-----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, QBOl4gienspKlfsfh5i/ljeS2OTkRULJ4rA4Eh0a7p5HWaEbvSZGjfAUF8XCZxds 5ASQ0Hy4Ptkz2N1kKJIbMw== 0000086312-99-000003.txt : 19990204 0000086312-99-000003.hdr.sgml : 19990204 ACCESSION NUMBER: 0000086312-99-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990129 ITEM INFORMATION: FILED AS OF DATE: 19990203 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: 99519966 BUSINESS ADDRESS: STREET 1: 385 WASHINGTON ST CITY: SAINT PAUL STATE: MN ZIP: 55102 BUSINESS PHONE: 6123107911 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 29, 1999 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) (651) 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. ------------ The following information was derived from press releases of The St. Paul Companies, Inc. dated February 2, 1999 and January 29, 1999: February 2, 1999 - ---------------- The St. Paul's board of directors increased the regular quarterly dividend from $0.25 per share to $0.26 per share payable April 16, 1999 to shareholders of record at the close of business March 31, 1999. The new annual dividend rate of $1.04 per share represents a 4 percent increase over the previous rate of $1.00 per share. The St. Paul has paid cash dividends without interruption for 127 years and has increased the dividend in each of the last 13 years. January 29, 1999 - ---------------- The St. Paul Companies reported 1998 fourth-quarter core* operating earnings of $133.5 million, or $0.53 per share (diluted). These results compare to core operating earnings of $206.9 million, or $0.82 per share (diluted) for the same period in 1997. The decline in the 1998 quarter is attributable to continuing difficult conditions in the property-liability insurance marketplace. Fourth quarter net income was $104.0 million, or $0.41 per share, compared with net income of $255.8 million, or $1.01 per share, for the same period of 1997. Fourth- quarter 1998 net income included $22.3 million, or $0.09 per share, in after-tax restructuring charges for severance and lease buy-out costs related to a fourth-quarter reorganization of the company's commercial insurance operations. 1998 fourth-quarter net income also included after-tax realized investment losses of $7.2 million, or $0.03 per share, compared with fourth-quarter after-tax realized gains of $48.9 million, or $0.19 per share. "Our performance in the final quarter of 1998, although worse than last year's comparable results, reflects strong improvement over the second and third quarters of 1998 in a persistently difficult market," said Douglas W. Leatherdale, chairman and chief executive officer of The St. Paul. "The improvement is due in part to our successful integration of USF&G operations." *Core operating earnings exclude the 1998 second-quarter merger-related charges and fourth-quarter restructuring charges. 1998 results - ------------ Core operating earnings for 1998 were $397.2 million, or $1.61 per share (diluted), compared with 1997 core operating earnings of $742.9 million, or $2.95 per share (diluted). 1998 results were affected by $418.7 million in pretax catastrophe losses, and difficult market conditions. Net income for 1998 was $65.2 million or $0.22 per share, compared with 1997 net income of $929.3 million, or $3.69 per share. 1998 net income includes a second-quarter after- tax merger-related charge of $457.5 million, or $1.92 per share, as well as the fourth-quarter restructuring charges. 1998 net income also includes after-tax realized gains of $147.8 million, or $0.62 per share, compared with gains of $254.2 million, or $1.01 per share, for 1997. Net income in 1997 included an after-tax loss of $67.8 million, or $0.27 per share, from discontinued operations. All results reflect the combined St. Paul and USF&G operations, and figures for prior periods have been restated. "Even though written premiums were down 3 percent from 1997, and we incurred commercial underwriting losses in a market characterized by a continued decline in prices, several of our businesses turned in excellent results. These include our Surety, Technology, and Financial and Professional Services businesses within our specialty segment; our Nonstandard Auto operation; and our reinsurance segment," Leatherdale said. "In addition, our operations outside the property- liability insurance industry continue to produce strong results. F&G Life's pretax earnings were up 19 percent over last year, and our portion of The John Nuveen Company's earnings was up 12 percent." Consolidated financial position of The St. Paul Companies - --------------------------------------------------------- Consolidated assets of The St. Paul Companies as of Dec. 31, 1998 were $38.3 billion, compared with $37.4 billion on Dec. 31, 1997. Common shareholders' equity was $6.6 billion at year-end, or $28.22, about even with Dec. 31, 1997. During the fourth quarter of 1998, The St. Paul repurchased 3.8 million of its common shares for a total cost of $135 million. The St. Paul Companies is a group of companies providing insurance and reinsurance products and services worldwide. Certain statements made by the company in this release may constitute forward-looking statements. Actual results may differ materially from those projected in the forward- looking statements. These forward looking statements involve risks and uncertainties including, but not limited to, the following: the frequency and severity of catastrophic events; a change in the demand for, pricing of, or supply of reinsurance or insurance; increased competitive pressure; losses due to foreign currency exchange rate fluctuations; changes in the rate of inflation; effects of the merger with USF&G Corporation; and general economic conditions. THE ST. PAUL COMPANIES CONSOLIDATED YEAR-END RESULTS Year ended Dec. 31 1998 1997 - ------------------ ------ ------ Core Revenues $9,137,409,000 $9,623,179,000 Pretax Core Operating Earnings Property-Liability Insurance $392,443,000 $978,253,000 Life Insurance $75,908,000 $63,886,000 Asset Management $103,960,000 $92,617,000 Parent and Other ($196,072,000) ($222,096,000) ------------- ------------- Total Pretax Core Operating Earnings $376,239,000 $912,660,000 Income Tax Expense (Benefit) ($20,962,000) $169,801,000 ------------- ------------- Core Operating Earnings from Continuing Operations $397,201,000 $742,859,000 Per Common Share (Basic) $1.63 $3.16 Per Common Share (Diluted) $1.61 $2.95 Restructuring Charges, Net of Taxes (22,295,000) - Per Common Share (Basic) ($0.09) - Per Common Share (Diluted) ($0.09) - Merger-Related Charges, Net of Taxes ($457,517,000) - Per Common Share (Basic) ($1.95) - Per Common Share (Diluted) ($1.92) - Core Realized Investment Gains, Net of Taxes* $147,768,000 $254,183,000 Per Common Share (Basic) $0.63 $1.11 Per Common Share (Diluted) $0.62 $1.01 Discontinued Operations, Net of Taxes - ($67,750,000) Per Common Share (Basic) - ($0.30) Per Common Share (Diluted) - ($0.27) -------------- -------------- Net Income $65,157,000 $929,292,000 Per Common Share (Basic) $0.22 $3.97 Per Common Share (Diluted) $0.22 $3.69 Common Shareholders Equity $6,596,620,000 $6,591,443,000 Per Common Share $28.22 $28.27 *Core realized investment gains exclude the 1998 second- quarter merger-related writedown in the carrying value of certain investments. THE ST. PAUL COMPANIES CONSOLIDATED FOURTH-QUARTER RESULTS Three months ended Dec. 31 1998 1997 - -------------------------- ----- ------ Core Revenues $2,193,271,000 $2,403,536,000 Pretax Core Operating Earnings Property-Liability Insurance $114,144,000 $267,859,000 Life Insurance $18,929,000 $18,130,000 Asset Management $29,378,000 $25,334,000 Parent and Other ($38,827,000) ($58,426,000) ------------- ------------- Total Pretax Core Operating Earnings $123,624,000 $252,897,000 Income Tax Expense (Benefit) ($9,873,000) $46,009,000 -------------- ------------- Core Operating Earnings from Continuing Operations $133,497,000 $206,888,000 Per Common Share (Basic) $0.55 $0.87 Per Common Share (Diluted) $0.53 $0.82 Realized Investment Gains (Losses), Net of Taxes ($7,244,000) $48,872,000 Per Common Share (Basic) ($0.03) $0.22 Per Common Share (Diluted) ($0.03) $0.19 Restructuring Charges, Net of Taxes (22,295,000) - Per Common Share (Basic) ($0.09) - Per Common Share (Diluted) ($0.09) - ------------- ------------- Net Income $103,958,000 $255,760,000 Per Common Share (Basic) $0.43 $1.09 Per Common Share (Diluted) $0.41 $1.01 ST. PAUL YEAR-END PROPERTY-LIABILITY UNDERWRITING OPERATIONS HIGHLIGHTS Year ended Dec. 31 1998 1997 - ------------------ ------ ------ Written premiums $6,693,168,000 $6,931,928,000 Net investment income (pretax) 1,306,828,000 $1,323,967,000 Core statutory combined ratio 112.5 103.8 ST. PAUL FOURTH-QUARTER PROPERTY-LIABILITY UNDERWRITING OPERATIONS HIGHLIGHTS Three months ended Dec. 31 1998 1997 - -------------------------- ------ ------ Written premiums $1,566,409,000 $1,605,565,000 Net investment income $321,841,000 $338,273,000 Core statutory combined ratio 110.7 103.8 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 and Chief Legal Counsel Date: February 3, 1999 -----END PRIVACY-ENHANCED MESSAGE-----