-----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, JOlpiKBSUG/v3Hup4RG4aV5cbDJGKFjMHsHttGO/6mjuzBLXo2POVrPaczNdesgZ F3ezypuu9BfGX8m0yn55pA== 0000891092-04-000589.txt : 20040209 0000891092-04-000589.hdr.sgml : 20040209 20040209083222 ACCESSION NUMBER: 0000891092-04-000589 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040209 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCURY GENERAL CORP CENTRAL INDEX KEY: 0000064996 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 952211612 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12257 FILM NUMBER: 04576064 BUSINESS ADDRESS: STREET 1: 4484 WILSHIRE BOULEVARD CITY: LOS ANGELES STATE: CA ZIP: 90010 BUSINESS PHONE: 2139371060 MAIL ADDRESS: STREET 1: LOS ANGELES 8-K 1 e16854_8k.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): February 9, 2004 MERCURY GENERAL CORPORATION (Exact Name of Registrant as Specified in Charter) California 0-3681 95-221-1612 - ---------------------------- ------------ ------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 4484 Wilshire Boulevard Los Angeles, California 90010 (Address of Principal Executive Offices) -------------------- (323) 937-1060 (Registrant's telephone number, including area code) -------------------- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits. 99.1 Press Release, dated February 9, 2004, issued by Mercury General Corporation, furnished pursuant to Item 12 of Form 8-K. Item 12. Results of Operations and Financial Condition The following information is furnished pursuant to Item 12, "Results of Operations and Financial Condition," and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. On February 9, 2004, Mercury General Corporation issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2003. A copy of the press release is attached hereto as Exhibit 99.1. The information contained in this Current Report, including the exhibit, shall not be incorporated by reference into any filing of Mercury General Corporation, whether made before or after the date hereof, regardless of any general incorporation language in such filing. -2- 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 hereunto duly authorized. Date: February 9, 2004 MERCURY GENERAL CORPORATION By: /s/ THEODORE STALICK ------------------------------------------ Name: Theodore Stalick Its: Vice President and Chief Financial Officer -3- Exhibit Index Exhibit 99.1. Press Release, dated February 9, 2004, issued by Mercury General Corporation. -4- EX-99.1 3 e16854ex99_1.txt PRESS RELEASE Exhibit 99.1 Mercury General Corporation Announces Fourth Quarter Results LOS ANGELES, Feb. 9 /PRNewswire-FirstCall/ -- Mercury General Corporation (NYSE: MCY) reported today that net income was $49.2 million ($0.90 per share - - diluted) in the fourth quarter of 2003 compared to $17.3 million ($0.32 per share - diluted) in the same period in 2002. Included in net income are net realized investment gains, net of tax, of $3.8 million ($0.07 per share) in the fourth quarter of 2003 compared to net realized investment losses, net of tax benefit, of $14.2 million ($0.26 per share) for the same period in 2002. Net income in the fourth quarter of 2003 also includes approximately $16 million ($10.2 million after tax benefit or $0.19 per share) in losses resulting from the October 2003 Southern California fire storms. For the year, net income was $184.3 million ($3.38 per share - diluted) in 2003 compared to net income of $66.1 million ($1.21 per share - diluted) in 2002. Net realized investment gains, net of tax, was $7.3 million ($0.13 per share) in 2003 compared to net realized investment losses, net of tax benefit, of $45.8 million ($0.84 per share) in 2002. Company-wide premiums written were $591.4 million in the fourth quarter of 2003, a 17.2% increase over 2002, and $2.3 billion for the year, a 21.6% increase over 2002. California premiums written were $481.7 million in the fourth quarter of 2003, a 12.6% increase over 2002, and $1.9 billion for the year, an 18.8% increase over 2002. Non-California premiums written were $109.7 million in the fourth quarter of 2003, a 43.2% increase over 2002 and $382.6 million for the year, a 37.7% increase over 2002. Non-California premiums made up 18.5% of fourth quarter premiums, up from 15.2% for the same period in 2002. The Company's combined ratio (GAAP basis) was 94.1% in the fourth quarter of 2003 and 94.0% for the entire year compared to 97.6% and 98.8% for the respective periods of 2002. The Southern California fire storms negatively impacted the combined ratio by 2.7% for the fourth quarter of 2003 and 0.7% for the entire year of 2003. Net investment income of $26.3 million for the fourth quarter decreased by $0.4 million over the corresponding period in 2002. The after-tax yield was 3.9% on average investments of $2.42 billion (fixed maturities and equities at cost) for the quarter. This compares with 4.4% in the fourth quarter of 2002. Net investment income for 2003 was $104.5 million compared to $113.1 million for 2002. Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent agents and brokers in many states. For more information, visit our website at www.mercuryinsurance.com. The Company will be hosting a conference call and webcast today at 10:00 a.m. pacific time where management will discuss results and address questions. The teleconference can be accessed by calling 1 (877) 807-1888 or by visiting www.mercuryinsurance.com/corporate/calendarofevents.asp. A replay of the call will be available beginning at 1:30 p.m. pacific time and running through February 16, 2004. The replay telephone numbers are 1 (800) 642-1687 (USA) or 1 (706) 645-9291 (International). The conference ID# is 4885467. The replay will also be available on our website shortly following the call. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for the Company's insurance products, and in general economic conditions; the accuracy and adequacy of the Company's pricing methodologies; market risks associated with the Company's investment portfolio; uncertainties related to estimates, assumptions and projections generally; the possibility actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves; inflation and changes in economic conditions; the Company's ability to obtain and the timing of regulatory approval for requested rate changes; legislation adverse to the automobile insurance industry or business generally that may be enacted in California or other states; the presence of competitors with greater financial resources and the impact of competitive pricing; changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation and health care and auto repair costs and marketing efforts; and various legal, regulatory and litigation risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company's filings with the Securities and Exchange Commission. Mercury General Corporation Information Regarding Non-GAAP Measures The Company has presented information within this document containing operating measures which in management's opinion provide investors useful industry specific information to evaluate and perform meaningful comparisons of the Company's performance but that may not be presented in accordance with Generally Accepted Accounting Principles ("GAAP"). These measures are not intended to replace, and should be read in conjunction with, the GAAP financial results. The Company has reconciled these measures with the most directly comparable GAAP measure in the supplemental schedule entitled, "Summary of Operating Results." Net Premiums Written represents the premiums charged on policies issued during a fiscal period. Net Premiums Earned, the most directly comparable GAAP measure, represents the portion of premiums written that is recognized as income in the financial statements for the periods presented and earned on a pro-rata basis over the term of the policies. Net Premiums Written is meant as supplemental information and is not intended to replace Net Premiums Earned. It should be read in conjunction with the GAAP financial results. Paid Losses and Loss Adjustment Expenses is the portion of Incurred Losses and Loss Adjustment Expenses, the most directly comparable GAAP measure, excluding the effects of changes in the loss reserve accounts. Paid Losses and Loss Adjustment Expenses is meant as supplemental information and is not intended to replace Incurred Losses and Loss Adjustment Expenses. It should be read in conjunction with the GAAP financial results. Mercury General Corporation and Subsidiaries Summary of Operating Results (000's) except per-share amounts (unaudited) Quarter Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 Net premiums written $591,401 $504,597 $2,268,778 $1,865,046 Net premiums earned 572,671 481,277 2,145,047 1,741,527 Paid losses and loss adjustment expenses 347,453 300,001 1,330,784 1,119,946 Incurred losses and loss adjustment expenses 385,330 344,528 1,452,051 1,268,243 Net investment income 26,348 26,732 104,520 113,083 Net realized investment gains (losses), net of tax 3,817 (14,163) 7,285 (45,768) Net income $49,226 $17,330 $184,321 $66,105 Basic average shares outstanding 54,418 54,350 54,402 54,314 Diluted average shares outstanding 54,586 54,487 54,547 54,502 Basic Per Share Data Net income $0.90 $0.32 $3.39 $1.22 Net realized investment gains (losses), net of tax $0.07 ($0.26) $0.13 ($0.84) Incurred losses from Southern California Fire Storms, net of tax benefit ($0.19) N/A $(0.19) N/A Diluted Per Share Data Net income $0.90 $0.32 $3.38 $1.21 Net realized investment gains (losses), net of tax $0.07 ($0.26) $0.13 ($0.84) Incurred losses from Southern California Fire Storms, net of tax benefit ($0.19) N/A $(0.19) N/A Operating Ratios--GAAP Basis (a) Loss ratio 67.3% 71.6% 67.7% 72.8% Expense ratio 26.8% 26.0% 26.3% 26.0% Combined ratio 94.1% 97.6% 94.0% 98.8% Impact of Southern California Fire Storms on loss ratio 2.7% N/A 0.7% N/A Reconciliations of Operating Measures to Comparable GAAP (a) Measures Net premiums written $591,401 $504,597 $2,268,778 $1,865,046 Increase in unearned premiums (18,730) (23,320) (123,731) (123,519) Net premiums earned $572,671 $481,277 $2,145,047 $1,741,527 Paid losses and loss adjustment expenses $347,453 $300,001 $1,330,784 $1,119,946 Increase in net losses and loss adjustment expense reserves 37,877 44,527 121,267 148,297 Incurred losses and loss adjustment expenses $385,330 $344,528 $1,452,051 $1,268,243 (a) Generally Accepted Accounting Principles N/A - Not applicable Mercury General Corporation and Subsidiaries Other Supplemental Information (000's) except ratios (unaudited) Quarter ending, Twelve months ending, December 31, December 31, 2003 2002 2003 2002 Total California Operations (1) Net Premiums Written $481,744 $428,018 $1,886,217 $1,587,165 Net Premiums Earned 477,291 407,759 1,804,960 1,489,144 Loss Ratio 68.8% 72.6% 68.9% 73.1% Expense Ratio 25.5% 25.2% 25.4% 25.1% Combined Ratio (3) 94.3% 97.8% 94.3% 98.3% California Automobile lines Net Premiums Written $442,636 $398,493 $1,738,462 $1,477,750 Net Premiums Earned 440,791 380,959 1,674,801 1,397,446 Loss Ratio 67.9% 73.4% 69.0% 73.1% Expense Ratio 25.7% 24.9% 25.3% 24.8% Combined Ratio 93.6% 98.3% 94.3% 97.9% California Homeowners line Net Premiums Written $32,407 $24,345 $122,897 $90,570 Net Premiums Earned 30,328 22,399 108,141 75,830 Loss Ratio 84.0% 66.2% 67.9% 75.0% Expense Ratio 24.4% 26.4% 25.1% 27.3% Combined Ratio 108.4% 92.6% 93.0% 102.3% Non-California Operations (2) Net Premiums Written $109,657 $76,579 $382,561 $277,881 Net Premiums Earned 95,381 73,518 340,087 252,383 Loss Ratio 59.7% 66.0% 61.5% 71.0% Expense Ratio 33.5% 30.5% 30.9% 31.3% Combined Ratio 93.2% 96.5% 92.4% 102.3% At At Policies-in-force (000's) December 31, 2003 September 30, 2003 California Personal Auto 1,026 1,018 California Commercial Auto 20 19 Non-California Personal Auto 184 169 California Homeowners 187 178 Florida Homeowners 10 9 At At December 31, 2002 September 30, 2002 California Personal Auto 952 916 California Commercial Auto 18 18 Non-California Personal Auto 150 144 California Homeowners 154 145 Florida Homeowners 6 6 All ratios are calculated on GAAP basis. (1) Total California operations includes homeowners, auto, commercial property and other immaterial California business lines (2) Includes all states except California (3) Some numbers may not sum due to rounding Mercury General Corporation and Subsidiaries Condensed Balance Sheet and Other Information (000's) except per-share amounts December 31, 2003 December 31, 2002 Investments - available for sale Fixed maturities at market (amortized cost $1,856,083 in 2003 and $1,565,760 in 2002) $1,945,309 $1,632,871 Equity securities at market (cost $223,113 in 2003 and $233,297 in 2002) 264,393 230,981 Short-term cash investments, at cost, which approximates market 329,812 286,806 Total investments 2,539,514 2,150,658 Net receivables 299,094 259,445 Deferred policy acquisition costs 132,059 107,485 Other assets 149,099 127,708 Total assets $3,119,766 $2,645,296 Loss and loss adjustment expenses $797,927 $679,271 Unearned premiums 663,004 545,485 Other liabilities 278,617 192,895 Notes payable 124,715 128,859 Shareholders' equity 1,255,503 1,098,786 Total liabilities and shareholders' equity $3,119,766 $2,645,296 Common stock - shares outstanding 54,424 54,362 Book value per share $23.07 $20.21 Statutory surplus $1,169,427 $1,014,935 Portfolio duration 3.8 years 4.4 years SOURCE Mercury General Corporation -0- 02/09/2004 /CONTACT: Theodore Stalick, VP/CFO of Mercury General Corporation, +1-323-937-1060/ /Web site: http://www.mercuryinsurance.com/corporate/calendarofevents.asp http://www.mercuryinsurance.com / (MCY) CO: Mercury General Corporation ST: California IN: FIN INS SU: ERN -----END PRIVACY-ENHANCED MESSAGE-----