-----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, K2g4CW9aFcn6oiw1m9znlStath5/P5a6EJJOQAfybzCT6jgHriSV9YKh43Czb8pw JwjuwsItnpaXCCal19CGCg== 0000086312-98-000001.txt : 19980128 0000086312-98-000001.hdr.sgml : 19980128 ACCESSION NUMBER: 0000086312-98-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980126 ITEM INFORMATION: FILED AS OF DATE: 19980127 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST PAUL COMPANIES INC /MN/ CENTRAL INDEX KEY: 0000086312 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 410518860 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10898 FILM NUMBER: 98513831 BUSINESS ADDRESS: STREET 1: 385 WASHINGTON ST CITY: SAINT PAUL STATE: MN ZIP: 55102 BUSINESS PHONE: 6122217911 FORMER COMPANY: FORMER CONFORMED NAME: SAINT PAUL COMPANIES INC DATE OF NAME CHANGE: 19900730 8-K 1 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): January 26, 1998 THE ST. PAUL COMPANIES, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Minnesota 0-3021 41-0518860 --------------- ----------------------------------------- (State of (Commission File (I.R.S. Employer Incorporation) Number) Identification No.) 385 Washington St., St. Paul, MN 55102 - -------------------------------- -------- (Address of principal (Zip Code) executive offices) (612) 310-7911 ---------------------------------- (Registrant's telephone number, including area code) N/A - ------------------------------------------------------------ (Former name or former address, if changed since last report) Item 5. Other Events. ------------ Filed herewith are statements derived from a press release dated January 26, 1998, of the registrant relating to its results for the year ended December 31, 1997, which will be superseded by the registrant's Annual Report on Form 10-K for such period. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------- An Exhibit Index is set forth as the next page in this report. 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. THE ST. PAUL COMPANIES, INC. By /s/ Bruce A. Backberg --------------------- Bruce A. Backberg Senior Vice President, Chief Legal Counsel and Corporate Secretary Date: January 27, 1998 EXHIBIT INDEX ------------- How Exhibit Filed - ------- ----- (99) Statements derived from a press release of The St. Paul Companies, Inc. dated January 26, 1998 relating to its results for the year ended December 31, 1997. . . . . . . . . . . . . . . . .. . . (1) (1) Filed electronically. EX-99 2 Exhibit 99 Jan. 26, 1998 - THE ST. PAUL COMPANIES REPORTS RECORD EARNINGS FOR 1997 Operating Earnings Increase 28% ST. PAUL, Minn. - The St. Paul Companies (NYSE:SPC) today reported record operating earnings from continuing operations of $531.1 million, or $5.77 per share (diluted), for 1997, compared with $414.8 million, or $4.56 per share (diluted), for 1996. "Our underwriting operations performed well in a fiercely competitive market, aided by a $100 million decline in catastrophe losses from last year's near-record level," said Douglas W. Leatherdale, chairman and chief executive officer. "Our specialized commercial segment - our largest underwriting unit, consisting of Major Markets and Custom Markets, delivered especially good results in 1997, although premiums were flat with 1996, reflecting tough competition in that marketplace. "Our reinsurance operation posted another year of solid results, also in a very competitive market, In 1997, St. Paul Re opened branch offices in Chicago and Sydney, Australia. "One of our major success stories for 1997 was the turnaround in our Personal Insurance operation, with particularly good results in the fourth quarter. "Our investment portfolio generated a record $886 million in pretax investment income and over $400 million in pretax realized gains." Net income for 1997 was a record $705.5 million, or $7.66 per share, compared with net income of $450.1 million, or $4.94 per share, for 1996. 1997 net income included after-tax realized investment gains of $242.1 million, or $2.62 per share, compared with $143.1 million, or $1.55 per share, in 1996. The St. Paul Companies' 77% share of The John Nuveen Company's 1997 pretax earnings was $92.6 million. "Our shareholders' equity grew to $4.6 billion - a new high. Book value at year-end stood at $55.06 per share, up from $47.93 a year ago," Leatherdale said. "Company assets were $21.5 billion at year-end, up from $20.7 billion a year ago. "Of particular note at this time is our announcement one week ago that the boards of The St. Paul Companies and USF&G Corporation approved a merger agreement," Leatherdale said. The merger is expected to form the nation's eighth- largest property-casualty insurer (based on combined 1996 net written premium volume for the two companies). The combined company will have a very large market presence in key areas of the specialty insurance business, as well as leading positions in surety, reinsurance and certain niches of commercial insurance. The company will operate under the St. Paul name, and headquarters will be in St. Paul, Minn. The transaction is subject to various regulatory approvals and votes by The St. Paul Companies, Inc. and USF&G Corporation shareholders, and is expected to close in mid- 1998. The transaction will provide USF&G shareholders with St. Paul common stock. The merger will be a tax-free exchange accounted for on a pooling-of-interests basis. The total value of the transaction is approximately $3.5 billion, which includes $2.8 billion of equity, plus the assumption of approximately $400 million in debt and $300 million of capital securities. The St. Paul Companies, Inc. expects to incur restructuring charges of between $300 million and $500 million in 1998 in connection with the merger. Fourth-quarter results - ---------------------- For the fourth quarter of 1997, operating earnings from continuing operations were $147.5 million, or $1.59 per share, compared with operating earnings of $107.2 million, or $1.18 per share, for the fourth quarter of 1996. Net income for the fourth quarter of 1997 was $187.0 million, or $2.02 per share, compared with net income of $62.3 million, or $0.69 per share, for the fourth quarter of 1996. Net income for the fourth quarter of 1997 included after-tax realized investment gains of $39.5 million, or $0.43 per share, compared with $56.2 million, or $0.61 per share, in 1996. THE ST. PAUL COMPANIES CONSOLIDATED 1997 RESULTS 1997 1996 ---- ---- Revenues $6,219,273,000 $5,734,156,000 Pretax Operating Earnings Underwriting $615,445,000 $477,535,000 Investment Banking- Asset Management 92,617,000 91,697,000 Parent and Other (97,439,000) (88,621,000) ------------- ------------ Total pretax operating earnings $610,623,000 $480,611,000 Income Tax Expense $79,538,000 $65,856,000 ------------- ------------ Operating Earnings $531,085,000 $414,755,000 Per Common Share (Diluted) $5.77 $4.56 Per Common Share (Basic) $6.20 $4.85 Realized Investment Gains, Net of Taxes $242,138,000 $143,103,000 Per Common Share (Diluted) $2.62 $1.55 Per Common Share (Basic) $2.90 $1.72 Discontinued Operations, Net of Taxes $(67,750,000) $(107,759,000) Per Common Share (Diluted) $(0.73) $(1.17) Per Common Share (Basic) $(0.82) $(1.29) ------------- ------------- Net Income $705,473,000 $450,099,000 Per Common Share (Diluted) $7.66 $4.94 Per Common Share (Basic) $8.28 $5.28 ============= ============= Common Shareholders' Equity $4,609,985,000 $3,987,757,000 Per Common Share $55.06 $47.93 THE ST. PAUL COMPANIES CONSOLIDATED FOURTH-QUARTER RESULTS 1997 1996 ---- ---- Revenues $1,544,311,000 $1,563,633,000 Pretax Operating Earnings Underwriting $165,754,000 $148,593,000 Investment Banking- Asset Management 25,334,000 25,179,000 Parent and Other (25,804,000) (26,566,000) ------------- ------------ Total pretax operating earnings $165,284,000 $147,206,000 Income Tax Expense $17,775,000 $40,037,000 ------------- ------------- Operating Earnings from Continuing Operations $147,509,000 $107,169,000 Per Common Share (Diluted) $1.59 $1.18 Per Common Share (Basic) $1.71 $1.26 Realized Investment Gains, Net of Taxes $39,487,000 $56,160,000 Per Common Share (Diluted) $0.43 $0.61 Per Common Share (Basic) $0.48 $0.67 Discontinued Operations, Net of Taxes - ($101,038,000) Per Common Share (Diluted) - ($1.10) Per Common Share (Basic) - ($1.21) ------------- ------------- Net Income $186,996,000 $62,291,000 Per Common Share (Diluted) $2.02 $0.69 Per Common Share (Basic) $2.19 $0.72 ============= ============= THE ST. PAUL COMPANIES TWELVE-MONTHS UNDERWRITING OPERATIONS HIGHLIGHTS Twelve months ended Dec. 31 1997 1996 - --------------------------- ---- ---- Written premiums $4,479,903,000 $4,396,122,000 Net investment income $880,802,000 $794,901,000 Combined ratio 105.1 105.5 THE ST. PAUL COMPANIES FOURTH-QUARTER UNDERWRITING OPERATIONS HIGHLIGHTS Three months ended Dec. 31 1997 1996 - -------------------------- ---- ---- Written premiums $1,081,561,000 $1,136,615,000 Net investment income $225,612,000 $210,265,000 Combined ratio 105.2 105.2 The St. Paul Companies, headquartered in St. Paul, Minn., is a group of companies providing property-liability insurance products and services throughout the world. -----END PRIVACY-ENHANCED MESSAGE-----