Mercury Insurance 2014 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2014 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114


TXDOLW\ DQG GXUDWLRQ RI WKH DVVHWV KHOG DQG UDQJH EHWZHHQ  DQG  RI WKH IDLU YDOXH RI HDFK ERQG (IIHFWLYH 'HFHPEHU 
 WKH &RPSDQ\ H[WHQGHG WKH PDWXULW\ GDWH RI WKH  PLOOLRQ FUHGLW IDFLOLW\ IURP -XO\   WR 'HFHPEHU  
2Q 'HFHPEHU   WKH &RPSDQ\ H[WHQGHG WKH PDWXULW\ GDWH RI WKH  PLOOLRQ EDQN ORDQ IURP -DQXDU\   WR
'HFHPEHU   7KH  PLOOLRQ EDQN ORDQ KDV FROODWHUDO UHTXLUHPHQWV VLPLODU WR WKRVH RI WKH  PLOOLRQ FUHGLW IDFLOLW\
7KH FUHGLW IDFLOLWLHV DQG EDQN ORDQ FRQWDLQ ILQDQFLDO FRYHQDQWV SHUWDLQLQJ WR PLQLPXP VWDWXWRU\ VXUSOXV GHEW WR FDSLWDO UDWLR
DQG 5%& UDWLR H[FHSW WKDW &DOLIRUQLD $XWRPRELOH ,QVXUDQFH &RPSDQ\V 5LVN %DVHG &DSLWDO 5DWLR DV RI 'HFHPEHU   ZDV
EHORZ WKH UHTXLUHG OHYHO 7KH &RPSDQ\ UHFHLYHG D ZDLYHU RI WKH QRQFRPSOLDQFH DQG FRQWULEXWHG  PLOOLRQ WR WKH VWDWXWRU\
VXUSOXV RI &$,& WR FRPSO\ ZLWK WKH FRYHQDQW 7KH &RPSDQ\ ZLOO FRQWLQXH WR PRQLWRU SURMHFWHG 5%& WR HYDOXDWH FRPSOLDQFH ZLWK
WKLV FRYHQDQW 1RWZLWKVWDQGLQJ WKH ORDQ FRYHQDQW &$,&V 5%& UDWLR LV ZHOO LQ H[FHVV RI WKH UHJXODWRU\ PLQLPXP FDSLWDO
UHTXLUHPHQWV
7KH DJJUHJDWHG PDWXULWLHV IRU QRWHV SD\DEOH DUH DV IROORZV
<HDU 0DWXULW\
$PRXQWV LQWKRXVDQGV
 
 
  
 
  
)RU DGGLWLRQDO GLVFORVXUHV UHJDUGLQJ PHWKRGV DQG DVVXPSWLRQV XVHG LQ HVWLPDWLQJ IDLU YDOXHV RI LQWHUHVW UDWH VZDS DJUHHPHQWV
DVVRFLDWHG ZLWK WKH &RPSDQ\µV ORDQV OLVWHG DERYH VHH 1RWH 
 'HULYDWLYH)LQDQFLDO ,QVWUXPHQWV
7KH &RPSDQ\ LV H[SRVHG WR FHUWDLQ ULVNV UHODWLQJ WR LWV RQJRLQJ EXVLQHVV RSHUDWLRQV 7KH SULPDU\ ULVNV PDQDJHG E\ XVLQJ
GHULYDWLYH LQVWUXPHQWV DUH HTXLW\ SULFH ULVN DQG LQWHUHVW UDWH ULVN (TXLW\ FRQWUDFWV RQ YDULRXV HTXLW\ VHFXULWLHV DUH LQWHQGHG WR
PDQDJH WKH SULFH ULVN DVVRFLDWHG ZLWK IRUHFDVWHG SXUFKDVHV RU VDOHV RI VXFK VHFXULWLHV ,QWHUHVW UDWH VZDSV DUH LQWHQGHG WR PDQDJH
WKH LQWHUHVW UDWH ULVN DVVRFLDWHG ZLWK WKH &RPSDQ\µV GHEWV ZLWK IL[HG RU IORDWLQJ UDWHV
2Q )HEUXDU\   ))/ HQWHUHG LQWR D WRWDO UHWXUQ VZDS DJUHHPHQW ZLWK &LWLEDQN VXEMHFW WR UHQHZ DQQXDOO\ 8QGHU WKH
WRWDO UHWXUQ VZDS DJUHHPHQW ))/ UHFHLYHV WKH LQFRPH HTXLYDOHQW RQ XQGHUO\LQJ REOLJDWLRQV GXH WR &LWLEDQN DQG SD\V WR &LWLEDQN
LQWHUHVW HTXDO WR /,%25 SOXV  EDVLV SRLQWV RQ WKH RXWVWDQGLQJ QRWLRQDO DPRXQW RI WKH XQGHUO\LQJ REOLJDWLRQV ZKLFK ZDV
DSSUR[LPDWHO\  PLOOLRQ DV RI 'HFHPEHU   7KH WRWDO UHWXUQ VZDS LV VHFXUHG E\ DSSUR[LPDWHO\  PLOOLRQ RI 86
7UHDVXULHV DV FROODWHUDO ZKLFK DUH LQFOXGHG LQ VKRUWWHUP LQYHVWPHQWV RQ WKH FRQVROLGDWHG EDODQFH VKHHWV 7KH &RPSDQ\ H[WHQGHG
WKH DJUHHPHQW IRU RQH \HDU
2Q $XJXVW   $)/ HQWHUHG LQWR D WKUHH\HDU WRWDO UHWXUQ VZDS DJUHHPHQW ZLWK &LWLEDQN 8QGHU WKH WRWDO UHWXUQ VZDS
DJUHHPHQW $)/ UHFHLYHV WKH LQFRPH HTXLYDOHQW RQ XQGHUO\LQJ REOLJDWLRQV GXH WR &LWLEDQN DQG SD\V WR &LWLEDQN LQWHUHVW HTXDO WR
/,%25 SOXV  EDVLV SRLQWV RQ WKH RXWVWDQGLQJ QRWLRQDO DPRXQW RI WKH XQGHUO\LQJ REOLJDWLRQV ZKLFK ZDV DSSUR[LPDWHO\ 
PLOOLRQ DV RI 'HFHPEHU  7KH WRWDO UHWXUQ VZDS LV VHFXUHG E\ DSSUR[LPDWHO\  PLOOLRQ RI 86 7UHDVXULHV DV FROODWHUDO
ZKLFK DUH LQFOXGHG LQ VKRUWWHUP LQYHVWPHQWV RQ WKH FRQVROLGDWHG EDODQFH VKHHWV
2Q )HEUXDU\   WKH &RPSDQ\ HQWHUHG LQWR DQ LQWHUHVW UDWH VZDS RI LWV IORDWLQJ /,%25 UDWH RQ D  PLOOLRQ FUHGLW
IDFLOLW\ IRU D IL[HG UDWH RI  WKDW PDWXUHG RQ -DQXDU\  7KH SXUSRVH RI WKH VZDS ZDV WR RIIVHW WKH YDULDELOLW\ RI FDVK
IORZV UHVXOWLQJ IURP WKH YDULDEOH LQWHUHVW UDWH 7KH VZDS ZDV QRW GHVLJQDWHG DV D KHGJH DQG FKDQJHV LQ WKH IDLU YDOXH ZHUH DGMXVWHG
WKURXJK WKH FRQVROLGDWHG VWDWHPHQWV RI RSHUDWLRQV LQ WKH SHULRG RI FKDQJH