(Mark One)
|
|
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For Quarterly Period Ended June 30, 2016
|
|
or
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|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ontario, Canada
(State or other jurisdiction of
incorporation or organization)
|
|
Not Applicable (I.R.S. Employer
Identification No.)
|
45 St. Clair Avenue West, Suite 400 Toronto, Ontario M4V 1K9
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(Address of principal executive offices and zip code)
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1-416-848-1171
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(Registrant's telephone number, including area code)
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
o
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KINGSWAY FINANCIAL SERVICES INC.
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Table Of Contents
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||
PART I - FINANCIAL INFORMATION
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|
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ITEM 1. FINANCIAL STATEMENTS
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|
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Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31, 2015
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Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015 (unaudited)
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Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2016 and 2015 (unaudited)
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Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (unaudited)
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Notes to Consolidated Financial Statements (unaudited)
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. CONTROLS AND PROCEDURES
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PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
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ITEM 1A. RISK FACTORS
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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ITEM 4. MINE SAFETY DISCLOSURES
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ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
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SIGNATURES
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2
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KINGSWAY FINANCIAL SERVICES INC.
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June 30, 2016
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December 31, 2015
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||
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(unaudited)
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|||
Assets
|
|
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|
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||||
Investments:
|
|
|
|
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||||
Fixed maturities, at fair value (amortized cost of $62,397 and $55,606, respectively)
|
|
$
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63,003
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|
|
$
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55,559
|
|
Equity investments, at fair value (cost of $21,121 and $26,428, respectively)
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21,508
|
|
|
27,559
|
|
||
Limited liability investments
|
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21,768
|
|
|
20,141
|
|
||
Other investments, at cost which approximates fair value
|
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5,435
|
|
|
4,077
|
|
||
Short-term investments, at cost which approximates fair value
|
|
670
|
|
|
400
|
|
||
Total investments
|
|
112,384
|
|
|
107,736
|
|
||
Cash and cash equivalents
|
|
39,887
|
|
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51,701
|
|
||
Investments in investees
|
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4,018
|
|
|
1,772
|
|
||
Accrued investment income
|
|
496
|
|
|
594
|
|
||
Premiums receivable, net of allowance for doubtful accounts of $135 and $165, respectively
|
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31,915
|
|
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27,090
|
|
||
Service fee receivable, net of allowance for doubtful accounts of $288 and $276, respectively
|
|
950
|
|
|
911
|
|
||
Other receivables, net of allowance for doubtful accounts of $806 and $806, respectively
|
|
3,107
|
|
|
3,789
|
|
||
Reinsurance recoverable
|
|
959
|
|
|
1,422
|
|
||
Prepaid reinsurance premiums
|
|
91
|
|
|
7
|
|
||
Deferred acquisition costs, net
|
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13,824
|
|
|
12,143
|
|
||
Income taxes recoverable
|
|
66
|
|
|
61
|
|
||
Property and equipment, net of accumulated depreciation of $12,632 and $12,537, respectively
|
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5,373
|
|
|
5,577
|
|
||
Goodwill
|
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10,078
|
|
|
10,078
|
|
||
Intangible assets, net of accumulated amortization of $6,541 and $6,009, respectively
|
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14,865
|
|
|
14,736
|
|
||
Other assets
|
|
3,124
|
|
|
3,405
|
|
||
Total Assets
|
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$
|
241,137
|
|
|
$
|
241,022
|
|
Liabilities and Shareholders' Equity
|
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||||
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||||
Liabilities:
|
|
|
|
|
||||
Unpaid loss and loss adjustment expenses:
|
|
|
|
|
||||
Property and casualty
|
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$
|
52,195
|
|
|
$
|
55,471
|
|
Vehicle service agreements
|
|
2,975
|
|
|
2,975
|
|
||
Total unpaid loss and loss adjustment expenses
|
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55,170
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|
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58,446
|
|
||
Unearned premiums
|
|
41,122
|
|
|
35,234
|
|
||
Reinsurance payable
|
|
284
|
|
|
145
|
|
||
Subordinated debt, at fair value
|
|
36,302
|
|
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39,898
|
|
||
Deferred income tax liability
|
|
2,968
|
|
|
2,924
|
|
||
Deferred service fees
|
|
35,999
|
|
|
34,319
|
|
||
Accrued expenses and other liabilities
|
|
20,456
|
|
|
19,959
|
|
||
Total Liabilities
|
|
192,301
|
|
|
190,925
|
|
||
|
|
|
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|
||||
Class A preferred stock, no par value; unlimited number authorized; 262,876 and 262,876 issued and outstanding at June 30, 2016 and December 31, 2015, respectively; redemption amount of $6,572
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6,411
|
|
|
6,394
|
|
||
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|
|
|
||||
Shareholders' Equity:
|
|
|
|
|
||||
Common stock, no par value; unlimited number authorized; 19,842,806 and 19,709,706 issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
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—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
342,864
|
|
|
341,646
|
|
||
Accumulated deficit
|
|
(311,292
|
)
|
|
(308,995
|
)
|
||
Accumulated other comprehensive income
|
|
9,500
|
|
|
9,300
|
|
||
Shareholders' equity attributable to common shareholders
|
|
41,072
|
|
|
41,951
|
|
||
Noncontrolling interests in consolidated subsidiaries
|
|
1,353
|
|
|
1,752
|
|
||
Total Shareholders' Equity
|
|
42,425
|
|
|
43,703
|
|
||
Total Liabilities and Shareholders' Equity
|
|
$
|
241,137
|
|
|
$
|
241,022
|
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|
3
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KINGSWAY FINANCIAL SERVICES INC.
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Three months ended June 30,
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Six months ended June 30,
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||||||||||
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2016
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2015
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2016
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|
|
2015
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|
||||
Revenues:
|
|
|
|
|
|
|
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|
||||||||
Net premiums earned
|
|
$
|
31,813
|
|
|
$
|
30,200
|
|
|
$
|
61,240
|
|
|
$
|
59,230
|
|
Service fee and commission income
|
|
5,394
|
|
|
5,848
|
|
|
10,716
|
|
|
11,246
|
|
||||
Net investment income
|
|
1,072
|
|
|
528
|
|
|
1,000
|
|
|
1,841
|
|
||||
Net realized gains (losses)
|
|
67
|
|
|
53
|
|
|
(104
|
)
|
|
53
|
|
||||
Other-than-temporary impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Other income
|
|
2,791
|
|
|
2,514
|
|
|
5,165
|
|
|
10,871
|
|
||||
Total revenues
|
|
41,137
|
|
|
39,143
|
|
|
78,017
|
|
|
83,231
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses
|
|
24,838
|
|
|
24,187
|
|
|
48,335
|
|
|
46,140
|
|
||||
Commissions and premium taxes
|
|
6,103
|
|
|
5,799
|
|
|
11,701
|
|
|
11,546
|
|
||||
Cost of services sold
|
|
770
|
|
|
1,058
|
|
|
1,543
|
|
|
1,721
|
|
||||
General and administrative expenses
|
|
10,826
|
|
|
10,175
|
|
|
20,377
|
|
|
21,751
|
|
||||
Amortization of intangible assets
|
|
307
|
|
|
313
|
|
|
602
|
|
|
630
|
|
||||
Contingent consideration (benefit) expense
|
|
(657
|
)
|
|
110
|
|
|
(657
|
)
|
|
254
|
|
||||
Total operating expenses
|
|
42,187
|
|
|
41,642
|
|
|
81,901
|
|
|
82,042
|
|
||||
Operating (loss) income
|
|
(1,050
|
)
|
|
(2,499
|
)
|
|
(3,884
|
)
|
|
1,189
|
|
||||
Other expenses (revenues), net:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
1,108
|
|
|
1,414
|
|
|
2,201
|
|
|
2,805
|
|
||||
Foreign exchange losses, net
|
|
9
|
|
|
760
|
|
|
10
|
|
|
1,152
|
|
||||
(Gain) loss on change in fair value of debt
|
|
(1,068
|
)
|
|
1,228
|
|
|
(3,596
|
)
|
|
967
|
|
||||
Loss on deconsolidation of subsidiary
|
|
—
|
|
|
4,420
|
|
|
—
|
|
|
4,420
|
|
||||
Equity in net loss of investee
|
|
874
|
|
|
71
|
|
|
943
|
|
|
207
|
|
||||
Total other expenses (revenues), net
|
|
923
|
|
|
7,893
|
|
|
(442
|
)
|
|
9,551
|
|
||||
Loss from continuing operations before income tax expense
|
|
(1,973
|
)
|
|
(10,392
|
)
|
|
(3,442
|
)
|
|
(8,362
|
)
|
||||
Income tax expense
|
|
26
|
|
|
34
|
|
|
52
|
|
|
56
|
|
||||
Loss from continuing operations
|
|
(1,999
|
)
|
|
(10,426
|
)
|
|
(3,494
|
)
|
|
(8,418
|
)
|
||||
Income from discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,426
|
|
||||
Gain on disposal of discontinued operations, net of taxes
|
|
1,124
|
|
|
11,259
|
|
|
1,124
|
|
|
11,259
|
|
||||
Net (loss) income
|
|
(875
|
)
|
|
833
|
|
|
(2,370
|
)
|
|
4,267
|
|
||||
Less: net (loss) income attributable to noncontrolling interests in consolidated subsidiaries
|
|
(361
|
)
|
|
(1,064
|
)
|
|
(400
|
)
|
|
160
|
|
||||
Less: dividends on preferred stock
|
|
82
|
|
|
82
|
|
|
164
|
|
|
163
|
|
||||
Net (loss) income attributable to common shareholders
|
|
$
|
(596
|
)
|
|
$
|
1,815
|
|
|
$
|
(2,134
|
)
|
|
$
|
3,944
|
|
Loss per share - continuing operations:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
$
|
(0.09
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.44
|
)
|
Diluted:
|
|
$
|
(0.09
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.44
|
)
|
Earnings per share - discontinued operations:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
$
|
0.06
|
|
|
$
|
0.57
|
|
|
$
|
0.06
|
|
|
$
|
0.64
|
|
Diluted:
|
|
$
|
0.06
|
|
|
$
|
0.57
|
|
|
$
|
0.06
|
|
|
$
|
0.64
|
|
(Loss) earnings per share – net (loss) income attributable to common shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
$
|
(0.03
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.20
|
|
Diluted:
|
|
$
|
(0.03
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.20
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
19,818
|
|
|
19,710
|
|
|
19,764
|
|
|
19,710
|
|
||||
Diluted:
|
|
19,818
|
|
|
19,710
|
|
|
19,764
|
|
|
19,710
|
|
|
4
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
|
$
|
(875
|
)
|
|
$
|
833
|
|
|
$
|
(2,370
|
)
|
|
$
|
4,267
|
|
Other comprehensive income, net of taxes
(1)
:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on fixed maturities and equity investments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) arising during the period
|
|
430
|
|
|
(1,068
|
)
|
|
705
|
|
|
(1,268
|
)
|
||||
Reclassification adjustment for amounts included in net (loss) income
|
|
(73
|
)
|
|
1,451
|
|
|
(505
|
)
|
|
1,464
|
|
||||
Foreign currency translation adjustments
|
|
—
|
|
|
719
|
|
|
—
|
|
|
693
|
|
||||
Recognition of currency translation loss on deconsolidation of subsidiary
|
|
—
|
|
|
1,243
|
|
|
—
|
|
|
1,243
|
|
||||
Other comprehensive income
|
|
357
|
|
|
2,345
|
|
|
200
|
|
|
2,132
|
|
||||
Comprehensive (loss) income
|
|
(518
|
)
|
|
3,178
|
|
|
(2,170
|
)
|
|
6,399
|
|
||||
Less: comprehensive loss attributable to noncontrolling interests in consolidated subsidiaries
|
|
(360
|
)
|
|
(1,237
|
)
|
|
(399
|
)
|
|
(310
|
)
|
||||
Comprehensive (loss) income attributable to common shareholders
|
|
$
|
(158
|
)
|
|
$
|
4,415
|
|
|
$
|
(1,771
|
)
|
|
$
|
6,709
|
|
(1) Net of income tax expense of $0 and $0 for the three and six months ended June 30, 2016 and June 30, 2015, respectively.
|
|
5
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
Six months ended June 30,
|
|
|||||
|
|
2016
|
|
|
2015
|
|
||
Cash provided by (used in):
|
|
|
|
|
||||
Operating activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(2,370
|
)
|
|
$
|
4,267
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
||||
Gain on disposal of discontinued operations, net of taxes
|
|
(1,124
|
)
|
|
(11,259
|
)
|
||
Equity in net loss of investee
|
|
943
|
|
|
207
|
|
||
Equity in net income of limited liability investments
|
|
(310
|
)
|
|
(995
|
)
|
||
Depreciation and amortization expense
|
|
697
|
|
|
954
|
|
||
Contingent consideration (benefit) expense
|
|
(657
|
)
|
|
254
|
|
||
Stock-based compensation expense, net of forfeitures
|
|
474
|
|
|
405
|
|
||
Net realized losses (gains)
|
|
104
|
|
|
(53
|
)
|
||
(Gain) loss on change in fair value of debt
|
|
(3,596
|
)
|
|
967
|
|
||
Deferred income taxes
|
|
44
|
|
|
43
|
|
||
Other-than-temporary impairment loss
|
|
—
|
|
|
10
|
|
||
Amortization of fixed maturities premiums and discounts
|
|
133
|
|
|
164
|
|
||
Loss on deconsolidation of subsidiary
|
|
—
|
|
|
4,420
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Premiums and service fee receivable, net
|
|
(4,864
|
)
|
|
(1,058
|
)
|
||
Other receivables, net
|
|
682
|
|
|
(1,707
|
)
|
||
Reinsurance recoverable
|
|
463
|
|
|
2,147
|
|
||
Prepaid reinsurance premiums
|
|
(84
|
)
|
|
(83
|
)
|
||
Deferred acquisition costs, net
|
|
(1,681
|
)
|
|
(420
|
)
|
||
Income taxes recoverable
|
|
(5
|
)
|
|
17
|
|
||
Unpaid loss and loss adjustment expenses
|
|
(3,276
|
)
|
|
(5,676
|
)
|
||
Unearned premiums
|
|
5,888
|
|
|
1,416
|
|
||
Reinsurance payable
|
|
139
|
|
|
32
|
|
||
Deferred service fees
|
|
1,680
|
|
|
(400
|
)
|
||
Other, net
|
|
1,408
|
|
|
(1,235
|
)
|
||
Net cash used in operating activities
|
|
(5,312
|
)
|
|
(7,583
|
)
|
||
Investing activities:
|
|
|
|
|
||||
Proceeds from sales and maturities of fixed maturities
|
|
13,349
|
|
|
18,861
|
|
||
Proceeds from sales of equity investments
|
|
3,721
|
|
|
307
|
|
||
Purchases of fixed maturities
|
|
(19,781
|
)
|
|
(19,727
|
)
|
||
Purchases of equity investments
|
|
(1,541
|
)
|
|
(4,281
|
)
|
||
Net acquisitions of limited liability investments
|
|
(1,017
|
)
|
|
(4,495
|
)
|
||
Net purchases of other investments
|
|
(1,357
|
)
|
|
—
|
|
||
Net (purchases of) proceeds from short-term investments
|
|
(533
|
)
|
|
4
|
|
||
Net proceeds from sale of discontinued operations
|
|
1,404
|
|
|
44,919
|
|
||
Net purchases of property and equipment and intangible assets
|
|
(622
|
)
|
|
(144
|
)
|
||
Net cash (used in) provided by investing activities
|
|
(6,377
|
)
|
|
35,444
|
|
||
Financing activities:
|
|
|
|
|
||||
Repurchase of common stock for cancellation
|
|
(125
|
)
|
|
—
|
|
||
Redemption of LROC preferred units
|
|
—
|
|
|
(12,920
|
)
|
||
Net cash used in financing activities
|
|
(125
|
)
|
|
(12,920
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(11,814
|
)
|
|
14,941
|
|
||
Cash and cash equivalents at beginning of period
|
|
51,701
|
|
|
71,234
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
39,887
|
|
|
$
|
86,175
|
|
|
6
|
|
|
7
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
8
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
9
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
||
|
|
April 21, 2016
|
|
|
Cash and cash equivalents
|
|
$
|
5
|
|
Other receivables
|
|
17
|
|
|
Intangible assets - subject to amortization
|
|
731
|
|
|
Other assets
|
|
5
|
|
|
Total assets
|
|
$
|
758
|
|
|
|
|
||
Accrued expenses and other liabilities
|
|
$
|
14
|
|
Total liabilities
|
|
$
|
14
|
|
|
|
|
||
Purchase price
|
|
$
|
744
|
|
|
10
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Service fee and commission income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,342
|
|
Other expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||
Total revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,322
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,462
|
|
||||
Income from discontinued operations before income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,860
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434
|
|
||||
Income from discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,426
|
|
||
Gain on disposal of discontinued operations before income tax benefit
|
|
1,124
|
|
|
11,010
|
|
|
1,124
|
|
|
11,010
|
|
||||
Income tax benefit
|
|
—
|
|
|
(249
|
)
|
|
—
|
|
|
(249
|
)
|
||||
Gain on disposal of discontinued operations, net of taxes
|
|
1,124
|
|
|
11,259
|
|
|
1,124
|
|
|
11,259
|
|
||||
Total gain from discontinued operations, net of taxes
|
|
$
|
1,124
|
|
|
$
|
11,259
|
|
|
$
|
1,124
|
|
|
$
|
12,685
|
|
|
11
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
June 30, 2016
|
|
|||||||||||||
|
|
Amortized Cost
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Estimated Fair Value
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government, government agencies and authorities
|
|
$
|
27,501
|
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
27,716
|
|
States, municipalities and political subdivisions
|
|
3,892
|
|
|
23
|
|
|
—
|
|
|
3,915
|
|
||||
Mortgage-backed
|
|
7,236
|
|
|
118
|
|
|
4
|
|
|
7,350
|
|
||||
Asset-backed securities and collateralized mortgage obligations
|
|
4,595
|
|
|
23
|
|
|
2
|
|
|
4,616
|
|
||||
Corporate
|
|
19,173
|
|
|
251
|
|
|
18
|
|
|
19,406
|
|
||||
Total fixed maturities
|
|
62,397
|
|
|
630
|
|
|
24
|
|
|
63,003
|
|
||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
19,870
|
|
|
2,988
|
|
|
2,045
|
|
|
20,813
|
|
||||
Warrants
|
|
1,251
|
|
|
18
|
|
|
574
|
|
|
695
|
|
||||
Total equity investments
|
|
21,121
|
|
|
3,006
|
|
|
2,619
|
|
|
21,508
|
|
||||
Total fixed maturities and equity investments
|
|
$
|
83,518
|
|
|
$
|
3,636
|
|
|
$
|
2,643
|
|
|
$
|
84,511
|
|
(in thousands)
|
|
December 31, 2015
|
|
|||||||||||||
|
|
Amortized Cost
|
|
|
Gross Unrealized Gains
|
|
|
Gross Unrealized Losses
|
|
|
Estimated Fair Value
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government, government agencies and authorities
|
|
$
|
20,443
|
|
|
$
|
73
|
|
|
$
|
63
|
|
|
$
|
20,453
|
|
States, municipalities and political subdivisions
|
|
2,241
|
|
|
20
|
|
|
5
|
|
|
2,256
|
|
||||
Mortgage-backed
|
|
7,997
|
|
|
25
|
|
|
59
|
|
|
7,963
|
|
||||
Asset-backed securities and collateralized mortgage obligations
|
|
6,040
|
|
|
4
|
|
|
21
|
|
|
6,023
|
|
||||
Corporate
|
|
18,885
|
|
|
60
|
|
|
81
|
|
|
18,864
|
|
||||
Total fixed maturities
|
|
55,606
|
|
|
182
|
|
|
229
|
|
|
55,559
|
|
||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
25,177
|
|
|
3,464
|
|
|
2,055
|
|
|
26,586
|
|
||||
Warrants
|
|
1,251
|
|
|
52
|
|
|
330
|
|
|
973
|
|
||||
Total equity investments
|
|
26,428
|
|
|
3,516
|
|
|
2,385
|
|
|
27,559
|
|
||||
Total fixed maturities and equity investments
|
|
$
|
82,034
|
|
|
$
|
3,698
|
|
|
$
|
2,614
|
|
|
$
|
83,118
|
|
|
12
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
June 30, 2016
|
|
|||||
|
|
Amortized Cost
|
|
|
Estimated Fair Value
|
|
||
Due in one year or less
|
|
$
|
8,686
|
|
|
$
|
8,702
|
|
Due after one year through five years
|
|
42,813
|
|
|
43,258
|
|
||
Due after five years through ten years
|
|
3,378
|
|
|
3,418
|
|
||
Due after ten years
|
|
7,520
|
|
|
7,625
|
|
||
Total
|
|
$
|
62,397
|
|
|
$
|
63,003
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
|||||||||||||
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government, government agencies and authorities
|
$
|
701
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
701
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||||
Mortgage-backed
|
981
|
|
|
3
|
|
|
146
|
|
|
1
|
|
|
1,127
|
|
|
4
|
|
||||||
Asset-backed securities and collateralized mortgage obligations
|
1,587
|
|
|
1
|
|
|
252
|
|
|
1
|
|
|
1,839
|
|
|
2
|
|
||||||
Corporate
|
2,623
|
|
|
13
|
|
|
745
|
|
|
5
|
|
|
3,368
|
|
|
18
|
|
||||||
Total fixed maturities
|
6,052
|
|
|
17
|
|
|
1,143
|
|
|
7
|
|
|
7,195
|
|
|
24
|
|
||||||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
8,461
|
|
|
1,657
|
|
|
982
|
|
|
388
|
|
|
9,443
|
|
|
2,045
|
|
||||||
Warrants
|
651
|
|
|
542
|
|
|
1
|
|
|
32
|
|
|
652
|
|
|
574
|
|
||||||
Total equity investments
|
9,112
|
|
|
2,199
|
|
|
983
|
|
|
420
|
|
|
10,095
|
|
|
2,619
|
|
||||||
Total
|
$
|
15,164
|
|
|
$
|
2,216
|
|
|
$
|
2,126
|
|
|
$
|
427
|
|
|
$
|
17,290
|
|
|
$
|
2,643
|
|
|
13
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|||||||||||||
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government, government agencies and authorities
|
$
|
12,635
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,635
|
|
|
$
|
63
|
|
States, municipalities and political subdivisions
|
745
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
745
|
|
|
5
|
|
||||||
Mortgage-backed
|
5,685
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
5,685
|
|
|
59
|
|
||||||
Asset-backed securities and collateralized mortgage obligations
|
5,035
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
5,035
|
|
|
21
|
|
||||||
Corporate
|
9,171
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
9,171
|
|
|
81
|
|
||||||
Total fixed maturities
|
33,271
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
33,271
|
|
|
229
|
|
||||||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common stock
|
15,711
|
|
|
2,055
|
|
|
—
|
|
|
—
|
|
|
15,711
|
|
|
2,055
|
|
||||||
Warrants
|
897
|
|
|
330
|
|
|
—
|
|
|
—
|
|
|
897
|
|
|
330
|
|
||||||
Total equity investments
|
16,608
|
|
|
2,385
|
|
|
—
|
|
|
—
|
|
|
16,608
|
|
|
2,385
|
|
||||||
Total
|
$
|
49,879
|
|
|
$
|
2,614
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,879
|
|
|
$
|
2,614
|
|
•
|
identifying all unrealized loss positions that have existed for at least six months;
|
•
|
identifying other circumstances which management believes may impact the recoverability of the unrealized loss positions;
|
•
|
obtaining a valuation analysis from third-party investment managers regarding the intrinsic value of these investments based on their knowledge and experience together with market-based valuation techniques;
|
•
|
reviewing the trading range of certain investments over the preceding calendar period;
|
•
|
assessing if declines in market value are other-than-temporary for debt instruments based on the investment grade credit ratings from third-party rating agencies;
|
•
|
assessing if declines in market value are other-than-temporary for any debt instrument with a non-investment grade credit rating based on the continuity of its debt service record;
|
•
|
determining the necessary provision for declines in market value that are considered other-than-temporary based on the analyses performed; and
|
•
|
assessing the Company's ability and intent to hold these investments at least until the investment impairment is recovered.
|
•
|
the opinions of professional investment managers could be incorrect;
|
•
|
the past trading patterns of individual investments may not reflect future valuation trends;
|
•
|
the credit ratings assigned by independent credit rating agencies may be incorrect due to unforeseen or unknown facts related to a company's financial situation; and
|
•
|
the debt service pattern of non-investment grade instruments may not reflect future debt service capabilities and may not reflect a company's unknown underlying financial problems.
|
|
14
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Gross realized gains
|
|
$
|
214
|
|
|
$
|
53
|
|
|
$
|
248
|
|
|
$
|
53
|
|
Gross realized losses
|
|
(147
|
)
|
|
—
|
|
|
(352
|
)
|
|
—
|
|
||||
Net realized gains (losses)
|
|
$
|
67
|
|
|
$
|
53
|
|
|
$
|
(104
|
)
|
|
$
|
53
|
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Investment income
|
|
|
|
|
|
|
|
|
||||||||
Interest from fixed maturities
|
|
$
|
242
|
|
|
$
|
124
|
|
|
$
|
460
|
|
|
$
|
393
|
|
Dividends
|
|
126
|
|
|
201
|
|
|
392
|
|
|
348
|
|
||||
Income from limited liability investments
|
|
511
|
|
|
66
|
|
|
310
|
|
|
995
|
|
||||
Gain (loss) on change in fair value of warrants
|
|
141
|
|
|
165
|
|
|
(246
|
)
|
|
165
|
|
||||
Other
|
|
100
|
|
|
32
|
|
|
139
|
|
|
66
|
|
||||
Gross investment income
|
|
1,120
|
|
|
588
|
|
|
1,055
|
|
|
1,967
|
|
||||
Investment expenses
|
|
(48
|
)
|
|
(60
|
)
|
|
(55
|
)
|
|
(126
|
)
|
||||
Net investment income
|
|
$
|
1,072
|
|
|
$
|
528
|
|
|
$
|
1,000
|
|
|
$
|
1,841
|
|
|
15
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Beginning balance, net
|
|
$
|
13,440
|
|
|
$
|
13,203
|
|
|
$
|
12,143
|
|
|
$
|
12,197
|
|
Additions
|
|
7,180
|
|
|
6,164
|
|
|
14,769
|
|
|
13,718
|
|
||||
Amortization
|
|
(6,796
|
)
|
|
(6,750
|
)
|
|
(13,088
|
)
|
|
(13,298
|
)
|
||||
Balance at June 30, net
|
|
$
|
13,824
|
|
|
$
|
12,617
|
|
|
$
|
13,824
|
|
|
$
|
12,617
|
|
|
16
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
June 30, 2016
|
|
||||||||
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Intangible assets subject to amortization
|
|
|
|
|
|
|
||||||
Database
|
|
$
|
4,918
|
|
|
$
|
1,783
|
|
|
$
|
3,135
|
|
Vehicle service agreements in-force
|
|
3,680
|
|
|
3,458
|
|
|
222
|
|
|||
Customer-related relationships
|
|
3,611
|
|
|
1,287
|
|
|
2,324
|
|
|||
Contract-based revenues
|
|
731
|
|
|
13
|
|
|
718
|
|
|||
Intangible assets not subject to amortization
|
|
|
|
|
|
|
||||||
Insurance licenses
|
|
7,803
|
|
|
—
|
|
|
7,803
|
|
|||
Trade name
|
|
663
|
|
|
—
|
|
|
663
|
|
|||
Total
|
|
$
|
21,406
|
|
|
$
|
6,541
|
|
|
$
|
14,865
|
|
(in thousands)
|
|
|
December 31, 2015
|
|
||||||||
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Intangible assets subject to amortization
|
|
|
|
|
|
|
||||||
Database
|
|
$
|
4,918
|
|
|
$
|
1,537
|
|
|
$
|
3,381
|
|
Vehicle service agreements in-force
|
|
3,680
|
|
|
3,362
|
|
|
318
|
|
|||
Customer-related relationships
|
|
3,611
|
|
|
1,040
|
|
|
2,571
|
|
|||
Non-compete agreement
|
|
70
|
|
|
70
|
|
|
—
|
|
|||
Intangible assets not subject to amortization
|
|
|
|
|
|
|
||||||
Insurance licenses
|
|
7,803
|
|
|
—
|
|
|
7,803
|
|
|||
Trade name
|
|
663
|
|
|
—
|
|
|
663
|
|
|||
Total
|
|
$
|
20,745
|
|
|
$
|
6,009
|
|
|
$
|
14,736
|
|
|
17
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
||
Balance at beginning of period, gross
|
|
$
|
55,471
|
|
|
$
|
63,895
|
|
Less reinsurance recoverable related to property and casualty unpaid loss and loss adjustment expenses
|
|
1,207
|
|
|
3,203
|
|
||
Balance at beginning of period, net
|
|
54,264
|
|
|
60,692
|
|
||
Incurred related to:
|
|
|
|
|
|
|||
Current year
|
|
45,614
|
|
|
43,610
|
|
||
Prior years
|
|
67
|
|
|
(484
|
)
|
||
Paid related to:
|
|
|
|
|
|
|||
Current year
|
|
(22,060
|
)
|
|
(21,418
|
)
|
||
Prior years
|
|
(26,535
|
)
|
|
(26,009
|
)
|
||
Balance at end of period, net
|
|
51,350
|
|
|
56,391
|
|
||
Plus reinsurance recoverable related to property and casualty unpaid loss and loss adjustment expenses
|
|
845
|
|
|
1,828
|
|
||
Balance at end of period, gross
|
|
$
|
52,195
|
|
|
$
|
58,219
|
|
|
18
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
||
Balance at beginning of period
|
|
$
|
2,975
|
|
|
$
|
2,975
|
|
Incurred related to:
|
|
|
|
|
||||
Current year
|
|
2,654
|
|
|
3,014
|
|
||
Prior years
|
|
—
|
|
|
—
|
|
||
Paid related to:
|
|
|
|
|
||||
Current year
|
|
(2,502
|
)
|
|
(2,904
|
)
|
||
Prior years
|
|
(152
|
)
|
|
(110
|
)
|
||
Balance at end of period
|
|
$
|
2,975
|
|
|
$
|
2,975
|
|
(in thousands)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Principal
|
|
|
Fair Value
|
|
|
Principal
|
|
|
Fair Value
|
|
||||
Subordinated debt
|
|
$
|
90,500
|
|
|
$
|
36,302
|
|
|
$
|
90,500
|
|
|
$
|
39,898
|
|
Issuer
|
Principal
|
|
Issue date
|
Interest
|
Redemption date
|
|
Kingsway CT Statutory Trust I
|
$
|
15,000
|
|
12/4/2002
|
annual interest rate equal to LIBOR, plus 4.00% payable quarterly
|
12/4/2032
|
Kingsway CT Statutory Trust II
|
$
|
17,500
|
|
5/15/2003
|
annual interest rate equal to LIBOR, plus 4.10% payable quarterly
|
5/15/2033
|
Kingsway CT Statutory Trust III
|
$
|
20,000
|
|
10/29/2003
|
annual interest rate equal to LIBOR, plus 3.95% payable quarterly
|
10/29/2033
|
Kingsway DE Statutory Trust III
|
$
|
15,000
|
|
5/22/2003
|
annual interest rate equal to LIBOR, plus 4.20% payable quarterly
|
5/22/2033
|
Kingsway DE Statutory Trust IV
|
$
|
10,000
|
|
9/30/2003
|
annual interest rate equal to LIBOR, plus 3.85% payable quarterly
|
9/30/2033
|
Kingsway DE Statutory Trust VI
|
$
|
13,000
|
|
1/8/2004
|
annual interest rate equal to LIBOR, plus 4.00% payable quarterly
|
1/8/2034
|
|
19
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Income tax benefit at United States statutory income tax rate
|
|
$
|
(671
|
)
|
|
$
|
(3,533
|
)
|
|
$
|
(1,170
|
)
|
|
$
|
(2,843
|
)
|
Non-deductible compensation
|
|
381
|
|
|
70
|
|
|
449
|
|
|
138
|
|
||||
Valuation allowance
|
|
251
|
|
|
1,172
|
|
|
640
|
|
|
533
|
|
||||
Foreign operations subject to different tax rates
|
|
38
|
|
|
33
|
|
|
74
|
|
|
155
|
|
||||
Deconsolidation of subsidiary
|
|
—
|
|
|
2,391
|
|
|
—
|
|
|
2,391
|
|
||||
Non-taxable dividend income
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(415
|
)
|
||||
Other
|
|
27
|
|
|
(108
|
)
|
|
59
|
|
|
97
|
|
||||
Income tax expense
|
|
$
|
26
|
|
|
$
|
34
|
|
|
$
|
52
|
|
|
$
|
56
|
|
|
20
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands, except per share data)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
|
$
|
(1,999
|
)
|
|
$
|
(10,426
|
)
|
|
$
|
(3,494
|
)
|
|
$
|
(8,418
|
)
|
Plus (less): net loss (income) attributable to noncontrolling interests
|
|
361
|
|
|
1,064
|
|
|
400
|
|
|
(160
|
)
|
||||
Less: dividends on preferred stock
|
|
(82
|
)
|
|
(82
|
)
|
|
(164
|
)
|
|
(163
|
)
|
||||
Loss from continuing operations attributable to common shareholders
|
|
$
|
(1,720
|
)
|
|
$
|
(9,444
|
)
|
|
$
|
(3,258
|
)
|
|
$
|
(8,741
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic shares
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
19,818
|
|
|
19,710
|
|
|
19,764
|
|
|
19,710
|
|
||||
Weighted average diluted shares
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
19,818
|
|
|
19,710
|
|
|
19,764
|
|
|
19,710
|
|
||||
Effect of potentially dilutive securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total weighted average diluted shares
|
|
19,818
|
|
|
19,710
|
|
|
19,764
|
|
|
19,710
|
|
||||
Basic loss per common share from continuing operations
|
|
$
|
(0.09
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.44
|
)
|
Diluted loss per common share from continuing operations
|
|
$
|
(0.09
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.44
|
)
|
|
21
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands, except for share data)
|
|
|
|
|
|
|
|
|||||||
|
|
Number of Options Outstanding
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (in Years)
|
|
Aggregate Intrinsic Value
|
||||||
Outstanding at December 31, 2015
|
|
611,875
|
|
|
$
|
4.50
|
|
|
2.2
|
|
|
$
|
43
|
|
Granted
|
|
40,000
|
|
|
4.67
|
|
|
|
|
|
||||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Outstanding at June 30, 2016
|
|
651,875
|
|
|
$
|
4.51
|
|
|
1.9
|
|
|
$
|
560
|
|
Exercisable at June 30, 2016
|
|
611,875
|
|
|
$
|
4.51
|
|
|
1.9
|
|
|
$
|
560
|
|
|
|
Six months ended June 30, 2016
|
|
Risk-free interest rate
|
|
1.1
|
%
|
Dividend yield
|
|
—
|
|
Expected volatility
|
|
0.5
|
%
|
Expected term (in years)
|
|
4.0
|
|
|
22
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
|
Three months ended June 30, 2016
|
|
|||||||
|
|
Unrealized Gains (Losses) on Fixed Maturities and Equity Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total Accumulated Other Comprehensive Income
|
||||||
|
|
|
|
|
|
|
||||||
Balance at April 1, 2016
|
|
$
|
12,923
|
|
|
$
|
(3,780
|
)
|
|
$
|
9,143
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassifications
|
|
430
|
|
|
—
|
|
|
430
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
(73
|
)
|
|
—
|
|
|
(73
|
)
|
|||
Net current-period other comprehensive income
|
|
357
|
|
|
—
|
|
|
357
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at June 30, 2016
|
|
$
|
13,280
|
|
|
$
|
(3,780
|
)
|
|
$
|
9,500
|
|
(in thousands)
|
|
|
|
Three months ended June 30, 2015
|
|
|||||||
|
|
Unrealized Gains (Losses) on Fixed Maturities and Equity Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total Accumulated Other Comprehensive Income
|
||||||
|
|
|
|
|
|
|
||||||
Balance at April 1, 2015
|
|
$
|
14,527
|
|
|
$
|
(5,772
|
)
|
|
$
|
8,755
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income before reclassifications
|
|
(1,068
|
)
|
|
1,114
|
|
|
46
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
1,227
|
|
|
1,243
|
|
|
2,470
|
|
|||
Net current-period other comprehensive income
|
|
159
|
|
|
2,357
|
|
|
2,516
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at June 30, 2015
|
|
$
|
14,686
|
|
|
$
|
(3,415
|
)
|
|
$
|
11,271
|
|
|
23
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
|
Six months ended June 30, 2016
|
|
|||||||
|
|
Unrealized Gains (Losses) on Fixed Maturities and Equity Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total Accumulated Other Comprehensive Income
|
||||||
|
|
|
|
|
|
|
||||||
Balance at January 1, 2016
|
|
$
|
13,080
|
|
|
$
|
(3,780
|
)
|
|
$
|
9,300
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassifications
|
|
705
|
|
|
—
|
|
|
705
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
|||
Net current-period other comprehensive income
|
|
200
|
|
|
—
|
|
|
200
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at June 30, 2016
|
|
$
|
13,280
|
|
|
$
|
(3,780
|
)
|
|
$
|
9,500
|
|
(in thousands)
|
|
|
|
Six months ended June 30, 2015
|
|
|||||||
|
|
Unrealized Gains (Losses) on Fixed Maturities and Equity Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total Accumulated Other Comprehensive Income
|
||||||
|
|
|
|
|
|
|
||||||
Balance at January 1, 2015
|
|
$
|
14,622
|
|
|
$
|
(5,952
|
)
|
|
$
|
8,670
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income before reclassifications
|
|
(1,176
|
)
|
|
1,294
|
|
|
118
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
1,240
|
|
|
1,243
|
|
|
2,483
|
|
|||
Net current-period other comprehensive income
|
|
64
|
|
|
2,537
|
|
|
2,601
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at June 30, 2015
|
|
$
|
14,686
|
|
|
$
|
(3,415
|
)
|
|
$
|
11,271
|
|
|
24
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Reclassification of accumulated other comprehensive income from unrealized gains (losses) on fixed maturities and equity investments to:
|
|
|
|
|
|
|
|
|
||||||||
Net realized gains (losses)
|
|
$
|
73
|
|
|
$
|
(1,227
|
)
|
|
$
|
505
|
|
|
$
|
(1,230
|
)
|
Other-than-temporary impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Loss from continuing operations before income tax expense
|
|
73
|
|
|
(1,227
|
)
|
|
505
|
|
|
(1,240
|
)
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (loss) income
|
|
73
|
|
|
(1,227
|
)
|
|
505
|
|
|
(1,240
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reclassification of accumulated other comprehensive income from foreign currency translation adjustments to:
|
|
|
|
|
|
|
|
|
||||||||
Loss on deconsolidation of subsidiary
|
|
—
|
|
|
(1,243
|
)
|
|
—
|
|
|
(1,243
|
)
|
||||
Loss from continuing operations before income tax expense
|
|
—
|
|
|
(1,243
|
)
|
|
—
|
|
|
(1,243
|
)
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (loss) income
|
|
—
|
|
|
(1,243
|
)
|
|
—
|
|
|
(1,243
|
)
|
||||
Total reclassification from accumulated other comprehensive income to net (loss) income
|
|
$
|
73
|
|
|
$
|
(2,470
|
)
|
|
$
|
505
|
|
|
$
|
(2,483
|
)
|
|
25
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
|
$
|
31,813
|
|
|
$
|
30,200
|
|
|
$
|
61,240
|
|
|
$
|
59,230
|
|
Other income
|
|
2,665
|
|
|
2,364
|
|
|
4,938
|
|
|
4,601
|
|
||||
Total Insurance Underwriting
|
|
34,478
|
|
|
32,564
|
|
|
66,178
|
|
|
63,831
|
|
||||
Insurance Services:
|
|
|
|
|
|
|
|
|
||||||||
Service fee and commission income
|
|
5,394
|
|
|
5,848
|
|
|
10,716
|
|
|
11,246
|
|
||||
Other income
|
|
62
|
|
|
107
|
|
|
116
|
|
|
204
|
|
||||
Total Insurance Services
|
|
5,456
|
|
|
5,955
|
|
|
10,832
|
|
|
11,450
|
|
||||
Total segment revenues
|
|
39,934
|
|
|
38,519
|
|
|
77,010
|
|
|
75,281
|
|
||||
Net investment income
|
|
1,072
|
|
|
528
|
|
|
1,000
|
|
|
1,841
|
|
||||
Net realized gains (losses)
|
|
67
|
|
|
53
|
|
|
(104
|
)
|
|
53
|
|
||||
Other-than-temporary impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Other income not allocated to segments
|
|
64
|
|
|
43
|
|
|
111
|
|
|
6,066
|
|
||||
Total revenues
|
|
$
|
41,137
|
|
|
$
|
39,143
|
|
|
$
|
78,017
|
|
|
$
|
83,231
|
|
|
26
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Segment operating (loss) income
|
|
|
|
|
|
|
|
|
||||||||
Insurance Underwriting
|
|
$
|
181
|
|
|
$
|
(480
|
)
|
|
$
|
(58
|
)
|
|
$
|
(158
|
)
|
Insurance Services
|
|
(780
|
)
|
|
(102
|
)
|
|
(936
|
)
|
|
(288
|
)
|
||||
Total segment operating loss
|
|
(599
|
)
|
|
(582
|
)
|
|
(994
|
)
|
|
(446
|
)
|
||||
Net investment income
|
|
1,072
|
|
|
528
|
|
|
1,000
|
|
|
1,841
|
|
||||
Net realized gains (losses)
|
|
67
|
|
|
53
|
|
|
(104
|
)
|
|
53
|
|
||||
Other-than-temporary impairment loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Other income and expenses not allocated to segments, net
|
|
(1,940
|
)
|
|
(2,075
|
)
|
|
(3,841
|
)
|
|
635
|
|
||||
Amortization of intangible assets
|
|
(307
|
)
|
|
(313
|
)
|
|
(602
|
)
|
|
(630
|
)
|
||||
Contingent consideration benefit (expense)
|
|
657
|
|
|
(110
|
)
|
|
657
|
|
|
(254
|
)
|
||||
Interest expense
|
|
(1,108
|
)
|
|
(1,414
|
)
|
|
(2,201
|
)
|
|
(2,805
|
)
|
||||
Foreign exchange losses, net
|
|
(9
|
)
|
|
(760
|
)
|
|
(10
|
)
|
|
(1,152
|
)
|
||||
Gain (loss) on change in fair value of debt
|
|
1,068
|
|
|
(1,228
|
)
|
|
3,596
|
|
|
(967
|
)
|
||||
Loss on deconsolidation of subsidiary
|
|
—
|
|
|
(4,420
|
)
|
|
—
|
|
|
(4,420
|
)
|
||||
Equity in net loss of investee
|
|
(874
|
)
|
|
(71
|
)
|
|
(943
|
)
|
|
(207
|
)
|
||||
Loss from continuing operations before income tax expense
|
|
(1,973
|
)
|
|
(10,392
|
)
|
|
(3,442
|
)
|
|
(8,362
|
)
|
||||
Income tax expense
|
|
26
|
|
|
34
|
|
|
52
|
|
|
56
|
|
||||
Loss from continuing operations
|
|
$
|
(1,999
|
)
|
|
$
|
(10,426
|
)
|
|
$
|
(3,494
|
)
|
|
$
|
(8,418
|
)
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
||||||||
Private passenger auto liability
|
|
$
|
21,656
|
|
|
$
|
20,292
|
|
|
$
|
41,731
|
|
|
$
|
39,631
|
|
Auto physical damage
|
|
10,157
|
|
|
9,908
|
|
|
19,509
|
|
|
19,599
|
|
||||
Total net premiums earned
|
|
$
|
31,813
|
|
|
$
|
30,200
|
|
|
$
|
61,240
|
|
|
$
|
59,230
|
|
|
27
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
28
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
29
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
|
|
|
June 30, 2016
|
|
|||||||||
|
|
|
|
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Total
|
|
|
Quoted Prices in Active Markets for Identical Assets(Level 1)
|
|
|
Significant Other Observable Inputs (Level 2)
|
|
|
Significant Unobservable Inputs (Level 3)
|
|
||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government, government agencies and authorities
|
|
$
|
27,716
|
|
|
$
|
—
|
|
|
$
|
27,716
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
|
3,915
|
|
|
—
|
|
|
3,915
|
|
|
—
|
|
||||
Mortgage-backed
|
|
7,350
|
|
|
—
|
|
|
7,350
|
|
|
—
|
|
||||
Asset-backed securities and collateralized mortgage obligations
|
|
4,616
|
|
|
—
|
|
|
4,616
|
|
|
—
|
|
||||
Corporate
|
|
19,406
|
|
|
—
|
|
|
19,406
|
|
|
—
|
|
||||
Total fixed maturities
|
|
63,003
|
|
|
—
|
|
|
63,003
|
|
|
—
|
|
||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
20,813
|
|
|
20,813
|
|
|
—
|
|
|
—
|
|
||||
Warrants
|
|
695
|
|
|
197
|
|
|
498
|
|
|
—
|
|
||||
Total equity investments
|
|
21,508
|
|
|
21,010
|
|
|
498
|
|
|
—
|
|
||||
Other investments
|
|
5,435
|
|
|
—
|
|
|
5,435
|
|
|
—
|
|
||||
Short-term investments
|
|
670
|
|
|
—
|
|
|
670
|
|
|
—
|
|
||||
Total assets
|
|
$
|
90,616
|
|
|
$
|
21,010
|
|
|
$
|
69,606
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Subordinated debt
|
|
$
|
36,302
|
|
|
$
|
—
|
|
|
$
|
36,302
|
|
|
$
|
—
|
|
Contingent consideration
|
|
325
|
|
|
—
|
|
|
—
|
|
|
325
|
|
||||
Total liabilities
|
|
$
|
36,627
|
|
|
$
|
—
|
|
|
$
|
36,302
|
|
|
$
|
325
|
|
|
30
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
(in thousands)
|
|
|
|
|
|
December 31, 2015
|
|
|||||||||
|
|
|
|
Fair Value Measurements at the End of the Reporting Period Using
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Total
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant Other Observable Inputs (Level 2)
|
|
|
Significant Unobservable Inputs (Level 3)
|
|
||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government, government agencies and authorities
|
|
$
|
20,453
|
|
|
$
|
—
|
|
|
$
|
20,453
|
|
|
$
|
—
|
|
States municipalities and political subdivisions
|
|
2,256
|
|
|
—
|
|
|
2,256
|
|
|
—
|
|
||||
Mortgage-backed
|
|
7,963
|
|
|
—
|
|
|
7,963
|
|
|
—
|
|
||||
Asset-backed securities and collateralized mortgage obligations
|
|
6,023
|
|
|
—
|
|
|
6,023
|
|
|
—
|
|
||||
Corporate
|
|
18,864
|
|
|
—
|
|
|
18,864
|
|
|
—
|
|
||||
Total fixed maturities
|
|
55,559
|
|
|
—
|
|
|
55,559
|
|
|
—
|
|
||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
26,586
|
|
|
26,586
|
|
|
—
|
|
|
—
|
|
||||
Warrants
|
|
973
|
|
|
229
|
|
|
744
|
|
|
—
|
|
||||
Total equity investments
|
|
27,559
|
|
|
26,815
|
|
|
744
|
|
|
—
|
|
||||
Other investments
|
|
4,077
|
|
|
—
|
|
|
4,077
|
|
|
—
|
|
||||
Short-term investments
|
|
400
|
|
|
—
|
|
|
400
|
|
|
—
|
|
||||
Total assets
|
|
$
|
87,595
|
|
|
$
|
26,815
|
|
|
$
|
60,780
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Subordinated debt
|
|
$
|
39,898
|
|
|
$
|
—
|
|
|
$
|
39,898
|
|
|
$
|
—
|
|
Contingent consideration
|
|
1,982
|
|
|
—
|
|
|
—
|
|
|
1,982
|
|
||||
Total liabilities
|
|
$
|
41,880
|
|
|
$
|
—
|
|
|
$
|
39,898
|
|
|
$
|
1,982
|
|
(in thousands)
|
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Contingent consideration:
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
1,982
|
|
|
$
|
3,265
|
|
|
$
|
1,982
|
|
|
$
|
3,121
|
|
Settlement of contingent consideration liabilities
|
|
(1,000
|
)
|
|
—
|
|
|
(1,000
|
)
|
|
—
|
|
||||
Change in fair value of contingent consideration included in net (loss) income
|
|
(657
|
)
|
|
110
|
|
|
(657
|
)
|
|
254
|
|
||||
Ending balance
|
|
$
|
325
|
|
|
$
|
3,375
|
|
|
$
|
325
|
|
|
$
|
3,375
|
|
|
31
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
32
|
|
KINGSWAY FINANCIAL SERVICES INC.
Notes to Consolidated Financial Statements (Unaudited) June 30, 2016
|
|
33
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
34
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
35
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Segment operating (loss) income
|
|
|
|
|
|
|
||||||
Insurance Underwriting
|
181
|
|
(480
|
)
|
661
|
|
(58
|
)
|
(158
|
)
|
100
|
|
Insurance Services
|
(780
|
)
|
(102
|
)
|
(678
|
)
|
(936
|
)
|
(288
|
)
|
(648
|
)
|
Total segment operating loss
|
(599
|
)
|
(582
|
)
|
(17
|
)
|
(994
|
)
|
(446
|
)
|
(548
|
)
|
Net investment income
|
1,072
|
|
528
|
|
544
|
|
1,000
|
|
1,841
|
|
(841
|
)
|
Net realized gains (losses)
|
67
|
|
53
|
|
14
|
|
(104
|
)
|
53
|
|
(157
|
)
|
Other-than-temporary impairment loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
10
|
|
Other income and expenses not allocated to segments, net
|
(1,940
|
)
|
(2,075
|
)
|
135
|
|
(3,841
|
)
|
635
|
|
(4,476
|
)
|
Amortization of intangible assets
|
(307
|
)
|
(313
|
)
|
6
|
|
(602
|
)
|
(630
|
)
|
28
|
|
Contingent consideration benefit (expense)
|
657
|
|
(110
|
)
|
767
|
|
657
|
|
(254
|
)
|
911
|
|
Interest expense
|
(1,108
|
)
|
(1,414
|
)
|
306
|
|
(2,201
|
)
|
(2,805
|
)
|
604
|
|
Foreign exchange losses, net
|
(9
|
)
|
(760
|
)
|
751
|
|
(10
|
)
|
(1,152
|
)
|
1,142
|
|
Gain (loss) on change in fair value of debt
|
1,068
|
|
(1,228
|
)
|
2,296
|
|
3,596
|
|
(967
|
)
|
4,563
|
|
Loss on deconsolidation of subsidiary
|
—
|
|
(4,420
|
)
|
4,420
|
|
—
|
|
(4,420
|
)
|
4,420
|
|
Equity in net loss of investee
|
(874
|
)
|
(71
|
)
|
(803
|
)
|
(943
|
)
|
(207
|
)
|
(736
|
)
|
Loss from continuing operations before income tax expense
|
(1,973
|
)
|
(10,392
|
)
|
8,419
|
|
(3,442
|
)
|
(8,362
|
)
|
4,920
|
|
Income tax expense
|
26
|
|
34
|
|
(8
|
)
|
52
|
|
56
|
|
(4
|
)
|
Loss from continuing operations
|
(1,999
|
)
|
(10,426
|
)
|
8,427
|
|
(3,494
|
)
|
(8,418
|
)
|
4,924
|
|
Income from discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
1,426
|
|
(1,426
|
)
|
Gain on disposal of discontinued operations, net of taxes
|
1,124
|
|
11,259
|
|
(10,135
|
)
|
1,124
|
|
11,259
|
|
(10,135
|
)
|
Net (loss) income
|
(875
|
)
|
833
|
|
(1,708
|
)
|
(2,370
|
)
|
4,267
|
|
(6,637
|
)
|
|
36
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
37
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
38
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
39
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
Type of investment
|
|
June 30, 2016
|
|
|
% of Total
|
|
|
December 31, 2015
|
|
|
% of Total
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||
U.S. government, government agencies and authorities
|
|
27,716
|
|
|
18.2
|
%
|
|
20,453
|
|
|
12.8
|
%
|
States, municipalities and political subdivisions
|
|
3,915
|
|
|
2.6
|
%
|
|
2,256
|
|
|
1.4
|
%
|
Mortgage-backed
|
|
7,350
|
|
|
4.8
|
%
|
|
7,963
|
|
|
5.0
|
%
|
Asset-backed securities and collateralized mortgage obligations
|
|
4,616
|
|
|
3.0
|
%
|
|
6,023
|
|
|
3.8
|
%
|
Corporate
|
|
19,406
|
|
|
12.7
|
%
|
|
18,864
|
|
|
11.8
|
%
|
Total fixed maturities
|
|
63,003
|
|
|
41.3
|
%
|
|
55,559
|
|
|
34.8
|
%
|
Equity investments:
|
|
|
|
|
|
|
|
|
||||
Common stock
|
|
20,813
|
|
|
13.7
|
%
|
|
26,586
|
|
|
16.7
|
%
|
Warrants
|
|
695
|
|
|
0.5
|
%
|
|
973
|
|
|
0.6
|
%
|
Total equity investments
|
|
21,508
|
|
|
14.2
|
%
|
|
27,559
|
|
|
17.3
|
%
|
Limited liability investments
|
|
21,768
|
|
|
14.3
|
%
|
|
20,141
|
|
|
12.6
|
%
|
Other investments
|
|
5,435
|
|
|
3.6
|
%
|
|
4,077
|
|
|
2.6
|
%
|
Short-term investments
|
|
670
|
|
|
0.4
|
%
|
|
400
|
|
|
0.3
|
%
|
Total investments
|
|
112,384
|
|
|
73.8
|
%
|
|
107,736
|
|
|
67.6
|
%
|
Cash and cash equivalents
|
|
39,887
|
|
|
26.2
|
%
|
|
51,701
|
|
|
32.4
|
%
|
Total
|
|
152,271
|
|
|
100.0
|
%
|
|
159,437
|
|
|
100.0
|
%
|
|
|
June 30, 2016
|
|
|
% of Total
|
|
|
December 31, 2015
|
|
|
% of Total
|
|
Due in less than one year
|
|
8,702
|
|
|
13.8
|
%
|
|
10,078
|
|
|
18.1
|
%
|
Due in one through five years
|
|
43,258
|
|
|
68.7
|
%
|
|
35,999
|
|
|
64.8
|
%
|
Due after five through ten years
|
|
3,418
|
|
|
5.4
|
%
|
|
1,425
|
|
|
2.6
|
%
|
Due after ten years
|
|
7,625
|
|
|
12.1
|
%
|
|
8,057
|
|
|
14.5
|
%
|
Total
|
|
63,003
|
|
|
100.0
|
%
|
|
55,559
|
|
|
100.0
|
%
|
|
40
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
Rating (S&P/Moody's)
|
June 30, 2016
|
|
December 31, 2015
|
|
AAA/Aaa
|
62.9
|
%
|
61.9
|
%
|
AA/Aa
|
13.9
|
|
10.5
|
|
A/A
|
14.5
|
|
18.4
|
|
Percentage rated A/A2 or better
|
91.3
|
%
|
90.8
|
%
|
BBB/Baa
|
3.9
|
|
3.7
|
|
Not rated
|
4.8
|
|
5.5
|
|
Total
|
100.0
|
%
|
100.0
|
%
|
|
41
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
Unfunded Commitment
|
|
Carrying Value
|
|||||
Limited liability investments:
|
|
June 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|||
Investments held through LLCs
|
|
1,598
|
|
|
20,987
|
|
|
19,449
|
|
Investments held through LPs and GP
|
|
225
|
|
|
781
|
|
|
692
|
|
Total
|
|
1,823
|
|
|
21,768
|
|
|
20,141
|
|
|
42
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
Line of Business
|
June 30, 2016
|
|
December 31, 2015
|
|
Non-standard automobile
|
50,133
|
|
53,066
|
|
Commercial automobile
|
1,095
|
|
1,358
|
|
Other
|
967
|
|
1,047
|
|
Total
|
52,195
|
|
55,471
|
|
Line of Business
|
June 30, 2016
|
|
December 31, 2015
|
|
Non-standard automobile
|
49,354
|
|
51,937
|
|
Commercial automobile
|
1,029
|
|
1,280
|
|
Other
|
967
|
|
1,047
|
|
Total
|
51,350
|
|
54,264
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Favorable) unfavorable change in provision for property and casualty unpaid loss and loss adjustment expenses for prior accident years:
|
(24
|
)
|
(408
|
)
|
67
|
|
(484
|
)
|
|
43
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
44
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
45
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
46
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
47
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
48
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ Larry G. Swets, Jr.
|
|
|
|
Larry G. Swets, Jr., President, Chief Executive Officer and Director
|
|
|
|
(principal executive officer)
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ William A. Hickey, Jr.
|
|
|
|
William A. Hickey, Jr., Chief Financial Officer and Executive Vice President
|
|
|
|
(principal financial officer)
|
|
|
|
|
|
49
|
|
|
|
TRT LeaseCO, LLC, a Delaware
|
|
|
limited liability company
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name: Leo S. Schwartz
|
|
|
Title: Vice President
|
Settlement Date:
|
|
3/12/2015
|
|
Final Maturity:
|
|
5/15/2034
|
|
Monthly Coupon:
|
|
4.07%
|
|
Term (months):
|
|
230
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
|
|
|
|
|
|
$
|
182,666,908.56
|
|
||||||||||
3/15/2015
|
|
|
$
|
61,954.53
|
|
|
$
|
61,954.53
|
|
$
|
182,666,908.56
|
|
||||||
4/15/2015
|
$
|
777,280.00
|
|
$
|
500.00
|
|
$
|
776,780.00
|
|
$
|
157,234.74
|
|
$
|
619,545.26
|
|
$
|
182,509,673.82
|
|
5/15/2015
|
$
|
777,280.00
|
|
$
|
500.00
|
|
$
|
776,780.00
|
|
$
|
157,768.02
|
|
$
|
619,011.98
|
|
$
|
182,351,905.80
|
|
6/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
175,791.92
|
|
$
|
618,476.88
|
|
$
|
182,176,113.88
|
|
7/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
176,388.15
|
|
$
|
617,880.65
|
|
$
|
181,999,725.73
|
|
8/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
176,986.40
|
|
$
|
617,282.40
|
|
$
|
181,822,739.33
|
|
9/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
177,586.68
|
|
$
|
616,682.12
|
|
$
|
181,645,152.65
|
|
10/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
178,188.99
|
|
$
|
616,079.81
|
|
$
|
181,466,963.66
|
|
11/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
178,793.35
|
|
$
|
615,475.45
|
|
$
|
181,288,170.31
|
|
12/15/2015
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
179,399.76
|
|
$
|
614,869.04
|
|
$
|
181,108,770.55
|
|
1/15/2016
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
180,008.22
|
|
$
|
614,260.58
|
|
$
|
180,928,762.33
|
|
2/15/2016
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
180,618.75
|
|
$
|
613,650.05
|
|
$
|
180,748,143.58
|
|
3/15/2016
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
181,231.35
|
|
$
|
613,037.45
|
|
$
|
180,566,912.23
|
|
4/15/2016
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
181,846.02
|
|
$
|
612,422.78
|
|
$
|
180,385,066.21
|
|
5/15/2016
|
$
|
794,768.80
|
|
$
|
500.00
|
|
$
|
794,268.80
|
|
$
|
182,462.78
|
|
$
|
611,806.02
|
|
$
|
180,202,603.43
|
|
6/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
200,963.94
|
|
$
|
611,187.16
|
|
$
|
180,001,639.49
|
|
7/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
201,645.54
|
|
$
|
610,505.56
|
|
$
|
179,799,993.95
|
|
8/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
202,329.45
|
|
$
|
609,821.65
|
|
$
|
179,597,664.50
|
|
9/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
203,015.69
|
|
$
|
609,135.41
|
|
$
|
179,394,648.81
|
|
10/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
203,704.25
|
|
$
|
608,446.85
|
|
$
|
179,190,944.56
|
|
11/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
204,395.15
|
|
$
|
607,755.95
|
|
$
|
178,986,549.41
|
|
12/15/2016
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
205,088.39
|
|
$
|
607,062.71
|
|
$
|
178,781,461.02
|
|
1/15/2017
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
205,783.98
|
|
$
|
606,367.12
|
|
$
|
178,575,677.04
|
|
2/15/2017
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
206,481.93
|
|
$
|
605,669.17
|
|
$
|
178,369,195.11
|
|
3/15/2017
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
207,182.25
|
|
$
|
604,968.85
|
|
$
|
178,162,012.86
|
|
4/15/2017
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
207,884.94
|
|
$
|
604,266.16
|
|
$
|
177,954,127.92
|
|
5/15/2017
|
$
|
812,651.10
|
|
$
|
500.00
|
|
$
|
812,151.10
|
|
$
|
208,590.02
|
|
$
|
603,561.08
|
|
$
|
177,745,537.90
|
|
6/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
227,582.13
|
|
$
|
602,853.62
|
|
$
|
177,517,955.77
|
|
7/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
228,354.02
|
|
$
|
602,081.73
|
|
$
|
177,289,601.75
|
|
8/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
229,128.52
|
|
$
|
601,307.23
|
|
$
|
177,060,473.23
|
|
9/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
229,905.64
|
|
$
|
600,530.11
|
|
$
|
176,830,567.59
|
|
10/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
230,685.41
|
|
$
|
599,750.34
|
|
$
|
176,599,882.18
|
|
11/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
231,467.82
|
|
$
|
598,967.93
|
|
$
|
176,368,414.36
|
|
12/15/2017
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
232,252.88
|
|
$
|
598,182.87
|
|
$
|
176,136,161.48
|
|
1/15/2018
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
233,040.60
|
|
$
|
597,395.15
|
|
$
|
175,903,120.88
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
2/15/2018
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
233,831.00
|
|
$
|
596,604.75
|
|
$
|
175,669,289.88
|
|
3/15/2018
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
234,624.08
|
|
$
|
595,811.67
|
|
$
|
175,434,665.80
|
|
4/15/2018
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
235,419.84
|
|
$
|
595,015.91
|
|
$
|
175,199,245.96
|
|
5/15/2018
|
$
|
830,935.75
|
|
$
|
500.00
|
|
$
|
830,435.75
|
|
$
|
236,218.31
|
|
$
|
594,217.44
|
|
$
|
174,963,027.65
|
|
6/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
255,715.53
|
|
$
|
593,416.27
|
|
$
|
174,707,312.12
|
|
7/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
256,582.83
|
|
$
|
592,548.97
|
|
$
|
174,450,729.29
|
|
8/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
257,453.08
|
|
$
|
591,678.72
|
|
$
|
174,193,276.21
|
|
9/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
258,326.27
|
|
$
|
590,805.53
|
|
$
|
173,934,949.94
|
|
10/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
259,202.43
|
|
$
|
589,929.37
|
|
$
|
173,675,747.51
|
|
11/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
260,081.56
|
|
$
|
589,050.24
|
|
$
|
173,415,665.95
|
|
12/15/2018
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
260,963.67
|
|
$
|
588,168.13
|
|
$
|
173,154,702.28
|
|
1/15/2019
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
261,848.77
|
|
$
|
587,283.03
|
|
$
|
172,892,853.51
|
|
2/15/2019
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
262,736.87
|
|
$
|
586,394.93
|
|
$
|
172,630,116.64
|
|
3/15/2019
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
263,627.99
|
|
$
|
585,503.81
|
|
$
|
172,366,488.65
|
|
4/15/2019
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
264,522.13
|
|
$
|
584,609.67
|
|
$
|
172,101,966.52
|
|
5/15/2019
|
$
|
849,631.80
|
|
$
|
500.00
|
|
$
|
849,131.80
|
|
$
|
265,419.30
|
|
$
|
583,712.50
|
|
$
|
171,836,547.22
|
|
6/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
285,436.23
|
|
$
|
582,812.29
|
|
$
|
171,551,110.99
|
|
7/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
286,404.34
|
|
$
|
581,844.18
|
|
$
|
171,264,706.65
|
|
8/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
287,375.72
|
|
$
|
580,872.80
|
|
$
|
170,977,330.93
|
|
9/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
288,350.41
|
|
$
|
579,898.11
|
|
$
|
170,688,980.52
|
|
10/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
289,328.39
|
|
$
|
578,920.13
|
|
$
|
170,399,652.13
|
|
11/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
290,309.70
|
|
$
|
577,938.82
|
|
$
|
170,109,342.43
|
|
12/15/2019
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
291,294.33
|
|
$
|
576,954.19
|
|
$
|
169,818,048.10
|
|
1/15/2020
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
292,282.31
|
|
$
|
575,966.21
|
|
$
|
169,525,765.79
|
|
2/15/2020
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
293,273.63
|
|
$
|
574,974.89
|
|
$
|
169,232,492.16
|
|
3/15/2020
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
294,268.32
|
|
$
|
573,980.20
|
|
$
|
168,938,223.84
|
|
4/15/2020
|
$
|
868,748.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
295,266.38
|
|
$
|
572,982.14
|
|
$
|
168,642,957.46
|
|
5/15/2020
|
$
|
868,148.52
|
|
$
|
500.00
|
|
$
|
868,248.52
|
|
$
|
296,267.82
|
|
$
|
571,980.70
|
|
$
|
168,346,689.64
|
|
6/15/2020
|
$
|
888,295.36
|
|
$
|
500.00
|
|
$
|
887,795.36
|
|
$
|
316,819.50
|
|
$
|
570,975.86
|
|
$
|
168,029,870.14
|
|
7/15/2020
|
$
|
888,295.36
|
|
$
|
500.00
|
|
$
|
887,795.36
|
|
$
|
317,894.05
|
|
$
|
569,901.31
|
|
$
|
167,711,976.09
|
|
8/15/2020
|
$
|
888,295.36
|
|
$
|
500.00
|
|
$
|
887,795.36
|
|
$
|
318,972.24
|
|
$
|
568,823.12
|
|
$
|
167,393,003.85
|
|
9/15/2020
|
$
|
888,295.36
|
|
$
|
500.00
|
|
$
|
887,795.36
|
|
$
|
320,054.09
|
|
$
|
567,741.27
|
|
$
|
167,072,949.76
|
|
9/15/2021
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
353,516.76
|
|
$
|
554,265.25
|
|
$
|
163,066,214.17
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
10/15/2021
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
354,715.77
|
|
$
|
553,066.24
|
|
$
|
162,711,498.40
|
|
11/15/2021
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
355,918.84
|
|
$
|
551,863.17
|
|
$
|
162,355,579.56
|
|
12/15/2021
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
357,126.00
|
|
$
|
550,656.01
|
|
$
|
161,998,453.56
|
|
1/15/2022
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
358,337.26
|
|
$
|
549,444.75
|
|
$
|
161,640,116.30
|
|
2/15/2022
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
359,552.62
|
|
$
|
548,229.39
|
|
$
|
161,280,563.68
|
|
3/15/2022
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
360,772.10
|
|
$
|
547,009.91
|
|
$
|
160,919,791.58
|
|
4/15/2022
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
361,995.72
|
|
$
|
545,786.29
|
|
$
|
160,557,795.86
|
|
5/15/2022
|
$
|
908,282.01
|
|
$
|
500.00
|
|
$
|
907,782.01
|
|
$
|
363,223.49
|
|
$
|
544,558.52
|
|
$
|
160,194,572.37
|
|
6/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
384,891.77
|
|
$
|
543,326.59
|
|
$
|
159,809,680.60
|
|
7/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
386,197.19
|
|
$
|
542,021.17
|
|
$
|
159,423,483.41
|
|
8/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
387,507.05
|
|
$
|
540,711.31
|
|
$
|
159,035,976.36
|
|
9/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
388,821.34
|
|
$
|
539,397.02
|
|
$
|
158,647,155.02
|
|
10/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
390,140.09
|
|
$
|
538,078.27
|
|
$
|
158,257,014.93
|
|
11/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
391,463.32
|
|
$
|
536,755.04
|
|
$
|
157,865,551.61
|
|
12/15/2022
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
392,791.03
|
|
$
|
535,427.33
|
|
$
|
157,472,760.58
|
|
1/15/2023
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
394,123.25
|
|
$
|
534,095.11
|
|
$
|
157,078,637.33
|
|
2/15/2023
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
395,459.98
|
|
$
|
532,758.38
|
|
$
|
156,683,177.35
|
|
3/15/2023
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
396,801.25
|
|
$
|
531,417.11
|
|
$
|
156,286,376.10
|
|
4/15/2023
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
398,147.07
|
|
$
|
530,071.29
|
|
$
|
155,888,229.03
|
|
5/15/2023
|
$
|
928,718.36
|
|
$
|
500.00
|
|
$
|
928,218.36
|
|
$
|
399,497.45
|
|
$
|
528,720.91
|
|
$
|
155,488,731.58
|
|
6/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
421,748.57
|
|
$
|
527,365.95
|
|
$
|
155,066,983.01
|
|
7/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
423,179.00
|
|
$
|
525,935.52
|
|
$
|
154,643,804.01
|
|
8/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
424,614.28
|
|
$
|
524,500.24
|
|
$
|
154,219,189.73
|
|
9/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
426,054.43
|
|
$
|
523,060.09
|
|
$
|
153,793,135.30
|
|
10/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
427,499.47
|
|
$
|
521,615.05
|
|
$
|
153,365,635.83
|
|
11/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
428,949.41
|
|
$
|
520,165.11
|
|
$
|
152,936,686.42
|
|
12/15/2023
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
430,404.26
|
|
$
|
518,710.26
|
|
$
|
152,506,282.16
|
|
1/15/2024
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
431,864.05
|
|
$
|
517,250.47
|
|
$
|
152,074,418.11
|
|
2/15/2024
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
433,328.79
|
|
$
|
515,785.73
|
|
$
|
151,641,089.32
|
|
3/15/2024
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
434,798.49
|
|
$
|
514,316.03
|
|
$
|
151,206,290.83
|
|
4/15/2024
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
436,273.18
|
|
$
|
512,841.34
|
|
$
|
150,770,017.65
|
|
5/15/2024
|
$
|
949,614.52
|
|
$
|
500.00
|
|
$
|
949,114.52
|
|
$
|
437,752.88
|
|
$
|
511,361.64
|
|
$
|
150,332,264.77
|
|
6/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
460,603.92
|
|
$
|
509,876.93
|
|
$
|
149,871,660.85
|
|
7/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
462,166.13
|
|
$
|
508,314.72
|
|
$
|
149,409,494.72
|
|
8/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
463,733.65
|
|
$
|
506,747.20
|
|
$
|
148,945,761.07
|
|
9/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
465,306.48
|
|
$
|
505,174.37
|
|
$
|
148,480,454.59
|
|
10/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
466,884.64
|
|
$
|
503,596.21
|
|
$
|
148,013,569.95
|
|
11/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
468,468.16
|
|
$
|
502,012.69
|
|
$
|
147,545,101.79
|
|
12/15/2024
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
470,057.05
|
|
$
|
500,423.80
|
|
$
|
147,075,044.74
|
|
1/15/2025
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
471,651.32
|
|
$
|
498,829.53
|
|
$
|
146,603,393.42
|
|
2/15/2025
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
473,251.01
|
|
$
|
497,229.84
|
|
$
|
146,130,142.41
|
|
3/15/2025
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
474,856.12
|
|
$
|
495,624.73
|
|
$
|
145,655,286.29
|
|
4/15/2025
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
476,466.67
|
|
$
|
494,014.18
|
|
$
|
145,178,819.62
|
|
5/15/2025
|
$
|
970,980.85
|
|
$
|
500.00
|
|
$
|
970,480.85
|
|
$
|
478,082.69
|
|
$
|
492,398.16
|
|
$
|
144,700,736.93
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
6/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
501,551.25
|
|
$
|
490,776.67
|
|
$
|
144,199,185.68
|
|
7/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
503,252.35
|
|
$
|
489,075.57
|
|
$
|
143,695,933.33
|
|
8/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
504,959.21
|
|
$
|
487,368.71
|
|
$
|
143,190,974.12
|
|
9/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
506,671.87
|
|
$
|
485,656.05
|
|
$
|
142,684,302.25
|
|
10/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
508,390.33
|
|
$
|
483,937.59
|
|
$
|
142,175,911.92
|
|
11/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
510,114.62
|
|
$
|
482,213.30
|
|
$
|
141,665,797.30
|
|
12/15/2025
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
511,844.76
|
|
$
|
480,483.16
|
|
$
|
141,153,952.54
|
|
1/15/2026
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
513,580.76
|
|
$
|
478,747.16
|
|
$
|
140,640,371.78
|
|
2/15/2026
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
515,322.66
|
|
$
|
477,005.26
|
|
$
|
140,125,049.12
|
|
3/15/2026
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
517,070.46
|
|
$
|
475,257.46
|
|
$
|
139,607,978.66
|
|
4/15/2026
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
518,824.19
|
|
$
|
473,503.73
|
|
$
|
139,089,154.47
|
|
5/15/2026
|
$
|
992,827.92
|
|
$
|
500.00
|
|
$
|
992,327.92
|
|
$
|
520,583.87
|
|
$
|
471,744.05
|
|
$
|
138,568,570.60
|
|
6/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
544,688.15
|
|
$
|
469,978.40
|
|
$
|
138,023,882.45
|
|
7/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
546,535.55
|
|
$
|
468,131.00
|
|
$
|
137,477,346.90
|
|
8/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
548,389.22
|
|
$
|
466,277.33
|
|
$
|
136,928,957.68
|
|
9/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
550,249.17
|
|
$
|
464,417.38
|
|
$
|
136,378,708.51
|
|
10/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
552,115.43
|
|
$
|
462,551.12
|
|
$
|
135,826,593.08
|
|
11/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
553,988.02
|
|
$
|
460,678.53
|
|
$
|
135,272,605.06
|
|
12/15/2026
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
555,866.96
|
|
$
|
458,799.59
|
|
$
|
134,716,738.10
|
|
1/15/2027
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
557,752.28
|
|
$
|
456,914.27
|
|
$
|
134,158,985.82
|
|
2/15/2027
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
559,643.99
|
|
$
|
455,022.56
|
|
$
|
133,599,341.83
|
|
3/15/2027
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
561,542.12
|
|
$
|
453,124.43
|
|
$
|
133,037,799.71
|
|
4/15/2027
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
563,446.68
|
|
$
|
451,219.87
|
|
$
|
132,474,353.03
|
|
5/15/2027
|
$
|
1,015,166.55
|
|
$
|
500.00
|
|
$
|
1,014,666.55
|
|
$
|
565,357.70
|
|
$
|
449,308.85
|
|
$
|
131,908,995.33
|
|
6/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
590,116.46
|
|
$
|
447,391.34
|
|
$
|
131,318,878.87
|
|
7/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
592,117.94
|
|
$
|
445,389.86
|
|
$
|
130,726,760.93
|
|
8/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
594,126.20
|
|
$
|
443,381.60
|
|
$
|
130,132,634.73
|
|
9/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
596,141.28
|
|
$
|
441,366.52
|
|
$
|
129,536,493.45
|
|
10/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
598,163.19
|
|
$
|
439,344.61
|
|
$
|
128,938,330.26
|
|
11/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
600,191.96
|
|
$
|
437,315.84
|
|
$
|
128,338,138.30
|
|
12/15/2027
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
602,227.61
|
|
$
|
435,280.19
|
|
$
|
127,735,910.69
|
|
1/15/2028
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
604,270.17
|
|
$
|
433,237.63
|
|
$
|
127,131,640.52
|
|
2/15/2028
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
606,319.65
|
|
$
|
431,188.15
|
|
$
|
126,525,320.87
|
|
3/15/2028
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
608,376.09
|
|
$
|
429,131.71
|
|
$
|
125,916,944.78
|
|
4/15/2028
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
610,439.50
|
|
$
|
427,068.30
|
|
$
|
125,306,505.28
|
|
5/15/2028
|
$
|
1,038,007.80
|
|
$
|
500.00
|
|
$
|
1,037,507.80
|
|
$
|
612,509.90
|
|
$
|
424,997.90
|
|
$
|
124,693,995.38
|
|
6/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
637,942.51
|
|
$
|
422,920.47
|
|
$
|
124,056,052.87
|
|
7/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
640,106.20
|
|
$
|
420,756.78
|
|
$
|
123,415,946.67
|
|
8/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
642,277.23
|
|
$
|
418,585.75
|
|
$
|
122,773,669.44
|
|
9/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
644,455.62
|
|
$
|
416,407.36
|
|
$
|
122,129,213.82
|
|
10/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
646,641.40
|
|
$
|
414,221.58
|
|
$
|
121,482,572.42
|
|
11/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
648,834.59
|
|
$
|
412,028.39
|
|
$
|
120,833,737.83
|
|
12/15/2028
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
651,035.22
|
|
$
|
409,827.76
|
|
$
|
120,182,702.61
|
|
1/15/2029
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
653,243.31
|
|
$
|
407,619.67
|
|
$
|
119,529,459.30
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
2/15/2029
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
655,458.90
|
|
$
|
405,404.08
|
|
$
|
118,874,000.40
|
|
3/15/2029
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
657,682.00
|
|
$
|
403,180.98
|
|
$
|
118,216,318.40
|
|
4/15/2029
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
659,912.63
|
|
$
|
400,950.35
|
|
$
|
117,556,405.77
|
|
5/15/2029
|
$
|
1,061,362.98
|
|
$
|
500.00
|
|
$
|
1,060,862.98
|
|
$
|
662,150.84
|
|
$
|
398,712.14
|
|
$
|
116,894,254.93
|
|
6/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
688,277.30
|
|
$
|
396,466.35
|
|
$
|
116,205,977.63
|
|
7/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
690,611.71
|
|
$
|
394,131.94
|
|
$
|
115,515,365.92
|
|
8/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
692,954.03
|
|
$
|
391,789.62
|
|
$
|
114,822,411.89
|
|
9/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
695,304.30
|
|
$
|
389,439.35
|
|
$
|
114,127,107.59
|
|
10/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
697,662.54
|
|
$
|
387,081.11
|
|
$
|
113,429,445.05
|
|
11/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
700,028.78
|
|
$
|
384,714.87
|
|
$
|
112,729,416.27
|
|
12/15/2029
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
702,403.05
|
|
$
|
382,340.60
|
|
$
|
112,027,013.22
|
|
1/15/2030
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
704,785.36
|
|
$
|
379,958.29
|
|
$
|
111,322,227.86
|
|
2/15/2030
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
707,175.76
|
|
$
|
377,567.89
|
|
$
|
110,615,052.10
|
|
3/15/2030
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
709,574.26
|
|
$
|
375,169.39
|
|
$
|
109,905,477.84
|
|
4/15/2030
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
711,980.90
|
|
$
|
372,762.75
|
|
$
|
109,193,496.94
|
|
5/15/2030
|
$
|
1,085,243.65
|
|
$
|
500.00
|
|
$
|
1,084,743.65
|
|
$
|
714,395.71
|
|
$
|
370,347.94
|
|
$
|
108,479,101.23
|
|
6/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
741,236.68
|
|
$
|
367,924.95
|
|
$
|
107,737,864.55
|
|
7/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
743,750.71
|
|
$
|
365,410.92
|
|
$
|
106,994,113.84
|
|
8/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
746,273.26
|
|
$
|
362,888.37
|
|
$
|
106,247,840.58
|
|
9/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
748,804.37
|
|
$
|
360,357.26
|
|
$
|
105,499,036.21
|
|
10/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
751,344.07
|
|
$
|
357,817.56
|
|
$
|
104,747,692.14
|
|
11/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
753,892.37
|
|
$
|
355,269.26
|
|
$
|
103,993,799.77
|
|
12/15/2030
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
756,449.33
|
|
$
|
352,712.30
|
|
$
|
103,237,350.44
|
|
1/15/2031
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
759,014.95
|
|
$
|
350,146.68
|
|
$
|
102,478,335.49
|
|
2/15/2031
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
761,589.28
|
|
$
|
347,572.35
|
|
$
|
101,716,746.21
|
|
3/15/2031
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
764,172.33
|
|
$
|
344,989.30
|
|
$
|
100,952,573.88
|
|
4/15/2031
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
766,764.15
|
|
$
|
342,397.48
|
|
$
|
100,185,809.73
|
|
5/15/2031
|
$
|
1,109,661.63
|
|
$
|
500.00
|
|
$
|
1,109,161.63
|
|
$
|
769,364.76
|
|
$
|
339,796.87
|
|
$
|
99,416,444.97
|
|
6/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
796,941.58
|
|
$
|
337,187.44
|
|
$
|
98,619,503.39
|
|
7/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
799,644.54
|
|
$
|
334,484.48
|
|
$
|
97,819,858.85
|
|
8/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
802,356.67
|
|
$
|
331,772.35
|
|
$
|
97,017,502.18
|
|
9/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
805,077.99
|
|
$
|
329,051.03
|
|
$
|
96,212,424.19
|
|
10/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
807,808.55
|
|
$
|
326,320.47
|
|
$
|
95,404,615.64
|
|
11/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
810,548.37
|
|
$
|
323,580.65
|
|
$
|
94,594,067.27
|
|
12/15/2031
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
813,297.48
|
|
$
|
320,831.54
|
|
$
|
93,780,769.79
|
|
1/15/2032
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
816,055.91
|
|
$
|
318,073.11
|
|
$
|
92,964,713.88
|
|
2/15/2032
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
818,823.70
|
|
$
|
315,305.32
|
|
$
|
92,145,890.18
|
|
3/15/2032
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
821,600.88
|
|
$
|
312,528.14
|
|
$
|
91,324,289.30
|
|
4/15/2032
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
824,387.47
|
|
$
|
309,741.55
|
|
$
|
90,499,901.83
|
|
5/15/2032
|
$
|
1,134,629.02
|
|
$
|
500.00
|
|
$
|
1,134,129.02
|
|
$
|
827,183.52
|
|
$
|
306,945.50
|
|
$
|
89,672,718.31
|
|
6/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
855,518.20
|
|
$
|
304,139.97
|
|
$
|
88,817,200.11
|
|
7/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
858,419.83
|
|
$
|
301,238.34
|
|
$
|
87,958,780.28
|
|
8/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
861,331.31
|
|
$
|
298,326.86
|
|
$
|
87,097,448.97
|
|
9/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
864,252.66
|
|
$
|
295,405.51
|
|
$
|
86,233,196.31
|
|
Payment Date
|
Rent
|
Trustee Fee
|
Payment
|
Principal
|
Interest
|
O/S Principal Balance
|
||||||||||||
10/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
867,183.91
|
|
$
|
292,474.26
|
|
$
|
85,366,012.40
|
|
11/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
870,125.11
|
|
$
|
289,533.06
|
|
$
|
84,495,887.29
|
|
12/15/2032
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
873,076.29
|
|
$
|
286,581.88
|
|
$
|
83,622,811.00
|
|
1/15/2033
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
876,037.47
|
|
$
|
283,620.70
|
|
$
|
82,746,773.53
|
|
2/15/2033
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
879,008.70
|
|
$
|
280,649.47
|
|
$
|
81,867,764.83
|
|
3/15/2033
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
881,990.00
|
|
$
|
277,668.17
|
|
$
|
80,985,774.83
|
|
4/15/2033
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
884,981.42
|
|
$
|
274,676.75
|
|
$
|
80,100,793.41
|
|
5/15/2033
|
$
|
1,160,158.17
|
|
$
|
500.00
|
|
$
|
1,159,658.17
|
|
$
|
887,982.98
|
|
$
|
271,675.19
|
|
$
|
79,212,810.43
|
|
6/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
917,098.28
|
|
$
|
268,663.45
|
|
$
|
78,295,712.15
|
|
7/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
920,208.77
|
|
$
|
265,552.96
|
|
$
|
77,375,503.38
|
|
8/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
923,329.81
|
|
$
|
262,431.92
|
|
$
|
76,452,173.57
|
|
9/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
926,461.44
|
|
$
|
259,300.29
|
|
$
|
75,525,712.13
|
|
10/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
929,603.69
|
|
$
|
256,158.04
|
|
$
|
74,596,108.44
|
|
11/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
932,756.60
|
|
$
|
253,005.13
|
|
$
|
73,663,351.84
|
|
12/15/2033
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
935,920.20
|
|
$
|
249,841.53
|
|
$
|
72,727,431.64
|
|
1/15/2034
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
939,094.52
|
|
$
|
246,667.21
|
|
$
|
71,788,337.12
|
|
2/15/2034
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
942,279.62
|
|
$
|
243,482.11
|
|
$
|
70,846,057.50
|
|
3/15/2034
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
945,475.52
|
|
$
|
240,286.21
|
|
$
|
69,900,581.98
|
|
4/15/2034
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
948,682.26
|
|
$
|
237,079.47
|
|
$
|
68,951,899.72
|
|
5/15/2034
|
$
|
1,186,261.73
|
|
$
|
500.00
|
|
$
|
1,185,761.73
|
|
$
|
951,899.87
|
|
$
|
233,861.86
|
|
$
|
67,999,999.85
|
|
BNSF Railway Company
|
This instrument was
|
2264 Texas Highway 146
|
prepared by and when recorded
|
City of Dayton
|
return to:
|
County of Liberty, Texas
|
James R. Nelson, Esq.
|
SECTION HEADING
|
|
PAGE
|
|
|
|
Parties
|
|
1
|
|
|
|
Recitals
|
|
1
|
|
|
|
Granting Clauses
|
|
3
|
|
|
|
Section 1. Definitions
|
|
9
|
|
|
|
SECTION 2. GENERAL CONVENANTS AND WARRANTIES
|
|
17
|
Section 2.1. Office for Notices
|
|
17
|
Section 2.3. Negative Covenants
|
|
17
|
Section 2.4. Mergers and Consolidations
|
|
17
|
Section 2.5. Financial Information and Reports
|
|
23
|
Section 2.6. Notice of Default
|
|
23
|
Section 2.7. Mortgage Title Insurance Policy
|
|
24
|
Section 2.8. Payment of Certain Taxes
|
|
24
|
Section 2.9. Ownership of Granted Property
|
|
24
|
Section 2.10. Further Assurances
|
|
24
|
Section 2.11. Payment of Principal and Interest
|
|
24
|
Section 2.12. Prepayment of Note
|
|
25
|
Section 2.13. Method and Place of Payment of Principal and Interest
|
|
25
|
Section 2.14. Maintenance of Granted Property, Other Liens, Compliance
|
|
|
with Laws, Etc
|
|
26
|
Section 2.15. Insurance
|
|
28
|
Section 2.16. Payment of Taxes and Other Charges
|
|
30
|
Section 2.17. Limitation on Liens
|
|
31
|
Section 2.18. Assignment; Obligations and Terms Respecting the Lease, the
|
|
|
Other Leases and the Lease Guaranties
|
|
32
|
Section 2.19. Advances
|
|
36
|
Section 2.20. Recordation
|
|
36
|
Section 2.21. After-Acquired Property
|
|
37
|
Section 2.22. Environmental Indemnity
|
|
37
|
Section 2.23. Separate Identity
|
|
37
|
Section 2.24. General Indemnity
|
|
38
|
Section 2.25. No Forfeiture
|
|
39
|
|
|
|
SECTION 3. POSSESSION, USE AND RELEASE OF PROPERTY
|
|
40
|
Section 3.1. The Grantor’s Right of Possession
|
|
40
|
Section 3.2. Release of Granted Property - Event of Loss and Prepayment of
|
|
|
Note
|
|
40
|
Section 3.3. Eminent Domain
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 4. APPLICATION OF INSURANCE AND CERTAIN OTHER MONEYS RECEIVED
|
|
|
|
BY THE BENEFICIARY
|
|
41
|
|
Section 4.1. Insurance Proceeds and Condemnation Awards
|
|
41
|
|
Section 4.2. Title Insurance
|
|
43
|
|
Section 4.3. Investment of Insurance Proceeds and Condemnation Awards
|
|
|
|
or Compensation
|
|
43
|
|
Section 4.4. Application If Event of Default Exists
|
|
44
|
|
|
|
|
|
SECTION 5. DEFAULTS AND REMEDIES THEREFOR
|
|
44
|
|
Section 5.1. Events of Default
|
|
44
|
|
Section 5.2. Remedies
|
|
46
|
|
Section 5.3. Application of Proceeds
|
|
49
|
|
Section 5.4. Waiver of Extension, Appraisement and Stay Laws
|
|
50
|
|
Section 5.5. Costs and Expenses of Foreclosure
|
|
50
|
|
Section 5.6. Delay or Omission Not a Waiver
|
|
51
|
|
Section 5.7. Restoration of Positions
|
|
51
|
|
Section 5.8. Note to Become Due upon Sale
|
|
51
|
|
|
|
|
|
SECTION 6. MISCELLANEOUS
|
|
51
|
|
Section 6.1. Successors and Assigns
|
|
51
|
|
Section 6.2. Severability
|
|
51
|
|
Section 6.3. Addresses for Notices and Demands
|
|
51
|
|
Section 6.4. Headings and Table of Contents
|
|
52
|
|
Section 6.5. Release of Deed of Trust
|
|
52
|
|
Section 6.6. Counterparts
|
|
52
|
|
Section 6.7. Successor Trustee
|
|
52
|
|
Section 6.8. Governing Law
|
|
53
|
|
Section 6.9. Time
|
|
53
|
|
Section 6.10. Limitations of Liability
|
|
53
|
|
Section 6.11. Expenses, Stamp Tax Indemnity
|
|
53
|
|
Section 6.12. Cooperation
|
|
54
|
|
Section 6.13. No Merger of Estates
|
|
54
|
|
Section 6.14. NAIC Filing
|
|
54
|
|
Section 6.15. Commitment
|
|
55
|
|
Section 6.16. Usury Savings Clause
|
|
55
|
|
Section 6.17. Certain Prohibited Amendments
|
|
55
|
|
|
|
|
|
SECTION 7. ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE
|
|
55
|
|
|
|
|
|
SECTION 7. DEED OF TRUST PROVISIONS
|
|
56
|
|
Section 7.1. Concerning The Trustee
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 7.2. Trustee’s Fees
|
|
56
|
|
Section 7.3. Certain Rights
|
|
56
|
|
Section 7.4. Retention of Money
|
|
56
|
|
Section 7.5. Perfection of Appointment
|
|
57
|
|
Section 7.6. Succession Instruments
|
|
57
|
|
|
|
57
|
|
Section 8. State Specific Provisions
|
|
58
|
|
|
|
|
|
Signature Page
|
|
59
|
|
|
|
|
|
ATTACHMENTS TO THE DEED OF TRUST:
|
|
|
|
|
|
|
|
Exhibit A - Legal Description of Real Property
|
|
|
|
|
|
|
|
ADDENDUM A - State Specific Provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 1.
|
DEFINITIONS.
|
SECTION 2.
|
GENERAL COVENANTS AND WARRANTIES.
|
SECTION 3.
|
POSSESSION, USE AND RELEASE OF PROPERTY.
|
SECTION 4.
|
APPLICATION OF INSURANCE AND CERTAIN OTHER MONEYS RECEIVED BY THE BENEFICIARY.
|
SECTION 5.
|
DEFAULTS AND REMEDIES THEREFOR.
|
SECTION 6.
|
MISCELLANEOUS.
|
SECTION 7.
|
ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE.
|
SECTION 8.
|
STATE SPECIFIC PROVISIONS.
|
|
|
TRT LEASECO, LLC, a Delaware
|
|
|
limited liability company
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name: Leo S. Schwartz
|
|
|
Title: Vice President
|
|
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
Page
|
1.
|
BASIC LEASE PROVISIONS
|
1
|
2.
|
INTENTIONALLY OMITTED
|
9
|
3.
|
PREMISES
|
9
|
4.
|
NO MERGER OF TITLE
|
9
|
5.
|
RENEWAL OPTIONS
|
9
|
6.
|
USE
|
10
|
7.
|
FIXED RENT
|
11
|
8.
|
NET LEASE; TRUE LEASE
|
12
|
9.
|
CONDITION
|
12
|
10.
|
LIENS
|
13
|
11.
|
REPAIRS AND MAINTENANCE
|
13
|
12.
|
COMPLIANCE WITH LAWS
|
13
|
13.
|
ACCESS TO PREMISES BY LANDLORD
|
14
|
14.
|
WAIVER OF SUBROGATION
|
14
|
15.
|
DAMAGE; DESTRUCTION
|
14
|
16.
|
CONDEMNATION
|
15
|
17.
|
ASSIGNMENT AND SUBLETTING
|
16
|
18.
|
ALTERATIONS
|
17
|
19.
|
SIGNS
|
17
|
20.
|
SURRENDER
|
17
|
21.
|
SUBORDINATION OF LEASE
|
18
|
22.
|
INTENTIONALLY OMITTED
|
19
|
23.
|
UTILITIES
|
19
|
24.
|
TENANT DEFAULT
|
19
|
25.
|
LANDLORD DEFAULT
|
21
|
26.
|
RENT PAYMENTS
|
22
|
27.
|
HOLDOVER
|
22
|
28.
|
NOTICES
|
22
|
29.
|
INDEMNITY
|
23
|
30.
|
INTENTIONALLY OMITTED
|
24
|
31.
|
INTENTIONALLY OMITTED
|
24
|
32.
|
TAXES
|
24
|
33.
|
INSURANCE
|
26
|
34.
|
LANDLORD EXCULPATION
|
27
|
35.
|
LANDLORD'S TITLE
|
28
|
36.
|
QUIET ENJOYMENT
|
28
|
37.
|
FINANCIAL STATEMENTS
|
28
|
38.
|
BROKER
|
28
|
39.
|
TRANSFER OF TITLE
|
28
|
40.
|
HAZARDOUS MATERIALS
|
29
|
41.
|
ESTOPPEL CERTIFICATE
|
32
|
42.
|
NOTICE OF LEASE
|
32
|
43.
|
MISCELLANEOUS
|
32
|
44.
|
RIGHT OF FIRST OFFER
|
34
|
45.
|
RIGHT OF FIRST REFUSAL
|
35
|
46.
|
SECTION 1031 LIKE-KIND EXCHANGE
|
36
|
(a)
|
BASIC LEASE PROVISIONS
|
(b)
|
Tenant notice address:
|
(e)
|
Commencement Date: The date set forth in the Preamble.
|
(g)
|
Expiration Date: May 31
,
2034, unless extended by a Renewal Option.
|
(o)
|
Qualified Investment Buyer: shall mean, one or more of the following:
|
|
|
|
|
1031 Exchange
|
Section 46
|
|
Access Areas
|
Section l (c)
|
|
Access Area Agreements
|
Schedule l (c)
|
|
Additional Rent
|
Section 7(e)
|
|
Affiliate
|
Section 45(a)
|
|
Alteration or Alterations
|
Section 18(a)
|
|
Bona Fide Offer
|
Section 45(a)
|
|
Building
|
Section 1(d)
|
|
Building Trade Fixtures
|
Section 20
|
|
Business Day
|
Section 43(1)
|
|
Casualty
|
Section 15(a)
|
|
Commencement Date
|
Preamble
|
|
Competitor
|
Section 45(a)
|
|
Condemnation
|
Section 16(a)
|
|
Consumer
|
Section 45(a)
|
|
Designated Person
|
Section 43(n)
|
|
Discount Rate
|
Section 24(g)
|
|
Due Date
|
Section 7(a)
|
|
Environmental Laws
|
Section 40(a)
|
|
Event of Default
|
Section 24(a)
|
|
Exercise Period
|
Section 45(a)
|
|
Exhibits
|
Section 1(f)
|
|
Existing Agreements
|
Preamble
|
|
Expiration Date
|
Section I (g)
|
|
Extension Notice
|
Section 5(a)
|
|
Extension Periods
|
Section 1(p)
|
|
Fixed Rent
|
Section 1(h)
|
|
Hazardous Materials
|
Section 40(a)
|
|
Indemnified Parties
|
Section 29
|
|
Initial Term
|
Section 1(i)
|
|
Investor Eligibility Requirements
|
Section l (o)
|
|
Land
|
Section 1(n)
|
|
Landlord
|
Preamble
|
|
Laws
|
Section 12
|
|
Lease
|
Preamble
|
|
Lease Condemnation Termination Date
|
Section 16(b)
|
|
Lease Default Rate
|
Section l(j)
|
|
Lender
|
Section l(k)
|
|
Loan
|
Section l(k)
|
|
Major Condemnation
|
Section 16(b)
|
|
Minor Condemnation
|
Section 16(c)
|
|
Mortgage
|
Section 21(a)
|
|
Permitted Encumbrances
|
Section 1(m)
|
|
Premises
|
Section 1(n)
|
|
Property Agreements
|
Section l (m)
|
|
Qualified Investment Buyer
|
Section 1(o)
|
|
Railroad Enterprise
|
Section 45(a)
|
|
Remedial Work
|
Section 40(e)
|
|
Renewal Options
|
Section l (p)
|
|
Restoration
|
Section 15(c)
|
|
ROFO Negotiation Period
|
Section 44(b)
|
|
ROFO Notice
|
Section 44(a)
|
|
ROFO Offer
|
Section 44(b)
|
|
ROFO Request
|
Section 44(a)
|
|
ROFR Closing Period
|
Section 45(b)
|
|
ROFR Exercise
|
Section 45(a)
|
|
ROFR Notice
|
Section 45(a)
|
|
Signs
|
Section 19
|
|
SNDA Agreement
|
Section 21(a)
|
|
Sub-Surface Taking
|
Section 16(d)
|
|
Taking
|
Section 16(a)
|
|
Tax or Taxes
|
Section 32(a)
|
|
Tenant
|
Preamble
|
|
Tenant's Termination Notice
|
Section 16(b)
|
|
Term
|
Section 1(i)
|
(b)
|
INTENTIONALLY OMITTED.
|
(c)
|
PREMISES.
|
(d)
|
NO MERGER OF TITLE.
|
(e)
|
RENEWAL OPTIONS.
|
(f)
|
USE.
|
(g)
|
FIXED RENT.
|
(b)
|
Intentionally Omitted.
|
(d)
|
Intentionally Omitted.
|
(h)
|
NET LEASE; TRUE LEASE.
|
(i)
|
COND
IT
ION.
|
(j)
|
LIENS.
|
(k)
|
REPAIRS AND MAINTENANCE.
|
(l)
|
COMPLIANCE WITH LAWS.
|
14.
|
WAIVER
OF SUBROGATION.
|
15.
|
DAMAGE; DESTRUCTION.
|
16.
|
CONDEMNATION.
|
17.
|
ASSIGNMENT AND SUBLETTING.
|
18.
|
ALTERATIONS.
|
19.
|
SIGNS.
|
20.
|
SURRENDER.
|
21.
|
SUBORDINATION
OF LEASE.
|
22.
|
INTENTIONALLY OMITTED.
|
23.
|
UTILITIES.
|
24.
|
TENANT
DEFAULT.
|
25.
|
LANDLORD DEFAULT.
|
26.
|
RENT PAYMENTS.
|
27.
|
HOLDOVER.
|
28.
|
NOTICES.
|
29.
|
INDEMNITY.
|
30.
|
INTENTIONALLY OMITTED.
|
31.
|
INTENTIONALLY OMITTED.
|
32.
|
TAXES.
|
(b)
|
Tax Contests
|
33.
|
INSURANCE.
|
34.
|
LANDLORD EXCULPATION.
|
35.
|
LANDLORD'S TITLE.
|
36.
|
QUIET ENJOYMENT.
|
37.
|
FINANCIAL STATEMENTS.
|
38.
|
BROKER.
|
39.
|
TRANSFER OF TITLE.
|
40.
|
HAZARDOUS MATERIALS.
|
42.
|
NOTICE
OF
LEASE.
|
43.
|
MISCELLANEOUS.
|
44.
|
RIGHT OF FIRST OFFER.
|
45.
|
RIGHT
OF
FIRST
REFUSAL
.
|
46.
|
SECTION
1031LIKE-KIND
EXCHANGE.
|
Period
|
Annual Fixed Rent
|
|
Monthly Fixed Rent
|
|
||
Initial Term
|
|
|
||||
June 1, 2014 - May 31, 2015
|
$
|
9,327,360.00
|
|
$
|
777,280.00
|
|
June 1, 2015 - May 31, 2016
|
$
|
9,537,225.60
|
|
$
|
794,768.80
|
|
June 1, 2016 - May 31, 2017
|
$
|
9,751,813.18
|
|
$
|
812,651.10
|
|
June 1, 2017 - May 31, 2018
|
$
|
9,971,228.97
|
|
$
|
830,935.75
|
|
June 1, 2018 - May 31, 2019
|
$
|
10,195,581.62
|
|
$
|
849,631.80
|
|
June 1, 2019 - May 31, 2020
|
$
|
10,424,982.21
|
|
$
|
868,748.52
|
|
June 1, 2020 - May 31, 2021
|
$
|
10,659,544.31
|
|
$
|
888,295.36
|
|
June 1, 2021 - May 31, 2022
|
$
|
10,899,384.06
|
|
$
|
908,282.00
|
|
June 1, 2022 - May 31, 2023
|
$
|
11,144,620.20
|
|
$
|
928,718.35
|
|
June 1, 2023 - May 31, 2024
|
$
|
11,395,374.15
|
|
$
|
949,614.51
|
|
June 1, 2024 - May 31, 2025
|
$
|
11,651,770.07
|
|
$
|
970,980.84
|
|
June 1, 2025 - May 31, 2026
|
$
|
11,913,934.90
|
|
$
|
992,827.91
|
|
June 1, 2026 - May 31, 2027
|
$
|
12,181,998.43
|
|
$
|
1,015,166.54
|
|
June 1, 2027 - May 31, 2028
|
$
|
12,456,093.40
|
|
$
|
1,038,007.78
|
|
June 1, 2028 - May 31, 2029
|
$
|
12,736,355.50
|
|
$
|
1,061,362.96
|
|
June 1, 2029 - May 31, 2030
|
$
|
13,022,923.50
|
|
$
|
1,085,243.62
|
|
June 1, 2030 - May 31, 2031
|
$
|
13,315,939.28
|
|
$
|
1,109,661.61
|
|
June 1, 2031 - May 31, 2032
|
$
|
13,615,547.91
|
|
$
|
1,134,628.99
|
|
June 1, 2032 - May 31, 2033
|
$
|
13,921,897.74
|
|
$
|
1,160,158.14
|
|
June 1, 2033 - May 31, 2034
|
$
|
14,235,140.44
|
|
$
|
1,186,261.70
|
|
Extension Period
|
|
|
||||
June 1, 2034 - May 31, 2035
|
$
|
14,555,431.10
|
|
$
|
1,212,952.59
|
|
June 1, 2035 - May 31, 2036
|
$
|
14,882,928.30
|
|
$
|
1,240,244.02
|
|
June 1, 2036 - May 31, 2037
|
$
|
15,217,794.18
|
|
$
|
1,268,149.52
|
|
June 1, 2037 - May 31, 2038
|
$
|
15,560,194.55
|
|
$
|
1,296,682.88
|
|
June 1, 2038 - May 31, 2039
|
$
|
15,910,298.93
|
|
$
|
1,325,858.24
|
|
Second Extension Period
|
|
|
||||
June 1, 2039 - May 31, 2040
|
$
|
16,268,280.66
|
|
$
|
1,355,690.05
|
|
June 1, 2040 - May 31, 2041
|
$
|
16,634,316.97
|
|
$
|
1,386,193.08
|
|
June 1, 2041 - May 31, 2042
|
$
|
17,008,589.10
|
|
$
|
1,417,382.43
|
|
June 1, 2042 - May 31, 2043
|
$
|
17,391,282.36
|
|
$
|
1,449,273.53
|
|
June 1, 2043 - May 31, 2044
|
$
|
17,782,586.21
|
|
$
|
1,481,882.18
|
|
1.
|
Right-of-Way dated December 21
,
1928
,
executed by R.E. Armstrong, et us to Dixie Gulf Gas Co., recorded in Volume 151, Page 84 of the Deed Records of Liberty County
,
Texas. Said Right of Way amended by Instrument dated November 14, 1996 executed by Midon Texas Pipeline Corp., recorded in Volume 1646
,
Page 25 of the Official Public Records of Liberty County
,
Texas. Said Right of Way amended or modified by Delimitation Agreement dated October 6, 1997, executed by Midcon Texas Pipeline Operator
,
Inc. to Bill Sjolander, recorded in Volume 1690
,
Page 779 of the Official Public Records of Liberty County, Texas.
|
2.
|
Right-of-Way dated December 10
,
1957
,
executed by J.B. Sterling
,
et ux to Industrial Gas Supply Co
.
, recorded in Volume 480
,
Page 590 of the Deed Records of Liberty County, Texas
.
Amendment or Right-of-Way dated October 8, 1997, executed by Gulf Coast National Gas Company to Bill Sjolander, recorded in Volume 1690, Page 771 of the O
f
ficial Public Records of Liberty County
,
Texas.
|
3.
|
Right-of-Way dated October 16, 2013 executed by CMC Railroad
,
Inc., a Texas corporation to Entergy Texas
,
Inc
.,
recorded under County Clerk's File No. 2014007768 of the Official Public Records of Liberty County
,
Texas.
|
4.
|
That certain o
f
all the oil
,
gas and other mineral interest
,
the royalties, bonuses
,
rentals and all other rights in connection with same are excepted herefrom as the same are set forth in instrument recorded in/under Volume 172
,
Page 177 and corrected in Volume 175
,
Page 202 of the Deed Records of Liberty County, Texas
.
|
5.
|
A l/32nd royalty interest in and to all oil
,
gas and other minerals on
,
in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument recorded in/under Volume 215
,
Page 461 of the Deed Records of Libert
y
County
,
Texas.
|
6.
|
A 1
/
32nd royalty interest in and to all oil
,
gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument recorded in/under Volume 215, Page 169 of the Deed Records of Liberty County
,
Texas.
|
7.
|
A 1/32nd royalty interest in and to all oil
,
gas and other minerals on, in
,
under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument recorded in/under Volume 235
,
Page 244 of the Deed Records of Liberty County
,
Texas.
|
8.
|
A 1/64th royalty interest in and to all oil
,
gas and other minerals on
,
in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument recorded in/under Volume 259, Page 558 of the Deed Records of Liberty County
,
Texas.
|
9.
|
An oil, gas and mineral interest in and to all oil, gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument from Paul Goodrich, et al to W.F. Graves, dated December 31, 1947, recorded in/under Volume 302, Page 84 of the Deed Records of Liberty County, Texas.
|
10.
|
A royalty interest in and to all oil, gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument from Isa C. Armstrong to J.W. Trousdale, dated December 9, 1948, recorded in/under Volume 310, Page 367 of the Deed Records of Liberty County, Texas.
|
11.
|
A royalty interest in and to all oil, gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument from J.W. Trousdale to A.J. Otto, dated December 31, 1949, recorded in/under Volume 323
,
Page 157 of the Deed Records of Liberty County, Texas.
|
12.
|
An oil, gas and mineral interest in and to all oil, gas and other minerals on, in
,
under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument from A.J. Otto, et ux to J.B. Sterling, dated February 23, 1954, recorded in/under Volume 400, Page 540 of the Deed Records of Liberty County, Texas.
|
13.
|
An oil, gas and mineral interest in and to all oil, gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom as the same is set forth in instrument from Sun Oil Company et al to J.B. Sterling, dated June 24, 1966, recorded in/under Volume 605, Page 656 of the Deed Records of Liberty County, Texas.
|
14.
|
1/2 of all the oil, gas and other minerals, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as the same are set forth in instrument recorded in/under Volume 961, Page 791 of the Deed Records of Liberty County, Texas.
|
15.
|
All the oil, gas and other minerals
,
the royalties, bonuses, rentals and all other rights in connection with same all of which are expressly excepted herefrom and not insured hereunder, as the same are set forth in instrument recorded in/under Volume 975, Page 635 of the Deed Records of Liberty County, Texas.
|
16.
|
That certain of all the oil, gas and other mineral interest, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as the same are set forth in instrument recorded in/under Volume 1782, Page 30 of the Deed Records of Liberty County, Texas.
|
17.
|
Right-of-Way dated 03/02/2004, executed by Bill Sjolander to Entergy Gulf States, Inc., recorded under County Clerk's File No. 2004003263 of the Official Public Records of Liberty County, Texas.
|
18.
|
Affidavit regarding wastewater treatment system dated 09/19/2003 executed by Bill Sjolander to The Public, recorded under Liberty County Clerk's File No
.
2003014500 of the Official Public Records of Liberty County, Texas.
|
19.
|
Easement Agreement Entrance off 493 Roadway
,
dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware
|
20.
|
Easement Agreement for South Side Utility Corridor, Roadway and Drainage Ditch, dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware limited liability company, and intended to be recorded in the Official Public Records of Liberty County, Texas on or about such date.
|
21.
|
Easement Agreement for Western Roadway and Drainage Ditch, dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware limited liability company, and intended to be recorded in the Official Public Records of Liberty County, Texas on or about such date.
|
22.
|
Easement Agreement for Roadway adjacent to the West side of UP's Right of Way, dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware limited liability company, and intended to be recorded in the Official Public Records of Liberty County, Texas on or about such date.
|
23.
|
Declaration of Easements, Covenants, Conditions and Restrictions, dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware limited liability company, and intended to be recorded in the Official Public Records of Liberty County, Texas on or about such date.
|
24.
|
Easement Agreement Entrance off 493 Roadway, dated on or about July 15, 2014, by and between CMC Railroad, Inc., a Texas corporation and TRT LeaseCo, LLC, a Delaware limited liability company, and intended to be recorded in the Official Public Records of Liberty County, Texas on or about such date.
|
Period
|
Annual Fixed Rent
|
Monthly Fixed Rent
|
Section 467 Allocation Rent
|
||||||
Initial Term
|
|
|
|
||||||
June 1, 2014 - May 31, 2015
|
$
|
9,327,360.00
|
|
$
|
777,280.00
|
|
$
|
11,617,935.77
|
|
June 1, 2015 - May 31, 2016
|
$
|
9,537,225.60
|
|
$
|
794,768.80
|
|
$
|
11,617,935.77
|
|
June 1, 2016 - May 31, 2017
|
$
|
9,751,813.18
|
|
$
|
812,651.10
|
|
$
|
11,617,935.77
|
|
June 1, 2017 - May 31, 2018
|
$
|
9,971,228.97
|
|
$
|
830,935.75
|
|
$
|
11,617,935.77
|
|
June 1, 2018 - May 31, 2019
|
$
|
10,195,581.62
|
|
$
|
849,631.80
|
|
$
|
11,617,935.77
|
|
June 1, 2019 - May 31, 2020
|
$
|
10,424,982.21
|
|
$
|
868,748.52
|
|
$
|
11,617,935.77
|
|
June 1, 2020 - May 31, 2021
|
$
|
10,659,544.31
|
|
$
|
888,295.36
|
|
$
|
11,617,935.77
|
|
June 1, 2021 - May 31, 2022
|
$
|
10,899,384.06
|
|
$
|
908,282.00
|
|
$
|
11,617,935.77
|
|
June 1, 2022 - May 31, 2023
|
$
|
11,144,620.20
|
|
$
|
928,718.35
|
|
$
|
11,617,935.77
|
|
June 1, 2023 - May 31, 2024
|
$
|
11,395,374.15
|
|
$
|
949,614.51
|
|
$
|
11,617,935.77
|
|
June 1, 2024 - May 31, 2025
|
$
|
11,651,770.07
|
|
$
|
970,980.84
|
|
$
|
11,617,935.77
|
|
June 1, 2025 - May 31, 2026
|
$
|
11,913,934.90
|
|
$
|
992,827.91
|
|
$
|
11,617,935.77
|
|
June 1, 2026 - May 31, 2027
|
$
|
12,181,998.43
|
|
$
|
1,015,166.54
|
|
$
|
11,617,935.77
|
|
June 1, 2027 - May 31, 2028
|
$
|
12,456,093.40
|
|
$
|
1,038,007.78
|
|
$
|
11,617,935.77
|
|
June 1, 2028 - May 31, 2029
|
$
|
12,736,355.50
|
|
$
|
1,061,362.96
|
|
$
|
11,617,935.77
|
|
June 1, 2029 - May 31, 2030
|
$
|
13,022,923.50
|
|
$
|
1,085,243.62
|
|
$
|
11,617,935.77
|
|
June 1, 2030 - May 31, 2031
|
$
|
13,315,939.28
|
|
$
|
1,109,661.61
|
|
$
|
11,617,935.77
|
|
June 1, 2031 - May 31, 2032
|
$
|
13,615,547.91
|
|
$
|
1,134,628.99
|
|
$
|
11,617,935.77
|
|
June 1, 2032 - May 31, 2033
|
$
|
13,921,897.74
|
|
$
|
1,160,158.14
|
|
$
|
11,617,935.77
|
|
June 1, 2033 - May 31, 2034
|
$
|
14,235,140.44
|
|
$
|
1,186,261.70
|
|
$
|
11,617,935.77
|
|
Total
|
$
|
232,358,715.47
|
|
|
$
|
232,358,715.47
|
|
________,
of
[
|
],
a
[
]
corporation on behalf of said corporation.
|
|
,
of BNSF Railway Company, a
[Delaware]
corporation, on behalf of said corporation.
|
|
,
of TRT LEASECO, LLC, a
[
]
on behalf of said company
.
|
Re:
|
Lease of the Premises defined in that certain Lease between TRT Leaseco
,
LLC
("Landlord")
and BNSF Railway Company (f/k/a The Burlington Northern and Santa Fe Railway Company
("Tenant")
,
dated as of
[
]
,
2014 (the
"Lease")
|
2.
|
The Lease has not been canceled or terminated.
|
3.
|
The current monthly Fixed Rent under the Lease is $
.
Tenant's last date of payment of Fixed Rent, Additional Rent
,
and other sums due under the Lease
("Rent")
was
, and such payment applies through the month of
, and
,
except for such payment, Tenant has paid no Rent in advance. (The terms "Fixed Rent" and "Additional Rent" are as used or defined in the Lease.)
.
Tenant has not posted a security deposit with Landlord.
|
4.
|
Tenant has accepted possession of the Premises described in the Lease and is occupying such Premises.
|
5.
|
The term of the Lease commenced on
[ ],
2014, and expires on February 28, 2034. Tenant has two (2) options to extend the term of the Lease for a period of five (5) years each. Tenant has no right to terminate the Lease prior to its stated expiration other than as specifically set forth in the Lease.
|
6.
|
To the best of Tenant
'
s knowledge, Landlord is not in breach or default under any of its obligations set forth in the Lease, and Tenant is aware of no facts which,
with the passage of time, the giving of notice, or both, would constitute a breach or default by Landlord under the Lease.
|
7.
|
Tenant is not in default under any of its obligations set forth in the Lease and to the best of Tenant's knowledge, there is no fact which, with the passage of time, the giving of notice, or both, would constitute a Tenant default under the Lease. Tenant has not given Landlord notice of its intention to vacate the Premises prior to the end of the term of the Lease. Tenant's interest under the Lease has not been assigned, by operation of law or otherwise, and no sublease, concession agreement or license covering the Premises or any portion thereof has been entered into by Tenant.
|
8.
|
To the best of Tenant's knowledge, Tenant has no claims or defenses against Landlord with respect to the Lease or the Premises and Tenant has no offsets, defenses or claims against rental or any other amount payable under the Lease. There are no tenant improvements costs, allowances or similar amounts that the Landlord is obligated to pay under the Lease, and the Lease is not subject to any rental concessions or leasing brokerage commissions.
|
9.
|
No bankruptcy proceeding, whether voluntary or otherwise, is pending or, to the best of Tenant's knowledge, threatened against Tenant.
|
10.
|
To the best of Tenant's knowledge, its use, maintenance and operation of the Premises complies with, all applicable federal, state, county or local statutes, laws, rules and regulations of any governmental authorities, including those relating to environmental, health or safety matters.
|
Re:
|
Lease of the Premises defined in that certain Lease between TRT Leaseco, LLC
("Landlord")
and BNSF Railway Company (f/k/a The Burlington Northern and Santa Fe Railway Company
("Tenant"),
dated as of
[
]
,
2014 (the
"Lease")
|
1.
|
The Lease is in full force and effect, and unmodified except as to the following:
|
2.
|
The Lease has not been canceled or terminated.
|
3.
|
The current monthly Fixed Rent under the Lease is $
.
Tenant's last date of payment of Fixed Rent, Additional Rent, and other sums due under the Lease
("Rent")
was
,
and such payment applies through the month of
, and, except for such payment, Tenant has paid no Rent in advance. (The terms
"Fixed
Rent" and "Additional Rent" are as used or defined in the Lease.). Tenant has not posted a security deposit with Landlord.
|
4.
|
The term of the Lease commenced on [ ], 2014, and expires on February 28,
2034.
Tenant has two (2) options to extend the term of the Lease for a period of five (5) years each.
|
5.
|
To the best of Landlord's knowledge, Tenant is not in breach or default under any of its obligations set forth in the Lease, and Landlord is aware of no facts which, with the passage of time, the giving of notice, or both, would constitute a breach or default by Tenant under the Lease.
|
6.
|
Landlord is not in default under any of its obligations set forth in the Lease and to the best of Landlord's knowledge, there is no fact which, with the passage of
time, the giving of notice, or both, would constitute a Landlord default under the Lease.
|
7.
|
Landlord has received no written no claims or defenses from Tenant against Landlord with respect to the Lease or the Premises and, to Landlord's knowledge, Tenant has no offsets, defenses or claims against rental or any other amount payable under the Lease. There are no tenant improvements costs, allowances or similar
|
8.
|
No bankruptcy proceeding
,
whether voluntary or otherwise, is pending or, to the best of Landlord's knowledge
,
threatened against Landlord.
|
2.
|
Right of First Refusal
|