UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
or
o 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: 0-6612
RLI Corp.
(Exact name of registrant as specified in its charter)
|
ILLINOIS |
|
37-0889946 |
|
(State or other
jurisdiction of |
|
(I.R.S. Employer |
|
|
|
|
|
9025 North Lindbergh Drive, Peoria, IL |
|
61615 |
|
(Address of principal executive offices) |
|
(Zip Code) |
|
|
|
|
|
(309) 692-1000 |
||
|
(Registrant’s telephone number, including area code) |
||
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 ý No o
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 9, 2002 the number of shares outstanding of the registrant’s Common Stock was 9,934,612.
PART I
RLI Corp. & Subsidiaries
Condensed Consolidated Statement of Earnings and Comprehensive Earnings
For the Three-Month Period Ended June 30,
|
(Unaudited) |
|
2002 |
|
2001 |
|
||
|
|
|
|
|
|
|
||
|
Net premiums earned |
|
$ |
81,685,994 |
|
$ |
66,638,765 |
|
|
Net investment income |
|
9,571,744 |
|
7,709,119 |
|
||
|
Net realized investment gains |
|
1,076,701 |
|
517,467 |
|
||
|
|
|
92,334,439 |
|
74,865,351 |
|
||
|
Losses and settlement expenses |
|
47,356,407 |
|
38,748,891 |
|
||
|
Policy acquisition costs |
|
25,127,461 |
|
21,693,578 |
|
||
|
Insurance operating expenses |
|
6,584,895 |
|
4,616,059 |
|
||
|
Interest expense on debt |
|
481,402 |
|
811,399 |
|
||
|
General corporate expenses |
|
888,449 |
|
619,228 |
|
||
|
|
|
80,438,614 |
|
66,489,155 |
|
||
|
Equity in earnings of uncons. Investee |
|
1,906,137 |
|
1,742,769 |
|
||
|
Earnings before income taxes & cumulative effect |
|
13,801,962 |
|
10,118,965 |
|
||
|
Income tax expense |
|
3,848,582 |
|
2,714,999 |
|
||
|
Earnings before cumulative effect |
|
9,953,380 |
|
7,403,966 |
|
||
|
Cumulative effect of initial adoption of SFAS 133 |
|
0 |
|
800,415 |
|
||
|
Net earnings |
|
$ |
9,953,380 |
|
$ |
8,204,381 |
|
|
|
|
|
|
|
|
||
|
Other compre. earnings (loss), net of tax |
|
(14,644,052 |
) |
3,012,455 |
|
||
|
Comprehensive earnings (loss) |
|
$ |
(4,690,672 |
) |
$ |
11,216,836 |
|
|
|
|
|
|
|
|
||
|
Earnings per share: |
|
|
|
|
|
||
|
Basic: |
|
|
|
|
|
||
|
Net earnings per share from operations |
|
$ |
0.93 |
|
$ |
0.72 |
|
|
Realized gains, net of tax |
|
$ |
0.07 |
|
$ |
0.04 |
|
|
Basic earnings per share before cumulative effect |
|
$ |
1.00 |
|
$ |
0.76 |
|
|
Cumulative effect of SFAS 133 adoption |
|
$ |
0.00 |
|
$ |
0.08 |
|
|
Basic net earnings per share |
|
$ |
1.00 |
|
$ |
0.84 |
|
|
|
|
|
|
|
|
||
|
Basic compre. earnings (loss) per share |
|
$ |
(0.47 |
) |
$ |
1.14 |
|
|
|
|
|
|
|
|
||
|
Diluted: |
|
|
|
|
|
||
|
Net earnings per share from operations |
|
$ |
0.90 |
|
$ |
0.71 |
|
|
Realized gains, net of tax |
|
$ |
0.07 |
|
$ |
0.03 |
|
|
Diluted earnings per share before cumulative effect |
|
$ |
0.97 |
|
$ |
0.74 |
|
|
Cumulative effect of SFAS 133 adoption |
|
$ |
0.00 |
|
$ |
0.08 |
|
|
Diluted net earnings per share |
|
$ |
0.97 |
|
$ |
0.82 |
|
|
|
|
|
|
|
|
||
|
Diluted compre. earnings (loss) per share |
|
$ |
(0.46 |
) |
$ |
1.12 |
|
|
|
|
|
|
|
|
||
|
Weighted average number of common shares outstanding |
|
|
|
|
|
||
|
Basic |
|
9,925,844 |
|
9,813,920 |
|
||
|
Diluted |
|
10,231,662 |
|
9,991,330 |
|
||
|
Cash dividends declared per common share |
|
$ |
0.17 |
|
$ |
0.16 |
|
The accompanying notes are an integral part of the financial statements.
2
RLI Corp. & Subsidiaries
Condensed Consolidated Statement of Earnings and Comprehensive Earnings
For the Six-Month Period Ended June 30,
|
(Unaudited) |
|
2002 |
|
2001 |
|
||
|
|
|
|
|
|
|
||
|
Net premiums earned |
|
$ |
155,788,373 |
|
$ |
129,926,210 |
|
|
Net investment income |
|
18,656,893 |
|
15,161,259 |
|
||
|
Net realized investment gains |
|
2,863,566 |
|
1,949,205 |
|
||
|
|
|
177,308,832 |
|
147,036,674 |
|
||
|
Losses and settlement expenses |
|
90,470,857 |
|
74,612,731 |
|
||
|
Policy acquisition costs |
|
47,953,419 |
|
42,305,550 |
|
||
|
Insurance operating expenses |
|
12,198,394 |
|
9,303,278 |
|
||
|
Interest expense on debt |
|
905,009 |
|
2,013,436 |
|
||
|
General corporate expenses |
|
1,918,884 |
|
1,421,329 |
|
||
|
|
|
153,446,563 |
|
129,656,324 |
|
||
|
Equity in earnings of uncons. investee |
|
2,439,341 |
|
2,275,776 |
|
||
|
Earnings before income taxes & cumulative effect |
|
26,301,610 |
|
19,656,126 |
|
||
|
Income tax expense |
|
7,243,086 |
|
5,118,788 |
|
||
|
Earnings before cumulative effect |
|
19,058,524 |
|
14,537,338 |
|
||
|
Cumulative effect of initial adoption of SFAS 133 |
|
0 |
|
800,415 |
|
||
|
Net earnings |
|
$ |
19,058,524 |
|
$ |
15,337,753 |
|
|
|
|
|
|
|
|
||
|
Other compre. earnings (loss), net of tax |
|
(12,943,846 |
) |
(11,263,859 |
) |
||
|
Comprehensive earnings |
|
$ |
6,114,678 |
|
$ |
4,073,894 |
|
|
|
|
|
|
|
|
||
|
Earnings per share: |
|
|
|
|
|
||
|
Basic: |
|
|
|
|
|
||
|
Net earnings per share from operat | |||||||