(1) This lease terminates in 2016. (2) This lease terminates in 2006. (3) This lease terminates in 2007. (4) These leases terminate in 2004. (5) This lease terminates in 2009. (6) This lease terminates in 2003. (7) This lease terminates in 2005.
GENERAL. Our primary business is title insurance. We close transactions and issue policies on homes and other real property located in all 50 states, the District of Columbia and several foreign countries through more than 5,800 issuing locations. We also sell electronically delivered real estate services and information, as well as mapping products and geographic information systems, to domestic and foreign governments and private entities.
o declining mortgage interest rates, which usually increase home sales and refinancing transactions;
o increased market share; o additional revenues from our new offices; and
Premiums from agents increased 33.8% to $661.9 million in 2001 while decreasing 20.6% to $494.6 million in 2000 from $623.3 million in 1999. The increase in 2001 was primarily due to the increase in refinancings and regular transactions. The largest increases were in California, Florida, Pennsylvania and New York. The decrease in 2000 resulted primarily from declining refinancings and regular transactions handled by agents nationwide. While premiums in nearly all states declined in 2000, the largest decreases were in California, Utah, Florida and Oregon.
INVESTMENTS. Investment income increased 4.3% in 2001 primarily because of increases in average balances invested, partially offset by lower yields. Investment income increased 4.6% in 2000 primarily because of an increase in yields. Investment gains in 2001, 2000 and 1999 were realized as part of the ongoing management of the investment portfolio for the purpose of improving performance.
EMPLOYEE COSTS. Employee costs for the combined business segments increased 25.1% in 2001 and 3.3% in 2000. The number of persons we employed at December 31, 2001, 2000 and 1999 was approximately 6,900, 5,600 and 5,800, respectively. The increase in staff in 2001 was primarily due to increased title and REI volume and acquisitions of new offices. The decrease in staff in 2000 was primarily the result of reductions in existing operations in response to decreased volume. The reductions were offset partially by acquisitions and expansion in national marketing and technology operations.
In the REI segment, employee costs increased in 2001 and 2000 primarily due to a shift in focus to provide more post-closing services to lenders. These services are considerably more labor intensive.
Our labor and certain other operating costs are sensitive to inflation. 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 we handle.
LIQUIDITY AND CAPITAL RESOURCES. In 2001, 2000 and 1999 we financed a portion of the purchase price of certain acquisitions through the issuance of $3.2 million, $4.9 million and $7.4 million, respectively, of our common stock. Acquisitions during 2001, 2000 and 1999 resulted in additions to our goodwill of $19.3 million, $7.5 million and $8.8 million, respectively.
Cash provided by operations was $108.2 million, $31.9 million and $57.9 million in 2001, 2000 and 1999, respectively. Internally generated cash flow has been the primary source of financing for additions to property and equipment, expanding operations and other requirements. This source may be supplemented by bank borrowings. We do not have any material source of liquidity and financing that involves off-balance sheet arrangements.
A substantial majority of consolidated cash and investments is held by Stewart Title Guaranty Company (Guaranty) and its subsidiaries. Cash transfers between Guaranty and its subsidiaries and the Company are subject to certain legal restrictions. See Notes 3 and 4 to the consolidated financial statements.
Our liquidity, excluding Guaranty and its subsidiaries, is comprised of cash and investments aggregating $18.0 million and short-term liabilities of $1.0 million at December 31, 2001. We know of no commitments or uncertainties that are likely to materially affect our ability to fund cash needs.
We consider our capital resources, represented primarily by long-term debt of $7.0 million and stockholders' equity of $394.5 million at December 31, 2001, to be adequate.
The information required to be provided in this item is included in our Consolidated Financial Statements, including the Notes thereto, attached hereto as pages to, and such information is incorporated in this report by reference.