On June 1, 2010, the Company purchased property in Tampa, Florida for a total purchase price of $7.1 million. The property consists of 3.5 acres of land, a building with gross area of 122,000 square feet, and a three-story parking garage valued at $1.2 million, $5.3 million, and $0.6 million, respectively. This facility will be used by the Company and its subsidiaries, all of which will be headquartered in the new facility. The Company expects to complete the relocation of its employees and infrastructure during the second quarter of 2011 upon completion of various building improvements, which are expected to cost the Company between $1.50 million and $1.75 million. In addition, the Company expects to lease to non-affiliates up to forty-nine percent of the building’s office space, which includes space occupied by existing tenants under lease agreements assumed by the Company at acquisition.
Our results of operations for the year ended December 31, 2010 reflect net income of $5.4 million, or $0.81 earnings per diluted share, compared to net income of $10.9 million, or $1.52 per diluted share, for the year ended December 31, 2009.
The following is a reconciliation of our total Net Premiums Written to Net Premiums Earned for the years ended December 31, 2010 and 2009 (in thousands):
Currently, our estimated ultimate liability is calculated monthly using these principles and procedures applicable to the lines of business written. However, because the establishment of loss reserves is an inherently
uncertain process, we cannot be certain that ultimate losses will not exceed the established loss reserves and have a material adverse effect on our results of operations and financial condition. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made.
DAC is reviewed to determine if it is recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. The amount of
Consolidated Statements of Earnings for the Years Ended December 31, 2010 and
The Florida Insurance Code (the “Code”) requires HCPC to maintain capital and surplus equal to the greater of 10% of its liabilities or a statutory minimum as defined in the Code. At December 31, 2010 and 2009, HCPC is required to maintain a minimum capital and surplus of $4.0 million. At December 31, 2010 and 2009, HCPC’s statutory capital and surplus was $31.1 million and $24.1 million, respectively. For the year ended December 31, 2010, HCPC had a statutory net loss of $2.3 million. For the year ended December 31, 2009, HCPC had a statutory net loss of $0.6 million. Statutory surplus differs from stockholders’ equity reported in accordance with generally accepted accounting principles primarily because policy acquisition costs are expensed when incurred. In addition, the recognition of deferred tax assets is based on different recoverability assumptions.
As of December 31, 2010 and 2009, HCPC had a cash deposit with the Insurance Commissioner of the state of Florida, in the amount of $300,000, to meet regulatory requirements. At December 31, 2010 and 2009, there were no material permitted statutory accounting practices utilized by HCPC.