-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JZyHt/BekA7hHwPMlf34boJsmlHMez38bpcw9xead1TFWX10/h6hrUuHpgLT+YLo FuTpyJPMBfGyVaX2ED0J8Q== 0001193125-03-021806.txt : 20030820 0001193125-03-021806.hdr.sgml : 20030820 20030722080112 ACCESSION NUMBER: 0001193125-03-021806 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030721 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030721 DATE AS OF CHANGE: 20030820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVEREST RE GROUP LTD CENTRAL INDEX KEY: 0001095073 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 000000000 STATE OF INCORPORATION: C8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15731 FILM NUMBER: 03795341 BUSINESS ADDRESS: STREET 1: C/O ABG FINANCIAL & MANAGEMENT SERVICES STREET 2: PARKER HOUSE WILDEY ROAD CITY: ST MICHAEL BARBADOS BUSINESS PHONE: 2464366287 MAIL ADDRESS: STREET 1: C/O REINSURANCE HOLDINGS INC STREET 2: 477 MARTINSVILLE RD PO BOX 830 CITY: LIBERTY CORNER STATE: NJ ZIP: 07938 FORMER COMPANY: FORMER CONFORMED NAME: EVEREST REINSURANCE GROUP LTD DATE OF NAME CHANGE: 19990915 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 21, 2003 Everest Re Group, Ltd. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) - -------------------------------------------------------------------------------- Bermuda 1-15731 Not Applicable - ------------------------------ --------------------- ------------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) c/o ABG Financial & Management Services, Inc. Parker House, Wildey Road St. Michael, Barbados Not Applicable - --------------------------------------------- -------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 246-228-7398 Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits -------- Exhibit No. Description ----------- ----------- 99.1 News Release of the registrant, dated July 21, 2003 Item 9. REGULATION FD DISCLOSURE See Item 12. Results of Operations and Financial Condition. Item 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 21, 2003, the registrant issued a news release announcing its second quarter 2003 results. A copy of that news release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The news release furnished herewith contains information regarding the registrant's operating income. Operating income differs from net income, the most directly comparable generally accepted accounting principle financial measure, only by the exclusion of realized gains and losses on investments. Management believes that presentation of operating income provides useful information to investors because it more accurately measures and predicts the registrant's results of operations by removing the variability arising from the management of the registrant's investment portfolio. In addition, management, analysts and investors use operating income to evaluate the financial performance of the registrant and the insurance industry in general. In accordance with general instructions B.2 and B.6 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Items 9 and 12 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EVEREST RE GROUP, LTD. By: /s/ STEPHEN L. LIMAURO -------------------------------------- Stephen L. Limauro Executive Vice President and Chief Financial Officer Dated: July 21, 2003 EXHIBIT INDEX Exhibit Number Description of Document Page No. - ------- ----------------------- -------- 99.1 Press Release of the registrant, dated 5 July 21, 2003. EX-99.1 3 dex991.txt NEWS RELEASE OF THE REGISTRANT [GRAPHIC APPEARS HERE] NEWS RELEASE - ---------------------------------- EVEREST RE GROUP, LTD. c/o ABG Financial & Management Services, Inc. Parker House, Wildey Business Park, Wildey Road, St. Michael, Barbados Contact: James H. Foster Senior Vice President, Investor Relations Everest Global Services, Inc. 908.604.3169 For Immediate Release Everest Re Group Announces Second Quarter Earnings with a 23% Increase in Book Value to $3.06 billion or $55.09 per share ST. MICHAEL, Barbados - July 21, 2003 -- Everest Re Group, Ltd. (NYSE: RE) reported second quarter 2003 after-tax operating income, which excludes realized capital gains and losses, of $107.1 million, or $1.94 per diluted share, a 53.7% increase compared to $69.7 million, or $1.34 per diluted share, in the second quarter of 2002. Net income increased 105.1% to $109.6 million, or $1.99 per diluted share, compared to $53.4 million, or $1.02 per diluted share, in the second quarter of 2002, which was affected by investment losses relating to the WorldCom bankruptcy. Operating income differs from net income only by the exclusion of realized gains and losses on investments. For the six months ended June 30, 2003, after-tax operating income was $211.2 million, or $3.96 per diluted share, an increase of 55.6% compared to $135.7 million, or $2.68 per diluted share, in 2002. Net income in the first six months of 2003 was $203.9 million, or $3.82 per diluted share, an increase of 78.1% compared to $114.5 million, or $2.26 per diluted share, in 2002. Gross premiums written for the second quarter of 2003 were $1.07 billion, a 69.6% increase compared to $630 million in 2002. Net premiums written were $988 million, an increase of 64.6% from $601 million for the second quarter of 2002. The Company's GAAP combined ratio in the second quarter was 95.5% compared to 97.6% in 2002. Net investment income for the second quarter was $102.1 million compared to $90.8 million in the second quarter of 2002. Cash 1 flow from operations for the quarter was $353.2 million, an increase of 108.3% from $169.6 million in the second quarter of 2002. For the six months ended June 30, 2003, gross premiums written were $2.07 billion, a 68.8% increase from $1.23 billion in the first six months of 2002. Net written premiums grew 66.5% to $1.94 billion from $1.17 billion in 2002. The GAAP combined ratio for the first six months of 2003 was 94.5% compared to 98.4% in 2002. Net investment income for the six months ended June 30, 2003 was $195.4 million, an increase of 10.8% from $176.4 million in 2002. Cash flow from operations in the first six months was $680.9 million, compared to $275.1 million in the first six months of 2002. At June 30, 2003, the Company's shareholders' equity was $3.06 billion or $55.09 per outstanding share. This represents a 29% increase from shareholders' equity of $2.37 billion or $46.55 per share at December 31, 2002. Commenting on the Company's results, Chairman and Chief Executive Officer Joseph V. Taranto said, "Solid execution in firming markets contributed to the Company's robust top-line growth, excellent cash flow, continued improvement in underwriting margins and strong earnings and book value growth". The Company also reaffirmed its estimate of 2003 operating earnings at $7.75 - $8.25 per diluted share, and its estimate of 2004 operating earnings at $9.50 - $10.50 per diluted share, both absent any unusual losses or market developments. This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. In particular, our forecasts of future earnings are forward looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the US and international 2 markets. Everest Reinsurance (Bermuda), Ltd. provides reinsurance to property and casualty and life insurers in both the Bermuda and international markets. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the United States. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the United States. Additional information on Everest Re Group companies can be found at the Company's web site at www.everestre.com. A conference call discussing the first quarter results will be held at 8:30 a.m. Eastern Standard Time on July 22, 2003. The call will be available on the Internet through the Company's web site or at www.streetevents.com. Anyone receiving this release by wire or through the Internet may visit the Company's web site to view supplemental financial information on the Company's results. The supplemental information is located at www.everestre.com in the "Financials/Financial Reports" section. The supplemental financial information may also be obtained by contacting the Company directly. --Financial Details Follow-- 3 EVEREST RE GROUP, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, --------------------- ------------------------- 2003 2002 2003 2002 -------- -------- ---------- ---------- (unaudited) (unaudited) REVENUES: Premiums earned $851,988 $502,330 $1,596,858 $ 993,538 Net investment income 102,060 90,830 195,437 176,370 Net realized capital gain (loss) 1,747 (31,008) (11,488) (34,863) Net derivative income (expense) 1,305 (4,890) (1,395) (5,140) Other expense (4,453) (2,908) (5,600) (1,571) -------- -------- ---------- ---------- Total revenues 952,647 554,354 1,773,812 1,128,334 -------- -------- ---------- ---------- CLAIMS AND EXPENSES: Incurred loss and loss adjustment expenses 585,042 353,177 1,098,513 705,683 Commission, brokerage, taxes and fees 204,409 120,320 367,214 241,329 Other underwriting expenses 23,920 16,724 43,784 30,849 Distributions related to trust preferred securities 4,122 - 8,243 - Interest expense on senior notes 9,733 9,728 19,464 19,456 Interest expense on credit facility 348 853 708 1,762 -------- -------- ---------- ---------- Total claims and expenses 827,574 500,802 1,537,926 999,079 -------- -------- ---------- ---------- INCOME BEFORE TAXES 125,073 53,552 235,886 129,255 Income tax expense 15,518 145 31,964 14,787 -------- -------- ---------- ---------- NET INCOME $109,555 $ 53,407 $ 203,922 $ 114,468 ======== ======== ========== ========== Other comprehensive income (loss), net of tax 142,261 39,328 172,249 (28,798) -------- -------- ---------- ---------- COMPREHENSIVE INCOME $251,816 $ 92,735 $ 376,171 $ 85,670 ======== ======== ========== ========== PER SHARE DATA: Average shares outstanding (000's) 54,096 51,301 52,505 49,713 Net income per common share-basic $ 2.03 $ 1.04 $ 3.88 $ 2.30 ======== ======== ========== ========== Average diluted shares outstanding (000's) 55,091 52,177 53,314 50,633 Net income per common share-diluted $ 1.99 $ 1.02 $ 3.82 $ 2.26 ======== ======== ========== ==========
EVEREST RE GROUP, LTD. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except par value per share)
June 30, December 31, ------------ ------------ 2003 2002 ------------ ------------ ASSETS: (unaudited) Fixed maturities - available for sale, at market value (amortized cost: 2003, $7,478,198; 2002, $6,460,839) $8,000,791 $6,779,858 Equity securities, at market value (cost: 2003, $60,902; 2002, $56,841) 56,296 47,473 Short-term investments 212,668 169,116 Other invested assets 61,728 53,856 Cash 134,909 208,830 ----------- ---------- Total investments and cash 8,466,392 7,259,133 Accrued investment income 107,769 85,959 Premiums receivable 890,656 673,377 Reinsurance receivables 1,151,733 1,116,362 Funds held by reinsureds 147,404 121,308 Deferred acquisition costs 270,383 207,416 Prepaid reinsurance premiums 88,060 63,437 Deferred tax asset 98,197 139,176 Other assets 199,576 198,435 ----------- ---------- TOTAL ASSETS $11,420,170 $9,864,603 =========== ========== LIABILITIES: Reserve for losses and adjustment expenses $5,403,294 $4,905,582 Future policy benefit reserve 219,855 227,925 Unearned premium reserve 1,247,864 872,340 Funds held under reinsurance treaties 371,946 347,360 Losses in the course of payment 46,662 45,511 Contingent commissions (277) 1,932 Other net payable to reinsurers 99,971 61,244 Current federal income taxes (13,364) (16,696) 8.5% Senior notes due 3/15/2005 249,826 249,780 8.75% Senior notes due 3/15/2010 199,201 199,158 Revolving credit agreement borrowings 70,000 70,000 Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debentures ("trust preferred securities") 210,000 210,000 Accrued interest on debt and borrowings 13,425 13,481 Other liabilities 246,403 308,340 ----------- ---------- Total liabilities 8,364,806 7,495,957 =========== ========== SHAREHOLDERS' EQUITY: Preferred shares, par value: $0.01; 50 million shares authorized; no shares issued and outstanding - - Common shares, par value: $0.01; 200 million shares authorized; 55.5 million shares issued in 2003 and 50.9 million shares issued in 2002 559 513 Additional paid-in capital 938,551 618,521 Unearned compensation (298) (340) Accumulated other comprehensive income, net of deferred income taxes of $133.2 million in 2003 and $74.4 million in 2002 393,791 221,542 Retained earnings 1,745,711 1,551,360 Treasury shares, at cost; 0.5 million shares in 2003 and 0.5 million shares in 2002 (22,950) (22,950) ----------- ---------- Total shareholders' equity 3,055,364 2,368,646 ----------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,420,170 $9,864,603 =========== ==========
EVEREST RE GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three Months Ended Six Months Ended June 30, June 30, ----------------------- ------------------------- 2003 2002 2003 2002 ---------- -------- ---------- ---------- (unaudited) (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: $ 353,209 $169,579 $ 680,865 $ 275,080 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from investments sold 210,480 693,752 676,289 1,137,834 Proceeds from investments maturing or called 204,960 128,401 401,945 275,995 Cost of investments acquired (1,144,754) (917,318) (2,112,036) (1,785,933) Net sales (purchases) of short-term investments 30,819 (57,677) (41,464) (194,896) ---------- -------- ---------- ---------- Net cash (used in) investing activities (698,495) (152,842) (1,075,266) (567,000) ---------- -------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued during the period 319,189 1,372 320,076 347,985 Dividends paid to shareholders (4,990) (4,105) (9,571) (8,207) Borrowings on revolving credit agreement - - - 20,000 Repayments on revolving credit agreement - - - (20,000) ---------- -------- ---------- ---------- Net cash provided (used in) by financing activities 314,199 (2,733) 310,505 339,778 ---------- -------- ---------- ---------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 12,275 9,174 9,975 5,195 ---------- -------- ---------- ---------- Net (decrease) increase in cash (18,812) 23,178 (73,921) 53,053 Cash, beginning of period 153,721 101,753 208,830 71,878 ---------- -------- ---------- ---------- Cash, end of period $ 134,909 $124,931 $ 134,909 $ 124,931 ========== ======== ========== ==========
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