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In the regular conduct of business, Zenith Insurance, leases offices in various cities. See Notes to Consolidated Financial Statements -- Note 11 -- "Commitments and Contingent Liabilities" on pages 57-58 of Zenith's 1999 Annual Report to Stockholders, which note is hereby incorporated by reference.
Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations, included in Zenith's 1999 Annual Report to Stockholders on pages 24-37 is hereby incorporated by reference.
Reference is made to the Property-Casualty Loss Development data on pages 40-41 of Zenith's 1999 Annual Report to Stockholders for information setting forth the loss and loss adjustment expense liability development for 1989 through 1999 and to the consolidated financial statements and notes thereto on pages 42-65 of Zenith's 1999 Annual Report to Stockholders, which are hereby incorporated by reference.
Unitrin's subsidiary, United, owns the 41-story office building at One East Wacker Drive, Chicago, Illinois, that houses the executive offices of Unitrin and United. Unitrin and United occupy approximately 83,000 square feet of the 527,000 rentable square feet in the building. In addition, Unitrin subsidiaries together own 14 buildings located in 10 states consisting of approximately 317,600 square feet in the aggregate.
The Unitrin Life and Health Insurance segment leases facilities with aggregate square footage of approximately 377,379 at 176 locations in 25 states. The latest expiration date of the existing leases is January 2007.
Selected consolidated financial data for the five years ended December 31, 2001 is incorporated herein by reference to the data captioned "Financial Highlights" and filed as Exhibit 13.3 hereto.
We own seven office buildings consisting of an aggregate of approximately 670,000 square feet of space. Our headquarters are located in Downers Grove, Illinois and our other six offices are located in West Sacramento, California; San Diego, California; Houston, Texas; Pittsburgh, Pennsylvania; Tucson, Arizona; and Scottsdale, Arizona. Additionally, we lease significant office space in Salt Lake City, Utah; Rockville, Maryland; Milwaukee, Wisconsin; Richmond, Virginia; Tampa, Florida; and Boise, Idaho. We also have numerous smaller leased facilities throughout the nation.
The information required by this item is set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2002 Annual Report to Stockholders and is incorporated herein by reference.
Financial Statements: Page No. -------------------- ------- Report of Independent Auditors 35
Consolidated Statements of Operations for the Years Ended December 31, 2000, 2001 and 2002 38
The principal executive offices of the Company and FSA are located at 350 Park Avenue, New York, New York 10022. The principal executive offices, which consist of approximately 53,000 square feet of office space, are under lease agreements which expire in 2005. The Company's telephone number at its principal executive offices is (212) 826-0100. FSA or its subsidiaries also maintain leased office space in San Francisco, Dallas, Hamilton (Bermuda), London (England), Paris (France), Madrid (Spain), Singapore, Sydney (Australia) and Tokyo (Japan). The Company and its subsidiaries do not own any real property.
Selected financial data for the Company and its subsidiaries for each of the last five years is set forth under the caption "Five-Year Financial Summary" on page 16 of the Company's 1998 Annual Report to Shareholders. Such information is incorporated herein by reference and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto contained on pages 26 to 44 of such Annual Report.
Management's Discussion and Analysis of Financial Condition and Results of Operations is set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 18 through 24 of the Company's 1998 Annual Report to Shareholders. Such information is incorporated herein by reference and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto contained on pages 26 to 44 of such Annual Report.
The 1998 Consolidated Financial Statements, together with the Notes thereto and the Report of Independent Accountants thereon, are set forth on pages 25 through 44 of the Company's 1998 Annual Report to Shareholders. Such information is incorporated herein by reference.
In addition, the Company and its subsidiaries lease office facilities in various other cities under leases with varying terms and expiration dates.
The Company's Home Office is located at 2801 Highway 280 South, Birmingham, Alabama. This campus includes the original 142,000 square-foot building which was completed in 1976 and a second contiguous 220,000 square-foot building which was completed in 1985. In addition, parking is provided for approximately 1,000 vehicles.
The Company leases administrative space in approximately 16 cities including approximately 114,000 square feet in Birmingham, with most leases being for periods of three to five years. The aggregate monthly rent is approximately $428 thousand.
(1) Prior periods have been restated to reflect a two-for-one stock split on June 1, 1995 and April 1, 1998.
The financial statements and supplementary data for the Company and its subsidiaries, which are included under the caption "Consolidated Financial Statements" in the Company's 1998 Annual Report to Share Owners, are incorporated herein by reference.
Our report on the consolidated financial statements of Protective Life Corporation and subsidiaries has been incorporated by reference in this Form 10-K from page 52 of the 1998 Annual Report to Share Owners of Protective Life Corporation. In connection with our audits of such financial statements, we have also audited the related financial statement schedules listed in the index on page 32 of this Form 10-K.
LIFE Department Premium Reserve . . . . .... Frs. 86,484,037.— Reserve for unsettled Claims . . . . „ 1,681,489.— „ 88,165,526.—
PROFIT ÄND LOSS ACCOUNT for the year ending 31®» December, 1920.
Life DepL. Premiums for Retrocession . . . . Commissions and Expenses, less Retrocession ...... Surrenders, less Retrocession Losses paid, less Retrocession . . . . . Annuities paid, less Retrocession . . . . . .... . . Premium Reserve, less Retrocession. . . Annuity Fund, less Retrocession ' . . . . . . Reserve for unsettled Claims, less Retrocession ..... Expenses of Management Taxes Written off for depreciation of Investments . . . . . . . . Net Profit . . . .
Balance of Profit and Loss Account . ,. . . • • ... • • • • • •
Assets. Shareholders' Liability House Property . . . . .... . . Frs. 2,500,000. — Mortgages , 27,658,181.25 Government and other Securities ......... , 52,288,781.05 Life and other funds deposited with ceding Companies . , 105,047,752.14 Bank Balances . , 6,055,486.27 Cash in hand 76,448. 47
Management: E. HUrlimann, General Manager. P. Althar, E. Bebier, E. Bollar, J. Gailloud, A. Hoiiingar,
The response to this Item is incorporated by reference to page 1 of the Company's Annual Report to Stockholders for the year ended December 31, 2001, which is included as Exhibit (13) to this Form 10-K Report.
Management's Discussion and Analysis of Financial Condition - ------ ------------------------------------------------------------ and Result of Operations. ------------------------
The response to this Item is incorporated by reference to pages 15 through 31 of the Company's Annual Report to Stockholders for the year ended December 31, 2001, which is included as Exhibit (13) to this Form 10-K Report.
Information required under this item is incorporated herein by reference to the sections entitled "Subsidiaries," "Branch Offices," "Field Offices," "Information Systems Office" and "Properties" on page 57 of the 1996 Annual Report. The Company's facilities are substantially fully utilized and are adequate for the conduct of the Company's business.
The consolidated financial statements and supplementary data of the Company are incorporated herein by reference to pages 33 through 52, inclusive, of the 1996 Annual Report. An index to the consolidated financial statements is contained in Item 14 (a)(1) of this report, and the Quarterly Financial Information is incorporated herein by reference to page 53 of the 1996 Annual Report.
The registrant and four of its subsidiaries, as tenants in common, own a 56% condominium interest in a 44-story building in New York City which serves as their worldwide headquarters. The principal offices of the registrant's Bowring subsidiaries in London are located in two adjoining buildings under a lease which expires in 2077.
The remaining business activities of the registrant and its subsidiaries are conducted principally in leased office space in cities throughout the world. No difficulty is anticipated in negotiating renewals as leases expire or in finding other satisfactory space if the premises become unavailable. From time to time, the registrant may have unused space and may seek to sublet such space to third parties, depending upon the demands for office space in the locations involved.
The selected financial data on pages 48 and 49 of the 1995 Annual Report are incorporated herein by reference.
Information on pages 23 through 29 of the 1995 Annual Report is incorporated herein by reference.
The Consolidated Financial Statements and the Report of Independent Auditors thereto on pages 30 through 46 of the 1995 Annual Report and Selected Quarterly Financial Data (Unaudited) on page 47 of the 1995 Annual Report are incorporated herein by reference. Supplemental Notes to Consolidated Financial Statements are included on pages 17 and 18 hereof.
The principal offices of MMC's risk and insurance services subsidiaries in the UK are located on the eastern side of the City of London in The Sedgwick Centre. This freehold building, owned by a subsidiary of MMC, comprises 360,000 square feet containing offices located around a central atrium, and ancillary facilities including a shopping mall.
On June 30, 1998, MMC sold a 37.58% condominium interest in a 40 story building in New York City, which it had acquired in the business combination with Johnson & Higgins.
The selected financial data on page 57 of the 1998 Annual Report are incorporated herein by reference.
The Consolidated Financial Statements and the Report of Independent Auditors thereto on pages 36 through 55 of the 1998 Annual Report and Selected Quarterly Financial Data (Unaudited) on page 56 of the 1998 Annual Report are incorporated herein by reference. Supplemental Notes to Consolidated Financial Statements are included on page 18 hereof.
Selected financial data for the two years ended December 31, 2000 and 1999, the three month period ended December 31, 1998, and the three years ended September 30, 1998, is incorporated by reference to page 3 of the 2000 Annual Report to Shareholders filed in Exhibit 13.1 filed with this Form 10-K.
This item is incorporated by reference to pages 32 through 50 of the 2000 Annual Report to Shareholders filed in Exhibit 13.1 filed with this Form 10-K.
This item is incorporated by reference to pages 51 through 93 of the 2000 Annual Report to Shareholders filed in Exhibit 13.1 filed with this Form 10-K.
In addition to the office space referenced above, we lease approximately 120 sites in 22 states, totaling roughly 2 million square feet of space.
The information required by this Item 6 is set forth in the Company's 2002 Annual Report to Stockholders on page 1, and is incorporated herein by reference and made a part hereof.
The information required by this Item 8 is incorporated herein by reference to the Company's 2002 Annual Report to Stockholders and made a part hereof as follows: (1) the consolidated financial statements of Health Net, Inc. and subsidiaries on pages 50 through 85 of the Company's 2002 Annual Report to Stockholders are so incorporated by reference and made a part hereof and (2) the Report of Independent Auditors on page 49 of the Company's 2002 Annual Report to Stockholders is so incorporated by reference and made a part hereof.
The following selected consolidated financial data for each of the five years in the period ended December 31, 2002 have been derived from Gallagher's consolidated financial statements. Such data should be read in conjunction with Gallagher's audited Consolidated Financial Statements and related notes thereto, which have been incorporated by reference in Item 8 of this annual report.
(1) Restated to conform to the current year presentation. See Note 3 to the Consolidated Financial Statements of Gallagher's 2002 Annual Report to Stockholders on page 39, which is incorporated herein by reference.
(3) Based on the weighted average number of common and common equivalent shares outstanding during the year.
(4) Based on the total dividends declared on a share of common stock outstanding during the entire year.
(5) Represents annual net earnings divided by stockholders' equity as of the beginning of the year.
Gallagher's Consolidated Financial Statements, the related notes thereto, Management's Report and Report of Independent Auditors are included in Gallagher's 2002 Annual Report to Stockholders on pages 31 to 58 and are incorporated herein by reference.
DGI shares headquarters with the Mutual Company in a building owned by the Mutual Company. The Mutual Company charges DGI for an appropriate portion of the building expenses under an inter-company allocation agreement which is consistent with the terms of the pooling agreement. The headquarters of the Mutual Company have approximately 82,000 square feet of office space, with an additional 40,000 square feet of office space currently under construction. The Mutual Company has a branch office of approximately 1,600 square feet in Pittsburgh, Pennsylvania, which it leases. Southern has a facility of approximately 10,000 square feet in Glen Allen, Virginia which it leases. Delaware American has a facility of approximately 4,000 square feet in New Castle, Delaware which it leases.
The answer to this Item is incorporated by reference to pages 7 through 9 of the Company's Annual Report to Stockholders for the year ended December 31, 1995, which is included as Exhibit (13) to this Form 10-K Report.
We lease our executive offices, which are located at 220 South Ridgewood Avenue, Daytona Beach, Florida 32114, and 401 East Jackson Street, Suite 1700, Tampa, Florida 33602. We lease offices at every location with the exception of our; Washington, New Jersey; Dansville, Hornell and Jamestown, New York; and Grand Forks, North Dakota offices, where we own the buildings. In addition, we own buildings in Loreauville and Scott, Louisiana where we no longer have offices, as well as a parcel of undeveloped property outside of Lafayette, Louisiana and an office condominium in Sarasota, Florida. There is a mortgage on the Grand Forks, North Dakota building with an outstanding balance as of December 31, 2002 of $0.1 million. There are no outstanding mortgages on our other owned properties. Set forth below is information relating to our office locations as of December 31, 2002, summarized by business segment:
Florida: Brooksville, Clearwater, Daytona Beach, Ft. Lauderdale, Ft. Myers, Ft. Pierce, Jacksonville, Largo, Leesburg, Melbourne, Miami Lakes, Monticello, Naples, Ocala, Orlando, Panama City, Perry, Port Charlotte, Sarasota, St. Petersburg, Tallahassee, Tampa, Titusville, West Palm Beach, Winter Haven
Information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 25-37 of the Company's 2002 Annual Report to Shareholders is incorporated herein by reference.
- PROPERTIES The Company's headquarters is located at 2 Eva Road, Suite 200, Etobicoke, Ontario, Canada in leased space.
- SELECTED FINANCIAL DATA The data included on page 4 of the 2002 Annual Report, included as Exhibit 13, under "Selected Financial Data" is incorporated herein by reference.
- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the 2002 Annual Report on pages 5 through 14 included as Exhibit 13 is incorporated herein by reference.
- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements in the 2002 Annual Report included as Exhibit 13, and listed in Item 15 of this Report, are incorporated herein by reference.
Selected financial data for the past five years appears on page 19 in the Annual Report to the Stockholders for the year ended December 31, 2000, and is incorporated herein by reference.
Management's Discussion and Analysis of financial condition and results of operations appears on pages 7-18 in the Annual Report to the Stockholders for the year ended December 31, 2000, and is incorporated herein by reference.
In addition, Zenith Insurance, CalFarm Insurance and CalFarm Life, in the regular conduct of their business, lease offices in various cities. See Note 9 of the Notes to Consolidated Financial Statements of Zenith on page 50 of the 1994 Annual Report to Stockholders, which note is hereby incorporated by reference.
CalFarm Life owns 25% and CalFarm Insurance owns 75% of the home office building (and surrounding property of approximately 4 acres) occupied by those companies in Sacramento, California, consisting of 133,000 square feet. Approximately 20% of the building is leased to the Farm Bureau and affiliates. In addition, CalFarm Life leases and occupies, in a nearby building in Sacramento, California, approximately 30,000 square feet under a lease expiring January 31, 1997.
The five-year summary of selected financial information and accompanying notes, included in Zenith's 1994 Annual Report to Stockholders on pages 34 and 35, is hereby incorporated by reference.
"Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations," included in Zenith's 1994 Annual Report to Stockholders on pages 25 to 33 is hereby incorporated by reference.
Reference is made to pages 36 and 37 of Zenith's 1994 Annual Report to Stockholders for information setting forth the loss and loss adjustment expense liability development for 1984 through 1994 and page 8 of Zenith's 1994 Annual Report to Stockholders for incurred loss and loss adjustment expense development for 1989 through 1994, and to the consolidated financial statements and notes thereto on pages 38 to 54 of Zenith's 1994 Annual Report to Stockholders, all of which are hereby incorporated by reference.
CFC-I owns the Fairfield Executive Center which is located on the northwest corner of the home office property in Fairfield, Ohio. This is a four-story office building containing approximately 96,000 rentable square feet. CFC and its subsidiaries occupy approximately 38% of the building, unaffiliated tenants occupy approximately 8% of the building, approximately 28% of the building is available for future CFC usage and approximately 26% is available for rent. The property is carried in the financial statements at $9,002,980 as of December 31, 2000 and is classified as "Land, buildings and equipment for Company use."
CFC-I also owns an 85,000 square feet office building in downtown Cincinnati that was leased to an unaffiliated company, on a net, net, net lease basis that expired at the end of 2000. The building is currently available for rent or for purchase. This property is carried in the financial statements at $535,000 as of December 31, 2000 and is classified as "Other invested assets."
This information is included in the Annual Report of the Registrant to its shareholders on pages 18 and 19 for the year ended December 31, 2000 and is incorporated herein by reference (see exhibit 13 to this filing).
AND 7(A). MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ---------------------------------------------------------- AND RESULTS OF OPERATIONS AND QUANTITATIVE AND QUALITATIVE ---------------------------------------------------------- DISCLOSURES ABOUT MARKET RISK -----------------------------
(a) Financial Statements The following consolidated financial statements of the Registrant and its subsidiaries, included in the Annual Report of the Registrant to its shareholders on pages 30 to 42 for the year ended December 31, 2000, are incorporated herein by reference (see Exhibit 13 to this filing).
Consolidated Balance Sheets--December 31, 2000 and 1999 Consolidated Statements of Income--Years ended December 31, 2000, 1999, and 1998 Consolidated Statements of Shareholders' Equity--Years ended December 31, 2000, 1999, and 1998 Consolidated Statements of Cash Flows--Years ended December 31, 2000, 1999, and 1998. Notes to Consolidated Financial Statements Independent Auditors' Report
RGA Reinsurance houses its employees and the majority of RGA's officers in approximately 116,000 square feet of office space at 1370 Timberlake Manor Parkway, Chesterfield, Missouri. These premises are leased through August 31, 2009, at annual rents ranging from approximately $2,000,000 to $2,400,000
RGA Reinsurance also conducts business from approximately 1,800 square feet of office space located in Hong Kong and approximately 2,900 square feet of office space located in Tokyo, Japan. The rental expenses paid by RGA Reinsurance under the leases during 1999 were approximately $145,000 and $176,000 for Hong Kong and Tokyo, respectively. RGA Australia conducts business from approximately 20,700 square feet of office space located in Sydney, Australia and paid approximately $100,000 during 1999 for lease expense. The Hong Kong and Tokyo leases expire in January 2001 and January 2002 respectively. The Sydney lease expires in October 2003.
RGA Reinsurance also conducts business from approximately 1,500 square feet of office space in Mexico City, Mexico. The rental expenses paid by RGA Reinsurance under the lease during 1999 were approximately $20,000. The lease expires in December 2000.
RGA Canada's operations are conducted from approximately 9,800 square feet of office space located in Montreal, Canada. The lease with respect to such space expires in 2010. Rental expenses paid by RGA Canada under the lease during 1999 were approximately $185,000. RGA Canada also sub-leases approximately 800 square feet of space in Montreal, Canada. The sub-lease expires in 2000. The rental expenses paid by RGA Canada under the sub-lease during 1999 were approximately $16,000. RGA Canada also leases approximately 5,900 square feet of space in Toronto, Canada. This lease expires in 2005. The rental expenses paid by RGA Canada under the Toronto lease during 1999 were approximately $144,000. RGA International conducts operations from approximately 9,800 square feet of office space located in Toronto, Canada. The lease with respect to such space expires in 2007. The rental expenses paid by RGA International under the lease during 1999 were approximately $312,000.
RGA UK Reinsurance conducts business from approximately 3,000 square feet of office space in London, England. The rental expenses paid by RGA UK Reinsurance under the lease during 1999 were approximately $356,000. The lease expires in 2009.
RGA South Africa conducts business from approximately 5,300 square feet of office space in Cape Town and 3,600 square feet of office space located in Johannesburg, South Africa. The rental expenses paid by RGA South Africa under the leases during 1999 were approximately $38,000 and $17,000 for Cape Town and Johannesburg respectively. The leases expire in September 2003 and May 2004 for Cape Town and Johannesburg respectively.
This information is incorporated by reference to the Annual Report for 1999 under the following captions:
: MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Incorporated by reference from the Company s Financial Statements, the notes thereto, and the independent auditors report included in the Company s Annual Report to Shareholders for the year ended December 31, 1996.
Management's discussion is incorporated by reference from pages 5 through 7 of the Annual Report to Shareholders for the year ended December 31, 1995. See pages 39 through 45 of this report.
The Company owns two adjacent office buildings and property located on the corner of North Columbia and West Rosemary Streets in Chapel Hill, North Carolina, which serves as the Company’s corporate headquarters. The main building contains approximately 23,000 square feet and has on-site parking facilities. The Company’s principal subsidiary, ITIC, leases office space in 33 locations throughout North Carolina, South Carolina, Michigan, Nebraska and Tennessee. NE-ITIC leases office space in one location in New York. Each of the office facilities occupied by the Company and its subsidiaries are in good condition and adequate for present operations. In September 2004, additional space in Chapel Hill, North Carolina was leased for ITEC, ITAC, ITIC’s Commercial Services Division and ITIC’s Settlement Services Division.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2004 Annual Report to Shareholders is incorporated by reference in this Form 10-K Annual Report.
Our corporate headquarters is located in the American General Center, a complex of office buildings with 2.2 million square feet on a 46-acre tract near downtown Houston. American General and certain subsidiaries own all of the buildings and underlying land in the complex. We occupy approximately 50% of the total office space available in the American General Center.
Our subsidiaries also own various other properties, including properties held for investment and the home office buildings of: (1) American General Finance, Inc. in Evansville, Indiana; (2) American General Life and Accident Insurance Company in Nashville, Tennessee; and (3) The Franklin Life Insurance Company in Springfield, Illinois.
(a) Includes $36 million ($.14 per share) aftertax litigation settlements. (b) Includes $246 million ($.94 per share) aftertax litigation settlements and $42 million ($.16 per share) aftertax Year 2000 costs. (c) Includes $247 million ($.99 per share) aftertax merger-related costs, $73 million ($.29 per share) aftertax loss on sale of non-strategic assets, and $33 million ($.13 per share) aftertax litigation settlement. (d) Includes $111 million ($.44 per share) aftertax loss on sale of non-strategic assets and $32 million ($.13 per share) aftertax write-down of USLIFE group insurance business. (e) Includes $140 million ($.57 per share) aftertax adjustment to the allowance for finance receivable losses. (f) Includes fair value adjustment related to securities. Additional information is incorporated herein by reference to the section "Investments - Fair Value of Securities" of MD&A in American General's 1999 ARS.
The company's financial statements and supplementary data are incorporated herein by reference to pages 36-56 in our 1999 ARS.
Inflation also has a significant impact on the insurance industry in general, as well as on the Company. Inflation creates higher claim costs, which are then matched currently against premiums whose rating statistics were developed from data of previous years. In recent inflationary periods, this has led to inade- quate rate structures, since rate regulators are slow to grant rate adjustments at times when the overall economy is in an inflationary cycle. Studies have shown that premium rates trail the claim experience by a period of two years or more. Adequate premium rates continue to be of concern to the Company and the property-casualty insurance industry.
Reserves for losses and loss adjustment expenses reflect the Company's best estimate of the liability for the ultimate cost of reported claims and incurred but not reported (IBNR) claims as of the end of each period. The estimates are based on past claim experience and consider current claim trends as well as social and economic conditions. The Company's reserves for losses and loss ad- justment expenses were $47,702,363 at December 31, 1996 compared with $38,584,084 at December 31, 1995. This increase is a combination of giving con- sideration for the increase in premium volume, increased retention on all lines of coverages written and an increase in the IBNR reserves. Management continues to closely monitor the reserve development trends and projections as it attempts to stabilize the loss reserve development which has occurred in recent years.
Consolidated statements of cash flows - for each of the three years in the period ended December 31, 1996.
The Company's principal executive office is located in Irvine, California in approximately 2,300 square feet of leased space. The lease expires in August 1997. The Company leases its branch offices, which range in size up to approximately 9,000 square feet. The lease terms for the branch offices range from monthly to five years. The Company believes that its facilities are adequate for its current needs and that suitable additional space will be available as required.
The information on pages 5 through 32 of the Company's 2001 Annual Report is incorporated herein by reference.
Certain amounts for 2007 and prior years have been restated to reflect a change in accounting in 2008 and to conform to the presentation of the 2008 financial statements.
Unitrin’s Life and Health Insurance segment leases facilities with aggregate square footage of approximately 472,000 at 148 locations in 26 states. The latest expiration date of the existing leases is in January 2015.
Unitrin Business Insurance leases facilities with an aggregate square footage of approximately 236,500 at 5 locations in 5 states. The latest expiration date of the existing leases is in August 2010.
Unitrin Specialty leases facilities with an aggregate square footage of approximately 147,500 at 3 locations in 3 states. The latest expiration date of the existing leases is in March 2014.
The properties described above are in good condition and suitable for all presently anticipated requirements of Unitrin and its subsidiaries.
Selected consolidated financial data for the five years ended December 31, 2005 is incorporated herein by reference to the data captioned “Financial Highlights” and filed as Exhibit 13.3 hereto.
MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS (Dollar Amounts in Millions)
Revenues increased $93 million, or 7%, to $1.4 billion in 1996 from $1.3 billion in 1995. This increase in revenues was largely a result of a $134 million increase in net investment income primarily due to an increase in the Company's COLI account values, partially offset by a decline in leveraged COLI premiums primarily in response to the enactment of the HIPA Act of 1996. Total expenses increased $89 million, primarily due to an increase in benefits, claims and claim adjustment expenses of $122 million, or 29%, to $545 million in 1996 from $423 million in 1995 partially offset by a decrease in policyholder dividends of $40 million due to the elimination of the sales of leveraged COLI. This increase in total expenses generally reflected an increase in the COLI block of business. These factors resulted in an increase in segment earnings of $4 million, or 16%, to $29 million in 1996 from $25 million in 1995.
Although the Closed Book GRC asset portfolio as a whole is duration matched with its liabilities, certain investments continue to have a longer maturity than their corresponding liabilities and will need to be liquidated prior to maturity in order to meet the specific liability commitments. To protect the existing value of these investments, the Company entered into various interest rate swap, cap and floor transactions in late September 1996 with the objective of offsetting the market price sensitivity of hedged assets to changes in interest rates. As a result of the hedge, the Company substantially eliminated further fluctuation in the fair value of these investments due to interest rate changes, thereby substantially reducing the likelihood of any further loss on the assets due to such changes.
The following table sets forth the after-tax losses incurred by the Company in respect of Closed Book GRC for the two years ended December 31, 1996.
As of December 31, 1996, Closed Book GRC had general account assets of $3.6 billion and general account liabilities of $3.6 billion. Closed Book GRC assets consisted of $2.7 billion of fixed maturity securities (including $21 million of MBSs and $1.03 billion of CMOs), a $471 million market-neutral portfolio based on London interbank offered quotations for U.S. dollar deposits
The Company's and PMA Re's headquarters are located in 78,000 square feet of leased space in center city Philadelphia, Pennsylvania. The PMA Insurance Group's headquarters are located in a four story, 110,000 square foot building in Blue Bell, Pennsylvania. Caliber One's headquarters are located in 20,000 square feet of leased office space in Yardley, Pennsylvania.
The information under the caption "Selected Financial Data" on pages 26 and 27 of the Annual Report is incorporated herein by reference.
The Company owns an office building with approximately 267,000 square feet of office space in Tampa, Florida, of which it occupies approximately 125,000 square feet.
See "Five-Year Summary of Selected Financial Data" on page 17 of the Company's 1996 Annual Report to Stockholders (the "1996 Annual Report"), included as part of Exhibit 13 to this Form 10-K and incorporated herein by reference.
See Index to Consolidated Financial Statements and Schedules on page hereof. There is also incorporated by reference herein in response to this Item the material under the caption "Selected Quarterly Financial Data (unaudited)" on page 54 of the 1996 Annual Report, which material is included as part of Exhibit 13 to this Form 10-K.
The combined financial statements of Aetna P&C as of December 31, 1995 and 1994 and for the years ended December 31, 1995, December 31, 1994 and December 31, 1993, together with the notes thereto and the related report of Independent Accountants, are included as Exhibit 99.01 to this Form 10-K and are incorporated herein by reference.
The	"Management's Discussion and Analysis of Results of Operations and Financial Condition" section from the Company's annual report to stockholders for the year ended December 31, 2000, which is included as Exhibit (13)(B) to this Form 10-K Report, is incorporated herein by reference. Certain of the statements contained herein (other than statements of historical facts) are forward looking statements. Such forward looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward looking statements are subject to change and uncertainty which are, in many instances, beyond the Company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Harleysville Group. There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Harleysville Group will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Harleysville Group depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; natural catastrophe losses; competition in insurance product pricing; government regulation and changes therein which may impede the ability to charge adequate rates; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of labor markets in which the Company operates.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ------- -------------------------------------------- The consolidated financial statements from the Company's annual report to stockholders for the year ended December 31, 2000, which is included as Exhibit (13)(D) to this Form 10-K Report, are incorporated herein by reference.
The information required by this Item is included on page 39 of the Registrant's Annual Report to Shareholders for the year ended December 31, 1997, under the caption "Selected Financial Data" and is incorporated herein by reference.
The information required by this Item is included on pages 16-20 of the Registrant's Annual Report to Shareholders for the year ended December 31, 1997 under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated herein by reference.
The information required by this Item is included on pages 21-41 of the Registrant's Annual Report to Shareholders for the year ended December 31, 1997 under the captions "Consolidated Statements of Income", "Consolidated Balance Sheets", "Consolidated Statements of Shareholders' Investment", "Consolidated Statements of Cash Flows", "Notes to Consolidated Financial Statements", and "Quarterly Financial Data", and is incorporated herein by reference.
MMC and its subsidiaries have major office locations in New York, London and Boston, as well as other offices around the world.
MMC and certain of its subsidiaries, including Marsh USA Inc. and Mercer Human Resource Consulting, Inc., as tenants in common, own a 69% condominium interest covering approximately 1,120,000 square feet in a 44-story building in midtown Manhattan in New York City, which serves as their worldwide headquarters. MMC has a fixed rate nonrecourse mortgage note agreement due in 2009 amounting to $200 million, bearing an interest rate of 9.8%, with the notes secured by MMC's interest in its worldwide headquarters. In the event the mortgage is foreclosed following a default, MMC would be entitled to remain in the space and would be obligated to pay rent sufficient to cover interest on the notes or at fair market value if greater. MMC leases an additional 276,000 square feet of space in its headquarters building. MMC and its subsidiaries lease an additional 680,000 square feet in various locations around New York City in support of its operations, including a lease covering approximately 420,000 rentable square feet in a building under construction in Hoboken, New Jersey.
The principal offices of the Marsh subsidiaries in the UK currently are located in the City of London in the Marsh Centre. This freehold building, comprising 360,000 square feet, was sold by a subsidiary of MMC in 2001. The office space in the Marsh Centre has been leased back on a temporary basis pending the completion of a move to approximately 340,000 square feet of office space in a new complex in London. Occupation of the new offices is expected to be completed in April 2003. Marsh subsidiaries lease an additional 230,000 square feet of office space in and around London in support of their operations. The principal offices of the Mercer subsidiaries in the UK currently comprise approximately 200,000 square feet of leased space in and around London. Mercer has entered into a lease covering approximately 140,000 rentable square feet in a new building under construction in London.
The information on pages 23 through 32 of the 2002 Annual Report is incorporated herein by reference.
The Consolidated Financial Statements and the Independent Auditors' Report thereto on pages 33 through 53 of the 2002 Annual Report and Selected Quarterly Financial Data (Unaudited) on page 54 of the 2002 Annual Report are incorporated herein by reference. Supplemental Notes to Consolidated Financial Statements are included on page 35 hereof.
Main Place does not own or lease any physical property and no such property is necessary for the conduct of Main Place’s business.
Omitted in accordance with General Instruction I (2) (a) to Form 10-K.
Main Place’s primary business activity in 2003 and beyond is presently expected to be entering into financial warranty agreements in favor of third parties for a fee.
Total income for the year ended December 31, 2007 was $255.6 million, representing an decrease of $100.3 million compared to 2006. The decrease was primarily a result of decreased interest on time deposits placed due to a lower time deposit balance. In addition, trading losses and fees for the year ended December 31, 2007 increased $98 thousand, to a loss of $239 thousand. The increased trading losses were due primarily to the lower present value caused by higher interest rate and the decrease in the aggregate net asset value of outstanding shares subject to the financial warranty agreements.
Total expense (excluding income taxes) for the year ended December 31, 2007 were $212 thousand, representing decrease of $2 thousand compared to 2006.
Total income for the year ended December 31, 2006 was $355.8 million, representing an increase of $130.1 million compared to 2005. The increase was primarily a result of increased interest on time deposits placed due to higher interest rates. In addition, trading losses and fees for the year ended December 31, 2006 decreased $1.1 million, to a loss of $141 thousand. The decreased trading losses were due primarily to the decrease in the aggregate net asset value of outstanding shares subject to the financial warranty agreements reducing the value of the agreements.
Total net income for the year ended December 31, 2006 was $220.0 million, representing an increase of $83.1 million from 2005. As discussed above, the increase was primarily a result of increased interest on time deposits placed due to higher interest rates. Income tax expense for the year ended December 31, 2006 was $135.6 million, representing an increase of $47.0 million from 2005 due to increased interest income.
The following is a summary of the more judgmental and critical accounting estimates and principles. In each area, we have identified the variables most important in the estimation process. Management has used the best information available to make the estimations necessary to value the related assets and liabilities. Actual performance that differs from our estimates and future changes in the key variables could change future valuations and impact net income.
(3) Dividend per Common Share is based on the number of outstanding Common Shares as of December 31, 1996 of 25,000,000.
(5) Return on average equity equals the annual net income divided by the average of the shareholders' equity on the first and last day of the respective period.
The Company’s corporate office complex is located on a 42-acre parcel in Mayfield Village, Ohio. This complex contains approximately 624,800 square feet and is owned by a subsidiary.
The Company also owns seven other buildings in suburbs adjoining the corporate office complex (excluding the buildings described in the following paragraph), four buildings in Tampa, Florida, and a building in each of the following cities: Tempe, Arizona; Ft. Lauderdale, Florida; Albany, New York; Tigard, Oregon; Plymouth Meeting, Pennsylvania; and Austin, Texas. Four of these buildings are partially leased to non-affiliates. In total, these buildings contain approximately 1,450,000 square feet of office, warehouse and training facility space and are owned by subsidiaries of the Company. These locations are occupied by the Company’s business units or other operations and are not segregated by industry segment. In addition, the Company owns two buildings in Tampa, Florida that are currently for sale, which are partially leased to non-affiliates.
Incorporated by reference from Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 42 through 46 of the Company’s 2000 Annual Report.
The Company leases office space in Pembroke, Bermuda where the Company’s principal executive office are located. Additionally, the Company and its subsidiaries lease office space in the United States and the United Kingdom including White Plains, New York; New York, New York; Chicago, Illinois; Los Angeles, California; San Francisco, California and London, England. We renew and enter into new leases in the ordinary course of business. For further discussion of our leasing commitments at December 31, 2005, please see Note 9 - ‘‘Commitments and Contingencies’’ of our consolidated financial statements.
(a) Gross premiums written and acquired for the year ended December 31, 2003 included $400.3 million of gross premiums acquired in the HartRe transaction. Gross premiums written and acquired for the year ended December 31, 2002 included $90.0 million of gross premiums acquired in the LaSalle transaction.
(b) Net premiums written and acquired for the year ended December 31, 2003 included $400.3 million of gross premiums acquired in the HartRe transaction. Net premiums written and acquired for the year ended December 31, 2002 included $69.0 million of net premiums acquired in the LaSalle transaction.
(c) Book value per share is a non-GAAP measure based on total shareholders’ equity divided by basic common shares outstanding of 66,412,937 at December 31, 2005, 61,472,808 at December 31, 2004, 64,046,776 at December 31, 2003, 55,000,000 at December 31, 2002 and 60,000,000 at December 31, 2001. Common shares outstanding include 274,036 vested restricted share units for purposes of the December 31, 2005 book value per share calculation.
(e) The loss ratio is calculated by dividing losses and loss expenses by net premiums earned.
(f) The acquisition expense ratio is calculated by dividing acquisition expenses by net premiums earned.
(g) The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned.
(h) The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. As a recently formed company, our historical combined ratio may not be indicative of future underwriting performance.
The Report of Independent Registered Public Accounting Firm, Audited Consolidated Financial Statements and related notes, specifically, Note 17 containing the Condensed Unaudited Quarterly Financial Data, included in our 2005 Annual Report to Shareholders are incorporated herein by reference and are filed as Exhibit 13.1 to this Form 10-K.
The five-year financial information under the caption "Highlights" on page one of CIGNA's 1995 Annual Report is incorporated by reference.
The information on pages eight through 23 of CIGNA's 1995 Annual Report is incorporated by reference.
CIGNA's Consolidated Financial Statements on pages 24 through 45 and the report of its independent accountants on page 46 of CIGNA's 1995 Annual Report are incorporated by reference, as is the unaudited information set forth under the caption "Quarterly Financial Data--Consolidated Results" on page 47.
The section entitled "Five-Year Consolidated Summary of Selected Financial Data" on page 16 of the Annual Report to Shareholders for the year ended December 31, 1995, is incorporated herein by reference.
Management's Discussion and Analysis on pages 17 through 25 of the Annual Report to Shareholders for the year ended December 31, 1995, is incorporated herein by reference.
The consolidated financial statements and notes to the consolidated financial statements of the Registrant and subsidiaries on pages 27 through 41 of the Annual Report to Shareholders for the year ended December 31, 1995, and the Independent Auditors' Report on page 42, are incorporated herein by reference.
At December 31, 2000, the Company leased office space in various cities throughout the United States under leases expiring between 2001 and 2006 and which required annual rentals of $2.7 million in 2000.
The consolidated statements of operations, of shareholders' equity and of cash flows for each of the years in the three-year period ended December 31, 2000, and the related consolidated balance sheet of the Company as of December 31, 2000 and 1999, together with the related notes thereto and the report of independent accountants, as well as the unaudited quarterly financial data, all set forth in Exhibit 13 to this Annual Report on Form 10-K, are hereby incorporated by reference in answer to this Item.