The Registrant's and Arista's principal executive offices are located at 116 John Street, New York, New York 10038. The offices contain approximately 16,100 square feet. Effective on June 1, 2000, the Company entered into a new seven year lease for its principal executive office space at an average rent over the term of the lease of approximately $475,000 per year, exclusive of electricity and a share of various operating expenses.
Prior to July 1, 1998, the Company, through its wholly-owned subsidiary, Arista Insurance Company, operated principally as an underwriter of New York State disability insurance to some 23,000 policyholders and 229,000 covered lives in the New York Metropolitan Area. In November 1998, effective July 1, 1998, the Company ceded its disability insurance underwriting operations to The Guardian pursuant to the Treaty and concurrently, the Registrant entered into the TPA Agreement under which the Company performs various functions as an independent administrator for all disability policies ceded to The Guardian and for other New York State statutory disability policies issued by The Guardian and other entities. (the "TPA services").
Consolidated revenues during the years ended December 31, 2000 and 1999 were $3,966,704 and $3,505,816, respectively, from the Company's continuing third party administrative service operations. During the years of 2000 and 1999, the Company operated solely as a full-time third party administrative service provider (a "Provider"). Revenues increased in 2000 mainly due to the additional fees earned by the Company acting as a Provider for an acquisition completed by its primary client in August 1999 and other increased business. In addition, the Company entered into a third party administration agreement effective October 1, 2000, with a new client.
Consolidated general and administrative expenses for 2000 was $3,773,390 as compared to such expenses from continuing operations of $3,669,298 for 1999. The increase in consolidated general and administrative expenses in 2000 was due principally to increases in rent and salaries and wages for claims department employees.
Consolidated general and administrative expenses for 1999 were $3,669,298 as compared to such expenses from continuing operations of $2,427,321 for 1998. In addition, in 1998 the Company incurred consolidated general and administrative expenses from discontinued operations of $2,272,616. In total, the consolidated general and administrative expenses for 1998 from all operations were $4,699,937.
YEAR ENDED DECEMBER 31, 2000 AS COMPARED TO DECEMBER 31, 1999
Retained earnings increased from $1,043,626 at December 31, 1999 to $1,161,829 at December 31, 2000 as a result of the Company's increase in operating profits of $118,203.
At December 31, 2000, the Company had cash and cash equivalents aggregating $463,573, compared to $206,079 at December 31, 1999. The increase in 2000 was due principally to the purchase of short term U.S. treasury obligations which are treated as a cash equivalent, after the maturity of certain long-term U.S. treasury obligations.
in connection with the Year 2000 compliance project were charged to operations. Expenditures in 1998 aggregated $20,500 and the Company incurred additional costs of less than $1,000 in 1999 to complete the project.