FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-12688
STEWART INFORMATION SERVICES CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 74-1677330
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1980 Post Oak Blvd., Houston TX 77056
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(Address of principal executive offices, including zip code)
(713) 625-8100
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(Registrant's telephone number, including area code)
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(Former name,former address and former fiscal yearif changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common 13,583,26313,765,520
Class B Common 1,050,012
FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 1999March 31, 2000
TABLE OF CONTENTS
Item No. Page
- -------- ----
Part I
1. Financial Statements 1
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
3. Quantitative and Qualitative Disclosures About
Market Risk 86
Part II
1. Legal Proceedings 108
5. Other Information 108
6. Exhibits and Reports on Form 8-K 97
Signature 119
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
FOR THE QUARTERS AND NINETHREE MONTHS ENDED
SEPTEMBER 30,MARCH 31, 2000 and 1999 and 1998
THIRD QUARTER NINETHREE MONTHS ---------------------ENDED
--------------------
2000 1999 1998 1999 1998
---------- ---------
-------- --------
($000 Omitted)
($000 Omitted)
Revenues
Title premiums, fees and other revenues 246,460 233,385 749,293 632,912191,176 227,716
Real estate information services 14,507 12,265 45,823 36,11212,199 15,091
Investment income 5,394 4,703 15,186 13,4795,168 4,907
Investment gains (losses) - net 20 72 50 403
---------(340) 164
-------- -------- --------
266,381 250,425 810,352 682,906------
208,203 247,878
Expenses
Amounts retained by agents 124,186 114,465 378,582 304,15690,839 112,134
Employee costs 72,030 62,690 215,493 180,93568,674 69,499
Other operating expenses 43,321 35,219 122,898 99,70139,061 36,461
Title losses and related claims 9,937 10,284 31,123 28,5238,560 9,266
Depreciation and amortization 4,968 3,809 13,161 10,6705,091 3,875
Interest 314 306 910 1,089381 286
Minority interests 1,377 1,233 3,803 3,662
---------944 990
-------- -------
213,550 232,511
-------- --------
256,133 228,006 765,970 628,736
--------- -------- -------- ---------------
Earnings (loss) before taxes 10,248 22,419 44,382 54,170(5,347) 15,367
Income taxes 4,150 8,371 16,958 20,239
---------(benefit) (1,993) 5,767
-------- -------- ---------------
Net earnings 6,098 14,048 27,424 33,931
========= ========(loss) (3,354) 9,600
======== =======
Average number of shares outstanding -
assuming dilution (000) 14,762 14,188 14,562 14,12814,811 14,336
Earnings (loss) per share - basic (1) 0.42 1.00 1.90 2.43(0.23) 0.68
Earnings (loss) per share - diluted (1) 0.41 0.99 1.88 2.40
========= =========(0.23) 0.67
======== ===============
Comprehensive earnings:
Net earnings 6,098 14,048 27,424 33,931(loss) (3,354) 9,600
Changes in unrealized investment gains,
net of taxes of $(700)$293 and $(1,190), $1,390, $(3,950)
and $1,061, respectively (1,300) 2,582 (7,335) 1,971
---------544 (2,210)
-------- -------- ---------------
Comprehensive earnings 4,798 16,630 20,089 35,902
========= =========(loss) (2,810) 7,390
======== ===============
(1) Restated for a two-for-one stock split in May 1999.
-1-
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999MARCH 31, 2000 AND DECEMBER 31, 19981999
SEP 30MAR 31 DEC 31
2000 1999 1998
---------- ----------
($000 Omitted)
Assets
Cash and cash equivalents 41,205 44,88330,738 36,803
Short-term investments 58,761 59,44657,604 67,455
Investments - statutory reserve funds 177,490 164,554185,706 185,087
Investments - other 66,141 62,75856,096 57,669
Receivables 42,508 46,73249,518 48,580
Property and equipment 44,526 36,39245,953 45,900
Title plants 24,450 23,60826,455 26,258
Goodwill 32,136 23,61535,080 31,641
Deferred income taxes 13,518 10,63312,110 12,378
Other 23,028 25,86026,012 23,970
---------- ----------
523,763 498,481525,272 535,741
========== ==========
Liabilities
Notes payable 19,101 16,19422,232 19,054
Accounts payable and accrued liabilities 31,424 44,57829,264 41,303
Estimated title losses 179,519 171,763183,826 183,787
Minority interests 6,790 5,5036,837 6,673
Contingent liabilities and commitments
Stockholders' equity
Common and Class B Common Stock and
additional paid-in capital 79,134 63,95180,125 79,126
Retained earnings 209,001 190,363206,100 209,454
Accumulated other comprehensive earnings (deficit) (1,206) 6,129(3,112) (3,656)
---------- -----------
Total stockholders' equity ($19.6119.17 per share at
September 30, 1999) 286,929 260,443March 31, 2000) 283,113 284,924
---------- -----------
523,763 498,481525,272 535,741
========== ===========
-2-
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINETHREE MONTHS ENDED SEPTEMBER 30,MARCH 31, 2000 AND 1999 AND 1998
2000 1999 1998
-------- --------
($000 Omitted)
Cash (used) provided by operating activities (Note) 42,114 58,697(9,095) 9,858
Investing activities:
Purchases of property and equipment and title plants - net (19,794) (13,914)(4,822) (4,874)
Proceeds from investments matured and sold 32,839 37,28130,361 8,034
Purchases of investments (57,269) (62,772)(19,059) (9,469)
Increases in notes receivable (5,838) (1,644)(2,281) (1,617)
Collections on notes receivable 5,315 1,303338 350
Proceeds from sale of equity investment 5,840 -0 2,855
Cash paid for the acquisition of subsidiaries - net (5,166) (1,476)(3,844) (1,038)
---------- ---------
Cash usedprovided (used) by investing activities (44,073) (41,222)693 (5,759)
Financing activities:
Dividends paid (1,612) (1,357)0 (527)
Distribution to minority interests (2,871) (2,763)(824) (530)
Proceeds from issuance of stock 39 2,2280 104
Proceeds of notes payable 8,470 5,4664,488 2,346
Payments on notes payable (5,745) (8,374)(1,327) (3,175)
---------- ---------
Cash usedprovided (used) by financing activities (1,719) (4,800)2,337 (1,782)
---------- ---------
(Decrease) increase in cash and cash equivalents (3,678) 12,675(6,065) 2,317
========== ==========
NOTE: Reconciliation of net earnings to the above amounts -
Net earnings 27,424 33,931(loss) (3,354) 9,600
Add (deduct):
Depreciation and amortization 13,161 10,6705,091 3,875
Provision for title losses in excess of payments 7,206 11,10239 374
Provision for uncollectible amounts - net (465) (502)0 (160)
Decrease (increase) in accounts receivable - net 5,477 (4,033)
(Decrease) increase1,036 9,070
Decrease in accounts payable and accrued liabilities - net (12,918) 7,389(12,123) (12,802)
Minority interest expense 3,803 3,662944 990
Equity in net earnings of investees (750) (701)(41) (274)
Realized investment gains (losses) - net (50) (403)
Gain on sale of equity investment (1,145) -340 (164)
Stock bonuses 598 342482 527
Increase in other assets (846) (1,003)(1,893) (1,224)
Other - net 619 (1,757)384 46
---------- ---------
Cash (used) provided by operating activities 42,114 58,697(9,095) 9,858
========== =========
-3-
STEWART INFORMATION SERVICES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Interim Financial Statements
The financial information contained in this report for the three and nine month periods
ended September 30,March 31, 2000 and 1999, and 1998, and as of September 30, 1999,March 31, 2000, is unaudited. In the
opinion of management, all adjustments necessary for a fair presentation of this
information for all unaudited periods, consisting only of normal recurring
accruals, have been made. The results of operations for the interim periods are
not necessarily indicative of results for a full year.
Certain amounts in the 19981999 condensed consolidated financial statements have
been reclassified for comparative purposes. Net earnings, as previously
reported, were not affected.
Note 2: Segment Information
The Company's two reportable segments are title and real estate information.
Selected financial information related to these segments follows:
Real Estate
Title Information Total
----- ----------- -----
($000 Omitted)
($000 Omitted)
Revenues:
- ---------
Three months ended
9/30/3/31/00 196,004 12,199 208,203
3/31/99 251,874 14,507 266,381
9/30/98 238,160 12,265 250,425
Nine months ended
9/30/99 764,529 45,823 810,352
9/30/98 646,794 36,112 682,906232,787 15,091 247,878
Pretax Earnings:Earnings (Loss):
- ---------------------------------------
Three months ended
9/30/3/31/00 (3,656) (1,691) (5,347)
3/31/99 9,675 573 10,248
9/30/98 22,092 327 22,419
Nine months ended
9/30/99 41,551 2,831 44,382
9/30/98 52,291 1,879 54,17013,805 1,562 15,367
Identifiable Assets:
- --------------------
9/30/3/31/00 484,746 40,526 525,272
12/31/99 483,748 40,015 523,763
12/31/98 463,030 35,451 498,481496,191 39,550 535,741
Note 3: Earnings Per Share
The Company's basic earnings per share figures were calculated by dividing net
earnings by the weighted average number of shares of Common Stock and Class B
Common Stock outstanding during the reporting period. The Company's stock option
plans have the only potentially
dilutive effect on earnings per share.share for the Company related to its stock
option plans.
In calculating the effect of the options and determining a figure for diluted
earnings per share, the average number of shares used in calculating basic
earnings per share was increased by 138,00095,000 and 157,000148,000 for the three month
periods ending September 30,March 31, 2000 and 1999, and 1998, respectively and 138,000 and 182,000
for the nine month periods ending September 30, 1999 and 1998, respectively.
-4-
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
The Company's two segments of operations are land titlestitle insurance and real estate
information. In general, the principal factors that contribute to increases in
the Company's operating revenues include declining mortgage interest rates
(which usually increase home sales and refinancing transactions), rising home
prices, higher premium rates, increased market share, additional revenues from
new offices and increased revenues from commercial transactions. Although
relatively few in number, large commercial transactions typically yield higher
premiums.
Mortgage interest rates, onwhich averaged 6.9% in the first quarter of 1999, rose
over the rest of the year to about 7.9% at the end of the year. Rates in early
2000 increased again to an average were only slightly higherof 8.3% for the first ninequarter.
Home sales declined about 9% in the first quarter of 2000 compared with the
first quarter of 1999. Refinancing transactions decreased during the second half
of 1999 and the first quarter of 2000. Refinance activity dropped from
representing 58 percent of total applications in the first three months of 1999
when compared to 25 percent in the same period in 1998. However, rates
steadily increased each month over the previous month in 1999. Rates for
September 1999 were approximately 100 basis points higher than September 1998.
Higher interest rates trimmed refinance activity. Asof 2000, as reported in the Mortgage
Banker's Association weekly survey, refinance activity, which had represented an
average 55 percent of all loan applications in the third quarter of 1998, was
only 21 percent in the third quarter of 1999.by industry experts.
A comparison of the results of operations of the Company for the first ninethree
months of 19992000 with the first ninethree months of 19981999 follows.
REVENUES
Revenues from title premiums and fees increased $116.4decreased $36.5 million, or 18.4%16.0%, from a
year ago. Mortgage interest rates were significantly higher in the first nine monthsearly part of
1999 compared to2000 than in the same period a year ago. Revenues
earned on premiums written by agents represented a substantial part of the total
increase in premium revenues in 1999. Strong order counts in the last few months
of 1998 and a healthyago, decreasing real estate market in the first half of 1999 generated
additional revenues.sales and
refinancing transactions.
The number of closings handled by the Company decreased 1.5% in 1999.24.4%. Closings
decreased in California, Arizona, Colorado Florida and most other states. The average
revenue per closing increased in 19992000 due in part, to higher home prices and a fewersmaller
number of refinancings, with theirwhich generate lower premiums and higher average home prices in 1999.premiums. Increases in revenues
from agentscommercial transactions also contributed to higher revenues per closing in
1999.2000.
Other revenues in the first nine monthsquarter of 1999 included a $1.1 million pretax gain
resulting from a settlement of a lawsuit and a related sale of an equity
ownership in a title agency.
The Company began to open its own offices in the
related markets during the second quarter of 1999.
Real estate information revenues were $45.8$12.2 million in 19992000 and $36.1$15.1 million in
1998.1999. The increasedecrease was primarily due to a favorablethe decline in real estate environment in
the first half of 1999 and new businesses started or acquired in 1998. These
increases were partially offset by a decrease in business due to increases in
mortgage interest rates. Real estate information profits were reduced by a $1.2
million pretax charge resulting from a settlement of a lawsuit during the second
quarter of 1999.activity.
Investment income increased 12.7%5.3% in 19992000 due primarily to an increase in the average
balances invested.
EXPENSES
Premiums earned from agents were $113.00 million in 2000 and $138.7 in 1999. The
amounts retained by agents, as a percentage of premiums, were 80.4% and 80.9%
for the three months ended March 31, 2000 and March 31, 1999, respectively.
Amounts retained by title agents increased $74.4are based on contracts between agents and the
title underwriters of the Company. The percentage that amounts retained by
agents bears to agent revenues may vary from year to year because of the
geographical mix of agent operations and the volume of title revenues.
Employee expenses for the combined business segments decreased $0.8 million, or
24.5%, over the same
period in 1998. The percentage of retention by agents to the amounts of revenues
from agents was comparable at 80.4% and 80.3% for the nine months ended
September 30, 1999 and September 30, 1998, respectively.
Employee expenses increased $34.6 million, or 19.1%1.2%, in 19992000 primarily because of a higherlower average number of employees during
the first nine monthsquarter of 19992000 compared to a year ago and increased average rates of compensation. The Company
has taken steps to align staff levels with lower order counts.
Increases inago.
Employee costs for the title segment decreased slightly, while employee costs
for the REI segment increased slightly. The number of employees in existing
title offices at the end of the first quarter of 2000 were primarilyreduced by about 10%
from a year ago. The decrease at the end of the first quarter of 2000 from the
peak reached in areasearly 1999 was 13%. The decreases in the number of automating services
rendered to customersemployees
were offset, however, by significant increases in newly acquired and improving its own processes, real estate information
services that are being developed and sold to customers and thestartup
offices, expansion of its
national marketing efforts.
The Company believes the developmentoperations to gain market share and
sale of new products and services is
important to its future. Through automated operating processes, the Company
expects to add customer services and revenues while reducing operating expenses
and title lossescontinued advancements in the future.
-5-
technology.
Other operating expenses increased by $23.2$2.6 million, or 23.3%, primarily because
of the increase7.1% in real estate information and title transaction volume. Other
expenses2000. Expenses
that increased included rent, business promotion andinclude expenses of new offices.offices, bad debts, rent and search fees.
Other significant components of other operating expenses also include premium taxes,are title plant
expenses, supplies, computer costs, business promotion, telephone, travel,
premium taxes, policy forms search fees and delivery costs.
Most of these expenses follow, to varying degrees, the
changes in transaction volume and revenues.-5-
Provisions for title losses and related claims were up $2.6down $0.7 million, or 9.1%7.6%,
in 1999.2000. As a percentage of title premiums, fees and related revenues, the
provision in the first nine monthsquarter of 1999 was 4.2%2000 increased to 4.5% versus 4.5%4.1% in 1998.1999.
The continued improvement in industry trends in claims and the Company's improved
experience in claims have led to lower loss ratios. An overall increase in
refinancing transactions in recent years, which results in lower loss exposure,
also reduced loss ratios.
The provision (benefit) for income taxes represented effective tax rates of
38.2%37.3% and 37.4%37.5% in 2000 and 1999, and 1998, respectively.
A comparison of the results of operations of the Company for the third quarter
of 1999 with the third quarter of 1998 follows.
REVENUES
Revenues from title premiums and fees increased $13.1 million, or 5.6%, from a
year ago. Mortgage interest rates, on average, were approximately 100 basis
points higher in the third quarter of 1999 than in the same period a year ago.
Refinancing activity was down substantially in 1999 as the result of higher
rates. Revenues from agents represented a substantial part of the total increase
in premium revenues in 1999.
The number of closings handled by the Company decreased 16.9%. Closings
decreased in California, Texas, Colorado, Florida and most other states. The
average revenue per closing increased in 1999 due, in part, to a fewer number of
refinancings with their lower premiums and higher average home prices in 1999.
Real estate information revenues were $14.5 million in 1999 and $12.3 million in
1998. The increase was primarily due to a favorable real estate environment in
the first half of 1999 and new businesses started or acquired in 1998. These
increases were partially offset by a decrease in business due to increases in
mortgage interest rates.
Investment income increased 14.7% in 1999 due primarily to an increase in the
average balances invested.
EXPENSES
Amounts retained by agents increased $9.7 million, or 8.5%, over the same period
in 1998. The percentage of retention by agents to the amounts of revenues from
agents was comparable at 80.2% and 80.6% for the three months ended September
30, 1999 and September 30, 1998, respectively.
Employee expenses increased $9.3 million, or 14.9%, in 1999 primarily because of
a higher average number of employees during the third quarter of 1999 compared
to a year ago and increased average rates of compensation.
The Company has taken steps to align staff levels with lower order counts.
Other operating expenses increased by $8.1 million, or 23.0%, primarily because
of the increase in real estate information volume. Other expenses that increased
included rent, business promotion, title plant expenses, supplies, computer
costs, telephone, travel, premium taxes, policy forms, search fees and delivery
costs. Most of these expenses follow, to varying degrees, the changes in
transaction volume and revenues.
Provisions for title losses and related claims were down $0.3 million, or 3.4%
in 1999. As a percentage of title premiums, fees and related revenues, the
provision in the third quarter of 1999 was 4.0% versus 4.4% in 1998. The
continued improvement in industry trends in claims and the Company's improved
experience in claims have led to lower loss ratios. An overall increase in
refinancing transactions in recent years, which results in lower loss exposure,
also reduced loss ratios.
The provision for income taxes represented effective tax rates of 40.5% and
37.3% in 1999 and 1998, respectively.
-6-
YEAR 2000 ISSUE
Introduction
The Company recognizes the technological challenges associated with the
inability of some older software to handle dates later than 1999 (the "Y2K"
issue).
Information technology is a crucial part of the Company's business. Computer software is used inAccordingly,
the title and real estate information segments of
the Company's business. The uses of software in the title segment include
searching and examining titles, closing transactions, accounting for agent
policies and claims. In the real estate information segment, software is used in
providing mortgage services, such as flood determinations, appraisals and
assignments.
The Company's Readiness Program
The Company has implementedcompleted a formalcomprehensive Year 2000 ("Y2K") readiness program
to address Y2K issues and has a Y2K
Team to carry out the program. The program includes several distinct phases: (1)
assessment, (2) remediation, (3) testing and (4) implementation. The progress of
the work ofthat addressed challenges associated with the Y2K Team is monitored by the Company's senior management and the
audit committeeissue. As a result of the Company's board of directors.
Most of the software used bythis
program, the Company was developed internally in recent
years withencountered no major automation or business disruption due
to Y2K issues in mind.issues. The Company has substantially completed its
assessment and any necessary remediation of this software.
In addition to its work on internally-developed computer software, the Y2K Team
conducted an inventory of the Company's systems worldwide. This inventory
included software and hardware acquired from third parties for use by the
Company. The inventory also included critical non-information technology systems
which may house non-compliant, imbedded technology, such as fax machines,
photocopiers, telephone facilities and other common devices. Assessment of these
systems and any necessary remediation was substantially completed during the
second quarter of 1999.
Certain subsidiaries that were acquired by the Company and operated with
different systems from the Company's were given high priority under the
Company's Y2K plan. All phases of Y2K readiness for these subsidiaries were
substantially completed during the second quarter of 1999. the Company continues to operate normally across all business
units and geographies and will continue to monitor this area as additional subsidiaries are acquired.
In addition to addressingoperations throughout 2000.
The total costs incurred for the Company's own systems, the Y2K Team assessed, to
the extent practicable, the state of readiness of the systems of other
mission-critical entities with which it does business. These included
independent title insurance agents and other business partners, such as county
courthouses and lenders, whose condition or operational capability is important
to the Company.
The Company hired an outside Y2K consultant to assist the Company in developing
contingency plans to define and address the worst-case scenario likely to be
faced. Contingency planning has been substantially completed during the third
quarter of 1999.
The Company has spent approximately $3.2 million from 1997 through the third
quarter of 1999 directly related to assessing, remediating, testing and
implementing its information technology systems. These amounts have been funded
from operations. The Company currently estimates that the total cost of its Y2K readiness program will not exceedwere $3.6 million.
Status of the Company's Y2K Readiness
The Company has now substantially completed all phases of its Y2K readiness plan
with respect to both internally developed, third-party and embedded software
that it uses in its offices and that it believes to be critical to its
operations. The Company believes that all of such software is now Y2K ready. In
addition, based upon inquiries to third parties with whom the Company does
business and whose software is critical to its operations, the Company does not
anticipate any material Y2K related problems from those entities' systems.
Risks
The Company's success in being Y2K ready cannot be finally and conclusively
known until the year 2000 is actually reached. Failure by one or more of the
Company's own systems could result in lost revenues and additional expenses
required to carry out manual processing of transactions. Failure by third
parties to resolve adequately their Y2K issues could have a material adverse
effect on the Company's operations. Failures by the telecommunications industry,
banking institutions and others could have far-reaching materially adverse
effects on the Company, the title insurance industry and the entire economy. The
magnitude of the failure of external forces on the business of the Company
cannot be predicted.
-7-
This entire section ("Year 2000 Issue") is hereby designated a "Year 2000
Readiness Disclosure", as defined in the Year 2000 Information and Readiness
Disclosure Act.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations represent the primary source of financing for the
Company, but this may be supplemented by bank borrowings. The capital resources
of the Company and the present debt-to-equity relationship are considered
satisfactory.
During the first ninethree months of 1999,2000, the Company financed a portion of various
acquisitions through the issuance of Common Stock totaling $7.5$0.4 million.
Acquisitions during the first ninethree months of 19992000 have resulted in an increase
inadditions to
goodwill of $9.6$3.9 million.
FORWARD LOOKING STATEMENTS
All statements included in this report, other than statements of historical
facts, which address activities, events or developments that the Company expects
or anticipates will or may occur in the future are forward-looking statements.
Such forward-looking statements are subject to risks and uncertainties
including, among other things, changes in mortgage interest rates, employment
levels, actions of competitors, changes in real estate markets, general economic
conditions and legislation (primarily legislation related to insurance) and
other risks and uncertainties discussed in the Company's filings with the
Securities and Exchange Commission.
Item 3: Quantitative and Qualitative Disclosures About Market Risk There have
been no material changes in the Company's investment strategies, types of
financial instruments held or the risks associated with such instruments which
would materially alter the market risk disclosures made in the Company's Annual
Statement on Form 10-K for the year ended December 31, 1998.
-8-1999.
-6-
PART II
Page
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Item 1. Legal Proceedings 108
Item 5. Other Information 108
Item 6. Exhibits and Reports on Form 8-K
(a) Index to exhibits
(b) There were no reports on Form 8-K filed during the quarter ended
September 30, 1999.
-9-March 31, 2000.
-7-
ITEM 1. LEGAL PROCEEDINGS
The Registrant is a party to routine lawsuits incidental to its
business, most of which involve disputed policy claims. In many of these suits,
the plaintiff seeks exemplary or treble damages in excess of policy limits based
on the alleged malfeasance of an issuing agent of the Registrant. The Registrant
does not expect that any of these proceedings will have a material adverse
effect on its financial condition.
ITEM 5. OTHER INFORMATION
The Board of Directors has approved a plan to repurchase up to 5
percent (680,000 shares) of the Company's currently issued and outstanding
Common Stock. The Board also determined that the Company's regular quarterly
dividend should be discontinued in favor of returning those and additional funds
to stockholders through the stock purchase plan.
On March 15, 1999, the Registrant's Board of Directors approved a
two-for-one split of the Registrant's Common Stock, $1.00 par value ("Common
Stock"), and Class B Common Stock, $1.00 par value, which was effected in the
form of a stock dividend. Each stockholder of record of the Registrant at the
close of business on May 7, 1999 received one additional share for each share
owned on that date. The stock dividend was paid on May 21, 1999.
-10--8-
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Stewart Information Services Corporation
----------------------------------------
(Registrant)
November 12, 1999May 11, 2000
- ---------------------------------
Date
By: /S/ MAX CRISP
-----------------------------------------------
Max Crisp
(Vice President-Finance, Secretary-Treasurer,
Director and Principal Financial and
Accounting Officer)
-11--9-
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4. - Rights of Common and Class B Common Stockholders
27.0 - Financial data schedule
28.2 - Details of investments as reported in the
Quarterly Report to Shareholders