Mercury Insurance 2012 Annual Report Download - page 89

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68
The following table presents a summary of changes in fair value of Level 3 financial assets and financial liabilities held at
fair value at December 31:
2012 2011
Collateralized
Debt
Obligations
Partnership
Interest in a
Private Credit
Fund
Municipal
Securities
Collateralized
Debt
Obligations
Partnership
Interest in a
Private Credit
Fund
(Amounts in thousands)
Beginning Balance $ 47,503 $ 10,008 $ 1,624 $ 55,692 $ 0
Realized gains (losses) included in earnings 7,975 1,298 39 (9,300) 8
Purchase 25,000 0 0 0 10,000
Sales (37,677) 0 (1,663) 0 0
Settlements 0 0 0 1,111 0
Ending Balance $ 42,801 $ 11,306 $ 0 $ 47,503 $ 10,008
The amount of total (losses) gains for the period
included in earnings attributable to assets still held at
December 31 $(3,017) $ 1,298 $ 0 $ (8,189) $ 8
There were no transfers between Levels 1, 2, and 3 of the fair value hierarchy in 2012 and 2011.
At December 31, 2012, the Company did not have any nonrecurring fair value measurements of nonfinancial assets or
nonfinancial liabilities.
4. Fixed Assets
Fixed assets consist of the following:
December 31,
2012 2011
(Amounts in thousands)
Land $ 26,770 $ 26,770
Buildings and improvements 126,726 125,837
Furniture and equipment 106,788 113,628
Capitalized software 133,477 123,356
Leasehold improvements 7,593 7,354
401,354 396,945
Less accumulated depreciation and amortization (239,414)(219,185)
Fixed assets, net $ 161,940 $ 177,760
Depreciation expense including amortization of leasehold improvements was $30.8 million, $34.3 million, and $33.9 million
during 2012, 2011, and 2010, respectively.
5. Deferred Policy Acquisition Costs
Deferred policy acquisition costs are as follows:
December 31,
2012 2011 2010
(Amounts in thousands)
Balance, beginning of year $ 171,430 $ 170,579 $ 175,866
Policy acquisition costs deferred 492,268 482,572 500,278
Amortization (477,788)(481,721)(505,565)
Balance, end of year $ 185,910 $ 171,430 $ 170,579