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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 40-F
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(Check one)
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Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
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or
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Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31,
2018 Commission File Number: 1-31556
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FAIRFAX FINANCIAL HOLDINGS LIMITED
(Exact name of Registrant as specified in its charter)
Canada
(Province or other jurisdiction of incorporation or organization)
6331
(Primary Standard Industrial Classification Code Number (if applicable))
Not Applicable
(I.R.S. Employer Identification Number (if applicable))
95 Wellington Street West
Suite 800
Toronto, Ontario Canada
M5J 2N7
(416)
367-4941
(Address and telephone number of Registrant's principal executive offices)
CT Corporation System
111 Eighth Avenue, 13
th
Floor
New York, NY 10011
U.S.A.
(212) 894-8700
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Securities
registered pursuant to Section 12(b) of the Act:
Not Applicable
Securities
registered or to be registered pursuant to Section 12(g) of the Act:
Subordinate Voting Shares
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Not Applicable
For
annual reports, indicate by check mark the information filed with this form:
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Annual Information Form
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Audited Annual Financial Statements
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:
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Subordinate Voting Shares
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26,489,177
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Multiple Voting Shares
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1,548,000
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Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging
growth company
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not
to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
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PRINCIPAL DOCUMENTS
The following documents have been filed as part of this Annual Report on Form 40-F
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1.
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Annual
Information Form dated March 8, 2019 attached as Exhibit 99.1 hereto.
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2.
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Audited
Consolidated Financial Statements of the Registrant as of December 31, 2018 and 2017 and for the two years in the period ended December 31, 2018
and the related notes, Management's Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm, attached as Exhibit 99.2 hereto.
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3.
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Management's
Discussion and Analysis of Financial Condition and Results of Operations dated March 8, 2019 attached as Exhibit 99.3 hereto.
DISCLOSURE CONTROLS AND PROCEDURES
Certifications
The required certifications are included in Exhibits 99.6 and 99.7 hereto.
Disclosure Controls and Procedures
The Registrant's chief executive officer and its chief financial officer, after evaluating the effectiveness of the Registrant's disclosure
controls and procedures, as of the end of the period covered by this annual report on Form 40-F, have concluded, based upon such evaluation, that the Registrant's disclosure controls and
procedures were effective as of the end of such period.
Management's Annual Report on Internal Control Over Financial Reporting
Management's Report on Internal Control over Financial Reporting is included in Exhibit 99.2 hereto and is incorporated by reference
herein.
Attestation Report of the Registered Public Accounting Firm
The effectiveness of the Registrant's internal control over financial reporting as at December 31, 2018 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included in Exhibit 99.2 hereto and is incorporated by reference herein.
Changes in Internal Control Over Financial Reporting
There was no change in the Registrant's internal control over financial reporting that occurred during the period covered by this report that
has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
The
design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
NOTICES PURSUANT TO REGULATION BTR
The Registrant was not required by Rule 104 of Regulation BTR to send any notice to any of its directors or executive officers during the
year ended December 31, 2018.
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AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant's board of directors determined that it has at least one audit committee financial expert serving on its audit committee.
Mr. Alan D. Horn has been determined to be such an audit committee financial expert and is independent as that term is defined by the New York Stock Exchange's listing standards. The U.S.
Securities and Exchange Commission has indicated that the designation of Mr. Horn as an audit committee financial expert does not make Mr. Horn an "expert" for any purpose, impose any
duties, obligations or liability on Mr. Horn that are greater than those imposed on members of the audit committee and board of directors who do not carry this designation or affect the duties,
obligations or liability of any other members of the audit committee or board of directors.
CODE OF ETHICS
The disclosure provided under "Statement of Corporate Governance Practices" in the Registrant's Management Proxy Circular, included as
Exhibit 99.4 hereto, is incorporated by reference herein.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
For details on the Registrant's principal accountant fees payable to PricewaterhouseCoopers LLP and its member firms for the years ended
December 31, 2018 and December 31, 2017, as well as a description of the nature of each category of fees, see the information under "Audit Committee" in the Registrant's Annual
Information Form dated March 8, 2019, included as Exhibit 99.1 hereto.
Pre-Approval Policies and Procedures
The Registrant's Audit Committee has adopted a pre-approval policy with respect to permitted audit and non-audit services. Non-audit services
are expected to relate primarily to tax
advisory services. Under the policy, non-audit service requests and associated estimated fees payable by the Registrant and its subsidiaries must be submitted prior to the initiation of the services
in advance of each financial quarter for pre-approval by the Registrant's Audit Committee. Requests by the Registrant or its subsidiaries for pre-approval of non-audit services (other than tax
advisory services discussed below) within any financial quarter must be submitted to the Registrant's chief financial officer and pre-approved by the Chair of the Audit Committee and must be presented
to the Audit Committee at its next meeting. The Audit Committee has pre-approved in principle certain types of tax advisory services and during any quarter, the Registrant's chief financial officer
may approve requests for such services of less than CDN $5,000 per item subject to an aggregate quarterly limit of CDN $25,000 for Canadian and international tax matters and $25,000 for U.S. tax
matters.
For
the year ended December 31, 2018, none of the services described above were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant and its subsidiaries have certain security arrangements and commitments that have financial implications. These arrangements are
described in Note 20 to the Registrant's audited consolidated financial statements for the year ended December 31, 2018, included as Exhibit 99.2 hereto.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
Tabular disclosure of the Registrant's present and future obligations as at December 31, 2018 is provided in Note 24 to the
Registrant's audited consolidated financial statements for the year ended December 31, 2018, included as Exhibit 99.2 hereto.
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For
further details on the Registrant's provision for claim liability, long term debt principal and interest payments, purchase obligation and other liabilities payments and operating
lease payments, see Notes 8, 15, 22, 23 and 24 of the Registrant's audited consolidated financial statements for the year ended December 31, 2018, included as Exhibit 99.2 hereto.
IDENTIFICATION OF THE AUDIT COMMITTEE
The Registrant has a standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The members of the Registrant's audit committee are Alan D. Horn, Anthony F. Griffiths, Robert J. Gunn, Timothy R. Price and Lauren C. Templeton. The disclosure provided under "Statement
of Corporate Governance Practices—Audit Committee" in the Registrant's Management Proxy Circular, included as Exhibit 99.4 hereto, is incorporated by reference herein.
MINE SAFETY DISCLOSURE
The Registrant is not currently required to disclose the information required by Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act.
FORWARD-LOOKING INFORMATION
A number of statements in the documents incorporated by reference in this Form 40-F constitute "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995. Please refer to the paragraph under the heading "Forward-Looking Statements" in the Management's Discussion and Analysis of
Financial Condition and Results of Operations dated March 8, 2019, including Management's Report on Internal Control over Financial Reporting incorporated by reference herein, attached as
Exhibit 99.3 hereto and forming an integral part of this document, for a discussion of risks, uncertainties and assumptions that could cause actual results to vary from those forward-looking
statements.
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
A. Undertaking.
Fairfax Financial Holdings Limited (the "Registrant") undertakes to make available, in person or by telephone, representatives to respond to inquiries made by
Securities and Exchange Commission (the "Commission") staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to
Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
B. Consent to Service of Process.
The Registrant has previously filed with the Securities and Exchange Commission a Form F-X in connection with the class of securities in relation to which
the obligation to file this report arises.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant certifies that it meets all of the requirements for filing on Form 40-F
and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
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FAIRFAX FINANCIAL HOLDINGS LIMITED
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Date: March 8, 2019
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By:
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/s/ Paul Rivett
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Name:
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Paul Rivett
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Title:
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President
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EXHIBIT INDEX
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99.1
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Annual Information Form dated March 8, 2019
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99.2
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Audited Consolidated Financial Statements of the Registrant as of December 31, 2018 and 2017 and for the two years in the period ended December 31, 2018 and the related notes, Management's Report on Internal
Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements and the effectiveness of internal control over financial reporting
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99.3
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Management's Discussion and Analysis of Financial Condition and Results of Operations dated March 8, 2019
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99.4
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The information under "Statement of Corporate Governance Practices" in the Registrant's Management Proxy Circular, dated March 8, 2019 in connection with the annual meeting of shareholders to be held on
April 11, 2019, is incorporated herein by reference to Exhibit 99.1 to the Registrant's Report on Form 6-K furnished to the Securities and Exchange Commission on March 8, 2019
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99.5
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Consent of PricewaterhouseCoopers LLP
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99.6
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Rule 13a-14(a)/15d-14(a) Certifications:
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Certification of Registrant's Chief Executive Officer
Certification of Registrant's Chief Financial Officer
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99.7
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Section 1350 Certifications:
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Certification of Registrant's Chief Executive Officer
Certification of Registrant's Chief Financial Officer
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101
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Interactive Data File
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PRINCIPAL DOCUMENTS
DISCLOSURE CONTROLS AND PROCEDURES
NOTICES PURSUANT TO REGULATION BTR
AUDIT COMMITTEE FINANCIAL EXPERT
CODE OF ETHICS
PRINCIPAL ACCOUNTANT FEES AND SERVICES
OFF-BALANCE SHEET ARRANGEMENTS
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
IDENTIFICATION OF THE AUDIT COMMITTEE
MINE SAFETY DISCLOSURE
FORWARD-LOOKING INFORMATION
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
SIGNATURES
EXHIBIT INDEX
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