Mercury Insurance 2008 Annual Report Download - page 34

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24
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
The Company owns the following buildings:
Location Purpose Size in square feet
Percent occupied by
Company at December
31, 2008
Brea, CA Home office and I.T. facilities (2 buildings) 236,000 100%
Los Angeles, CA Executive offices 41,000 95%
Rancho Cucamonga, CA Administrative 130,000 100%
St. Petersburg, FL Administrative 157,000 79%
Oklahoma, OK Administrative 100,000 87%
Folsom, CA Administrative and Data Center 88,000 100% *
* The building has been occupied by Company employees since January 2009.
The space owned and not occupied by the Company is leased to independent third party tenants. In addition, the
Company owns a 4.25 acre parcel of land in Brea, California, for future expansion.
The Company leases all of its other office space used for operations. Office location is not crucial to the Company’s
operations, and the Company anticipates no difficulty in extending these leases or obtaining comparable office space.
Item 3. Legal Proceedings
The Company is, from time to time, named as a defendant in various lawsuits incidental to its insurance business. In most
of these actions, plaintiffs assert claims for punitive damages, which are not insurable under judicial decisions. The Company has
established reserves for lawsuits in cases where the Company is able to estimate its potential exposure and it is probable that the
court will rule against the Company. The Company vigorously defends actions against it, unless a reasonable settlement appears
appropriate. An unfavorable ruling against the Company in the actions currently pending may have a material impact on the
Company’s results of operations in the period of such ruling, however, it is not expected to be material to the Company’s financial
condition. For a detailed description of the pending lawsuits, see Note 14 of Notes to Consolidated Financial Statements—
Litigation, which is incorporated herein by reference.
The Company is also involved in proceedings relating to assessments and rulings made by the California Franchise Tax
Board. See Note 6 of Notes to Consolidated Financial Statements, which is incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders by the Company during the fourth quarter of the fiscal year
covered by this report.