-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kao4nm1IXg3bb3xZ/4I58e9L1RYl7F7qC/vORi2I99YkN4RxAZpNyLj/C6G6ja2g OoddK5531s5jHRWlP5eMzA== 0000074931-94-000019.txt : 19941121 0000074931-94-000019.hdr.sgml : 19941121 ACCESSION NUMBER: 0000074931-94-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941101 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORION CAPITAL CORP CENTRAL INDEX KEY: 0000074931 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 956069054 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07801 FILM NUMBER: 94557181 BUSINESS ADDRESS: STREET 1: 30 ROCKFELLER PLZ CITY: NEW YORK STATE: NY ZIP: 10112 BUSINESS PHONE: 2123328080 MAIL ADDRESS: STREET 1: 30 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10112 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY FUNDING CORP OF AMERICA DATE OF NAME CHANGE: 19760518 FORMER COMPANY: FORMER CONFORMED NAME: TONGOR CORP OF AMERICA DATE OF NAME CHANGE: 19670330 FORMER COMPANY: FORMER CONFORMED NAME: TONGOR CORP DATE OF NAME CHANGE: 19661024 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1994 ( ) TRANSITION REPORT, PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7801 ORION CAPITAL CORPORATION -------------------------- (Exact name of registrant as specified in its charter) Delaware 95-6069054 - - --------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 600 Fifth Avenue New York, New York 10020 - 2302 - - ---------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 332-8080 -------------- Former name, former address and former fiscal year if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 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. Yes X No ---- ---- 14,051,687 shares of Common Stock, $1.00 par value, of the registrant were outstanding on October 28, 1994. Page 1 of 27 Exhibit Index Appears at Page 24 ORION CAPITAL CORPORATION FORM 10-Q INDEX For the Quarter Ended September 30, 1994 Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements: Consolidated Balance Sheet at September 30, 1994 (Unaudited) and December 31, 1993 .................... 3 - 4 Consolidated Statement of Earnings for the three and nine-month periods ended September 30, 1994 and 1993 (Unaudited) ................................. 5 Consolidated Statement of Stockholders' Equity for the nine-month periods ended September 30, 1994 and 1993 (Unaudited), and for the year ended December 31, 1993 .................................... 6 Consolidated Statement of Cash Flows for the nine-month periods ended September 30, 1994 and 1993 (Unaudited). 7 - 8 Notes to Consolidated Financial Statements (Unaudited).. 9 - 12 Independent Accountants' Review Report ................. 13 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............. 14 - 21 PART II. OTHER INFORMATION ................................ 22 Page 2
PART 1. FINANCIAL INFORMATION ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ASSETS (000s omitted) September 30, 1994 December 31, (Unaudited) 1993 ------------------ ------------ Investments: Fixed maturities at amortized cost (market $370,218 - 1994 and $402,149 - 1993) .................................. $ 372,764 $ 384,402 Fixed maturities at market (amortized cost $551,157 - 1994 and $517,716 - 1993) 526,070 548,336 Common stocks at market (cost $119,157 - 1994 and $111,325 - 1993) .............. 145,395 139,022 Non-redeemable preferred stocks at market (cost $135,156 - 1994 and $98,986 - 1993) ........................ 131,609 103,621 Other long-term investments .............. 52,570 50,682 Short-term investments ................... 111,554 96,473 ---------- ---------- Total investments ..................... 1,339,962 1,322,536 Cash ....................................... 5,328 6,433 Accrued investment income .................. 15,287 17,623 Investments in and advances to affiliates .. 108,612 111,459 Accounts and notes receivable .............. 131,190 111,539 Reinsurance recoverables and prepaid reinsurance .............................. 352,053 393,309 Deferred policy acquisition costs .......... 69,247 57,522 Property and equipment ..................... 24,701 23,596 Excess of cost over fair value of net assets acquired .......................... 29,708 30,587 Deferred federal income taxes .............. 36,926 18,891 Other assets ............................... 25,917 23,959 ---------- ---------- Total assets .......................... $2,138,931 $2,117,454 ========== ========== See Notes to Consolidated Financial Statements (Unaudited) Page 3 ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET LIABILITIES AND STOCKHOLDERS' EQUITY (000s omitted - except for share data) September 30, 1994 December 31, (Unaudited) 1993 ------------------ ------------ Liabilities: Policy liabilities - Losses ................................... $ 953,913 $ 937,775 Loss adjustment expenses ................. 221,483 202,628 Unearned premiums ........................ 265,955 259,359 Policyholders' dividends ................. 12,651 12,523 ---------- ---------- Total policy liabilities ............... 1,454,002 1,412,285 Federal income taxes payable ............... 16,622 19,294 Notes payable .............................. 154,380 160,372 Other liabilities .......................... 141,297 131,308 ---------- ---------- Total liabilities ...................... 1,766,301 1,723,259 ---------- ---------- Contingencies (Note E) Stockholders' equity: Preferred stock, authorized 5,000,000 shares - issued and outstanding - none Common stock, $1 par value; authorized 30,000,000 shares; issued 15,337,650 shares ................................... 15,338 15,338 Capital surplus ............................ 147,976 148,167 Net unrealized investment gains, net of federal income taxes (benefit) of $(6,487) - 1994 and $18,718 - 1993 ....... 2,758 49,566 Net unrealized foreign exchange translation losses, net of federal income tax benefits of $220 - 1994 and $394 - 1993 ........... (3,341) (3,665) Retained earnings .......................... 230,609 198,491 Treasury stock, at cost (1,126,813 shares - 1994 and 965,442 shares - 1993) .......... (17,495) (12,182) Deferred compensation on restricted stock .. (3,215) (1,520) ---------- ---------- Total stockholders' equity ............. 372,630 394,195 ---------- ---------- Total liabilities and stockholders' equity ............................... $2,138,931 $2,117,454 ========== ========== See Notes to Consolidated Financial Statements (Unaudited) Page 4 ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED) (000s omitted - except for per common share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 1994 1993 1994 1993 ---- ---- ---- ---- Revenues: Premiums earned .............................. $180,703 $151,641 $510,241 $458,317 Net investment income ........................ 22,550 22,218 63,919 65,065 Realized investment gains .................... 1,197 1,131 1,908 7,698 Other income ................................. 341 428 1,058 1,195 -------- -------- -------- -------- 204,791 175,418 577,126 532,275 -------- -------- -------- -------- Expenses: Losses incurred .............................. 101,318 89,267 293,466 273,024 Loss adjustment expenses ..................... 27,874 22,765 77,044 68,922 Amortization of deferred policy acquisition costs ...................................... 44,269 35,368 123,147 107,150 Other insurance expenses ..................... 5,576 5,164 14,399 13,285 Dividends to policyholders ................... 3,096 3,214 9,967 10,062 Interest expense ............................. 3,439 3,354 10,204 9,708 Other expenses ............................... 1,452 2,079 5,011 5,365 -------- -------- -------- -------- 187,024 161,211 533,238 487,516 -------- -------- -------- -------- Earnings before equity in earnings of affiliates, federal income taxes and cumulative effect of adoption of new accounting principles ........................ 17,767 14,207 43,888 44,759 Equity in earnings of affiliates ............... 2,577 2,805 8,715 8,452 -------- -------- -------- -------- Earnings before federal income taxes and cumulative effect of adoption of new accounting principles ........................ 20,344 17,012 52,603 53,211 Federal income taxes ........................... 5,015 4,144 12,467 12,108 -------- -------- -------- -------- Earnings before cumulative effect of adoption of new accounting principles ................. 15,329 12,868 40,136 41,103 Cumulative effect of adoption of new accounting principles ................................... - - - 11,825 -------- -------- -------- -------- Net earnings ................................... $ 15,329 $ 12,868 $ 40,136 $ 52,928 ======== ======== ======== ======== Earnings per common share before cumulative effect of adoption of new accounting principles ................................... $ 1.07 $ .88 $ 2.78 $ 2.79 Cumulative effect of adoption of new accounting principles ........................ - - - .81 -------- -------- -------- -------- Net earnings per common share .............. $ 1.07 $ .88 $ 2.78 $ 3.60 ======== ======== ======== ======== See Notes to Consolidated Financial Statements (Unaudited) Page 5 ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (000s omitted) Nine Months Ended September 30, Year Ended (Unaudited) December 31, ------------------- ------------ 1994 1993 1993 ---- ---- ---- Convertible exchangeable preferred stock: Balance, beginning of period .............. $ - $ 28,524 $ 28,524 Conversion of preferred stock ............. - (28,524) (28,524) -------- -------- -------- Balance, end of period .................... $ - $ - $ - ======== ======== ======== Common stock: Balance, beginning of period .............. $ 15,338 $ 11,110 $ 11,110 Conversion of preferred stock ............. - 1,139 1,139 Exercise of stock options and issuance of restricted stock ........................ - 11 24 Stock issued in 5-for-4 stock split ....... - 3,065 3,065 -------- -------- -------- Balance, end of period .................... $ 15,338 $ 15,325 $ 15,338 ======== ======== ======== Capital surplus: Balance, beginning of period .............. $148,167 $124,754 $124,754 Redemption and conversions of preferred stock ................................... - 26,072 26,072 Exercise of stock options and issuance of restricted stock ..................... (191) 266 406 Stock issued in 5-for-4 stock split ....... - (3,065) (3,065) -------- -------- -------- Balance, end of period .................... $147,976 $148,027 $148,167 ======== ======== ======== Net unrealized investment gains: Balance, beginning of period .............. $ 49,566 $ 18,815 $ 18,815 Cumulative effect of adoption of new accounting principle, net of taxes of $11,157 .............................. - - 20,720 Change in unrealized investment gains, net of taxes ............................ (46,808) 16,179 10,031 -------- -------- -------- Balance, end of period .................... $ 2,758 $ 34,994 $ 49,566 ======== ======== ======== Net unrealized foreign exchange translation losses: Balance, beginning of period .............. $ (3,665) $ (2,918) $ (2,918) Change in unrealized foreign exchange translation losses, net of taxes ........ 324 (567) (747) -------- -------- -------- Balance, end of period .................... $ (3,341) $ (3,485) $ (3,665) ======== ======== ======== Retained earnings: Balance, beginning of period .............. $198,491 $139,947 $139,947 Net earnings .............................. 40,136 52,928 68,813 Dividends declared ........................ (8,018) (7,679) (10,269) -------- -------- -------- Balance, end of period .................... $230,609 $185,196 $198,491 ======== ======== ======== Treasury stock: Balance, beginning of period .............. $(12,182) $ (6,694) $ (6,694) Exercise of stock options and issuance (cancellation) of restricted stock ...... 2,790 (7) (15) Acquisition of treasury stock ............. (8,103) (127) (5,473) -------- -------- -------- Balance, end of period .................... $(17,495) $ (6,828) $(12,182) ======== ======== ======== Deferred compensation on restricted stock: Balance, beginning of period .............. $ (1,520) $ (2,251) $ (2,251) Issuance of restricted stock .............. (2,276) (125) (108) Amortization of deferred compensation on restricted stock ........................ 581 632 839 -------- -------- -------- Balance, end of period .................... $ (3,215) $ (1,744) $ (1,520) ======== ======== ======== See Notes to Consolidated Financial Statements (Unaudited) Page 6 ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (000s omitted) Nine Months Ended September 30, ------------------------------- 1994 1993 ---- ---- Cash flows from operating activities: Premiums collected .......................... $ 522,006 $ 473,001 Net investment income collected ............. 64,546 62,353 Losses and loss adjustment expenses paid .... (323,664) (272,303) Policy acquisition costs paid ............... (139,138) (120,358) Dividends paid to policyholders ............. (9,839) (11,369) Interest paid ............................... (11,295) (11,669) Federal income tax payments ................. (8,144) (5,063) Other receipts (payments) ................... 11,625 (2,216) --------- --------- Net cash provided by operating activities.. 106,097 112,376 --------- --------- Cash flows from investing activities: Maturities of fixed maturity investments .... 70,489 101,153 Sales of fixed maturity investments ......... 79,753 48,731 Sales of equity securities .................. 36,004 68,984 Investments in fixed maturities ............. (172,071) (243,046) Investments in equity securities ............ (78,663) (100,372) Net sales (purchases) of short-term investments ............................... (15,620) 17,211 Purchase of property and equipment .......... (4,106) (3,181) Other investments - net ..................... (1,056) (11,925) --------- --------- Net cash used in investing activities ..... (85,270) (122,445) --------- --------- Cash flows from financing activities: Proceeds from issuance of notes payable ..... - 59,672 Proceeds from exercise of stock options ..... 259 123 Dividends paid to stockholders .............. (7,754) (8,159) Repayment of notes payable .................. (6,000) (28,000) Purchases and redemption of adjustable rate preferred and purchases of common stock ... (8,215) (18,806) Other payments .............................. (222) (1,098) --------- --------- Net cash provided by (used in) financing activities .............................. (21,932) 3,732 --------- --------- Effect of foreign exchange rate changes on cash - (24) --------- --------- Net decrease in cash ...................... (1,105) (6,361) Cash balance, beginning of period ............. 6,433 12,764 --------- --------- Cash balance, end of period ................... $ 5,328 $ 6,403 ========= ========= See Notes to Consolidated Financial Statements (Unaudited) Page 7 ORION CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS - (Continued) (UNAUDITED) (000s omitted) Nine Months Ended September 30, ------------------------------- 1994 1993 ---- ---- Reconciliation of net earnings to net cash provided by operating activities: Net earnings .................................. $ 40,136 $ 52,928 -------- -------- Adjustments: Cumulative effect of adoption of new accounting principles ..................... - (11,825) Depreciation and amortization ............... 3,584 2,798 Amortization of excess of cost over fair value of net assets acquired .............. 879 879 Deferred federal income taxes ............... 6,996 3,435 Amortization of fixed maturity investments .. 1,044 (246) Non-cash investment income .................. (1,758) (4,832) Equity in earnings of affiliates ............ (8,715) (8,452) Dividends received from affiliates .......... 2,544 2,304 Realized investment gains ................... (1,908) (7,698) Other ....................................... 342 33 Change in assets and liabilities: Decrease in accrued investment income ....... 2,336 2,023 Increase in accounts and notes receivable ... (19,651) (5,533) Decrease in reinsurance recoverables and prepaid reinsurance ....................... 41,256 55,106 Increase in deferred policy acquisition costs (11,725) (2,936) Decrease (increase) in other assets ......... (464) 594 Increase in losses .......................... 16,138 29,349 Increase in loss adjustment expenses ........ 18,855 7,384 Increase in unearned premiums ............... 6,596 11,643 Increase (decrease) in policyholders' dividends ................................. 128 (1,307) Increase (decrease) in other liabilities .... 9,484 (13,271) -------- -------- Total adjustments and changes ............. 65,961 59,448 -------- -------- Net cash provided by operating activities ..... $106,097 $112,376 ======== ======== See Notes to Consolidated Financial Statements (Unaudited) Page 8
ORION CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Nine Months Ended September 30, 1994 and 1993 Note A - Basis of Financial Statement Presentation The consolidated financial statements and notes thereto are prepared in accordance with generally accepted accounting principles for property and casualty insurance companies. The consolidated financial statements include Orion Capital Corporation and its majority-owned subsidiaries (collectively the "Company"). The Company's investments in unconsolidated affiliates are accounted for using the equity method. All material intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the Company's results of operations, financial position and cash flows for all periods presented. Although these consolidated financial statements are unaudited, they have been reviewed by the Company's independent accountants, Deloitte & Touche LLP, for conformity with accounting requirements for interim financial reporting. Their report on such review is included herein. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1993 annual report on Form 10-K. Effective January 1, 1993 the Company recorded the cumulative effect of adopting Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes" and SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other than Pensions." Upon adoption of SFAS No. 109, the Company recorded a benefit of $16,881,000 which was principally attributable to its deferred tax benefits that had not been recognized due to limitations under prior accounting standards. SFAS No. 106 requires the accrual of the estimated cost of retiree benefit payments during the years the employees provide services. Upon adoption of SFAS No. 106 the Company's accumulated obligation for providing medical benefits to retirees was $5,056,000, after a related tax benefit of $2,604,000. Included in the cumulative effects of adopting these accounting principles is the Company's portion of Guaranty National's benefit from changes in accounting principles in 1993 of $360,000, net of $185,000 of federal income taxes provided by the Company. Effective December 31, 1993, the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which establishes the "available-for-sale" category of investment securities and requires such securities to be recorded at market value, with unrealized gains and losses reported in a separate component of stockholders' equity. As a result of the adoption of this standard on December 31, 1993, the Company reclassified investments with a market value of $452,102,000 from fixed maturities recorded at amortized cost to fixed maturities recorded at market, and increased unrealized appreciation on investments, a component of stockholders' equity, by $20,720,000, net of deferred income taxes. Page 9 Note B - Investment in Affiliates The Company owns slightly less than fifty percent of the common stock of Guaranty National Corporation ("Guaranty National") and approximately twenty percent of Intercargo Corporation ("Intercargo"), both publicly-held companies. The acquisition of the Company's interest in Intercargo was completed in December 1993. The Company records its share of Intercargo's interim operating results in the subsequent quarter, after Intercargo has reported its financial results. Summarized financial information of affiliates for the three-month and nine-month periods ended September 30, 1994 and 1993, including second quarter and six-month results for Intercargo in the 1994 periods, is as follows: Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 1994 1993 1994 1993 ---- ---- ---- ---- (000s omitted) Revenues: Premiums earned .................... $100,968 $ 65,949 $271,495 $184,215 Realized investment gains .......... 598 2,060 2,306 4,070 Investment and other income ........ 7,931 5,489 21,055 16,578 -------- -------- -------- -------- 109,497 73,498 294,856 204,863 -------- -------- -------- -------- Expenses: Insurance expenses ................. 100,424 65,382 266,083 177,903 Interest and other ................. 1,367 783 4,104 4,210 -------- -------- -------- -------- 101,791 66,165 270,187 182,113 -------- -------- -------- -------- Earnings before federal income taxes and cumulative effect of change in accounting principles .............. 7,706 7,333 24,669 22,750 Federal income taxes ................. 2,000 1,644 5,958 5,608 -------- -------- -------- -------- Earnings before cumulative effect of change in accounting principles..... $ 5,706 $ 5,689 $ 18,711 $ 17,142 ======== ======== ======== ======== The Company's proportionate share: Earnings before cumulative effect of change in accounting principles... $ 2,577 $ 2,805 $ 8,715 $ 8,452 ======== ======== ======== ======== Cumulative effect of change in accounting principles ............ $ - $ - $ - $ 545 ======== ======== ======== ======== Page 10 The Company's investments in and advances to affiliates are as follows: September 30, December 31, 1994 1993 ------------ ------------ (000s omitted) Book value ................................ $108,612 $111,459 Market value .............................. 137,238 143,255 Guaranty National shares held ............. 6,004 6,143 - Book value of shares held ............. $ 72,967 $ 75,394 - Market value of shares held ........... 108,819 107,510 Intercargo shares held .................... 1,526 1,526 - Book value of shares held ............. $ 18,449 $ 18,869 - Market value of shares held ........... 12,212 17,936 Note C - Reinsurance In the normal course of business, the Company's insurance subsidiaries reinsure certain risks, generally on an excess-of-loss or pro rata basis, with other companies to limit exposure to losses. The table below summarizes certain reinsurance information: Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 1994 1993 1994 1993 ---- ---- ---- ---- (000s omitted-except for percentages) Direct premiums written .............. $172,919 $158,874 $503,144 $473,341 Reinsurance assumed .................. 37,343 33,186 94,982 97,105 -------- -------- -------- -------- Gross premiums written ............... 210,262 192,060 598,126 570,446 Reinsurance ceded .................... (27,569) (36,995) (63,096) (94,216) -------- -------- -------- -------- Net premiums written ................. $182,693 $155,065 $535,030 $476,230 ======== ======== ======== ======== Direct premiums earned ............... $165,673 $161,275 $489,895 $468,460 Reinsurance assumed .................. 42,298 31,368 101,634 90,343 -------- -------- -------- -------- Gross premiums earned ................ 207,971 192,643 591,529 558,803 Reinsurance ceded .................... (27,268) (41,002) (81,288)(100,486) -------- -------- -------- -------- Net premiums earned .................. $180,703 $151,641 $510,241 $458,317 ======== ======== ======== ======== Loss and loss adjustment expenses recoverable from reinsurers ........ $ 12,857 $ 12,047 $ 34,977 $ 40,394 ======== ======== ======== ======== Page 11 Note D - Stockholders' Equity and Earnings Per Common Share During the first nine months of 1994 the Company repurchased 250,500 shares of its common stock at an aggregate cost of $8,103,310. On October 14, 1994, the Board of Directors authorized an additional $5,000,000 for the stock repurchase program. Since September 30, 1994, the Company purchased an additional 156,150 shares for $4,539,000. The remaining authorization as of October 26, 1994 is $3,238,000. On December 21, 1992, Orion called for redemption its $2.125 Convertible Exchangeable Preferred Stock (the "$2.125 Preferred Stock") on January 21, 1993. The market price of the shares of common stock that a holder would receive upon conversion of the preferred stock was substantially higher than the redemption price of $25.76 per share. Consequently, most holders converted into common stock prior to the redemption date, resulting in the issuance of 3,579 shares of common stock in December 1992 and 1,423,544 shares of common stock in January 1993. Holders of 21,605 shares of $2.125 Preferred Stock, who did not elect to convert, redeemed their shares for an aggregate of $557,000. Primary earnings per common share are computed using the weighted average common and dilutive common equivalent shares outstanding for the three-month and nine-month periods ended September 30, 1994 and 1993. The weighted average common shares amounted to 14,378,000 and 14,685,000 shares for the three months ended September 30, 1994 and 1993, respectively, and 14,430,000 and 14,603,000 shares for the nine months ended September 30, 1994 and 1993, respectively. Preferred stock dividends of $409,000 for the nine months ended September 30, 1993 were deducted from earnings in order to compute earnings per common share. Note E - Contingencies Orion and its subsidiaries are routinely engaged in litigation incidental to their businesses. Loss reserves are provided based on the probable outcomes of such litigation. In the judgment of the Company's management, there are no significant legal proceedings pending against the Company or its subsidiaries which, net of loss reserves established therefor, are likely to result in judgments for amounts that are material to the financial condition, liquidity or results of operations of Orion and its consolidated subsidiaries, taken as a whole. (See also Notes G and H to the 1993 consolidated financial statements). Page 12 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors Orion Capital Corporation New York, New York We have reviewed the accompanying consolidated balance sheet of Orion Capital Corporation and subsidiaries (the "Company") as of September 30, 1994, and the related consolidated statements of earnings for the three-month and nine-month periods ended September 30, 1994 and 1993 and the statements of stockholders' equity and cash flows for the nine-month periods ended September 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. As discussed in Note A to the consolidated financial statements effective January 1, 1993 the Company changed the method of accounting for income taxes and post-retirement benefits. Also effective on December 31, 1993, the Company changed its method of accounting for investments. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Orion Capital Corporation and subsidiaries as of December 31, 1993, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended; and in our report dated February 22, 1994, we expressed an unqualified opinion on those consolidated financial statements. The consolidated statements of earnings and cash flows for the year ended December 31, 1993 are not presented herein. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1993 and related consolidated statement of stockholders' equity for the year then ended is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. DELOITTE & TOUCHE LLP Hartford, Connecticut October 26, 1994 Page 13 ORION CAPITAL CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations Nine Months Ended September 30, 1994 and 1993 RESULTS OF OPERATIONS Orion Capital Corporation ("Orion") and its wholly-owned subsidiaries (collectively the "Company") operate principally in the property and casualty insurance business which is reported as three segments - Regional Operations, Reinsurance/Special Programs and Guaranty National Companies. Regional Operations markets workers compensation insurance through EBI Companies and Nations' Care, Inc. Reinsurance/Special Programs includes (i) DPIC Companies ("DPIC"), which markets professional liability insurance, (ii) Connecticut Specialty Insurance Group ("Connecticut Specialty"), which writes specialty insurance programs, (iii) SecurityRe Companies ("SecurityRe"), a reinsurer and (iv) a 20.0% interest in Intercargo Corporation ("Intercargo") which underwrites insurance coverages for international trade. The third segment, Guaranty National Companies, specializes in writing nonstandard commercial and personal automobile insurance. The miscellaneous income and expenses (primarily interest, general and administrative expenses and other consolidating elimination entries) of the parent company are reported as a fourth segment. The Company's insurance operations have experienced favorable trends for the past several years, as indicated by its combined ratio which has improved from 109.4% in 1991, to 105.4% in 1992, 103.2% in 1993 and 101.5% for the first nine months of 1994. Operating earnings (defined as earnings after taxes, excluding the effects of the adoption of new accounting principles and after-tax realized investment gains) were $14,539,000 and $12,151,000, or $1.01 and $.83 per share, in the third quarters of 1994 and 1993, respectively, based on weighted average shares outstanding of 14,378,000 in 1994 and 14,685,000 in 1993. For the nine months ended September 30, 1994 and 1993, operating earnings were $38,660,000 and $36,555,000, or $2.68 and $2.48 per share, based on 14,430,000 and 14,603,000 weighted average shares, respectively. Preferred stock dividends of $409,000 in the nine months ended September 30, 1993 were deducted from earnings in order to compute earnings per common share. Management is of the opinion that, particularly considering the improvements in underwriting results as reflected in the Company's combined ratio, operating earnings for the full year 1994 will exceed the record level attained in 1993. Page 14 Earnings (loss) by segment before federal income taxes and the cumulative effect of the adoption of new accounting principles are summarized as follows for the quarterly and nine-month periods ended September 30, 1994 and 1993. Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 1994 1993 1994 1993 ---- ---- ---- ---- (000s omitted) Regional Operations ................. $10,409 $ 6,387 $31,739 $20,166 Reinsurance/Special Programs ........ 10,622 11,714 24,361 36,684 Guaranty National Corporation ....... 2,581 2,805 8,647 8,452 ------- ------- ------- ------- Total ............................. 23,612 20,906 64,747 65,302 Other ............................... (3,268) (3,894) (12,144) (12,091) ------- ------- ------- ------- $20,344 $17,012 $52,603 $53,211 ======= ======= ======= ======= The following table sets forth certain ratios of insurance operating expenses to premiums earned for the Company. Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 1994 1993 1994 1993 ---- ---- ---- ---- Loss and loss adjustment expenses ... 71.5% 73.9% 72.6% 74.6% Policy acquisition costs and other insurance expenses ................ 27.6 26.7 27.0 26.3 ----- ----- ----- ----- Total before policyholders' dividends ..................... 99.1 100.6 99.6 100.9 Policyholders' dividends ............ 1.7 2.1 1.9 2.2 ----- ----- ----- ----- Total after policyholders' dividends ..................... 100.8% 102.7% 101.5% 103.1% ===== ===== ===== ===== REVENUES Premiums written and premiums earned - - ------------------------------------ Net premiums written increased 17.8% ($27,628,000) to $182,693,000 in the third quarter of 1994 versus $155,065,000 in the third quarter of 1993, and 12.3% ($58,800,000) to $535,030,000 in the first nine months of 1994 from $476,230,000 in the first three quarters of 1993. The results by segment are as follows: - Regional Operations' premiums written increased 17.3% ($10,274,000) to $69,675,000 in the third quarter of 1994 from $59,401,000 in the third quarter of 1993 and 6.6% ($13,288,000) to $213,395,000 in the first nine months of 1994 as compared to $200,107,000 in 1993. Premiums written increased in geographic areas where the Company has had favorable loss experience stemming from its service-oriented approach. The increase was partially offset by the impact of legislative reforms in certain states which have led to lower premium rates and a concomitant reduction in losses and expenses, resulting in higher profit margins. The increase Page 15 in this segment was also offset by a reduction in net premiums at Nations' Care, Inc., reflecting its transition toward high-deductible and fee-based workers compensation products. - Reinsurance/Special Programs' premiums written increased 18.1% ($17,354,000) to $113,018,000 in the third quarter of 1994 from $95,664,000 in the 1993 third quarter, and 16.5% ($45,512,000) to $321,635,000 in the first three quarters of 1994 from $276,123,000 in 1993. Premiums written by DPIC for professional liability insurance, the largest special program, increased 35.2% ($33,867,000) to $130,137,000 for the first nine months of 1994 from $96,270,000 for the same period of 1993. The increase is primarily attributable to the discontinuation on January 1, 1994 of a reinsurance contract in order to retain more of DPIC's profitable business, including reinsurance applicable to business in force on that date. Premium volume for Connecticut Specialty decreased 2.0% ($2,852,000) to $136,907,000 in the first nine months of 1994 from $139,759,000 in the 1993 period. The decrease is primarily attributable to the cancellation of a personal injury protection program in Florida where the Company has had unfavorable loss experience and lower premiums from a physical damage program in Texas, offset in part by increased premiums written in the truck liability program and the introduction of an additional marine program. The percentage of treaty and facultative reinsurance premiums assumed to total net premiums written for Reinsurance/Special Programs amounted to 17.0% and 14.5% in the first three quarters of 1994 and 1993, respectively. The Company's reinsurance operations are benefitting from A.M. Best Company's upgrade last year of the rating applicable to the Company's principal insurance subsidiaries to "A (Excellent)". A.M. Best Company ratings are not primarily designed for investors and do not constitute recommendations to buy, sell or hold any security. Premiums earned increased 19.2% ($29,062,000) to $180,703,000 in the third quarter of 1994 compared to $151,641,000 in the third quarter of 1993, and 11.3% ($51,924,000) to $510,241,000 in the first nine months of 1994 from $458,317,000 in 1993. Net investment income - - --------------------- Pre-tax net investment income increased 1.5% ($332,000) to $22,550,000 for the third quarter of 1994 versus $22,218,000 for the third quarter of 1993, and decreased 1.8% ($1,146,000) to $63,919,000 for the first nine months of 1994 as compared to $65,065,000 for 1993. The pre-tax yields on the average investment portfolio were 6.9% and 7.1% for the third quarters of 1994 and 1993, respectively, and 6.6% and 7.1% for the nine-month periods ended September 30, 1994 and 1993, respectively. The year-to-year changes in net investment income reflect lower earnings from certain limited partnership investments which are accounted for on the equity basis, offset by an increase in investment income generated by the employment of positive operating cash flow in 1994. Page 16 The Company's investment philosophy is to achieve a superior rate of return after taxes and maintain a high degree of safety and liquidity. Fixed maturity investments which the Company has both the positive intent and the ability to hold to maturity are recorded at amortized cost. Investments which may be sold in response to, among other things, changes in interest rates, prepayment risk, income tax strategies or liquidity needs are classified as "available-for-sale" and are carried at market value, with unrealized gains and losses reported in a separate component of stockholders' equity. The carrying value of fixed maturity and short-term investments amounted to $1,010,388,000 and $1,029,211,000 at September 30, 1994 and December 31, 1993, respectively, or approximately 75.4% and 77.8% of the investment portfolio. The Company invests primarily in investment grade securities and strives to enhance the average return of its portfolio through limited investment in a diversified group of non-investment grade fixed maturity securities or securities that are not rated. The risk of loss due to default is generally considered greater for non-investment grade securities than for investment grade securities because the former, among other things, are often subordinated to other indebtedness of the issuer and are often issued by highly leveraged companies. At September 30, 1994 and December 31, 1993, the Company's investments in non-investment grade and unrated fixed maturity securities were carried at $129,183,000 and $97,653,000 with market values of $128,576,000 and $97,306,000, respectively. These investments represented a total of 9.6% and 7.3% of cash and investments and 6.0% and 4.6% of total assets at September 30, 1994 and December 31, 1993, respectively. The increase in non-investment grade securities during 1994 reflects both purchases of investments (bonds and preferred stocks totalling approximately $35,000,000 representing securities of 31 issuers) and rating agency downgrades of securities issued by Long Island Lighting Company and Cleveland Electric Illuminating Company (which had a combined carrying value of approximately $14,000,000 at September 30, 1994.) Realized investment gains - - ------------------------- Net realized investment gains were $1,197,000 and $1,908,000 in the third quarter and first nine months of 1994, respectively, as compared to gains of $1,131,000 and $7,698,000 in the respective periods of 1993. Realized investment gains in the third quarters of 1994 and 1993 are net of $44,000 and $1,912,000, respectively, of provisions for losses on securities deemed to be other than temporarily impaired. Such provisions were $1,132,000 and $6,282,000 for the nine-month periods ended September 30, 1994 and 1993, respectively. Realized gains (losses) vary from period to period, depending on market conditions relative to the Company's investment holdings, the timing of investment sales generating gains and losses, the occurrence of events which give rise to other than temporary impairment of investments, and other factors. Page 17 EXPENSES AND OTHER Operating ratios - - ---------------- The ratio of loss and loss adjustment expenses to premiums earned (the "loss ratio") was 71.5% and 72.6% in the third quarter and first nine months of 1994, respectively, compared to 73.9% and 74.6% in the corresponding periods of 1993. The decrease in the 1994 loss ratios was attributable to improved ratios for the Regional Operations segment offset in part by higher loss ratios for the Reinsurance/Special Programs segment. Adverse development of prior years' losses amounted to $13,557,000 in the first nine months of 1994 compared with $15,395,000 in the first three quarters of 1993. Management believes that the Company's reserves for losses and loss adjustment expenses make reasonable and sufficient provision for the ultimate net cost of all losses and claims incurred. The loss ratio for the Regional Operations segment was 67.7% in the 1994 third quarter and 72.1% in the 1993 third quarter. In the first nine months of 1994 the loss ratio was 67.5% as compared to 74.4% in 1993. These decreases reflect continued improvement in workers compensation insurance, and decreasing levels of losses applicable to discontinued business that is being run off, principally from closed offices and from the Company having ceased writing commercial package business. The third quarter 1994 and 1993 loss ratios for Reinsurance/Special Programs amounted to 74.0% and 75.1%, respectively. The loss ratios for the nine-month periods ended September 30, 1994 and 1993 were 76.1% and 74.7%, respectively. The increase in the nine-month loss ratio for this segment was primarily the result of increased losses incurred in Connecticut Specialty's personal injury protection program which was cancelled in the third quarter of 1994. The ratio of deferred policy acquisition costs and other insurance expenses to premiums earned (the "expense ratio") was 27.0% in the first nine months of 1994 as compared to 26.3% in 1993. The 1994 and 1993 expense ratios reflect low levels of assessments from assigned risk pools. The ratio of policyholders' dividends to premiums earned (the "dividend ratio") was 1.9% and 2.2% in 1994 and 1993, respectively. The combined ratio was 101.5% in the first nine months of 1994 and 103.1% for the same period of 1993. Interest expense - - ---------------- Interest expense increased to $3,439,000 in the third quarter of 1994 versus $3,354,000 in 1993, and to $10,204,000 in the first nine months of 1994 from $9,708,000 in 1993. The increases of 2.5% and 5.1%, respectively, reflect higher average debt outstanding in 1994 as compared to 1993, including debt incurred to redeem the Company's Adjustable Rate Preferred Stock. Page 18 Equity in earnings of affiliates - - -------------------------------- Equity in earnings of affiliates includes the Company's portion of earnings from Guaranty National and Intercargo. Earnings of $68,000 were recorded from the Intercargo investment in the first three quarters of 1994. The Company's portion of Guaranty National's net earnings before the cumulative effect of adopting changes in accounting principles was $2,581,000 and $8,647,000 for the third quarter and first nine-months of 1994, respectively, and $2,805,000 and $8,452,000 for the corresponding periods of 1993, based on Guaranty National's earnings of $5,167,000 and $5,689,000 for the third quarters of 1994 and 1993, respectively, and $17,312,000 and $17,142,000 for the nine-month periods ended September 30, 1994 and 1993, respectively. Guaranty National's gross premiums written increased to $273,142,000 for the first nine months of 1994 from $235,496,000 for the 1993 period. Guaranty National's overall combined ratio was 97.2% and 96.6% for the first three quarters of 1994 and 1993, respectively. Federal Income taxes - - -------------------- Federal income taxes on pre-tax operating results and the related effective tax rates amounted to $5,015,000 (24.7%) and $4,144,000 (24.4%) in the third quarters of 1994 and 1993, respectively. The corresponding amounts for the first nine months of 1994 and 1993 were $12,467,000 (23.7%) and $12,108,000 (22.8%), respectively. The Company's effective tax rate is less than the statutory tax rate of 35% primarily because of income derived from tax-advantaged securities. Cumulative effect of adoption of new accounting principles - - ---------------------------------------------------------- Effective January 1, 1993 the Company recorded the cumulative effect of adopting Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes" and SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other than Pensions." The cumulative effect of adopting SFAS No. 109 was a benefit of $16,881,000, which was principally attributable to the Company's deferred tax benefits that had not been recognized due to limitations under prior accounting standards. SFAS No. 106 requires the accrual of the estimated cost of retiree benefit payments during the years the employees provide services. Upon adoption of SFAS No. 106 the Company's accumulated obligation for providing medical benefits to retirees was $5,056,000, after a related tax benefit of $2,604,000. Included in the cumulative effects of adopting these accounting principles is the Company's portion of Guaranty National's benefit from changes in accounting principles in 1993 of $360,000, net of $185,000 of federal income taxes provided by the Company. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operating activities decreased by $6,279,000 for the first nine months of 1994 from $112,376,000 in 1993 to $106,097,000 in 1994. The decrease in operating cash provided for the first three quarters of 1994 is primarily due to an increase in paid losses, policy acquisition costs and federal income tax payments, offset in part by an increase in premiums Page 19 collected. In 1994 operating cash flow included a $10,223,000 receipt from DPIC's discontinuation of a reinsurance contract. Cash flow for 1993 included a receipt of $17,096,000 under a retrospectively rated program written by DPIC, and the benefit of a prior period income tax overpayment of approximately $4,000,000. Excluding these one-time items, year-to-year operating cash flows increased approximately $4,600,000. Cash used in investment activities decreased to $85,270,000 for the first nine months of 1994 from $122,445,000 in 1993. The use of investment cash in both 1994 and 1993 is attributable to purchases of investments which exceeded maturities and sales of investments, reflecting positive operating cash flows as well as cash provided by or used in the financing activities described below. Cash used in financing activities was $21,932,000 for the first nine months of 1994 and cash provided by financing activities during the same period of 1993 was $3,732,000. Cash was used in 1994 for dividend payments, scheduled debt repayments and the Company's stock repurchase program. The cash provided in 1993 resulted from an increase in bank borrowings, offset by the redemption of the Company's Adjustable Rate Preferred Stock. Orion's uses of cash consist of debt service, dividends to stockholders and overhead expenses. These cash uses are funded from existing available cash, financing transactions and receipt of dividends, reimbursement of overhead expenses and amounts in lieu of federal income taxes from Orion's insurance subsidiaries. Payments of dividends by Orion's insurance subsidiaries must comply with insurance regulatory limitations concerning stockholder dividends and capital adequacy. State insurance regulators have broad discretionary authority with respect to limitations on the payment of dividends by insurance companies. Limitations under current regulations are well in excess of Orion's cash requirements. Orion's insurance subsidiaries maintain liquidity in their investment portfolios substantially in excess of that required to pay claims and expenses. The insurance subsidiaries held cash and short-term investments of $107,219,000 and $92,421,000 at September 30, 1994 and December 31, 1993, respectively. Orion's insurance subsidiaries had consolidated policyholders' surplus of $453,037,000 at September 30, 1994 and $460,986,000 at December 31, 1993, and statutory operating leverage ratios of trailing twelve months net premiums written to policyholders' surplus of 1.5:1 at September 30, 1994 and 1.4:1 at December 31, 1993. In August 1994, Orion's shelf registration statement relating to the offering of up to $100 million of its debt and/or equity securities was declared effective by the Securities and Exchange Commission ("SEC"). The shelf registration provides for securities to be issued from time to time, with specified terms of an issue of securities set forth in a prospectus supplement at the time of issuance. The proceeds from the sale of securities may be used for general corporate purposes, including working capital, investment in subsidiaries, the repayment of existing bank debt, the repurchase of shares of common stock, or for such other purpose as may be specified in a prospectus supplement. Page 20 Orion entered into a bank loan arrangement (the "Loan Agreement") in March 1993 that provided for initial borrowings of up to $60,000,000, consisting of a $50,000,000 term loan (reduced by $10,500,000 in scheduled commitment reductions through September 30, 1994) and a $10,000,000 line of credit. These borrowings are unsecured and bear interest at or below prime. Borrowings under the Loan Agreement amounted to $44,500,000 at September 30, 1994. The proceeds were used to repay the Company's outstanding bank debt and to redeem Orion's Adjustable Rate Preferred Stock in April 1993. At September 30, 1994, the Company has available $5,000,000 in unused commitments under the line of credit. The terms of the Loan Agreement and Orion's Indenture for its 9 1/8% Senior Notes ($110,000,000 principal amount) limit the amount of additional borrowings, prepayments on existing indebtedness, liens and guaranties by the Company. Management does not believe that any of these limitations unduly restricts the Company's operations or limits Orion's ability to pay dividends on its stock. At September 30, 1994, the Company was in compliance with the terms of its debt agreements. Management believes that the Company continues to have substantial sources of capital and liquidity from the capital markets and bank borrowings. The Company repurchased 250,500 shares of its common stock at an aggregate cost of $8,103,310 in the first nine months of 1994. The Company's remaining stock purchase authorization from its Board of Directors amounted to $2,777,000 at September 30, 1994. On October 14, 1994, the Board of Directors authorized an additional $5,000,000 for the stock repurchase program. Since September 30, 1994, the Company repurchased an additional 156,150 shares for $4,539,000. The remaining authorization as of October 26, 1994 is $3,238,000. Page 21 PART II. OTHER INFORMATION Items 1 - 5. - - ------------ None. Item 6. Exhibits and Reports on Form 8-K - - ------------------------------------------ (a) Exhibits Exhibit 11: Computation of Earnings Per Common Share Exhibit 15: Letter in Lieu of Consent of Deloitte & Touche re Unaudited Interim Financial Information Exhibit 27: Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K have been filed during the quarter. Page 22 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. ORION CAPITAL CORPORATION Date: November 1, 1994 By: /s/ Alan R. Gruber --------------------------------- Chairman of the Board and Chief Executive Officer Date: November 1, 1994 By: /s/ Daniel L. Barry ---------------------------------- Vice President, Controller and Principal Accounting Officer Page 23 EXHIBIT INDEX Page No. Exhibit 11: Computation of Earnings 25 Per Common Share Exhibit 15: Letter in Lieu of Consent of 26 Deloitte & Touche re Unaudited Interim Financial Information Exhibit 27: Financial Data Schedule 27 Page 24 EX-11 2
EXHIBIT 11 ORION CAPITAL CORPORATION COMPUTATION OF EARNINGS PER COMMON SHARE (UNAUDITED) (000s omitted - except for per common share data) Three months ended Nine months ended September 30, September 30, ------------------ ----------------- 1994 1993 1994 1993 ---- ---- ---- ---- Computation of weighted average number of common and equivalent shares outstanding: PRIMARY - Weighted average number of shares outstanding ............................. 14,253 14,533 14,307 14,456 Dilutive effect of stock options .......... 125 152 123 147 ------- ------- ------- ------- Weighted average number of common and equivalent shares ....................... 14,378 14,685 14,430 14,603 ======= ======= ======= ======= Net earnings before preferred dividend requirements .............................. $15,329 $12,868 $40,136 $52,928 Preferred dividends ......................... - - - 409 ------- ------- ------- ------- Net earnings attributable to common stockholders .............................. $15,329 $12,868 $40,136 $52,519 ======= ======= ======= ======= Net earnings per common share ............... $ 1.07 $ .88 $ 2.78 $ 3.60 ======= ======= ======= ======= FULLY DILUTED Weighted average number of shares outstanding ............................. 14,253 14,533 14,307 14,456 Dilutive effect of stock options .......... 125 156 123 156 Conversion of $2.125 preferred stock ...... - - - 76 ------- ------- ------- ------- Weighted average number of common and equivalent shares ....................... 14,378 14,689 14,430 14,688 ======= ======= ======= ======= Net earnings before preferred dividend requirements .............................. $15,329 $12,868 $40,136 $52,928 Adjustable rate preferred stock dividends ... - - - 407 ------- ------- ------- ------- Net earnings attributable to common stockholders .............................. $15,329 $12,868 $40,136 $52,521 ======= ======= ======= ======= Net earnings per common share ............... $ 1.07 $ .88 $ 2.78 $ 3.58 ======= ======= ======= ======= Page 25
EX-15 3 EXHIBIT 15 October 26, 1994 Orion Capital Corporation 600 Fifth Avenue New York, New York We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Orion Capital Corporation and subsidiaries for the periods ended September 30, 1994 and 1993, as indicated in our report dated October 26, 1994; because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, is incorporated by reference in Registration Statements No. 2-65348 on Form S-8 and S-16 relating to the Orion Capital Corporation 1976 and 1979 Stock Option Plans, No. 2-80636 on Form S-8 relating to the Orion Capital Corporation 1982 Long-Term Performance Incentive Plan, No. 2-63344 on Form S-8 relating to the Orion Capital Corporation Employees' Stock Savings and Retirement Plan and No. 33-53759 on Form S-3. We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCHE LLP Hartford, Connecticut Page 26 EX-27 4
7 THIS FINANCIAL SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ORION CAPITAL CORPORATION'S FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR 9-MOS DEC-31-1993 SEP-30-1994 JAN-1-1993 JAN-1-1994 DEC-31-1993 SEP-30-1994 548,336 526,070 384,402 372,764 402,149 370,218 242,643 277,004 1,690 1,693 0 0 1,322,536 1,339,962 6,433 5,328 338,266 315,202 57,522 69,247 2,117,454 2,138,931 1,140,403 1,175,396 259,359 265,955 0 0 12,523 12,651 160,372 154,380 163,505 163,314 0 0 0 0 230,690 209,316 2,117,454 2,138,931 617,404 510,241 91,803 63,919 9,478 1,908 1,470 1,058 459,132 370,510 148,440 123,147 29,894 24,366 72,505 52,603 15,517 12,467 56,988 40,136 0 0 0 0 11,825 0 68,813 40,136 4.69 2.78 4.67 2.78 746,298 830,805 434,840 356,953 24,292 13,557 125,042 84,320 249,583 239,344 830,805 877,651 24,292 13,557
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