Salaries and other personnel costs — A summary by segment of the Company’s salaries and other personnel costs is as follows:

The Company’s title insurance segment (primarily direct operations) is labor intensive; accordingly, a major variable expense component is salaries and other personnel costs. This expense component is affected by two competing factors: the need to monitor personnel changes to match corresponding or anticipated new orders, and the need to provide quality service. In addition, this segment’s growth in operations that specialize in builder and lender business has created ongoing fixed costs required to service accounts.

Title insurance personnel expenses decreased 1.1% in 2000 from 1999 and increased 10.7% in 1999 over 1998. The decrease in 2000 from 1999 was primarily due to cost-containment measures, which included staff reductions in the production area (consistent with the decrease in open orders), the restructuring of the Company’s principal pension plan and the consolidation of certain administrative functions within the Company’s regional structure, offset in part by personnel costs associated with new acquisitions. The restructuring of the Company’s pension plan contributed $11.8 million to the decrease in title personnel expenses (see Note 11 to the consolidated financial statements). Personnel expenses associated with new acquisitions totaled $36.6 million for 2000. The increase in 1999 over 1998 was primarily due to the relatively high number of employees added during the latter part of 1998 and the beginning of 1999 in order to service the volume of orders processed during those periods. The Company initiated personnel and other cost-reduction programs in response to the subsequent decrease in business volume; however, because of separation costs, the benefits of these reductions were not fully realized until 2000. Contributing to the increase in salaries and other personnel costs in 1999 were $20.8 million of personnel costs associated with new acquisitions. The Company’s direct title operations opened 1,240,700, 1,334,100, and 1,585,400 title orders in 2000, 1999 and 1998, respectively, representing a decrease of 7.0% in 2000 from 1999 and 15.9% in 1999 from 1998.

Real estate information personnel expenses stayed constant in 2000 when compared with 1999 primarily as a result of staff reductions and the restructuring of the Company’s principal pension plan, offset by $15.1 million of personnel costs associated with new acquisitions. The restructuring of the Company’s pension plan reduced personnel expenses in 2000 by $3.0 million when compared with 1999. Real estate information personnel expenses increased 4.7% in 1999 over 1998. This increase was primarily attributable to $7.6 million of personnel costs associated with new acquisitions and costs incurred in connection with Y2K. Impacting personnel expenses for both 2000 and 1999 were higher overhead costs attributable to the integration of new acquisitions and costs associated with in-house development of new electronic communication delivery systems for information-based products to interface with customer needs.

Consumer information personnel expenses increased 14.9% in both 2000 over 1999 and 1999 over 1998. These increases were primarily attributable to additional personnel required to service the increased business volume and acquisition activity. The increase for 2000 was offset in part by a $0.8 million reduction in personnel expenses related to the restructuring of the Company’s pension plan. Personnel expenses associated with new acquisitions were $4.8 million and $2.7 million for 2000 and 1999, respectively.

Corporate personnel expenses decreased $20.6 million in 2000 from 1999. This decrease was primarily attributable to a reduction of $23.7 million resulting from the restructuring of the Company’s pension plan.

Premiums retained by agents — A summary of agent retention and agent revenues is as follows:

The premium split between underwriter and agents is in accordance with their respective agency contracts and can vary from region to region due to divergencies in real estate closing practices, as well as rating structures. As a result, the percentage of title premiums retained by agents may vary due to the geographical mix of revenues from agency operations.

Other operating expenses — A summary by segment of the Company’s other operating expenses is as follows:

Title insurance other operating expenses (principally direct operations) increased 11.2% in 2000 over 1999 and 6.6% in 1999 over 1998. The increase in 2000 over 1999 was primarily due to $19. 7 million of costs associated with new acquisitions and $15.2 million of lease expense related to a sale-leaseback agreement entered into in December 1999. The increase in 1999 over 1998 was primarily due to $9. 7 million of costs associated with new acquisitions, Y2K expenses of $5.8 million, a $2.5 million charge resulting from a previously announced fine imposed by the California insurance commissioner and approximately $2.0 million in impaired asset write-offs. Contributing to the increases for both years were general price-level increases, offset in part by the results of the Company’s cost-containment programs.