APPROXIMATE SQUARE LEASE PROPERTY FEET EXPIRATION - --------------------------- ------ ------------------ Hamilton, Bermuda.......... 5,900 June 20, 2006 London, England............ 12,500 August 10, 2009 Dallas, Texas.............. 14,700 August 31, 2003 Dallas, Texas.............. 10,500 May 31, 2001 New York, New York......... 7,900 October 31, 2003 New York, New York......... 2,600 September 14, 2004 Bradenton, Florida......... 12,350 June 28, 2008 Boca Raton, Florida........ 13,750 January 15, 2005 Southington, Connecticut... 3,300 August 31, 2011
All of the Company's facilities are leased. Aggregate lease payments for 1999 were $2.8 million (1998 - $2.2 million). The Company anticipates that it will be able to extend these leases as they expire or, if necessary or desirable, locate substitute facilities on acceptable terms.
Shareholders' equity decreased by $12.8 million, to $84.8 million, at December 31, 1999 from $97.6 million at December 31, 1998, due primarily to the net loss incurred for the year, together with purchases of treasury stock on the open market during the year.
In the U.S. and Bermuda, the Company's and its subsidiaries' internal computer systems and software are relatively modern and few costs were incurred to bring those systems into compliance. In the U.K., the Company's subsidiaries' internal systems and software were not as modern and the majority of the Company's Year 2000 costs in upgrading the Company's systems and software were incurred in that region. Because of the Year 2000 issue, one large system in the U.K. was replaced in late 1998. No further costs are expected with regard to the Year 2000 issue.
The total cost of compliance was $0.7 million. Approximately $0.5 million of the cost was related to reprogramming or replacement of software, and approximately $0.2 million was related to acquisition of hardware. Costs related to non-information technology were immaterial. All of the $0.7 million cost of compliance was incurred as of the end of December 31, 1999. All of these costs were funded through operating cash flows. Total costs have not had a material impact on the Company's financial results.
On December 2, 1997, Stirling Cooke and certain selling shareholders consummated an initial public offering of 3,421,250 ordinary shares. Of these shares, 1,375,000 were sold by Stirling Cooke and 2,046,250 were sold by selling shareholders. Net proceeds of $26,832 were received by Stirling Cooke upon consummation of the initial public offering.
a) The Company is subject to a 30% withholding tax on certain dividends and interest received from its United States subsidiaries.
Odyssey, which changed its name to Sphere Drake Insurance Limited ("Sphere Drake") during 1999, caused proceedings to be issued in the London Commercial Courts (equivalent to a civil complaint in U.S. jurisdictions) against the Company's U.K. subsidiaries, two former officers of those subsidiaries, and others on February 29, 2000. Neither the Company nor any of its U.S. or Bermuda subsidiaries are named in the action. Sphere Drake generally alleges a conspiracy to defraud it in connection with various reinsurance contracts.
(d) The Company is subject to other litigation and arbitration in the ordinary course of its business. While any of these proceedings contains an element of uncertainty, management presently believes the outcome of these currently pending proceedings will not have a material adverse effect on the Company's financial condition.