Our leases expire from 2017 through 2026 and have an average term of 4.6 years, although our typical lease term ranges from three to five years. We believe we will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable properties. The aggregate annual rent expense under all leases was approximately $41.3 million in 2016.
$2.7 million of depreciation, severance and goodwill impairment charges related to the exit of the delinquent loan servicing operations and $1.7 million of cost management program charges recorded in the ancillary services and corporate segment,
$0.8 million of severance charges recorded in the title segment, and
Non-commercial domestic revenue includes revenues from purchase transactions and centralized title operations. Revenues from purchase transactions increased 6.9%, while centralized revenues declined 14.9% due primarily to decreased default-related title transactions, partially offset by higher refinancing transactions. Total international revenues increased 8.8% in the fourth quarter 2016 compared to the prior year quarter due to volume growth on a local currency basis, primarily from our Canada operations, partially offset by the weakening of the British pound against the U.S. dollar. Revenues from independent agency operations in the fourth quarter 2016 increased 11.3% compared to the fourth quarter 2015, but declined 1.7% sequentially compared to the third quarter 2016. The independent agency remittance rate was 18.2% in the fourth quarter 2016 compared to 19.0% and 18.0% in the fourth quarter 2015 and the third quarter 2016, respectively. As a result, revenues from independent agencies, net of retention, increased 6.3% from the prior year quarter, and declined approximately 1% sequentially from the third quarter 2016. The average independent agency remittance rate for the full year 2016 was 18.2%, essentially unchanged from 18.3% in 2015.
As mentioned above, the fourth quarter 2016 segment pretax loss included $4.9 million of net realized losses, composed primarily of $3.3 million of realized losses on the sale of assets related to the loan file review and audit and government services lines of business and $1.6 million of early lease termination costs. Fourth quarter 2015 segment results included $0.7 million of net realized losses (primarily resulting from $1.0 million of early lease termination charges), $2.7 million of depreciation, severance and goodwill impairment charges related to the exit of the delinquent loan servicing operations and $1.7 million of cost management program charges. The third quarter 2016 pretax loss for the segment included $1.2 million of costs relating to shareholder activism offset by a $1.2 million realized gain on a cost-basis investment transaction.
In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. These escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees. Escrow losses also arise in cases of mortgage fraud, and in those cases the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed. Escrow losses are recognized as expense when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized. For the years ended December 31, 2016 and 2015, we accrued approximately $3.3 million and $1.0 million, respectively, for policy loss reserves relating to legacy escrow losses arising principally from mortgage fraud.
At each quarter end, our recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that our management compares to its actuarially-based calculation of the ending reserve balance necessary to provide for future title losses. The actuarially-based calculation is a paid loss experience calculation where loss experience factors are selected based on company data and input from our third-party actuaries. We also obtain input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While we are responsible for determining our loss reserves, we utilize this actuarial input to assess the overall reasonableness of our reserve estimation. If our recorded reserve amount is not at the actuary’s point estimate but is within a reasonable range (+5.0%/-4.0%) of our actuarially-based reserve calculation and the actuary’s point estimate, our management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of our recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in our claims management process. If the recorded amount is not within a reasonable range of our third-party actuary’s point estimate, we will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once our reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to our estimate of the overall level of required reserves.
Goodwill is not amortized, but is reviewed annually during the third quarter using June 30 balances, or whenever occurrences of events indicate a potential impairment at the reporting unit level. We have an option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we decide not to use a qualitative assessment or if the reporting unit fails the qualitative assessment, then we perform a two-step quantitative analysis.
Industry data. Published mortgage interest rates and other selected residential housing data for the years ended December 31, 2016, 2015 and 2014 follow (amounts shown for 2016 are preliminary and subject to revision). The amounts below may not relate directly to or provide accurate data for forecasting our operating revenues or order counts.
The real estate market remained strong in 2016 and mortgage rates remained lower than the prior years, although Fannie Mae is forecasting the 30-year rate to increase to approximately 4.2% by the end of 2017. Further, Fannie Mae expects total home sales to grow modestly by approximately 2.2% in 2017. It is expected the rising share of new home sales will lead to an increase in single-family construction of about 8.2%, or 849,000 units.
For the three years ended December 31, 2016, average monthly mortgage interest rates (30-year, fixed-rate) have fluctuated from a low of 3.44% in July 2016 to a high of 4.43% in January 2014. In 2016, total mortgage originations and refinancing mortgage originations increased 12.1% and 14.1%, respectively, from 2015. During 2016, sales of new and existing homes increased 13.1% and 3.3%, respectively, from 2015. In 2015, as compared to 2014, total mortgage originations and refinancing mortgage originations increased 33.0% and 56.0%, respectively; while sales of new and existing homes increased 14.6% and decreased 6.3%, respectively.
A comparison of our consolidated results of operations for 2016 to 2015 and 2015 to 2014 follows. Factors contributing to fluctuations in results of operations are presented in the order of their monetary significance, and we have quantified, when necessary, significant changes. Results from our ancillary services and corporate segment are included in year-to-year discussions and, when relevant, are discussed separately. Our employee costs and certain other operating expenses are sensitive to inflation.
Ancillary services revenues. Ancillary services revenues decreased $45.7 million, or 35.2%, in 2016 compared to 2015 and decreased $2.9 million, or 2.2%, in 2015 compared to 2014. The revenue reduction in both years was primarily due to decreased demand and lower pricing within our delinquent loan servicing activities. The relatively higher revenue decline in 2016 was due to our exit of the delinquent loan servicing activities in the first quarter 2016. The delinquent loan servicing product generated substantially all of the revenues of the former mortgage services segment from 2010 through 2014 which were highly profitable over that time frame. However, as the industry-wide inventory of defaulted and distressed loans declined due to the housing market recovery, revenues declined and these activities turned unprofitable during the second half of 2015, resulting in our decision to exit them in mid-2015, a process we completed in the first quarter 2016.
In 2015, investment and other losses - net included realized losses of $2.7 million relating to other-than-temporary impairment of investment in equity securities available-for-sale, $1.8 million impairment of other intangible assets and $1.4 million relating to office closure costs, partially offset by realized gains of $2.4 million from the sale of debt and equity investments available-for-sale and $1.5 million from the sale of office buildings.
In 2014, investment and other gains - net included realized gains of $5.6 million from the reduction in the fair value of a contingent consideration liability, $3.8 million from the sale of a business and $1.1 million from the sale of debt and equity investments available-for-sale, partially offset by charges of $1.9 million relating to office closure costs, $1.7 million impairment of an other intangible asset and $1.0 million relating to the impairment of a cost-basis investment.
Retention by agencies. Amounts retained by title agencies are based on agreements between the agencies and our title underwriters. On average, amounts retained by independent agencies, as a percentage of revenues generated by them, were 81.8%, 81.7% and 81.5% in the years 2016, 2015 and 2014, respectively. The average retention percentage may vary from year-to-year due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. Consequently, we expect our average annual retention percentage to remain in the 81% - 82% range over the near to medium term.
In 2016 and 2015, total employee count decreased by approximately 590 and 470 employees, or 8.5% and 6.4%, respectively. These decreases were mainly the result of our cost management program as well as reduction in force tied to volume declines, primarily in the ancillary services operations. In 2016 and 2015, ancillary services operations' employee count decreased by about 500 and 200 employees, respectively, primarily as a result of our exit from the delinquent loan servicing activities. Additionally, the 2016 employee count reduction in ancillary services operations was influenced by the sale of the loan file review and audit and government services lines of business at the end of the year. In 2015, we also reduced headcount in the parent holding company and centralized administrative services departments by approximately 270 employees in conjunction with the cost management program.
Employee costs in the title segment increased $9.7 million, or 1.8%, and $39.0 million, or 8.0%, in 2016 and 2015, respectively, as the result of increased salaries and commissions and incentive compensation on higher title operating revenues, which increased by approximately 1.0% and 10.2% in 2016 and 2015, respectively. Ancillary services and corporate segment's employee costs decreased $63.6 million, or 49.2%, and $5.1 million, or 3.8%, in 2016 and 2015, respectively, primarily due to the employee count reductions relating to the cost management program and exit from the delinquent loan servicing activities.
In 2016, excluding the costs listed above, costs fixed in nature were comparable to 2015 as increased costs related to third-party outsourcing provider fees were offset by decreases in rent and other occupancy expenses, technology costs, attorney and professional fees and insurance expenses. Costs that follow, to varying degrees, changes in transaction volumes and revenues increased $9.5 million, or 6.0%, mainly due to increases in outside search fees and fee attorney splits driven by higher title revenues. Excluding the non-operating litigation-related costs, costs that fluctuate independently of revenues decreased $9.8 million, or 18.5%, in 2016 compared to 2015, primarily due to reduced business promotion and marketing, travel and general legal expenses.
In 2015, excluding the costs listed above, costs fixed in nature increased $10.1 million, or 7.4%, primarily due to $10.8 million of additional professional and consulting fees and third-party outsourcing provider fees. Costs that follow, to varying degrees, changes in transaction volumes and revenues increased $29.6 million, or 23.3%, primarily due to increases in ancillary services expenses resulting from increased ancillary service revenues during the first through third quarters of 2015 and fee attorney splits driven by increased title revenues. Excluding the non-operating litigation-related costs, costs that fluctuate independently of revenues in 2015 were comparable to 2014.
Title losses. Provisions for title losses, as a percentage of title operating revenues, were 4.8%, 5.6% and 4.7% in 2016, 2015 and 2014, respectively, including adjustments to certain large claims and escrow losses. The title loss ratio in any given year can be significantly influenced by new large claims incurred as well as adjustments to reserves for existing large claims. We continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders.
For the year ended December 31, 2016, we recorded a $3.1 million decrease to the reserve for existing large losses and a $5.4 million policy loss reserve reduction relating to non-large policy losses as a result of favorable loss development experience. Title losses decreased $15.1 million, or 14.2%, in 2016 compared to the same period in 2015.
For the year ended December 31, 2015, we recorded $22.1 million of increases to existing large loss reserves relating to prior policy years, partially offset by a $17.5 million policy loss reserve reduction relating to non-large policy losses as a result of favorable loss development experience. Title losses increased $25.0 million, or 30.7%, in 2015 compared to the same period in 2014.
For the year ended December 31, 2014, we recorded a reduction of $14.8 million to our policy loss provision due to a bond claim which resulted in a partial recovery of a large claim recorded in the prior years. We also recorded a reserve reduction of $6.5 million during 2014 relating to non-large policy losses. In 2014, title losses decreased $25.0 million, or 23.5%, compared to the same period in 2013.
Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by our management and our third party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or less than current reserves and/or our third party actuary’s calculated estimates. As of December 31, 2016 and 2015, our reserve balance was above the actuarial midpoint of total estimated policy loss reserves.
Impairment of goodwill. During the year ended December 31, 2015, we recorded a non-cash impairment charge of $35.7 million relating to our goodwill. The impairment charge was triggered by our ancillary services reporting unit's continued losses and reduced revenue and margin outlook, driven primarily by falling demand and contract pricing pressures related to our delinquent loan servicing activities, which were exited at the end of first quarter 2016. Refer to our foregoing discussion of Goodwill and other long-lived assets under Critical Accounting Estimates and Note 8 to the audited consolidated financial statements for details on the 2015 impairment.
Depreciation and amortization. Depreciation and amortization expense in 2016 was comparable to 2015, while it increased $6.1 million, or 25.1%, in 2015 compared to 2014. The increase in 2015 was driven by $1.5 million of accelerated amortization of assets used in the delinquent loan servicing activities that we exited. In addition, approximately $2.7 million of amortization expense relating to 2014 acquired intangible assets in the ancillary services operations and $1.5 million of amortization expense relating to an underwriter production system placed into service in July 2014 contributed to the increase during 2015.
During 2014, we released $5.0 million of valuation allowance relating to deferred tax assets arising from foreign tax credit carryforwards. During 2016 and 2015, there were no material releases of our valuation allowance. As of December 31, 2016, our remaining valuation allowance relating principally to certain state and foreign net operating loss carryforwards was $2.5 million. The Company believes it is more-likely-than-not it will be able to utilize its net deferred tax assets.
Material contractual obligations consist primarily of amounts drawn on our line of credit facility which expires October 2019, other notes payable, operating leases and estimated title losses. The timing above for payments of notes payable is based upon contractually stated payment terms of each debt agreement. Operating leases are primarily for office space and expire over the next ten years. The timing shown above for the payments of estimated title losses is not set by contract. Rather, it is projected based on historical payment patterns. The actual timing of estimated title loss payments may vary materially from the above projection since claims, by their nature, are complex and paid over long periods of time. Title losses paid were $92.0 million, $123.6 million and $86.7 million in 2016, 2015 and 2014, respectively.
Cash held at the parent company totaled $2.9 million at December 31, 2016. As a holding company, the parent company is funded principally by cash from its subsidiaries in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. The expense reimbursements are paid in accordance with management agreements, approved by the Texas Department of Insurance (TDI), among the parent and its subsidiaries. In addition to funding operating expenses, cash held at the parent company is used for dividend payments to common stockholders and for stock repurchases, if any. To the extent such uses exceed cash available, the parent company is dependent on distributions from its regulated title insurance underwriter, Stewart Title Guaranty Company (Guaranty).
A substantial majority of our consolidated cash and investments as of December 31, 2016 was held by Guaranty and its subsidiaries. The use and investment of these funds, dividends to the parent company, and cash transfers between Guaranty and its subsidiaries and the parent company are subject to certain legal and regulatory restrictions. In general, Guaranty may use its cash and investments in excess of its legally-mandated statutory premium reserve (established in accordance with requirements under Texas law) to fund its insurance operations, including claims payments. Guaranty may also, subject to certain limitations, provide funds to its subsidiaries (whose operations consist principally of field title offices and ancillary services operations) for their operating and debt service needs.
As the parent company conducts no operations apart from its wholly-owned subsidiaries, the discussion below focuses on consolidated cash flows.
Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. Our approach allows us to adjust more easily to seasonal and cyclical fluctuations in transaction volumes. We are continuing our focus on cost management, specifically lowering unit costs of production, which will result in improved margins. Our plans to improve margins also include further outsourcing, additional automation of manual processes, and further consolidation of our various systems and production operations. We are currently investing in the technology necessary to accomplish these goals.
Cash used by investing activities was primarily driven by purchases of investments, capital expenditures and acquisition of subsidiaries, offset by proceeds from matured and sold available-for-sale investments. Total proceeds from available-for-sale investments matured and sold amounted to $108.2 million, $111.5 million and $106.6 million in 2016, 2015 and 2014, respectively. We used cash for the purchases of available-for-sale investments in the amounts of $166.4 million, $147.7 million and $147.4 million 2016, 2015 and 2014, respectively. Cash generated (used) by net sale (purchases) of short-term investments amounted to $17.5 million, $(14.7) million and $13.3 million in 2016, 2015 and 2014, respectively.
Total debt and stockholders’ equity were $106.8 million and $648.8 million, respectively, as of December 31, 2016. In 2016 and 2015, we borrowed $57.8 million and $52.7 million, respectively, and repaid $60.3 and $22.5 million, respectively, of debt in accordance with the underlying terms of the debt instruments. Our debt-to-equity ratio at December 31, 2016 was approximately 16.5%, below the 20% we have set as our unofficial internal limit on leverage.
In October 2014, we entered into a $125.0 million unsecured line of credit, which expires October 2019. As of December 31, 2016, total outstanding borrowings from this line of credit were $92.9 million; the remaining balance of the line of credit available for use was $29.6 million, net of an unused $2.5 million letter of credit. During 2016 and 2015, we drew $20.0 million and $45.0 million, respectively, from the line of credit and paid down $25.1 million and $7.0 million, respectively. The unsecured line of credit can be used for general corporate purposes, including acquisitions. Refer to Note 10 to the audited consolidated financial statements for details on the unsecured line of credit.
During 2016, we declared and paid aggregate dividends of $1.20, per common share. In comparison, we declared and paid aggregate dividends of $0.80 per common share during 2015. Additionally, in relation to the Class B Exchange Agreement approved by our stockholders during the second quarter 2016, we paid $12.0 million in cash and issued Common Stock shares in exchange for the retirement of the outstanding Class B Common Stock shares (refer to Note 12 to the audited consolidated financial statements for details).
In November 2015, we announced a stock repurchase program which may return up to $50.0 million to stockholders over a three-year period starting in 2016. Under the stock repurchase program, we have the ability to purchase shares of our outstanding Common Stock in both open market and privately negotiated transactions as we deem appropriate. The timing, form and amount of share repurchases under the program will depend on a variety of factors including: market conditions, share price, our capital and liquidity position relative to internal and rating agency targets, legal requirements, including approval of the release of cash from our regulated underwriter by the insurance regulators and corporate and other considerations. There were no stock repurchases during the year 2016, except for repurchases of approximately 22,800 shares (aggregate purchase price of approximately $1.1 million) related to the statutory income tax withholding on the vesting of restricted share grants to executives and senior management. The repurchases related to statutory tax withholding on vesting of shares are not included in the above stock repurchase program. During 2015, we acquired approximately 762,000 shares of our Common Stock for an aggregate purchase price of approximately $28.0 million pursuant to a previous stock repurchase program.
Other-than-temporary impairments of investments. We recorded other-than-temporary impairments on cost-basis investments of approximately $0.6 million and $1.0 million in 2015 and 2014, respectively. Additionally, during 2015, we recognized a $2.7 million other-than-temporary impairment on certain equity securities available-for-sale.
Forward-looking statements. Certain statements in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “will,” “foresee” or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things: economic conditions; adverse changes in the level of real estate activity; changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing; our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems; the impact of unanticipated title losses or the need to strengthen our policy loss reserves; any effect of title losses on our cash flows and financial condition; the impact of vetting our agency operations for quality and profitability; changes to the participants in the secondary mortgage market and the rate of refinancing that affects the demand for title insurance products; regulatory non-compliance, fraud or defalcations by our title insurance agencies or employees; our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services; the outcome of pending litigation; the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services; our dependence on our operating subsidiaries as a source of cash flow; the continued realization of expense savings from our cost management program; our ability to successfully integrate acquired businesses; our ability to access the equity and debt financing markets when and if needed; our ability to grow our international operations; and our ability to respond to the actions of our competitors. We expressly disclaim any obligation to update any forward-looking statements contained in this report to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.
The information required to be provided in this item is included in our audited consolidated financial statements, including the Notes thereto, attached hereto as pages to, and such information is incorporated in this report by reference.