchasers of the property want the assurance given in their policy against claims that may arise against their ownership. The face amount of the policy is normally the purchase price or the amount of the related loan. Title insurance is substantially different from other types of insurance. Fire, auto, health and life insurance protect against losses and events in the future. In contrast, title insurance seeks to eliminate most risks through the examination and settlement process. Losses. Losses on policies occur because of a title defect not discovered during the examination and settlement process. Other reasons for losses include forgeries, misrepresentations, unrecorded construction liens, the failure to pay off existing liens, mishandling of settlement funds, issuance by agents of unauthorized coverages and other legal issues. Some claimants seek damages in excess of policy limits. Such claims are based on various legal theories usually alleging misrepresentation by an issuing office. Although the Company vigorously defends against spurious claims, it has from time to time incurred a loss in excess of policy limits. Experience shows that most claims against policies and claim payments are made in the first six years after the policy has been issued, although claims may be made many years later. By their nature, claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions and the legal environment existing at the time of settlement of the claims. Factors affecting revenues. Title revenues are closely related to the level of activity in the real estate market and the prices at which real estate sales are made. Real estate sales are directly affected by the availability and cost of money to finance purchases. Other factors include demand by buyers, consumer confidence and family incomes. These factors may override the seasonal nature of the title business. Generally, the third quarter is the most active in terms of real estate sales and the first quarter is the least active. -1- 4 Selected information for the national real estate industry follows (1995 amounts are preliminary):
----------------------------------------------------------------------------------------- 1995 1994 1993 ----------------------------------------------------------------------------------------- Housing starts - millions . . . . . . . . . . . 1.35 1.46 1.29 Housing resales - millions . . . . . . . . . . . 3.81 3.95 3.80 Housing resales - median sales price in $ thousands . . . . . . . . . . . . . . . . . . 112.9 109.8 106.8
Customers. The primary sources of title business are attorneys, builders, developers, lenders and real estate brokers. No one customer was responsible for as much as five percent of Stewart's title revenues in any of the last three years. Titles insured included residential and commercial properties, undeveloped acreage, farms and ranches. Service, location, financial strength, size and related factors affect customer acceptance. Increasing market share is accomplished primarily by providing superior service. The parties to a closing are concerned with personal schedules and the interest and other costs associated with the delays in the settlement. The rates charged to customers are regulated to varying degrees by different states. = Market share. Estimating a title insurer's market share is difficult. Stewart believes it is the leading title insurer in Texas and in a number of cities across the USA. Based on unconsolidated statutory revenues for 1994 (1995 amounts are not available), Stewart Title Guaranty Company ("Guaranty") is the fourth largest title insurer in America. Competitors include (names are abbreviated) Chicago Title, Commonwealth, Fidelity, First American, Lawyers Title and Old Republic. As do most title insurers, Stewart also competes with abstractors, attorneys who issue title opinions and attorney-owned title insurance bar funds. A number of home builders, financial institutions, real estate brokers and others own or control title insurance agents, some of which issue policies underwritten by Guaranty. This "controlled" business also provides competition for Stewart's agents. Offices. The number of locations issuing Stewart policies was 3,549 at December 31, 1995, compared to 3,312 a year earlier and 2,979 two years earlier. Of these totals, 3,302, 3,018 and 2,741 were independent agents at December 31, 1995, 1994 and 1993, respectively. Affiliated offices produced 77% to 80% of consolidated revenues from title premiums and fees during each of the three years ended December 31, 1995. Title revenues by state. The approximate amounts and percentages of Stewart's consolidated title revenues (excluding other revenues) by state for the last three years were:
AMOUNTS ($MILLIONS) PERCENTAGES ----------------------- ---------------------- 1995 1994 1993 1995 1994 1993 ----------------------- ---------------------- Texas . . . . . . . . 62 73 85 25 27 27 California . . . . . 59 68 95 24 25 30 Florida . . . . . . . 21 22 27 9 8 9 Arizona . . . . . . 12 14 14 5 5 5 All others . . . . . 89 95 97 37 35 29 ---- --- ---- ---- ---- ---- 243 272 318 100 100 100 ==== ==== ==== ==== ==== ===
-2- 5 Regulations. Title insurance companies are subject to extensive state regulations covering rates, agent licensing, policy forms, trade practices, reserve requirements, investments and the flow of funds between an insurer and its parent or its subsidiaries and any similar related party transaction. Kickbacks and similar practices are prohibited by certain state and federal laws. Employees. Stewart and its subsidiaries employed approximately 3,757 persons at December 31, 1995. ITEM 2. PROPERTIES The Registrant and its wholly-owned subsidiary, Stewart Title Guaranty Company and its subsidiaries ("Guaranty"), own or lease the following principal properties: The following table sets forth information about the Registrant's principal properties:
Location Type Use Size Acquired In - ----------------------- ----------------------- ----------------------- --------------- ----------- Houston, Texas Leased office building Executive office of the 161,260 sq. ft. (1) Registrant and Guaranty Dallas, Texas Leased office building Office of Guaranty 25,117 sq. ft (2) Austin, Texas Leased office building Office of Guaranty 15,805 sq. ft. (3) Los Angeles, California Leased office building Office of Guaranty 22,466 sq. ft. (4) San Diego, California Leased office building Office of Guaranty 20,020 sq. ft. (5) Riverside, California Leased office building Office of Guaranty 20,968 sq. ft. (4) San Antonio, Texas Owned office building Office of Guaranty 26,769 sq. ft. 1980 & 1982 Galveston, Texas Owned office building Office of Guaranty 50,000 sq. ft. 1905 Phoenix, Arizona Owned office building Office of Guaranty 24,459 sq. ft. 1981 Tucson, Arizona Owned office building Office of Guaranty 24,000 sq. ft. 1974
(1) This lease terminates in 2004. (2) This lease terminates in 1999. (3) This lease terminates in 1996. (4) These leases terminate in 1998. (5) This lease terminates in 2000. The Registrant leases offices at approximately 301 locations. The average term for all such leases is approximately six years. The leases expire from 1996 to 2005. The Registrant believes it will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable property. The aggregate annual rental expense under all leases was approximately $17,284,000. All buildings and equipment owned or leased by the Registrant are considered by the Registrant to be well maintained, adequately insured and generally sufficient for the Registrant's purposes. Substantially all of the Registrant's owned real property above is subject to mortgages. -3- 6 ITEM 3. LEGAL PROCEEDINGS Guaranty and 10 other title insurers are defendants in a consolidated class action proceeding originating from complaints first filed in April 1990. The suit is currently pending in the United States District Court for the District of Arizona. The plaintiffs allege that the defendants violated federal antitrust law by participating in title insurance rating bureaus in Arizona and Wisconsin in the early 1980s through which they allegedly agreed upon the prices and other terms and conditions of sale for title search and examination services. The plaintiffs request treble damages in an unspecified amount, costs and attorneys' fees. The parties have negotiated and proposed to the court a settlement pursuant to which members of the class would receive cash (not to exceed approximately $4.1 million from all defendants) and additional coverage under, and discounts on, title insurance policies. In addition, the defendants and counsel for certain plaintiffs have proposed to the Court that it award such counsel the negotiated sum of $1.3 million in fees and expenses. Following hearings on these matters, the Court has certified the proceeding as a class action and taken the remaining issues under advisement. The Registrant is a party to routine lawsuits incidental to its business most of which involve disputed policy claims. In many of these suits, the plaintiff seeks exemplary or treble damages in excess of policy limits based on the alleged malfeasance of an issuing agent of the Registrant. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. -4- 7 P A R T II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Common Stock began trading on the New York Stock Exchange ("NYSE") on January 5, 1994 under the symbol "STC". The following table sets forth the high and low sales prices of the Common Stock for each fiscal period indicated, as reported by NYSE, and the amount of cash dividends paid per share.
HIGH LOW DIVIDENDS ---- --- --------- 1995: First quarter . . . . . . . . . . . . . . . . 17.63 15.13 .05 Second quarter . . . . . . . . . . . . . . . 20.00 17.13 .05 Third quarter . . . . . . . . . . . . . . . . 20.25 18.63 .05 Fourth quarter . . . . . . . . . . . . . . . . 22.50 18.63 .06 1994: First quarter . . . . . . . . . . . . . . . . 21.42 18.92 .05 Second quarter . . . . . . . . . . . . . . . 20.25 17.38 .05 Third quarter . . . . . . . . . . . . . . . . 18.63 15.38 .05 Fourth quarter . . . . . . . . . . . . . . . . 17.75 14.38 .05
The Company has paid regular quarterly cash dividends on its Common Stock since 1972. The Company's Certificate of Incorporation provides that no cash dividends may be paid on the Class B Common Stock. While it is the current intention of the Board of Directors to continue to pay quarterly cash dividends on its Common Stock, the payment of future dividends necessarily will depend on the earnings and financial needs of the Company, as well as applicable legal restrictions. -5- 8 ITEM 6. SELECTED FINANCIAL DATA Selected financial data have been included on Page 18 of the Registrant's Annual Report to Stockholders for the year ended December 31, 1995, and such information is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this Item is set forth on Pages 18 through 21 of the Registrant's Annual Report to Stockholders for the year ended December 31, 1995, and such information is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
1995 Annual Report to Stockholders Page No. ------- Independent Auditors' Report . . . . . . . . . . . . . . . . . 21 Consolidated Statements of Earnings and Retained Earnings for the Years Ended December 31, 1995, 1994 and 1993 . . . . . . . . . . 22 Consolidated Balance Sheets as of December 31, 1995 and 1994 . . 23 Consolidated Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . 24 Notes to Consolidated Financial Statements . . . . . . . . . . . 25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. -6- 9 P A R T III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this Item is set forth in the Registrant's Proxy Statement relating to the annual meeting of the Registrant's stockholders to be held April 26, 1996, under the captions "Election of Directors" and "Executive Compensation", and such information is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is set forth in the Registrant's Proxy Statement relating to the annual meeting of the Registrant's stockholders to be held April 26, 1996, under the caption "Executive Compensation", and such information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this Item is set forth in the Registrant's Proxy Statement relating to the annual meeting of the Registrant's stockholders to be held April 26, 1996, under the caption "Security Ownership of Certain Beneficial Owners and Management", and such information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this Item is set forth in the Registrant's Proxy Statement relating to the annual meeting of the Registrant's stockholders to be held April 26, 1996, under the caption "Executive Compensation", and such information is incorporated herein by reference. -7- 10 P A R T IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. and 2. Financial Statements and Financial Statement Schedules Item 8 of this Report on Form 10-K lists certain consolidated financial statements of the Registrant and its subsidiaries incorporated by reference to the Annual Report to Stockholders for the year ended December 31, 1995, which includes a reference to appropriate page numbers in such Annual Report.
Form 10-K Page No. -------- Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Reports of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Schedule II - Financial information of the Registrant (Parent Company) . . . . . . 37 - Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . 41 Schedule V - Valuation and qualifying accounts . . . . . . . . . . . . . . . . . . 42
All other schedules are omitted, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. (b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended December 31, 1995. (c) Exhibits 3.1 - Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987) 3.2 - By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991) 4 - Rights of Common and Class B Common Stockholders (incorporated by reference to Exhibits 3.1 and 3.2 hereto) 10.1 - Summary of agreements as to payment of bonuses to certain executive officers 10.2 - Deferred Compensation Agreements dated March 10, 1986 between the Registrant and certain executive officers (incorporated by reference to Exhibit 10.2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987)
-8- 11 13. - Annual Report to Stockholders for 1995 (the financial text of the annual report incorporated herein by reference in Item 6 of Part II of this report) 21. - Subsidiaries of the Registrant 23. - Consents of Independent Certified Public Accountants, including consents to incorporation by reference of their reports into previously filed Securities Act registration statements 27. - Financial Data Schedule
-9- 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. STEWART INFORMATION SERVICES CORPORATION (Registrant) By: Carloss Morris ---------------------------------------------------------- Carloss Morris, Co-Chief Executive Officer and Chairman of the Board of Directors By: Stewart Morris ---------------------------------------------------------- Stewart Morris, Co-Chief Executive Officer, President and Director By: Max Crisp ---------------------------------------------------------- Max Crisp, Vice President-Finance, Secretary, Treasurer, Director and Principal Financial and Accounting Officer
Dated: March 18, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Max Crisp Director March 18, 1996 - ------------------------------- (Max Crisp) E. Douglas Hodo Director March 18, 1996 - ------------------------------- (E. Douglas Hodo) C. M. Hudspeth Director March 18, 1996 - ------------------------------- (C. M. Hudspeth) Carloss Morris Director March 18, 1996 - ------------------------------- (Carloss Morris) Stewart Morris Director March 18, 1996 - ------------------------------- (Stewart Morris)
-10- 13 Independent Auditors' Report To the Board of Directors and Stockholders of Stewart Information Services Corporation: Under date of February 7, 1996, we reported on the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended December 31, 1995, as contained in the 1995 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1995. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ KPMG PEAT MARWICK LLP Houston, Texas February 7, 1996 -11- 14 REPORT OF INDEPENDENT ACCOUNTANT Stewart Title Company El Paso, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at 500 N. Mesa, Suite 300, El Paso, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company, El Paso, Texas, as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. /s/ M. TIMOTHY O'ROARK M. TIMOTHY O'ROARK, C.P.A. El Paso, Texas March 14, 1996 12 15 REPORT OF INDEPENDENT AUDITORS The Board of Directors Stewart Title We have audited the balance sheet of Stewart Title as of December 31, 1994, and the related statements of operations and retained earnings, and cash flows for each of the two years in the period ended December 31, 1994 (not presented separately herein). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to able present fairly, in all material respects, the financial position of Stewart Title at December 31, 1994, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Century City Los Angeles, California January 20, 1995 13 16 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Stewart Title & Trust of Phoenix, Inc. In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income and retained earnings and of cash flows as of and for each of the two years in the period ended December 31, 1994 present fairly, in all material respects, the financial position, results of operations and cash flows of Stewart Title & Trust of Phoenix, Inc. and its subsidiary and affiliate as of and for each of the two years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. We have not audited the consolidated financial statements of Stewart Title & Trust of Phoenix, Inc. and its subsidiary and affiliate for any period subsequent to December 31, 1994. /s/ PRICE WATERHOUSE LLP Price Waterhouse LLP Phoenix, Arizona January 20, 1995 14 17 To the Board of Directors Stewart Title of California San Jose, California INDEPENDENT AUDITOR'S REPORT We have audited the accompanying balance sheet of Stewart Title of California at December 31, 1995 and 1994 and the related statements of income, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stewart Title of California as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ GRANT BENNETT ACCOUNTANTS GRANT BENNETT ACCOUNTANTS A PROFESSIONAL CORPORATION Certified Public Accountants January 23, 1996 -15- 18 To the Board of Directors Stewart Title of Monterey County Monterey, California INDEPENDENT AUDITOR'S REPORT We have audited the accompanying balance sheet of Stewart Title of Monterey County as of December 31, 1995 and 1994 and the related statements of income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stewart Title of Monterey County as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ GRANT BENNETT ACCOUNTANTS GRANT BENNETT ACCOUNTANTS A PROFESSIONAL CORPORATION Certified Public Accountants January 5, 1996 -16- 19 To the Board of Directors Stewart Title of Modesto Modesto, California INDEPENDENT AUDITOR'S REPORT We have audited the accompanying balance sheets of Stewart Title of Modesto at December 31, 1995 and 1994 and the related statements of income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stewart Title of Modesto as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ GRANT BENNETT ACCOUNTANTS GRANT BENNETT ACCOUNTANTS A PROFESSIONAL CORPORATION Certified Public Accountants January 5, 1996 -17- 20 To the Board of Directors Stewart Title of Fresno County Fresno, California INDEPENDENT AUDITOR'S REPORT We have audited the accompanying balance sheet of Stewart Title of Fresno County at December 31, 1995 and 1994 and the related statements of income, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stewart Title of Fresno County as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ GRANT BENNETT ACCOUNTANTS GRANT BENNETT ACCOUNTANTS A PROFESSIONAL CORPORATION Certified Public Accountants January 4, 1996 -18- 21 EXHIBIT A INDEPENDENT AUDITORS' REPORT The Board of Directors Stewart Title Dallas, Inc. dba: Stewart Title North Texas, Inc. We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995, prepared from the accounts maintained at your office at 5728 LBJ Freeway, Dallas, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Dallas, Inc. dba: Stewart Title North Texas, Inc. as of December 31, 1995 in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and are not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. /s/ WILKERSON & ARTHUR, P.C. Wilkerson & Arthur, P.C. January 19, 1996 -19- 22 EXHIBIT A INDEPENDENT AUDITORS' REPORT The Board of Directors Priority Title Company of Dallas, L.L.C. We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995, prepared from the accounts maintained at your office at 5728 LBJ Freeway, Dallas, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Priority Title Company of Dallas, L.L.C. as of December 31, 1995 in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and are not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. /s/ WILKERSON & ARTHUR, P.C. Wilkerson & Arthur, P.C. January 19, 1996 -20- 23 REPORT OF INDEPENDENT ACCOUNTANTS To: Stewart Title Austin, Inc. Austin, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts of Stewart Title Austin, Inc. as of December 31, 1995, prepared from the accounts maintained at your office at Austin, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Austin, Inc., as of December 31, 1995, in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report is presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities taken as a whole. January 10, 1996 /s/ AARONSON, WHITE & COMPANY Aaronson, White & Company 16010 Barker's Point Lane Suite 175 Houston, Texas 77079 -21- 24 REPORT OF INDEPENDENT ACCOUNTANTS To: Stewart Title Company - Galveston Galveston, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts of Stewart Title Company - Galveston as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at Galveston, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company - Galveston, as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities taken as a whole. January 15, 1996 /s/ AARONSON, WHITE & COMPANY Aaronson, White & Company 16010 Barker's Point Lane Suite 175 Houston, Texas 77079 -22- 25 REPORT OF INDEPENDENT ACCOUNTANTS To: Stewart Title of Montgomery County, Inc. The Woodlands, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts of Stewart Title of Montgomery County, Inc. as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at The Woodlands, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title of Montgomery County, Inc., as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities taken as a whole. January 16, 1996 /s/ AARONSON, WHITE & COMPANY Aaronson, White & Company 16010 Barker's Point Lane Suite 175 Houston, Texas 77079 -23- 26 REPORT OF INDEPENDENT ACCOUNTANTS To: Stewart Title Company - Fort Bend Sugarland, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts of Stewart Title Company - Fort Bend as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at Sugarland, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company - Fort Bend, as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report is presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities taken as a whole. January 18, 1996 /s/ AARONSON, WHITE & COMPANY Aaronson, White & Company 16010 Barker's Point Lane Suite 175 Houston, Texas 77079 -24- 27 INDEPENDENT AUDITORS' REPORT The Board of Directors Stewart Title Guaranty Company I have audited the Statement of assets and liabilities of trust (escrow) fund accounts as of December 31, 1995, and 1994, prepared from the accounts maintained at your office in Houston, Texas. This financial statement is the responsibility of the Company's management. My responsibility is to express an opinion on this financial statement based on my audit. I conducted the audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the statement of assets and liabilities of trust (escrow) fund accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Guaranty Company as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. My audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplementary information included in Exhibits C through F, inclusive and Exhibit H, of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the auditing procedures applied in the audit of the basic statement of assets and liabilities and, and in my opinion, is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. January 16, 1996 /s/ GINNY SANDERS MAY, CPA -25- 28 INDEPENDENT AUDITORS' REPORT The Board of Directors Stewart Title - Houston Division I have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995, and 1994, prepared from the accounts maintained in your office at 1980 Post Oak Boulevard, Houston, Texas. This financial statement is the responsibility of the company's management. My responsibility is to express an opinion on this financial statement based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by the Houston Division of Stewart Title as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. My audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. January 16, 1996 /s/ GINNY SANDERS MAY, CPA -26- 29 INDEPENDENT AUDITORS' REPORT Managers Priority Title Company of Houston, L.L.C. I have audited the Statement of Assets and Liabilities of Trust (Escrow) Accounts as of December 31, 1995, and 1994, prepared from the accounts maintained in your office at 1980 Post Oak Boulevard, Houston, Texas. This financial statement is the responsibility of the company's management. My responsibility is to express an opinion on this financial statement based on my audit. I conducted the audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Priority Title Company of Houston, L.L.C. as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. My audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. January 19, 1996 /s/ GINNY SANDERS MAY, CPA -27- 30 EXHIBIT A INDEPENDENT AUDITORS' REPORT Board of Directors Stewart Title Company--Beaumont Division Beaumont, Texas 77706 We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995 prepared from the accounts maintained at your office at 2390 N. Dowlen Road, Beaumont, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company--Beaumont Division as of December 31, 1995, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities, taken as a whole. Very truly yours, /s/ EDGAR, KIKER & CROSS, L.L.P. EDGAR, KIKER & CROSS, L.L.P. Certified Public Accountants RTE/lg -28- 31 INDEPENDENT AUDITOR'S REPORT Board of Directors Stewart Title Company Houston, Texas I have examined the statement of assets and liabilities of trust (escrow) fund accounts as of December 31, 1995 and 1994, prepared from the accounts maintained at your office in San Antonio, Texas. My examination, which was limited to such accounts, was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as I considered necessary in the circumstances. In my opinion, the aforementioned statements of assets and liabilities of trust (escrow) fund accounts (not separately presented herein) present fairly the assets and liabilities of such accounts handled by the San Antonio Division of Stewart Title Company, as of December 31, 1995 and 1994, in accordance with generally accepted accounting principles, applied on a consistent basis. /s/ JIM S. WALKER ---------------------------------------- Jim S. Walker Certified Public Accountant Beaumont, Texas January 96, 1996 -29- 32 INDEPENDENT AUDITORS' REPORT Board of Directors Stewart Title Company Amarillo, Texas District Office We have audited the accompanying Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995, prepared from the accounts maintained at your office at Amarillo, Texas. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit of the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts provides a reasonable basis for our opinion. In our opinion, the accompanying Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company, for the year then ended in conformity with generally accepted accounting principles. Our audit has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the audit of the basic Statement of Assets and Liabilities, and is fairly stated in all material respects in relation to the basic Statement of Assets and Liabilities, taken as a whole. /s/ DOSHIER, PICKENS & FRANCIS, P.C. DOSHIER, PICKENS & FRANCIS, P.C. January 12, 1996 -30- 33 REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors Stewart Title Company Corpus Christi, Texas We have audited the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at Corpus Christi, Texas. These financial statements is the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statements of Assets and Liabilities of Trust [Escrow] Fund Accounts referred to above present fairly, in all material respects, the assets and liabilities of such accounts managed by Stewart Title Company, Corpus Christi Branch, as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audits have been made a conducted for the purpose of forming an opinion of the basic financial statements taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of these reports is presented as additional information and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the examinations of the basic statements of assets and liabilities, and is fairly stated in all material respects in relation to the basic statements of assets and liabilities, taken as a whole. /s/ FANCHER AND COMPANY FANCHER AND COMPANY January 24, 1996 -31- 34 REPORT OF INDEPENDENT ACCOUNTANT Board of Directors Stewart Title of Lubbock, Inc. 7802 Indiana Avenue Lubbock, TX 79423 I have audited the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995, and 1994, prepared from the accounts maintained at your office 7802 Indiana Avenue, Lubbock, Texas. These financial statements is the responsibility of the company's management. My responsibility is to express an opinion on this financial statement based on my audit. I conducted the audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinions. In my opinion, the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title of Lubbock, Inc. as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. My audits has been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive and Exhibit H of these reports are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities and, and in may opinion, is fairly stated in all material respects in relation to the basic statements of assets and liabilities, taken as a whole. /s/ JESUS YEPEZ Jesus Yepez Certified Public Account Lubbock, Texas -32- 35 REPORT OF INDEPENDENT ACCOUNTANT Board of Directors Stewart Title Guaranty Company Houston, Texas We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts of Stewart Title Company - Fort Bend as of December 31, 1995 and 1994, prepared from the accounts maintained at your office at 218 Main Street, Texarkana, Texas. These financial statements is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company - Fort Bend, as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audits have been made for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic statement of assets and liabilities taken as a whole. /s/ WILLIAMS & PEARCY, P.C. Williams & Pearcy, P.C. January 10, 1996 -33- 36 INDEPENDENT AUDITOR'S REPORT Stewart Title Company of Rockport, Inc. Rockport, Texas 78382 We have audited the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995 and 1994 prepared from the accounts maintained at your office at Rockport, Texas. The financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company of Rockport, Inc. as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audits have been made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information contained in Exhibits C through H, inclusive, of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statements of assets and liabilities, and is fairly stated in all material respects in relation to the basic statements of assets and liabilities, taken as a whole. /s/ FLUSCHE, VAN BEVEREN, KILGORE, P.C. Flusche, Van Beveren, Kilgore, P.C. Certified Public Accountants January 23, 1996 Corpus Christi, Texas -34- 37 INDEPENDENT AUDITOR'S REPORT Stewart Title Company of San Patricio County, Inc. Rockport, Texas 78382 We have audited the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1995 and 1994 prepared from the accounts maintained at your office at Portland, Texas. The financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statements of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above presents fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Company of San Patricio County, Inc. as of December 31, 1995 and 1994, in conformity with generally accepted accounting principles. Our audits have been made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information contained in Exhibits C through H, inclusive, of this report are presented as additional information and is not a required part of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statements of assets and liabilities, and is fairly stated in all material respects in relation to the basic statements of assets and liabilities, taken as a whole. /s/ FLUSCHE, VAN BEVEREN, KILGORE, P.C. Flusche, Van Beveren, Kilgore, P.C. Certified Public Accountants January 23, 1996 Corpus Christi, Texas -35- 38 INDEPENDENT AUDITORS' REPORT The Board of Directors Stewart Title Dallas, Inc. d/b/a Stewart Title North Texas, Inc. We have audited the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts as of December 31, 1994, prepared from the accounts maintained at your office at 5728 LBJ Freeway, Dallas, Texas. This financial statement is the responsibility of the company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Assets and Liabilities of Trust (Escrow) Fund Accounts referred to above present fairly, in all material respects, the assets and liabilities of such accounts handled by Stewart Title Dallas, Inc. as of December 31, 1994, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statement taken as a whole. The supplemental information contained in Exhibits C through F, inclusive, and Exhibit H of this report are presented as additional information and are not required parts of the basic financial statement. Such information has been subjected to the audit procedures applied in the examination of the basic statement of assets and liabilities, and is fairly stated in all material respects in relation to the basic Statement of Assets and Liabilities of Trust (Escrow) Fund accounts. /s/ [ILLEGIBLE] January 20, 1995 -36- 39 SCHEDULE II STEWART INFORMATION SERVICES CORPORATION (PARENT COMPANY) INCOME AND RETAINED EARNINGS INFORMATION
Year Ended December 31, ----------------------- 1995 1994 1993 -------- -------- -------- (In thousands) Revenues Investment income . . . . . . . . . . . . . . . . . . . . $ 224 $ 201 $ 131 Other income . . . . . . . . . . . . . . . . . . . . . . . 12 28 22 --------- -------- -------- 236 229 153 Expenses Employee costs . . . . . . . . . . . . . . . . . . . . . . 211 288 533 Other operating expenses . . . . . . . . . . . . . . . . . 1,634 1,211 855 Depreciation and amortization . . . . . . . . . . . . . . . 101 21 29 --------- -------- -------- 1,946 1,520 1,417 Loss before taxes and equity in earnings of investees . . . (1,710) (1,291) (1,264) Income taxes (benefit) . . . . . . . . . . . . . . . . . . . (592) (444) (549) Equity in earnings of investees . . . . . . . . . . . . . . 8,125 10,525 24,374 --------- -------- -------- Net income . . . . . . . . . . . . . . . . . . . . . . . . . 7,007 9,678 23,659 Retained earnings at beginning of year . . . . . . . . . . . 112,754 106,262 83,575 Cash dividends on Common Stock ($.21, $.20 and $.17 per share) . . . . . . . . . . . . . . . . . . . . . . . . . (1,214) (1,118) (972) Stock dividend . . . . . . . . . . . . . . . . . . . . . . . - (2,068) - --------- -------- -------- Retained earnings at end of year . . . . . . . . . . . . . . $ 118,547 $112,754 $106,262 ========= ======== ========
See accompanying note to financial statements. (Schedule continued on following page.) -37- 40 SCHEDULE II (CONTINUED) STEWART INFORMATION SERVICES CORPORATION (PARENT COMPANY) BALANCE SHEET INFORMATION
December 31, ------------ 1995 1994 ---- ---- (In thousands) Assets Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54 $ 184 --------- --------- Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,373 4,520 --------- --------- Receivables: Notes, including $7,057 and $6,868 from affiliates . . . . . . . . . . . . . . 7,251 7,018 Other, including $5,000 and $1,260 from affiliates . . . . . . . . . . . . . . 6,873 5,611 Less allowance for uncollectible amounts . . . . . . . . . . . . . . . . . . . - (8) 14,124 12,621 Furniture and equipment at cost . . . . . . . . . . . . . . . . . . . . . . . . 167 166 Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . (67) (46) --------- --------- 100 120 Title plants, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 48 Investments in investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,408 141,806 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,241 2,256 --------- --------- $ 177,348 $ 161,555 ========= ========== Liabilities Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . $2,496 $5,202 Contingent liabilities and commitments Stockholders' equity Common - $1 par, authorized 15,000,000, issued and outstanding 5,864,758 and 5,686,706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865 5,687 Class B Common - $1 par, authorized 1,500,000, issued and outstanding 525,006 . . 525 525 Additional paid-in-capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,945 42,750 Net unrealized investment gains (losses), net of deferred taxes . . . . . . . 3,970 (5,363) Retained earnings (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,547 112,754 --------- --------- Total stockholders' equity ($27.36 and $25.17 per share) . . . . . . . . . . . . 174,852 156,353 --------- --------- $ 177,348 $ 161,555 ========= ==========
(1) Includes undistributed earnings of subsidiaries of $126,480 in 1995 and $124,005 in 1994. See accompanying note to financial statements. (Schedule continued on following page.) -38- 41 SCHEDULE II (CONTINUED) STEWART INFORMATION SERVICES CORPORATION (PARENT COMPANY) CASH FLOWS INFORMATION
Year Ended December 31, ----------------------- 1995 1994 1993 -------- -------- -------- (In thousands) Cash flow from operating activities (Note) . . . . . . . . . $ 1,169 $ (281) $ 2,167 Cash flow from investing activities: Purchases of furniture and equipment and title plants - net . . . . . . . . . . . . . . . . . . . . . . . . . - (56) (23) Proceeds from investments sold . . . . . . . . . . . . . 7,011 4,076 772 Purchases of investments, excluding mortgage loans . . . (6,865) (4,901) (1,661) Increases in mortgages and other notes receivable . . . . (262) - (70) Collections on mortgages and other notes receivable . . . . 31 698 617 -------- ------- ------- Cash used by investing activities . . . . . . . . . . . . . . (85) (183) (365) -------- ------- ------- Cash flow from financing activities: Dividends paid . . . . . . . . . . . . . . . . . . . . . . (1,214) (1,118) (972) Proceeds from issuance of stock . . . . . . . . . . . . . - 837 23 -------- ------- ------- Cash used by financing activities . . . . . . . . . . . . . . (1,214) (281) (949) -------- ------- ------- (Decrease) increase in cash and cash equivalents . . . . . . $ (130) $ (745) $ 853 ======== ======= ======= Note: Reconciliation of net income to the above amounts: Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 7,007 $ 9,678 $23,659 Add (deduct): Depreciation and amortization . . . . . . . . . . . . . 101 21 29 Provision for uncollectible amounts - net . . . . . . . 64 - (200) (Increase) decrease in accounts receivable - net . . . (1,326) (378) 284 (Decrease) increase in accounts payable and accrued liabilities - net . . . . . . . . . . . . . . . . . . (2,668) 195 1,126 Equity in net earnings of investees . . . . . . . . . . (8,125) (10,525) (24,374) Dividends received from unconsolidated subsidiaries . . 5,650 1,340 890 Stock bonuses . . . . . . . . . . . . . . . . . . . . . - 61 729 Other - net . . . . . . . . . . . . . . . . . . . . . . 466 (673) 24 -------- ------- ------- Cash provided (used) by operating activities . . . . . . . . $ 1,169 $ (281) $ 2,167 ======== ======= ======= Supplemental information: Income taxes paid . . . . . . . . . . . . . . . . . . . . - - - Interest paid . . . . . . . . . . . . . . . . . . . . . . - - -
See accompanying note to financial statements. (Schedule continued on following page.) -39- 42 SCHEDULE II (continued) STEWART INFORMATION SERVICES CORPORATION (PARENT COMPANY) NOTE TO FINANCIAL STATEMENT INFORMATION The Registrant operates as a holding company transacting substantially all business through its subsidiaries. The consolidated financial statements for the Registrant and its subsidiaries 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. Total dividends received from unconsolidated subsidiaries for 1995, 1994 and 1993 were $9,390,000, $2,600,000 and $890,000, respectively. -40- 43 SCHEDULE II (CONTINUED) STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES SHORT-TERM BORROWINGS THREE YEARS ENDED DECEMBER 31, 1995
========================================================================================================== Col. A Col. B Col. C Col. D Col. E Col. F ========================================================================================================== Maximum Average Weighted Weighted amount amount average Balance average outstanding outstanding interest rate Category of aggregate at end interest during the during the during the short-term borrowings (1) of period rate period period (2) period (3) ========================================================================================================== December 31, 1993: Banks . . . . . . . . . . . . $ 1,900,066 5.92% $ 1,900,066 $ 1,398,131 6.03% ============ ===== ============ ============ ===== December 31, 1994: Banks . . . . . . . . . . . . $ 4,456,107 8.58% $ 4,456,107 $ 2,739,508 7.38% ============ ===== ============ ============ ===== December 31, 1995: Banks . . . . . . . . . . . . $ 3,380,430 8.61% $ 5,055,807 $ 4,487,714 8.82% ============ ===== ============ ============ =====
- ----------------- (1) Bank borrowings represent short-term notes due within one year of the loan's origination. (2) Computed by summing each month-end balance and dividing the total by twelve. (3) Computed by dividing total yearly interest expense by the average of the month-end principal balances. -41- 44 SCHEDULE V STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS DECEMBER 31, 1995
==================================================================================================================== Col. A Col. B Col. C Col. D Col. E Additions ==================================================================================================================== Balance Charged Charged to at to other Balance beginning cost and accounts -Deductions- at end Description of period expenses describe described of period ==================================================================================================================== Stewart Information Services Corporation and subsidiaries: Year ended December 31, 1993: Estimated title losses . . . . . $ 87,575,367 $58,573,916 - $28,563,724(A) $117,585,559 Allowance for uncollectible amounts . . . . . . . . . . . . . 4,689,425 3,784,675 - 3,205,681(B) 5,268,419 Year ended December 31, 1994: Estimated title losses . . . . . 117,585,559 40,211,895 - 23,481,018(A) 134,316,436 Allowance for uncollectible amounts . . . . . . . . . . . . 5,268,419 2,233,675 - 1,379,045(B) 6,123,049 Year ended December 31, 1995: Estimated title losses . . . . . 134,316,436 29,590,891 - 25,594,793(A) 138,312,534 Allowance for uncollectible amounts.. . . . . . . . . . . . . 6,123,049 1,333,744 - 957,846(B) 6,498,947 Stewart Information Services Corporation - Parent: Year ended December 31, 1993: Allowance for uncollectible amounts $ 208,198 $ (200,000)(C) - - $ 8,198 Year ended December 31, 1994: Allowance for uncollectible amounts 8,198 - - - 8,198 Year ended December 31, 1995: Allowance for uncollectible amounts 8,198 64,382 - 72,580(D) -
(A) Represents payments of policy losses and loss adjustment expenses during the year, less salvage collections. (B) Represents uncollectible accounts written off. (C) Represents recoveries on accounts previously reserved. (D) Represents an adjustment to accounts receivable previously reserved and current year write-off of uncollected accounts. -42- 45 INDEX TO EXHIBITS
Sequentially Numbered Exhibit Page - ------- ---- 3.1 - Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987) 3.2 - By-laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991) 4 - Rights of Common and Class B Common Stockholders (incorporated by reference to Exhibits 3.1 and 3.2 hereto) 10.1 - Summary of agreements as to payment of bonuses to certain executive officers 10.2 - Deferred Compensation Agreements dated March 10, 1986 between the Registrant and certain executive officers (incorporated by reference to Exhibit 10.2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987) 13. - Annual Report to Stockholders for 1995 (the financial text of the annual report incorporated herein by reference in Item 6 of Part II of this report) 21. - Subsidiaries of the Registrant 23. - Consents of Independent Certified Public Accountants, including consents to incorporation by reference of their reports to previously filed Securities Act registration statements 27. - Financial Data Schedule
EX-10.1 2 SUMMARY OF AGREEMENTS AS TO PAYMENT OF BONUSES 1 EXHIBIT 10.1 STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES MATERIAL CONTRACTS DECEMBER 31, 1995 For 1996, Executive Compensation from all Stewart Companies, including base salaries and any bonus payments, for any officer listed within unless otherwise noted in the body of this report, shall not exceed $290,000. STEWART MORRIS, JR., as Chairman of the Board, shall receive in addition to his salary, 1% of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its shareholders. For the calendar year 1995, Mr. Morris received $117,790 in bonus compensation. Total compensation shall exclude payments made by the company for insurance premiums, board fees or stock options granted. MALCOLM S. MORRIS, as President and Chief Executive Officer, shall receive in addition to his salary, 1% of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its shareholders. For the calendar year 1995, Mr. Morris received $117,790 in bonus compensation. Total compensation shall exclude payments made by the company for insurance premiums, board fees or stock options granted. CARLOSS MORRIS, as Chairman of the Executive Committee, shall receive in addition to his salary, 3% of the consolidated net income of Stewart Title Guaranty Company as reported to its shareholders. For the calendar year 1995, Mr. Morris received $160,000 in bonus compensation. Total compensation shall exclude any insurance premiums, board fees or stock options granted. STEWART MORRIS, as Vice Chairman of the Executive Committee, shall receive in addition to his salary, 3% of the consolidated net income of Stewart Title Guaranty Company as reported to its shareholders. For the calendar year 1995, Mr. Morris received $160,000 in bonus compensation. Total compensation shall exclude any insurance premiums, board fees or stock options granted. EX-13 3 ANNUAL REPORT 1 EXHIBIT 13 SELECTED FINANCIAL DATA (Ten year summary)
- -------------------------------------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - -------------------------------------------------------------------------------------------------------------- In millions of dollars: Total revenues . . . . . . . . . 282.5 302.2 348.6 290.0 217.1 210.5 188.5 176.9 183.2 178.5 Title premiums, fees and other revenues . . . . . . . . 266.7 289.3 334.2 275.6 202.3 197.9 173.8 165.1 173.5 167.8 Total operating expenses (1) . . 269.6 287.0 308.8 266.9 214.7 208.1 187.3 171.2 177.0 165.1 Title losses, included above . . 29.6 40.2 58.6 54.1 40.7 38.2 33.0 25.6 25.9 25.0 Investment gains (losses), after taxes . . . . . . . . . . 0.6 (0.5) 0.3 0.1 1.4 -- 1.0 0.1 (0.2) -- Net earnings (2) . . . . . . . . 7.0 9.7 23.7 14.6 1.7 0.2 0.1 3.7 11.7 7.8 Cash from operating activities . 20.6 27.7 54.3 36.3 18.6 11.0 10.2 8.9 10.8 28.0 Total assets . . . . . . . . . . 351.4 325.2 313.9 251.9 219.1 201.3 197.8 193.9 182.4 178.5 Long-term debt . . . . . . . . . 7.3 2.5 3.0 4.2 6.8 6.6 5.3 7.3 5.0 5.5 Stockholders' equity (3) . . . . 174.9 156.4 156.2 128.6 114.8 113.9 115.0 116.8 115.2 106.8 Ratios (%): Net earnings/total revenues . . 2.5 3.2 6.8 5.0 0.8 0.1 0.1 2.1 6.4 4.4 Title losses/title premiums, etc. 11.1 13.9 17.5 19.6 20.1 19.3 19.0 15.5 14.9 14.9 Per share data:(4) Average shares (in thousands) . . 6,292 6,198 6,119 6,096 6,096 6,096 6,096 6,071 6,047 5,625 Net earnings (2) . . . . . . . . 1.11 1.56 3.87 2.40 0.27 0.03 0.01 0.61 1.93 1.39 Cash dividends . . . . . . . . . 0.21 0.20 0.17 0.15 0.13 0.23 0.33 0.51 0.51 0.49 Stockholders' equity (3) . . . . 27.36 25.17 25.37 21.10 18.84 18.69 18.87 19.17 19.05 17.67 Market price - High . . . . . . . . . . . . . 22.50 21.42 20.33 14.50 9.67 12.33 14.00 12.00 17.17 19.33 Low . . . . . . . . . . . . . . 15.13 14.38 12.50 8.67 5.17 4.50 11.17 9.17 7.17 12.33 Year-end . . . . . . . . . . . 21.50 15.38 20.00 13.67 9.17 5.25 11.33 11.92 9.17 13.17
(1) Excludes interest expense and minority interests. (2) Includes the following items, after providing for taxes: 1992 - a reserve established for title losses over ten years old of $2.2 million, or $.36 per share. 1991 - a fresh start tax credit of $1.3 million, or $.21 per share. 1988 - a gain on the termination of pension plan of $0.5 million, or $.08 per share. 1987 - a tax benefit of $7.4 million, or $1.22 per share, granted by the Tax Reform Act of 1986. (3) Includes unrealized gains and losses upon adoption of FAS 115 in 1993. (4) Restated for one-for-two stock split in April 1994. - -------------------------------------------------------------------------------- MANAGEMENT DISCUSSION AND ANALYSIS A comparison of the results of operations of the Company for 1995 with 1994 and 1994 with 1993 follows. General. The Company's dominant segment of operations is the land title business. In general, the principal factors that contribute to increases in title revenues include declining mortgage interest rates (which usually increase home sales), increases in refinancing transactions, rising home prices, higher premium rates, increased market share, additional revenues from new offices and increased revenues from nonresidential, commercial transactions. Although relatively few in number, large commercial transactions usually yield higher premiums. 18 2 Mortgage interest rates declined throughout most of 1993. However, in early 1994, rates rose dramatically. By the end of 1994, rates were roughly two percentage points higher than they were at the end of 1993. As a result, real estate activity fell in 1994. The increase in rates also reduced refinancing transactions to normal levels. The widely publicized refinancing boom, which began in late 1991, came to an end in the second quarter of 1994. In the early months of 1995, interest rates began a downward trend that continued for the rest of the year. By May 1995, rates had fallen to below year-earlier levels. This improvement in interest rates helped increase real estate activity. Company revenues for the third and fourth quarters of 1995 exceeded revenues for the same quarters in 1994. Title revenues. The Company's revenues from premiums, fees and other revenues decreased 7.8% in 1995 and 13.4% in 1994. The number of orders opened and closed by the Company and the average revenue per order closed follow:
- ----------------------------------------------------------------------------- 1995 1994 1993 - ----------------------------------------------------------------------------- Number of orders opened (000s) . . . . . . . 268 270 397 Number of orders closed (000s) . . . . . . . 197 223 289 Average revenue per order closed(1) . . . . $ 945 $ 907 $ 839 - -----------------------------------------------------------------------------
(1) Based on revenues from title operations of $243.3 million, $271.9 million and $317.7 million, less amounts earned from independent agents of $57.1 million, $69.7 million and $75.2 million for 1995, 1994 and 1993, respectively. Total closings decreased 11.7% in 1995 and 22.8% in 1994. The average revenue per closing increased 4.2% in 1995 and 8.1% in 1994. The average rate was increased each year by higher home prices and fewer refinancing transactions (which are discounted). There were no major rate increases in 1995 or 1994. Title revenues by state. The approximate amounts and percentages of Stewart's consolidated title revenues (excluding other revenues) by state for the last three years were:
- --------------------------------------------------------------------------------------------- Amounts ($ millions) Percentages 1995 1994 1993 1995 1994 1993 - --------------------------------------------------------------------------------------------- Texas . . . . . . . . . . . . . . . . . . . 62 73 85 25 27 27 California . . . . . . . . . . . . . . . . . 59 68 95 24 25 30 Florida . . . . . . . . . . . . . . . . . . 21 22 27 9 8 9 Arizona . . . . . . . . . . . . . . . . . . 12 14 14 5 5 5 All others . . . . . . . . . . . . . . . . . 89 95 97 37 35 29 - --------------------------------------------------------------------------------------------- 243 272 318 100 100 100 - ---------------------------------------------------------------------------------------------
Other revenues. Investment income increased 9.5% in 1995 and 20.2% in 1994, primarily because of increases in the average balances invested and, in 1995, higher market yields. The investment gains in 1995 were realized as part of the ongoing management of the investment portfolio for the purpose of improving performance. Investment losses in 1994 include a sale of certain portfolio bonds to use tax loss carrybacks that otherwise would have expired. The pretax loss on the sale was $1.3 million. There were no significant gains or losses in 1993. Other income declined slightly in 1995 and $2.4 million in 1994. The decrease in 1994 was primarily due to a reduction in earnings of affiliates accounted for on an equity basis. Expenses. The Company incurs a substantial portion of its total expenses when orders are received and processed, but revenues are not recognized until the orders are closed. Most orders are closed, or canceled, within 90 days of receipt. 19 3 Employee costs decreased 5.1% in 1995 and 2.6% in 1994. The average number of employees decreased in both years. The average compensation paid to employees increased in 1995 but decreased in 1994. The number of persons employed by the Company at December 31, 1995, 1994 and 1993 was 3,757, 3,470 and 4,382, respectively. The increase in staff in 1995 was primarily in the automation area and new offices. The decrease in staff in 1994 was primarily in California, Texas and Florida, offset in part by new offices. While the Company has reduced overall employee expenses, it has chosen to increase cost levels in automation and real estate information areas. The Company believes the development and sale of new products and services for new and existing customers is important to its future. Through automating operating processes, the Company expects to add customer revenue and reduce operating expenses and title losses in the future. Other operating expenses decreased slightly in 1995 and 1994. Excluding the effect of new offices, the decrease was 5.3% in 1995 and 2.2% in 1994. The overall decrease in both years was caused primarily by lower transaction volumes. Bad debts, premium taxes and supplies decreased both years. Rent expense increased in 1994, which included canceled leases on closed branch offices and the addition of new offices. Other operating expenses also include policy forms, delivery costs, title plant expenses, business promotion, telephone and travel. Most of these expenses follow, to varying degrees, the changes in transaction volume and revenues. Provisions for title losses, as a percentage of title premiums, fees and other revenues, were 11.1%, 13.9% and 17.5% in 1995, 1994 and 1993, respectively. The provision in 1995 was reduced by larger-than-usual recoveries and management's reduction of its estimate of exposure to loss on certain major claims. The continued improvement in industry trends and the Company's recent experience in claims has also led to smaller provisions for title losses. The Company has made significant improvements in its procedures to curtail claims. The Company's labor and certain other operating costs are sensitive to inflation. Increases in cost of living are considered in granting pay raises. To the extent inflation causes increases in the prices of homes and other real estate, premium revenues are also increased. Premiums are determined in part by the insured values of the transactions handled by the Company. Premium taxes. In December 1994 the California Board of Equalization (CBOE) ruled in favor of the Company concerning an assessment of additional premium taxes for the year 1987. However, an assessment of $2.5 million, excluding interest and penalties, for retaliatory taxes for 1987 was left pending. A hearing before the CBOE is expected in the near future. Five other states have also assessed the Company additional premium taxes. The assessments, excluding interest and penalties, aggregate $1.8 million. The years of assessments cover 1984 through 1994. The Company cannot predict whether additional taxes of this nature will be assessed by California, the five states or any other states. State taxing authorities are under increasing pressure to collect additional tax revenues. The Company intends to vigorously oppose any assessments and believes its tax payments are correct. However, there can be no assurance the Company will prevail in these controversies. If it does not prevail, the tax assessments may, in the aggregate, result in a material reduction in the Company's earnings in future years. Income taxes. The provisions for income taxes represented an effective tax rate of 34.7%, 30.1% and 37.0% in 1995, 1994 and 1993, respectively. The 1994 tax rate was lower primarily because dividends remitted by investees in 1994 exceeded the earnings of investees. In the other two years, earnings exceeded dividends. The effective tax rate in each of the three years was lowered by nontaxable income from municipal bonds. Uncertainty. A major bank holding company introduced a plan in 1994 guaranteeing the performance of its subsidiary mortgage lending company to cure any title defects relating to loans sold by it to the secondary market, or else repurchase the loans. The Company believes the plan constitutes the business of title insurance and may violate various state insurance laws and regulations. If the plan followed such laws and regulations, the operation would be subject to state licensing, payment of premium taxes and the setting aside of required reserves. The insurance departments of various states have asserted the plan is insurance and should not be permitted. In Nebraska, a trial court has determined that such a program constitutes title insurance and is not permitted. The Company does not believe the plan will materially reduce the demand for title insurance; however, the Company cannot predict the ultimate effect of this plan, or similar plans, on the title insurance industry. Liquidity and capital resources. Cash provided by operations was $20.6 million, $27.7 million and $54.3 million in 1995, 1994 and 1993, respectively. Internally-generated cash flow has been the primary source of funds for additions to property and equipment, expanding operations, dividends to shareholders and other requirements. This source may be supplemented by bank borrowings. 20 4 A substantial majority of consolidated cash and investments is held by Stewart Title Guaranty Company (Guaranty) and its title insurance subsidiary, Stewart Title Insurance Company. Cash transfers between Guaranty and its subsidiaries and the Company are subject to certain legal restrictions. See Notes 4 and 5 to the financial statements. The liquidity of the Company itself, excluding Guaranty and its subsidiaries and excluding notes receivable from affiliates, consisted of cash and investments of $4.4 million, a dividend receivable of $5.0 million from Guaranty (received in February 1996) and short-term liabilities of $0.7 million at December 31, 1995. The Company knows of no commitments or uncertainties which are likely to materially affect the ability of the Company and its subsidiaries to fund their cash needs. See Note 15 to the financial statements. The Company's capital resources, represented primarily by long-term debt of $7.3 million and stockholders' equity of $174.9 million at December 31, 1995, are considered adequate. INDEPENDENT AUDITORS' REPORT To the Stockholders and Board of Directors of Stewart Information Services Corporation We have audited the accompanying consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended December 31, 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. For the years ended December 31, 1994 and 1993 we did not audit the financial statements of certain subsidiaries and a majority of the escrow funds referred to in Note 1. The financial statements of these subsidiaries reflect total assets constituting 7% in 1994 and total revenues constituting 19% and 20% in 1994 and 1993, respectively, of the related consolidated totals. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the subsidiaries and the escrow funds, is based solely on the reports of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit for the year ended December 31, 1995 and on our audits and the reports of other auditors for the years ended December 31,1994 and 1993, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Stewart Information Services Corporation and subsidiaries as of December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1995 in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, the Company adopted the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", and Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed Of", as of January 1, 1993, December 31, 1993 and December 31, 1995, respectively. KPMG Peat Marwick LLP Houston, Texas February 7, 1996 21 5 CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
- ------------------------------------------------------------------------------------------------------- Years ended December 31 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- ($000 Omitted) Revenues Title premiums, fees and other revenues . . . . . . . . . . . . 266,728 289,265 334,187 Investment income . . . . . . . . . . . . . . . . . . . . . . . 13,564 12,382 10,304 Investment gains (losses) - net . . . . . . . . . . . . . . . . 956 (842) 404 Other income, including equity earnings . . . . . . . . . . . . 1,257 1,350 3,733 - ------------------------------------------------------------------------------------------------------- 282,505 302,155 348,628 Expenses Employee costs . . . . . . . . . . . . . . . . . . . . . . . . 140,795 148,325 152,231 Other operating expenses . . . . . . . . . . . . . . . . . . . 89,408 90,704 90,883 Title losses and related claims . . . . . . . . . . . . . . . . 29,591 40,212 58,574 Depreciation and amortization . . . . . . . . . . . . . . . . . 9,855 7,801 7,094 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,194 586 526 Minority interests . . . . . . . . . . . . . . . . . . . . . . 933 687 1,744 - ------------------------------------------------------------------------------------------------------- 271,776 288,315 311,052 Earnings before taxes . . . . . . . . . . . . . . . . . . . . . . 10,729 13,840 37,576 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 3,722 4,162 13,917 - ------------------------------------------------------------------------------------------------------- Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,007 9,678 23,659 Retained earnings at beginning of year . . . . . . . . . . . . . . 112,754 106,262 83,575 Cash dividends on Common Stock ($.21, $.20 and $.17 per share) . . (1,214) (1,118) (972) Stock dividend . . . . . . . . . . . . . . . . . . . . . . . . . . -- (2,068) -- - ------------------------------------------------------------------------------------------------------- Retained earnings at end of year . . . . . . . . . . . . . . . . . 118,547 112,754 106,262 - ------------------------------------------------------------------------------------------------------- Average number of shares outstanding (000 omitted) . . . . . . . . 6,292 6,198 6,119 Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . 1.11 1.56 3.87 - -------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 22 6 Consolidated Balance Sheets
- ------------------------------------------------------------------------------------------------------- December 31 1995 1994 - ------------------------------------------------------------------------------------------------------- ($000 Omitted) Assets Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,698 16,214 Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,238 26,740 Investments in debt securities, at market: Statutory reserve funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,040 104,697 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,716 58,532 - ------------------------------------------------------------------------------------------------------- 185,756 163,229 Receivables: Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,242 8,281 Premiums from agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,418 9,654 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,079 20,937 Less allowance for uncollectible amounts . . . . . . . . . . . . . . . . . . (6,499) (6,123) - ------------------------------------------------------------------------------------------------------- 30,240 32,749 Property and equipment, at cost: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,359 1,359 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,576 5,249 Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,115 54,719 Less accumulated depreciation and amortization . . . . . . . . . . . . . . . (44,779) (36,549) - ------------------------------------------------------------------------------------------------------- 24,271 24,778 Title plants, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,243 14,369 Real estate, at lower of cost or net realizable value . . . . . . . . . . . . . 3,303 3,896 Investments in investees, on an equity basis . . . . . . . . . . . . . . . . . 6,123 6,688 Goodwill, less accumulated amortization of $3,881 and $3,308 . . . . . . . . . 11,029 4,979 Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,108 20,477 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,350 11,057 - ------------------------------------------------------------------------------------------------------- 351,359 325,176 - ------------------------------------------------------------------------------------------------------- Liabilities Notes payable, including $7,334 and $2,472 long-term portion . . . . . . . . . 12,589 7,865 Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . 20,559 21,175 Estimated title losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,312 134,316 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482 793 Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,565 4,674 Contingent liabilities and commitments Stockholders' equity Common - $1 par, authorized 15,000,000, issued and outstanding 5,864,758 and 5,686,706 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865 5,687 Class B Common - $1 par, authorized 1,500,000, issued and outstanding 525,006 . 525 525 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . 45,945 42,750 Net unrealized investment gains (losses), net of deferred taxes . . . . . . . 3,970 (5,363) Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,547 112,754 - ------------------------------------------------------------------------------------------------------- Total stockholders' equity ($27.36 and $25.17 per share) . . . . . . . . . . 174,852 156,353 - ------------------------------------------------------------------------------------------------------- 351,359 325,176 - -------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 23 7 CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------- Years ended December 31 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- ($000 Omitted) Cash provided by operating activities (Note) . . . . . . . . . . . 20,568 27,702 54,344 Investing activities: Purchases of property and equipment and title plants - net . . (6,700) (12,177) (8,733) Proceeds from investments matured and sold . . . . . . . . . . 81,674 113,777 52,215 Purchases of investments . . . . . . . . . . . . . . . . . . . (90,385) (145,273) (85,772) Increases in notes receivable . . . . . . . . . . . . . . . . . (1,081) (2,408) (3,555) Collections on notes receivable . . . . . . . . . . . . . . . . 2,069 3,962 2,989 Cash paid for the purchase of subsidiaries - net . . . . . . . (5,175) (1,042) (142) Proceeds from issuance of stock . . . . . . . . . . . . . . . . -- 296 23 - ------------------------------------------------------------------------------------------------------- Cash used by investing activities . . . . . . . . . . . . . . . . (19,598) (42,865) (42,975) Financing activities: Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . (1,214) (1,118) (972) Proceeds of notes payable . . . . . . . . . . . . . . . . . . . 7,937 5,125 3,309 Payments on notes payable . . . . . . . . . . . . . . . . . . . (7,209) (3,514) (4,289) - ------------------------------------------------------------------------------------------------------- Cash (used) provided by financing activities . . . . . . . . . . . (486) 493 (1,952) - ------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents . . . . . . . . . 484 (14,670) 9,417 - ------------------------------------------------------------------------------------------------------- Note: Reconciliation of net earnings to the above amounts - Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . 7,007 9,678 23,659 Add (deduct): Depreciation and amortization . . . . . . . . . . . . . . . . 9,855 7,801 7,094 Provisions for title losses in excess of payments . . . . . . 3,996 16,730 30,011 Provision for uncollectible amounts - net . . . . . . . . . . 376 855 579 Decrease (increase) in accounts receivable - net . . . . . . 2,814 3,265 (4,520) (Decrease) increase in accounts payable and accrued liabilities - net . . . . . . . . . . . . . . . . . . . . . . (1,834) (2,909) 4,166 Provision for deferred income taxes . . . . . . . . . . . . . 1,344 (1,794) (6,548) Decrease in income taxes payable . . . . . . . . . . . . . . (708) (7,042) (72) Minority interest expense . . . . . . . . . . . . . . . . . . 933 687 1,744 Equity in net earnings of investees . . . . . . . . . . . . . (700) (801) (3,077) Realized investment (gains) losses - net . . . . . . . . . . (956) 842 (404) Stock bonuses . . . . . . . . . . . . . . . . . . . . . . . . 303 61 729 Increase in other assets . . . . . . . . . . . . . . . . . . (846) -- -- Other - net . . . . . . . . . . . . . . . . . . . . . . . . . (1,016) 329 983 - ------------------------------------------------------------------------------------------------------- Cash provided by operating activities . . . . . . . . . . . . . 20,568 27,702 54,344 - ------------------------------------------------------------------------------------------------------- Supplemental information: Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . 3,283 13,794 20,532 Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . 1,199 446 476
See notes to consolidated financial statements. 24 8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Three years ended December 31, 1995) NOTE 1 A. Nature of operations. Stewart Information Services Corporation's dominant segment of operations is the land title business. The Company's revenues are materially affected by the volume of real estate activity in the United States. Mortgage interest rates are a major factor underlying real estate activity. B. Summary of significant accounting policies. The accompanying financial statements were prepared by management which is responsible for their integrity and objectivity. The statements have been prepared in conformity with generally accepted accounting principles, including management's best judgments and estimates, with due consideration given to materiality. Actual results could differ from estimates. C. Reclassification. Certain amounts in the 1994 and 1993 consolidated financial statements have been reclassified to the 1995 reporting presentation for comparative purposes. D. Consolidation. Consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. Unconsolidated investees, owned 20% through 50%, and over which the Company exercises significant influence, are accounted for by the equity method. All significant intercompany accounts and transactions are eliminated and provision is made for minority interests. E. Statutory accounting. The accounts of Stewart Title Guaranty Company (Guaranty) and its subsidiary, Stewart Title Insurance Company, also a title insurer, are maintained on a statutory basis, in accordance with practices required or permitted by regulatory authorities. The statutory accounts are restated in consolidation to conform with generally accepted accounting principles. In restating to generally accepted accounting principles, the amounts for statutory premium reserve and reserve for reported title losses are eliminated and, in substitution, amounts are established for estimated title losses (see below). The net effect, after providing for deferred income taxes, is included in consolidated retained earnings. In calculating the amount owed on federal income tax returns, the statutory premium reserve and reserve for reported title losses must be discounted to their present values. F. Title premiums and fees. Revenues from services rendered in closing and insuring titles are considered earned at the time of the closing of the related real estate transactions. G. Title losses and related claims. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims and other factors. For losses under $750,000 each, the Company estimates the aggregate amount that will be paid in future years on title policies issued in the current year. The estimated amount is charged to earnings currently (when the related revenues are recognized). In making the estimates, the Company uses moving average ratios of recent actual policy loss payment experience, net of recoveries, to premium revenues. Policy losses in excess of $750,000 each are individually evaluated and charged to earnings when they become known. A general reserve is maintained for unknown major losses. Escrow and other losses incurred in office operations are accounted for separately. Amounts shown as the Company's estimated liability for future loss payments are continually reviewed for reasonableness and adjusted as appropriate. In accordance with industry practice, the amounts have not been discounted to their present values. H. Income taxes. The Company adopted FAS 109 in the first quarter of 1993. The cumulative effect of the change was negligible. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax bases and the book carrying values for certain assets and liabilities. Valuation allowances are provided as may be appropriate. Enacted tax rates are used in calculating amounts. I. Earnings per share. Earnings per share amounts are calculated using the weighted average number of shares of Common Stock and Class B Common Stock outstanding during each year. The dilutive effect of Common Stock equivalents is insignificant. J. Cash equivalents. Cash equivalents are highly liquid investments that are convertible to cash or mature on a daily basis as part of the Company's management of day-to-day operating cash. 25 9 K. Investments. The Company adopted FAS 115 effective December 31, 1993. There was no adverse effect on the consolidated financial condition of the Company. The Company has classified all of its investments in debt securities as available for sale. Any net unrealized gains or losses on securities, less taxes, are included in stockholders' equity. Any permanent decline in fair value of securities is charged to earnings. L. Property and equipment. Depreciation is computed principally by the straight-line method at the following rates: buildings - 30 to 40 years and furniture and equipment - 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal. M. Title plants. Title plants include compilations of a county's official land records, prior examination files, copies of prior title policies, maps and related materials which are geographically indexed to a specific property. The costs of acquiring existing title plants and building new ones, prior to the time such plants are placed in operation, are capitalized. Such costs are not amortized because there is no indication of any loss of value. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized in the year of sale. N. Goodwill. Goodwill is the excess of the purchase price over the fair value of net assets of subsidiaries acquired and is amortized by charges to earnings over 10 to 40 years. O. Long-lived assets. The Company adopted FAS 121 effective December 31, 1995. The cumulative effect of the change was negligible. The Company continuously reviews the carrying value of its title plants, goodwill and other long-lived assets for possible impairment. Where applicable, the book amounts are reduced to fair market values. P. Escrow funds. Cash held in escrow for customers is excluded from the balance sheets. NOTE 2 Gross revenues. In the accompanying financial statements, premiums earned on policies issued by independent agents are shown net of amounts charged by agents for their services. Under statutory accounting, premium revenues include agent charges, with an offsetting charge to expense for the same amount. On a statutory basis, revenues and expenses would be increased by like amounts and would be stated as shown below. There would be no effect on net earnings.
- ------------------------------------------------------------------------------------------------------- 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- ($000 Omitted) Title premiums, fees and other revenues (gross) . . . . . . . . . . . . . . . . . . . . . 518,792 598,179 669,142 Less amounts retained by agents . . . . . . . . . . . . . . . . . . . . . . . . . . . (252,064) (308,914) (334,955) - ------------------------------------------------------------------------------------------------------- Title premiums, fees and other revenues (net) . . . . . . . . . . . . . . . . . . . . . . 266,728 289,265 334,187 - -------------------------------------------------------------------------------------------------------
NOTE 3 Income taxes. The following reconciles federal income taxes computed at the statutory rate with income taxes as reported.
- ------------------------------------------------------------------------------------------------------- 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- ($000 Omitted) Expected income taxes at 35% . . . . . . . . . . . . . . . . . . . 3,755 4,844 13,152 State income taxes . . . . . . . . . . . . . . . . . . . . . . . . 393 494 1,422 Tax effect of permanent differences: Tax-exempt interest . . . . . . . . . . . . . . . . . . . . . . (1,657) (1,648) (752) Nondeductible items . . . . . . . . . . . . . . . . . . . . . . 606 665 215 Equity income . . . . . . . . . . . . . . . . . . . . . . . . . (251) (280) (1,077) Minority interests . . . . . . . . . . . . . . . . . . . . . . 327 240 610 Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . 549 (153) 347 - ------------------------------------------------------------------------------------------------------- Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,722 4,162 13,917 - ------------------------------------------------------------------------------------------------------- Effective income tax rate (%) . . . . . . . . . . . . . . . . . . 34.7 30.1 37.0 - -------------------------------------------------------------------------------------------------------
26 10 Deferred tax assets and liabilities at December 31, 1995 and 1994 were as follows:
- ------------------------------------------------------------------------------------------- 1995 1994 - ------------------------------------------------------------------------------------------- ($000 Omitted) Deferred tax assets: Book over tax title loss provisions . . . . . . . . . . . . . . 16,464 17,830 Unrealized losses on investments . . . . . . . . . . . . . . . -- 2,888 Net operating losses . . . . . . . . . . . . . . . . . . . . . 619 550 Allowance for bad debts . . . . . . . . . . . . . . . . . . . . 1,086 1,339 Salvage recoverable . . . . . . . . . . . . . . . . . . . . . . -- 520 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938 918 - ------------------------------------------------------------------------------------------- 19,107 24,045 Less valuation allowance . . . . . . . . . . . . . . . . . . . . (1,221) (1,157) - ------------------------------------------------------------------------------------------- 17,886 22,888 Deferred tax liabilities: Unrealized gains on investments . . . . . . . . . . . . . . . (2,137) -- Tax over book depreciation . . . . . . . . . . . . . . . . . . (356) (802) Investments in partnerships . . . . . . . . . . . . . . . . . . (90) (685) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,195) (924) - ------------------------------------------------------------------------------------------- (3,778) (2,411) - ------------------------------------------------------------------------------------------- Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . 14,108 20,477 - -------------------------------------------------------------------------------------------
The Company's valuation allowance relates to portions of certain subsidiary operating loss carryforwards and other deferred tax assets. Management believes future earnings levels will be sufficient to permit the Company to realize net deferred tax assets. There was a deferred tax expense of $1,344,000 and deferred tax benefits of $1,794,000 and $6,548,000 for the years ended December 31, 1995, 1994 and 1993, respectively. NOTE 4 Restrictions on cash and investments. The "statutory reserve funds" included in the accompanying financial statements have been set aside to comply with legal requirements for statutory premium reserves and state deposits. These funds were not available for any other purpose. A substantial majority of investments and cash at each year end was held by title insurer subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions. Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party transactions, are restricted by law and generally require the approval of state insurance authorities. NOTE 5 Dividend restrictions. Substantially all of consolidated retained earnings at each year end was represented by the retained earnings of Guaranty, which owns directly or indirectly substantially all of the subsidiaries included in the consolidation. Guaranty cannot pay a dividend in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend which could have been paid without such approval in 1995 was $24,001,000. Guaranty paid or declared cash dividends of $9,390,000 in 1995. Guaranty also paid significantly less than maximum legal limits for dividends in 1994 and 1993. Dividends from Guaranty were also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer. 27 11 NOTE 6 Investments. The amortized cost and market value of investments in debt securities at December 31 follow:
- ------------------------------------------------------------------------------------------------------------ 1995 1994 - ------------------------------------------------------------------------------------------------------------ Amortized Market Amortized Market cost value cost value - ------------------------------------------------------------------------------------------------------------ ($000 Omitted) Municipal . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,042 95,049 91,598 85,267 Mortgage-backed . . . . . . . . . . . . . . . . . . . . . . . . 26,630 27,499 28,114 26,872 US Government . . . . . . . . . . . . . . . . . . . . . . . . . 28,393 29,636 40,105 39,728 Corporate, utilities . . . . . . . . . . . . . . . . . . . . . . 31,584 33,572 11,663 11,362 - ------------------------------------------------------------------------------------------------------------ 179,649 185,756 171,480 163,229 - ------------------------------------------------------------------------------------------------------------
The gross unrealized gains and losses at December 31 were:
- ---------------------------------------------------------------------------------------------------------- 1995 1994 - ---------------------------------------------------------------------------------------------------------- Gains Losses Gains Losses - ---------------------------------------------------------------------------------------------------------- ($000 Omitted) Municipal . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,117 110 166 6,497 Mortgage-backed . . . . . . . . . . . . . . . . . . . . . . . . 1,684 815 157 1,399 US Government . . . . . . . . . . . . . . . . . . . . . . . . . 1,286 43 24 401 Corporate, utilities . . . . . . . . . . . . . . . . . . . . . . 2,033 45 138 439 - ---------------------------------------------------------------------------------------------------------- 7,120 1,013 485 8,736 - ----------------------------------------------------------------------------------------------------------
Debt securities at December 31, 1995 mature, according to their contractual terms, as follows (actual maturities may differ because of call or prepayment rights):
- -------------------------------------------------------------------------------------- Amortized Market cost value - -------------------------------------------------------------------------------------- ($000 Omitted) In one year or less . . . . . . . . . . . . . . . . . . . . . . 1,519 1,532 After one year through five years . . . . . . . . . . . . . . . 27,522 28,344 After five years through ten years . . . . . . . . . . . . . . . 78,379 80,916 After ten years . . . . . . . . . . . . . . . . . . . . . . . . 45,599 47,465 Mortgage-backed securities . . . . . . . . . . . . . . . . . . . 26,630 27,499 - -------------------------------------------------------------------------------------- 179,649 185,756 - --------------------------------------------------------------------------------------
The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. The mortgage-backed securities are insured by GNMA and FNMA. NOTE 7 Investment income. Income from investments and net realized gains (losses) from sales of investments for the three years follow:
- ---------------------------------------------------------------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------------------------- ($000 Omitted) Income: Short-term investments and cash equivalents . . . . . . . . . . . . . . . . . . . . . 2,025 1,745 1,587 Debt securities - Municipal . . . . . . . . . . . . . . . . . . . . . . . . . 4,805 4,639 2,089 Mortgage-backed . . . . . . . . . . . . . . . . . . . . . . 2,204 2,526 3,577 US Government . . . . . . . . . . . . . . . . . . . . . . . 2,042 1,156 557 Corporate, utilities . . . . . . . . . . . . . . . . . . . 1,936 1,740 1,827 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 576 667 - ---------------------------------------------------------------------------------------------- 13,564 12,382 10,304 - ---------------------------------------------------------------------------------------------- Net realized gains (losses): Debt securities . . . . . . . . . . . . . . . . . . . . . . . 1,072 (1,093) 404 Other investments . . . . . . . . . . . . . . . . . . . . . . (116) 251 -- - ---------------------------------------------------------------------------------------------- 956 (842) 404 - ----------------------------------------------------------------------------------------------
The sales of debt securities in 1995 resulted in proceeds of $41,911,000, gross gains of $1,258,000 and gross losses of $186,000. The sales of debt securities in 1994 resulted in proceeds of $70,442,000, gross gains of $914,000 and gross losses of $2,007,000. In 1994, certain securities were sold to use tax loss carrybacks that would have otherwise expired. Expenses assignable to investment income were insignificant. There were no significant investments at December 31, 1995 that did not produce income during the year. 28 12 NOTE 8 Notes payable.
- ------------------------------------------------------------------------------------- 1995 1994 - ------------------------------------------------------------------------------------- ($000 Omitted) Banks: Secured by mortgages on real estate, primarily at prime (8.5% at December 31, 1995), payable lump sum and serially . . . . . . . . . . . . . . . 994 1,122 Unsecured, 6.0% to 10.5%, varying payments . . . . . . . . . . . . . . . . . . . . . . . . . 10,453 5,241 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 661 Other than banks: Secured by equipment, office buildings, real estate and subsidiary stock, 8.0% to 12.0%, varying payments . . . . . . . . . . . . . . 526 841 - ------------------------------------------------------------------------------------- 12,589 7,865 - -------------------------------------------------------------------------------------
The above notes mature $5,255,000 in 1996, $1,611,000 in 1997, $2,530,000 in 1998, $2,716,000 in 1999, $445,000 in 2000 and $32,000 subsequent to 2000. NOTE 9 Estimated title losses. Provisions accrued, payments made and liability balances for the three years follow:
- ---------------------------------------------------------------------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------------------------------- ($000 Omitted) Balances at January 1 . . . . . . . . . . . . . . . . . . . . . 134,316 117,586 87,575 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,591 40,212 58,574 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,530) (22,172) (29,615) (Decrease) increase in salvage . . . . . . . . . . . . . . . . . (65) (1,310) 1,052 - ---------------------------------------------------------------------------------------------------- Balances at December 31 . . . . . . . . . . . . . . . . . . . . . 138,312 134,316 117,586 - ----------------------------------------------------------------------------------------------------
Provisions include amounts related to the current year of approximately $27,554,000, $39,642,000 and $51,634,000 for 1995, 1994 and 1993, respectively. Payments related to the current year, including escrow and other loss payments, were approximately $5,613,000, $8,216,000 and $11,209,000 for 1995, 1994 and 1993, respectively. The above current year provision totals include provisions made for claims which are based on historical ratios of losses-to-premium revenues. See Note 1(G) for the principles followed in accounting for title losses and related claims. NOTE 10 Fair values. The Company's financial instruments include cash and cash equivalents, short-term investments, investments in debt securities (carried at market value), notes receivable, accounts receivable, notes payable, accounts payable and commitments. The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. The fair values of financial instruments approximated their carrying values at December 31, 1995 and 1994. NOTE 11 Common Stock and Class B Common Stock. Holders of Common and Class B Common Stock have the same rights, except no cash dividends may be paid on Class B Common Stock. The two classes vote separately when electing directors and on any amendment to the Company's certificate of incorporation that affects the two classes unequally. A provision of the by-laws requires an affirmative vote of at least two-thirds of the directors to elect officers or to approve any proposal which may come before the directors. This provision cannot be changed without a majority vote of each class of stock. Holders of Class B Common Stock may, with no cumulative voting rights, elect four directors if 525,000 or more shares of Class B Common Stock are outstanding; three directors if between 300,000 and 525,000 shares are outstanding; and none if less than 300,000 shares of Class B Common Stock are outstanding. Holders of Common Stock, with cumulative voting rights, elect the balance of the nine directors. Class B Common Stock may, at any time, be converted by its shareholders into Common Stock on a share-for-share basis, but all of the holders of Class B Common Stock have agreed among themselves not to convert their stock prior to January 2005. Such conversion is mandatory on any transfer to a person not a lineal descendant (or spouse, trustee, etc. of such descendant) of William H. Stewart. At December 31, 1995 and 1994, there were 84,482 shares (cost $294,000) of Common Stock held by a subsidiary of the Company. These shares are considered retired but may be issued from time to time in lieu of new shares. On April 28, 1994, the Company effected a one-for-two stock split recorded in the form of a 50% stock dividend. All share and per share data presented in these financial statements have been restated for the effects of the stock split. 29 13 NOTE 12 Changes in Common Stock. Changes in Common Stock and additional paid-in capital for the years ended December 31, 1995, 1994 and 1993 were as follows:
- --------------------------------------------------------------------------------------------------- Class B Additional Common Common paid-in Stock Stock capital - --------------------------------------------------------------------------------------------------- ($000 Omitted) Balances at December 31, 1992 . . . . . . . . . . . . . . . . . 3,714 350 41,005 Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . 9 -- 166 Exercise of stock options . . . . . . . . . . . . . . . . . . 5 -- 102 Stock bonuses . . . . . . . . . . . . . . . . . . . . . . . . 25 -- 621 - ------------------------------------------------------------------------------------------------- Balances at December 31, 1993 . . . . . . . . . . . . . . . . . 3,753 350 41,894 Stock dividend . . . . . . . . . . . . . . . . . . . . . . . 1,893 175 -- Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . 3 -- 41 Exercise of stock options . . . . . . . . . . . . . . . . . . 22 -- 401 Stock bonuses . . . . . . . . . . . . . . . . . . . . . . . . 16 -- 414 - ------------------------------------------------------------------------------------------------- Balances at December 31, 1994 . . . . . . . . . . . . . . . . . 5,687 525 42,750 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . 159 -- 2,911 Stock bonuses . . . . . . . . . . . . . . . . . . . . . . . . 19 -- 284 - ------------------------------------------------------------------------------------------------- Balances at December 31, 1995 . . . . . . . . . . . . . . . . . 5,865 525 45,945 - -------------------------------------------------------------------------------------------------
NOTE 13 Stock options. The Company has granted stock options to certain executive and management personnel. Transactions under stock option plans during the last three years were as follows:
- ---------------------------------------------------------------------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------------------------------- Number of options: January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 128,100 141,450 135,750 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,300 18,900 20,100 Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . -- (32,250) (6,996) Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (7,404) - ---------------------------------------------------------------------------------------------------- December 31 . . . . . . . . . . . . . . . . . . . . . . . . . 158,400 128,100 141,450 - ----------------------------------------------------------------------------------------------------
Stock options were granted at prices equal to the market price at the prior year end. Options outstanding at December 31, 1995 and 1994 were at prices of $9.17 to $20.00 and at December 31, 1993, at $9.17 to $13.67 per share. Options exercised during 1994 and 1993 were at $9.17 per share. Shares available for future option grants at December 31, 1995 were 119,950. The Financial Accounting Standards Board issued Statement 123, "Accounting for Stock-Based Compensation", effective for fiscal years beginning after December 15, 1995. The statement allows companies to retain the current intrinsic value based method of accounting for its stock-based compensation arrangements or adopt a new fair value based method. Expanded disclosure is required in the financial statements of companies that continue to follow current practice. The Company intends to continue its current practice of accounting for stock-based compensation and therefore expects no effect on the financial statements. NOTE 14 Leases. The Company's expense for leased office space was $17,284,000 in 1995, $16,296,000 in 1994 and $12,521,000 in 1993. These are operating, noncancelable leases expiring over the next ten years. The future minimum lease payments are as follows (stated in thousands of dollars): 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,929 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,308 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,329 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,991 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,025 2001 and after . . . . . . . . . . . . . . . . . . . . . . . . 9,274 - --------------------------------------------------------------------------- 55,856 - ---------------------------------------------------------------------------
A subsidiary owned limited partnership interests in certain buildings partially occupied by the Company, including the former Company headquarters occupied until 1994. Annual rents paid to these partnerships by the Company approximated $1,637,000 in 1994 and $1,728,000 in 1993, before deducting partnership income or sub-rentals. The Company signed a ten year lease with an unaffiliated company for its new headquarters in Houston in 1994. 30 14 NOTE 15 Contingent liabilities and commitments. The Company makes separate provisions for individual title losses over $750,000 and reviews claims in excess of this amount asserted against Guaranty when evaluating the adequacy of recorded reserves. See Note 1(G). Claims had been made at December 31, 1995 against Guaranty for amounts in excess of $750,000 for which no provision was made. Management believes, based on the advice of counsel, the loss on these claims (1) will be resolved for less than $750,000 each or (2) cannot be reasonably estimated. Management believes any loss on these claims which cannot be estimated at December 31, 1995 will not be material in relation to the consolidated financial condition of the Company. The Company is contingently liable for disbursements of escrow funds held by agents in certain cases where specific insured closing guarantees have been issued. In December 1994 the California Board of Equalization (CBOE) ruled in favor of the Company concerning an assessment of additional premium taxes for the year 1987. However, an assessment of $2.5 million, excluding interest and penalties, for retaliatory taxes for 1987 was left pending. A hearing before the CBOE is expected in the near future. Five other states have also assessed the Company additional premium taxes. The assessments, excluding interest and penalties, aggregate $1.8 million. The years of assessments cover 1984 through 1994. The Company cannot predict whether additional taxes of this nature will be assessed by California, the five states or any other states. State taxing authorities are under increasing pressure to collect additional tax revenues. The Company intends to vigorously oppose any assessments and believes its tax payments are correct. However, there can be no assurance the Company will prevail in these controversies. If it does not prevail, the tax assessments may, in the aggregate, result in a material reduction in the Company's earnings in future years. Various takeout commitments approximated $1,151,000 at December 31, 1995. Management believes adequate provisions have been made for any losses from these commitments. NOTE 16 Reinsurance. As is the industry practice, the Company cedes risk to other underwriters in excess of certain underwriting limits. However, the Company remains contingently liable if the reinsurer should fail to satisfy its obligations. The Company also assumes risk from other underwriters. A payment on an assumed risk or a recovery on a ceded risk is rare in the experience of the Company and the industry. The Company has not paid or recovered any reinsured losses during the three years ended December 31, 1995. The total amount of premiums for assumed and ceded risks was less than one percent of title premiums, fees and other revenues in each of the last three years. NOTE 17 Equity in investees. Certain summarized aggregate financial information for investees follows:
- ---------------------------------------------------------------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------------------------- ($000 Omitted) For the year: Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . 50,804 69,125 86,866 Net earnings . . . . . . . . . . . . . . . . . . . . . . . . 2,245 1,471 8,993 As of December 31: Total assets . . . . . . . . . . . . . . . . . . . . . . . . 25,321 36,496 Stockholders' equity . . . . . . . . . . . . . . . . . . . . 16,567 19,260 - ----------------------------------------------------------------------------------------------
NOTE 18 Quarterly financial information (unaudited).
- ---------------------------------------------------------------------------------------------------------------- Mar 31 June 30 Sept 30 Dec 31 - ---------------------------------------------------------------------------------------------------------------- ($000 Omitted, except per share) Revenues 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,048 67,327 77,165 79,965 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,411 79,849 71,785 66,110 Net earnings (loss) 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,427) 1,675 3,501 3,258 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,440 2,304 1,667 1,267 (1) Earnings (loss) per share 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.23) .27 .55 .51 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 .37 .27 .20 (1) - ----------------------------------------------------------------------------------------------------------------
(1) Includes an after-tax capital loss of $839,000, or $.14 per share, on the sale of certain portfolio bonds. 31 15 STEWART TITLE GUARANTY COMPANY STEWART TITLE INSURANCE COMPANY Subsidiaries of Stewart Information Services Corporation UNCONSOLIDATED Statutory BALANCE SHEETS From statutory Annual Statements as filed (unaudited)
Stewart Title Stewart Title December 31, 1995 Guaranty Company Insurance Company - -------------------------------------------------------------------------------------------------------------- ($000 Omitted) Admitted assets Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,120 11,793 Stocks (investments in subsidiaries) . . . . . . . . . . . . . . . . . 64,702 1,049 Cash and bank deposits . . . . . . . . . . . . . . . . . . . . . . . . 8,449 816 Short-term investments . . . . . . . . . . . . . . . . . . . . . . . 7,305 2,203 Title plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,825 328 Title insurance premiums, fees and other receivables . . . . . . . . 6,945 237 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,896 468 - ------------------------------------------------------------------------------------------------------- 268,242 16,894 - ------------------------------------------------------------------------------------------------------- Liabilities, surplus and other funds Reserve for title losses . . . . . . . . . . . . . . . . . . . . . . . 22,350 865 Statutory premium reserve . . . . . . . . . . . . . . . . . . . . . . 106,499 3,414 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,573 880 - ------------------------------------------------------------------------------------------------------- 142,422 5,159 Surplus as regards policyholders (Note) . . . . . . . . . . . . . . . . . 125,820 11,735 - ------------------------------------------------------------------------------------------------------- 268,242 16,894 - ------------------------------------------------------------------------------------------------------- Consolidated stockholder's equity (unaudited), based on generally accepted accounting principles (GAAP), for Stewart Title Guaranty Company at December 31, 1995 was ($000 omitted) . . . . . . . . . . . . . . . . 151,615 =======
Note: The amount shown above for stockholder's equity exceeds policyholder surplus primarily because under GAAP the statutory premium reserve and reserve for reported title losses are eliminated and estimated title loss reserves are substituted, net of applicable income taxes. STEWART TITLE GUARANTY COMPANY Statutory Policyholder Surplus Growth (In $ millions) [BAR GRAPH]
Year Amount ---- --------------- (In $ millions) 1975 . . . . . . . . . . . . . . . . . . . . . . . . 6 1976 . . . . . . . . . . . . . . . . . . . . . . . . 7 1977 . . . . . . . . . . . . . . . . . . . . . . . . 8 1978 . . . . . . . . . . . . . . . . . . . . . . . . 10 1979 . . . . . . . . . . . . . . . . . . . . . . . . 12 1980 . . . . . . . . . . . . . . . . . . . . . . . . 12 1981 . . . . . . . . . . . . . . . . . . . . . . . . 12 1982 . . . . . . . . . . . . . . . . . . . . . . . . 14 1983 . . . . . . . . . . . . . . . . . . . . . . . . 17 1984 . . . . . . . . . . . . . . . . . . . . . . . . 21 1985 . . . . . . . . . . . . . . . . . . . . . . . . 24 1986 . . . . . . . . . . . . . . . . . . . . . . . . 44 1987 . . . . . . . . . . . . . . . . . . . . . . . . 45 1988 . . . . . . . . . . . . . . . . . . . . . . . . 61 1989 . . . . . . . . . . . . . . . . . . . . . . . . 62 1990 . . . . . . . . . . . . . . . . . . . . . . . . 63 1991 . . . . . . . . . . . . . . . . . . . . . . . . 65 1992 . . . . . . . . . . . . . . . . . . . . . . . . 87 1993 . . . . . . . . . . . . . . . . . . . . . . . . 114 1994 . . . . . . . . . . . . . . . . . . . . . . . . 120 1995 . . . . . . . . . . . . . . . . . . . . . . . . 126
21 consecutive years of statutory policyholder surplus growth - unmatched in the title industry. 32 EX-21 4 SUBSIDIARIES OF THE REGISTRANT 1 Exhibit 21 STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES
STATE OF NAME OF SUBSIDIARY INCORPORATION ------------------ ------------- Stewart Title of Mobile, Inc. . . . . . . . . Alabama Stewart Title & Trust of Phoenix, Inc. . . . . Arizona Citizens Title & Trust . . . . . . . . . . . . Arizona Stewart Title & Trust of Tucson . . . . . . . Arizona Stewart Title Company of San Diego . . . . . . California Stewart Title of California . . . . . . . . . California Stewart Title of Modesto . . . . . . . . . . . California Stewart Title (Los Angeles) . . . . . . . . . California Stewart Title of Fresno . . . . . . . . . . . California Stewart Title Company of the Inland Empire . . California Stewart Title of Central California . . . . . California Landata, Inc. of Los Angeles . . . . . . . . . California Stewart Title of Monterey County . . . . . . . California Stewart Title of Santa Barbara . . . . . . . . California Asset Preservation, Inc. . . . . . . . . . . . California Landata, Inc. of the West Coast - Northern California Division . . . . . . . . . . . . . California Stewart Title of Larimer County, Inc. . . . . Colorado Stewart Title of Greeley, Inc. . . . . . . . . Colorado Stewart Title of Aspen, Inc. . . . . . . . . . Colorado Stewart Title of Eagle County, Inc. . . . . . Colorado Stewart Title of Glenwood Springs, Inc. . . . . Colorado Stewart Title of Denver, Inc. . . . . . . . . Colorado Stewart Title of Summit County, Inc. . . . . . Colorado Stewart Title of Boulder County, L.L.C. . . . . Colorado Stewart Title Company of Colorado Springs . . Colorado Landata, Inc. of the Rocky Mountains . . . . . Colorado Stewart Title of Tampa . . . . . . . . . . . . Florida Stewart Title of Palm Beach County, Inc. . . . Florida Stewart Title Guaranty of Jacksonville, Inc. . Florida Stewart Title of Orange County, Inc. . . . . . Florida Stewart Title of Clearwater, Inc. . . . . . . Florida Stewart Title of Fort Myers, Inc. . . . . . . Florida Stewart Title of Polk County, Inc. . . . . . . Florida Stewart Title of Martin County . . . . . . . . Florida Stewart Title of Miami, Inc. . . . . . . . . . Florida Stewart Title of Ft. Lauderdale . . . . . . . Florida Stewart Title of Sarasota . . . . . . . . . . Florida Stewart-Fidelity Title Company . . . . . . . . Florida Landata, Inc. of Florida . . . . . . . . . . . Florida Stewart Title of Pensacola, Inc. . . . . . . . Florida Stewart Title of Tallahassee, Inc. . . . . . . Florida Stewart River City Title . . . . . . . . . . . Florida Stewart Title of Northwestern Florida . . . . . Florida
(continued) 2 Exhibit 21 (continued) STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES
STATE OF NAME OF SUBSIDIARY INCORPORATION ------------------ ------------- Charlotte County Abstract & Title Company . . Florida Bay Title Services, Inc. . . . . . . . . . . . Florida Stewart Approved Title, Inc. . . . . . . . . . Florida Stewart Title of Illinois . . . . . . . . . . Illinois Landata, Inc. of Illinois . . . . . . . . . . Illinois Stewart Title Services of Indiana . . . . . . . Indiana Stewart Title of Louisiana, Inc. . . . . . . . Louisiana Stewart Title of Maryland . . . . . . . . . . Maryland Cambridge Landata, Incorporated . . . . . . . Maryland Landata, Inc. of the Northeast . . . . . . . . Massachusetts Stewart Title Company of Minnesota . . . . . . Minnesota Stewart Title Company of Mississippi . . . . . Mississippi Stewart Title, Inc. (Kansas City) . . . . . . Missouri Stewart Title of Douglas County . . . . . . . Nevada Stewart Title of Northern Nevada . . . . . . . Nevada Stewart Title of Carson City . . . . . . . . . Nevada Stewart Title of Nevada . . . . . . . . . . . Nevada Stewart Title of Northeastern Nevada . . . . . Nevada Stewart Title of Central Nevada . . . . . . . Nevada Public Data Marketing, Inc. . . . . . . . . . Nevada Stewart Title of Central Jersey, Inc. . . . . New Jersey Stewart-Princeton Abstract . . . . . . . . . . New Jersey Stewart Title Services of North Jersey, L.L.C . New Jersey Santa Fe Abstract Limited . . . . . . . . . . . New Mexico Stewart Title Limited . . . . . . . . . . . . New Mexico Stewart Title Insurance Company . . . . . . . New York Barretta Landata, L.L.C. . . . . . . . . . . . New York Stewart Title of Mecklenburg County . . . . . North Carolina Stewart Title of North Carolina . . . . . . . North Carolina Stewart Title Agency of Ohio, Inc. . . . . . . Ohio Stewart Abstract & Title Co. of Oklahoma . . . Oklahoma Stewart Title of Rhode Island, Inc. . . . . . Rhode Island Ortem Investments, Inc. . . . . . . . . . . . Texas East-West, Inc. . . . . . . . . . . . . . . . Texas Stewart Title of San Patricio County, Inc. . . Texas Stewart Title Guaranty Company . . . . . . . . Texas Southland Information, Inc. . . . . . . . . . Texas Stewart Title Company . . . . . . . . . . . . . Texas Stewart Title Austin, Inc. . . . . . . . . . . Texas Stewart Title of Lubbock, Inc. . . . . . . . . Texas
(continued) 3 Exhibit 21 (continued) STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES
STATE OF NAME OF SUBSIDIARY INCORPORATION ------------------ ------------- Stewart Title Company of Rockport, Inc. . . . . Texas Texarkana Title and Abstract, Inc. . . . . . . Texas Stewart Investment Services Corporation . . . Texas Stewart Trust Company . . . . . . . . . . . . Texas Landata Systems, Inc. . . . . . . . . . . . . Texas Landata, Inc. of San Antonio . . . . . . . . . Texas Landata, Inc. of Midwest . . . . . . . . . . . Texas Landata RE-Source, Inc. . . . . . . . . . . . Texas Landata Field Services . . . . . . . . . . . . Texas Fulghum, Inc. . . . . . . . . . . . . . . . . . Texas OnLine Mortgage Documents . . . . . . . . . . . Texas Mortgage Management Services, Inc. . . . . . . Texas Stewart Management Information, Inc. . . . . . Texas Stewart - U.A.M., Inc. . . . . . . . . . . . . Texas Baca Landata, Inc. . . . . . . . . . . . . . . Texas Primero, Inc. . . . . . . . . . . . . . . . . Texas United Aerial Mapping, Inc. . . . . . . . . . Texas Priority Title - Houston . . . . . . . . . . . Texas Priority Title - Dallas . . . . . . . . . . . . Texas Stewart Title of North Texas . . . . . . . . . Texas Stewart Information International, Inc. . . . Texas San Antonio Data, Inc. . . . . . . . . . . . . Texas Stewart Title Insurance Company (U.K.) Limited . . . . . . . . . . . . . . . . . . United Kingdom Conquest Group . . . . . . . . . . . . . . . . United Kingdom Michael Hickmott & Co. . . . . . . . . . . . . United Kingdom Stewart Title Great Britain . . . . . . . . . . United Kingdom Stewart Title of Virginia . . . . . . . . . . . Virginia Stewart Title and Escrow, Inc. . . . . . . . . Virginia Stewart Title - Shenandoah Valley, L.C. . . . Virginia Stewart Title Services of Virginia, L.C. . . . Virginia Signature & Stewart Settlements, L.C. . . . . Virginia Stewart Title & Associates . . . . . . . . . . Virginia Cedar Run Title & Abstract . . . . . . . . . . Virginia Land Title Research . . . . . . . . . . . . . Virginia Stewart Services of Greater Virginia . . . . . Virginia Stewart Title of Gillette . . . . . . . . . . Wyoming
EX-23 5 CONSENTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNT. 1 The Board of Directors Stewart Information Services Corporation: We consent to incorporation by reference in the registration statements (No. 33-48519, 48520, 58156 and 59747) on Form S-8 of Stewart Information Services Corporation of our report dated February 7, 1996, relating to the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 1995 and 1994 and the related consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended December 31, 1995, and all related schedules, which report appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. Our report covering the December 31, 1995 financial statements refers to a change in accounting for long-lived assets. We also consent to the reference to our firm under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ KPMG PEAT MARWICK LLP Houston, Texas March 15, 1996 2 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747 and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ M. TIMOTHY O'ROARK ---------------------- M. TIMOTHY O'ROARK El Paso, TX 3 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Forms S-8 No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747 and No. 33-62535) pertaining to the 1992 Nonqualified Stock Option Plan for Region Manager, the Stewart Morris, Jr. 1992 Stock Option and Malcolm Morris 1992 Stock Option, the Associates Stock Bonus Plan, 1995 Stock Option Plan, and the Salary Deferral Plan and Trust, respectively, of Stewart Information Services Corporation of our report dated January 20, 1995 with respect to the balance sheet of Stewart Title as of December 31, 1994, and the related statements of operations and retained earnings, and cash flows for each of the two years in the period ended December 31, 1994 (no presented separately therein) included in Stewart Information Services Corporation's Annual Report (Form 10-K) for the year ended December 31, 1995. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Los Angeles, California March 15, 1996 4 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747 and No. 33-62535) of Stewart Information Services Corporation of our report dated January 20, 1995 on the consolidated financial statements of Stewart Title & Trust of Phoenix, Inc. appearing in this Form 10-K. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ PRICE WATERHOUSE LLP ------------------------------ PRICE WATERHOUSE LLP Phoenix, Arizona March 14, 1996 5 The Board of Directors Stewart Information Service Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on form S-8 of Stewart Information Services Corporation of our reports dated February 8, 1995, relating to the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 1994 and 1993 and the related consolidated statements of earnings and retained earnings and cash flows and related schedules for each of the years in the three-year period ended December 31, 1994, which appear in or are incorporated by reference in the December 31, 1994 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to our firm under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ GRANT BENNETT ACCOUNTANTS GRANT BENNETT ACCOUNTANTS A PROFESSIONAL CORPORATION Certified Public Accountants Sacramento, California 6 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, 33-58156, 33-59747, and 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ WILKERSON & ARTHUR, P.C. Wilkerson & Arthur, P.C. Fort Worth, Texas 7 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1994 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ AARONSON, WHITE & COMPANY AARONSON, WHITE & COMPANY Houston, TX 8 The Board of Directors Stewart Information Services Corporation I consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of my report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. I also consent to the reference to me under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ GINNY SANDERS MAY, CPA Ginny Sanders May, CPA Lake Jackson 9 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ EDGAR, KIKER & CROSS, L.L.P. EDGAR, KIKER & CROSS, L.L.P. Certified Public Accountants Beaumont, Texas 10 The Board of Directors Stewart Information Services Corporation I consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of my report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. I also consent to the reference to me under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ JIM S. WALKER Jim S. Walker Certified Public Accountant Beaumont, Texas January 19, 1996 11 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ DOSHIER, PICKENS, & FRANCIS, P.C. ---------------------------------------- DOSHIER, PICKENS, & FRANCIS, P.C. Amarillo, TX March 5, 1996 12 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ FANCHER AND COMPANY FANCHER AND COMPANY Corpus Christi, Texas 13 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1994 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ JESUS YEPEZ Jesus Yepez Certified Public Accountant Lubbock, Texas 14 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1995 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ WILLIAMS & PEARCY, P.C. Williams & Pearcy, P.C. Texarkana, USA 15 The Board of Directors Stewart Information Services Corporation Houston, Texas We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, No. 33-58156, No. 33-59747, and No. 33-62535) on Form S-8 of Stewart Information Services Corporation of our report for the audit of escrow fund of Stewart Title Rockport and San Patricio. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements, only to the extent it relates to the audit of the escrow funds. /s/ FLUSCHE, VAN BEVEREN, KILGORE, P.C. Flusche, Van Beveren, Kilgore, P.C. February 29, 1996 Corpus Christi, Texas 16 The Board of Directors Stewart Information Services Corporation We consent to incorporation by reference in the registration statements (No. 33-48519, No. 33-48520, 33-58156, 33-59747 and 33-62535) on Form S-8 of Stewart Information Services Corporation of our report, which appears in the December 31, 1994 annual report on Form 10-K of Stewart Information Services Corporation. We also consent to the reference to us under the heading "Interests of Named Experts and Counsel" in such Registration Statements. /s/ MCGEE, HAZA & CO. ---------------------------------------- McGee, Haza & Co. Dallas, Texas February 29, 1996 EX-27 6 FINANCIAL DATA SCHEDULE
7 This schedule contains summary financial information extracted from the consolidatd balance sheet as of December 31, 1995 and the related consolidated statement of earnings for the year ended December 31, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 YEAR DEC-31-1995 DEC-31-1995 185,756 0 0 0 3,133 2,882 213,994 16,698 0 0 351,359 138,312 0 0 0 12,589 6,390 0 0 168,462 351,359 266,728 13,564 956 1,257 29,591 0 0 10,729 3,722 7,007 0 0 0 7,007 1.11 1.11 134,316 27,554 2,037 5,678 19,917 138,312 0 Includes short-term investments.
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